TAXING DECISIONS

The degrees of separation between Ronald Reagan, the late, former president of the US, and Peter Peterson, cofounder and chairman of New York's The Blackstone Group. The two were closely linked through the highest levels of business and the Republican party, but shared differing views on economic policy:

Ronald Reagan, the 40th president of the US, occupied the White House from 1981 to 1989. Since his passing last month, much has been said of Reagan's economic legacy. An arch foe of big government, Reagan believed that tax cuts would shrink a bloated government and stoke economic growth. Among the original architects of “Reaganomics” was the president's budget director…

David Stockman, a supply-side economics advocate and the youngest White House cabinet member of the 20th Century, earning him a reputation as a “whiz kid.” In 1986, Stockman published a book, The Triumph of Politics, arguing that Reagan's “revolution” had failed to produce the results anticipated. Stockman now manages “Rust Belt” investment specialist Heartland Industrial Partners. He formed Heartland after leaving The Blackstone Group, where he had been a senior managing director. There he worked closely with…

Peter Peterson, the stately co-founder of one of the world's largest private equity firms and no stranger to politics. He was Nixon's secretary of commerce and, last month, published a book with which supply-siders may take issue – Running on Empty: How the Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It. In recent comments to political magazine The Nation, Peterson said: “I'm rather offended that fat cats like me are getting tax cuts which over the long term will only serve to increase taxes on my own children and grandchildren at a time when our entitlement programmes are underfunded.”