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When I appeard on CNBC's "Kudlow & Company" on Tuesday (YouTube video replay coming soon), Larry gave me a hard time for crediting Gerald Ford as the White House godfather of supply-side tax policy. Tom Blumer asked me to respond to commenters on his blog who have taken the same position. No problem -- the historical facts are squarely on my side.

I relied for my column on the account of events presented in Jude Wanniski’s book The Way the World Works. Most of it is on page 288 of the first edition hardback.

According to Wanniski, “President Ford proposed a 5% surtax on personal incomes as the result of the advice he received at his Economic Summit Meeting in September, 1974 (even as the stock market was plummeting below 600 DJI).”

Wanniski writes, “The Republicans…lost three dozen seats in the House of Representatives. In the days immediately following the GOP debacle, White House Chief of Staff Donald Rumsfeld was persuaded by Laffer that the correct policy was tax reduction, not tax increase. It was for Rumsfeld’s assistant, Richard Cheney, that Laffer drew his Curve for the first time on the back of a paper napkin in the Two Continents Restaurant a block from the White House. The stock market stopped its decline and began a serious advance in December, 1974, with the first hints that Ford was turning on tax policy. And while the ‘tax cuts’ announced by Ford in February [1975] were inefficiently designed by the administration’s conservative Keynesians, it made a great deal of difference to the economy that there would be some movement down the Laffer Curve instead of a leap upwards.”

Here are the details of the Ford tax cuts. “In March 1975, Ford signed into law a bill that provided individuals with a 10 percent rebate on their 1974 tax liability, a fattened standard deduction, and a temporary $30 tax credit for each taxpayer and dependent. For companies, the investment tax credit was temporarily increased to 10 percent.”

It seems clear to me that while we can fault Ford for not doing more or for not doing better with his tax cut, he deserves a great deal of credit for (a) having an organization that was capable of getting outside-the-box inputs from a then-unknown Arthur Laffer, and (b) having the wisdom to take that advice and stand away from doing something really terrible – raising taxes – even though it was firmly embraced by the conventional wisdom of the time.

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