Greatest Period of Peacetime Economic Growth

This is a partial transcript from "HANNITY & COLMES", June 9, 2004, that has been edited for clarity.

ALAN COLMES, CO-HOST: We're joined by former HUD Secretary Jack Kemp. Thank you for being with us.

JACK KEMP, FORMER HUD SECRETARY: Thank you, Alan.

COLMES: You're in the rotunda, you just came from -- did you have a visit with members of the Reagan family?

KEMP: Well, we were among the family and friends that all gathered with Secretary Shultz and Margaret Thatcher and Brian Mulroney. So it was really a great evening, very memorable for the Kemps and the Kemp family.

COLMES: Anything about that that you can tell us? I think it's amazing that Margaret Thatcher made the trip to be here.

KEMP: She's wonderful. She's wonderful.

And of course, Brian Mulroney and Ronald Reagan had a very special relationship, as you know.

Hugh Sidney of TIME magazine was sitting next to me and Hugh and Ann are good friends. And I leaned over to Hugh, who was there when John F. Kennedy went through the streets of our capital on the same type of a funeral procession.

And I said, "Is this anything reminiscent of the Kennedy funeral." I'm not trying to say anything to you guys that you don't already know.

COLMES: Yes.

KEMP: But he said, "This is maybe not as big, but it is just as overwhelming."

I had a feeling that it was more Lincolnesque, if you don't mind me saying so and the "Battle Hymn of the Republic," a riderless horse. It was a fabulous day.

And I thought Dick Cheney, among the speeches I've heard Dick give, that was one of the greatest speeches Dick Cheney has ever given.

COLMES: What was your relationship like with President Reagan?

KEMP: Well, I first met him in 1962 when he was thinking of running for governor. He was supporting Barry Goldwater.

I was a young quarterback with the San Diego Chargers, and a buddy of mine said, "You've got to come out and hear this Ronald Reagan's speech. You like to give speeches, Kemp. Wait until you hear Reagan."

And I was just blown away by his humor, his wit, his wisdom. And I campaigned for him for governor, worked for him in California. I knew him through the 1970s.

And became the author of -- at least part of the authorship of the famous Reagan tax cut of 1981 and '82.

SEAN HANNITY, CO-HOST: Hi, Jack, welcome back to the program. Good to see you, Mr. Secretary.

You know, one of the things -- I guess we spend a lot of time talking about him helping to win the Cold War and confronting the Soviet Union.

But I know the one thing that was near and dear to Jack Kemp's heart as he discusses a rising tide lifting all boats, of course, was when he dropped the top marginal rates to 70 to 28 percent.

And lo and behold, we doubled revenues to the government, and we unleashed a recovery the likes of which we've never seen before, the greatest period of peacetime economic growth in history.

That's Kemp.

KEMP: I tell people -- I've been called a witch doctor, snake oil salesman, dangerous riverboat gambler and a voodoo economist, and that was just coming from the Republicans. You can't imagine what the other guys were saying.

HANNITY: Yes.

KEMP: But you know, two things happened. He rediscovered classical economic theory, the 18th Century economic theory that sound money and low tax rates were the key to economic prosperity.

And then secondly, he taught us about optimism, that there was a pony in there, notwithstanding a lot of manure around there for a couple of years. He saw the pony.

So I think Reagan gave us that vision of a city set on a hill. And then he would say, "Hey, we've come a long way, but we've got a long way to go."

HANNITY: A lot of us -- I know I consider myself, Jack, a Reagan Republican. I believe in the economic theory that you outlined. I think you articulated as well as anybody.

I believe we've got to confront evil in our time the way he confronted the Soviet Union. I see a lot of similarities in terms of the challenges that we face today were similar to the challenges he faced with the Soviet Union. We now have terrorism.

Economically, we're cutting taxes and we're reaping the rewards.

Do you see the similarities?

KEMP: Yes, I think there are parallels. No parallel in history is perfect. And certainly, we can pick holes in that parallel.

But, Sean, I think you're correct. President Bush has been steadfast in his allegiance to the idea that tax rates were too high, that they needed to come down on both labor and capital.

The economy has to grow if we're to have revenues to do things for people that have to be done in this country, from roads and highways to health care and, of course, prescription drug benefits, if you want to add another one.

So as far as I'm concerned, I never believed, when Dave Stockman said we were trying to starve the government, that that was what I was for. I wanted to get the rates down, grow the pie, and get more revenue and a lower tax rate.

And that's what happened in the '80s, and it happened in the '90s.

COLMES: We thank you so much for being with us on this special night.

KEMP: Thank you, sir.

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