Memo To: Website browsers, fans, clients
From: Jude Wanniski
Re: Two decades of sage analysis and advice
In June of 1978, I resigned from The Wall Street Journal editorial page when the conflict of interest I'd been trying to live with finally got too big. I'd been preaching supply-side economics since I'd arrived at the Journal in February of 1972 - although I did not coin the phrase until 1975 — and by 1976 politicians around the country and in Puerto Rico began running on the tax-cutting ideas suggested by the Laffer Curve. By 1977, I'd cautioned Bob Bartley, the WSJ editor, that I thought the situation was becoming untenable, as more and more of my phone calls in and out were coming from political candidates. When my friend Jeff Bell spent two years of his life and his life savings running for the GOP nomination for the U.S. Senate seat held by five-term Republican Sen. Clifford Case, I wound up helping Jeff in every way I could. I'd promised Bartley that I'd stay out of active politicking, but on June 5, as I made my way home to Morristown, N. J., from Wall Street, I encountered Jeff at the Hoboken train station handing out leaflets I'd written for him. He looked like hell, his eyes bloodshot, his suit a mass of wrinkles. The election was the next day, and the last poll we'd seen showed him being slaughtered by Case.
"To hell with it," I said, grabbing a handful of leaflets from him, and handing them out as the Wall Streeters surged past us to their trains. Several of the people who took leaflets from me were Dow Jones executives. The next day, election day, when I got to the office Bartley called me into his office and showed me several leaflets the executives had gotten from me at Hoboken. I explained what happened and said, "Bob, I promise you this will never happen again." I went straight to my desk and called my wife, then my father, and said I was quitting the paper after 13 years with Dow Jones. That night, I went to the Trenton campaign headquarters, fully expecting to sit around crying in our beer, but when the returns finally came in, Jeff had defeated Case. He went on to lose to Bill Bradley in the general election, but had established the viability of the tax-cutting ideas to the satisfaction of John Sears, Ronald Reagan's campaign manager. On the basis of a post-election poll, Sears and Reagan decided to build the 1980 presidential campaign around the Kemp-Roth 30% income tax cut that had been the centerpiece of Jeff s campaign.
What would I do with my life? I couldn't work for another newspaper, because the same conflict of interest would arise. Bartley offered to let me use my desk and telephone while I tried to figure this out, and the thought struck me that I might be a consultant on economics and the political world. Sometime later in June I called a fellow I'd gotten to know well, Wendell "Lars" Larson, who was director of public affairs at Chrysler Corporation in Detroit. I told him I'd left the paper, and asked him if Chrysler would use me if I became a consultant. He said yes, and when I asked him how much money I might make on an annual basis, he named a figure I thought too high. I asked him if he would — on the spot — retain me at half the amount. He agreed. A few weeks later we had lunch at the top of the Pan Am building and he gave me my first assignment: He confided that Chrysler was going bankrupt and could only survive with a government bailout. He wanted me to help figure out how to get one. The rationale I devised was based on the argument that the federal government had caused Chrysler's financial difficulties, by more and more burdensome environmental regulations on the company, going back to the 1970 Clean Air Act. The regulations hit Chrysler the hardest because it was the smallest of the Big Three auto firms, and the regulatory burden was the equivalent of a poll tax that would hit the smallest the hardest. The argument appealed to liberals and to conservatives, for different reasons, and Chrysler got the bailout.
I needed more than one client, of course, and spent the next several weeks signing up other people in the business world at the same fee agreed upon with Larson at Chrysler. Don Rumsfeld, who I'd known since he was an Illinois congressman, signed up at G.D. Searle, the pharmaceutical firm in Skokie, Ill. Tom Pownall, the CEO of Martin Marietta (now Lockheed Martin), signed up in Rockville, Md. Fred Bucy, CEO of Texas Instruments, signed up in Dallas. Lloyd Unsell, director of the Independent Petroleum Association of America, the "wildcatters," signed up in Washington, D.C., and Bill Agee of Bendix signed up in Detroit. All six signed before the end of September, so I could afford to hire a manager who could do all the paperwork while I lid the consulting. My cousin, Ronald deLa Rosa, then was working as a schoolteacher at a junior high school in Brooklyn. After seeing me collect the clients and that I could actually pay him, he informed the school he would not be returning. He's been with me ever since.
Where did the name Polyconomics come from? The lawyer I met with who handled our incorporation asked me what I was going to call the company. I hadn't thought of that and asked him how long I would lave to think about it. He said he thought we should proceed immediately, but suggested I take 15 minutes, while he completed the rest of the paperwork. He asked what would the company do? I said political and economic consulting. I took a sheet of paper and wrote in lock letters: "POLICONOMICS." It just didn't look right, with the "I" in the middle of the name. So I substituted "Y," and it became "POLYCONOMICS."
And here we are 20 years later, alive and well, with more than a hundred clients and a staff of 20 or so that covers the politics and economics of the world. Happy Anniversary, Poly!!