Monday, June 24, 2019

Ali Velshi Interviews Arthur Laffer

Today I endured listening to Arthur Laffer lie serially to Ali Velshi today. Skip the first 36 minutes of this Youtube as the interview begins there. Never mind the praise for Laffer’s cheerleading for Trump. Laffer actually claimed that the FED’s low interest rates after the Great Recession began was the cause of the Great Recession. OK! But then he pivots and advocates we should have low interest rates now that Trump is President. I know – WTF?! OK – don’t trust Laffer on monetary policy but the real fun was when he claimed that the Reagan tax cut of 1981 led to average annual growth rates of 8% during his first term. I think that is what Laffer is claiming but BEA data suggests much lower growth rates for real GDP. OK – we all know that Laffer lies a lot but why on earth does MSNBC bother to let Ali Velshi just sit there as thank him for such dishonesty. Update: Paul Krugman explains Laffer’s bizarre monetary theory well before this interview:
The Trumpification of the Federal Reserve: In late 2015 then-candidate Donald Trump accused Janet Yellen, chair of the Federal Reserve, of being part of a political conspiracy. Yellen, he insisted, was keeping interest rates unjustifiably low in an attempt to help Hillary Clinton win the presidency. As it happens, there were very good reasons for the Fed to keep rates low at the time. Some measures of the job market, notably prime-age employment, were still well below precrisis levels, and business investment was going through a significant slump — a sort of mini-recession. Fast forward to the present. The employment picture is much stronger now than it was then. There are hints of an economic slowdown, partly because of the uncertainty created by Trump’s trade war, but they’re considerably fainter than those of 2015-16. And Trump himself keeps boasting about the economy’s strength.
But of course Trump insists we need to lower interest rate because??? And of course Art Laffer has to agree with his political master.

3 comments: said...

Regarding growth in the Reagan era, he had 8% growth in one year 1983, the bounceback from his recession, which was deeper while shorter than the Great Recesssion. It was this growth that gave Reagan his "Morning in America" campaign slogan in 1984, but he was never anywhere near that growth rate in any other year of his presidency.

Anonymous said...

Interesting that MSNBC took down this version of their show but put up a version claiming to be the full transcript even if the Laffer interview was not included.

Not Trampis said...

PGL, for shame for shame, Laffer is merely being 'flexible' in his views.
Mind you I have always found his views lafferable