In 1979 economist Martin Anderson, a senior fellow at the Hoover Institution, took a leave of absence from the think tank to work as an adviser to presidential candidate Ronald Reagan. That August he penned ''Policy Memorandum No. 1,'' and what would later become known as Reaganomics was born.
Theodore H. White, in ''America in Search of Itself: The Making of the President 1956-1980,'' writes: ''Anderson's policy memo ... was a montage of minority ideas puckering among intellectuals around the nation. What makes it so fascinating as a campaign document is that two years later, so much of its thinking had become the law of the land.''
Mr. Anderson stayed with Reagan a year into his first term, as the President's assistant for policy development. During that period he helped shepherd many of his ideas - such as three-year, phased-in income tax reductions - toward enactment as law. Now, with a possible second Reagan term looming, he anticipates action on the longer-term aspects of Reaganomics that a ''too cynical'' American public wasn't ready for in 1980.
This second phase involves what Anderson calls ''institutional changes,'' such as constitutional amendments mandating a balanced federal budget and prohibiting wage and price controls. These and other sweeping measures are dubbed by Anderson ''an economic bill of rights.'' Why is such drastic change needed? ''The economy is so big and the power of economic interest groups is so great that elected officials cannot control spending,'' he says.