Sunday, June 2, 2019

Art Laffer is Not an Economist

Can The Hill be more wrong?
President Trump will award the Presidential Medal of Freedom, the nation's highest civilian honor, to economist Arthur Laffer, the White House announced Friday. The president will honor Laffer on June 19 for his contributions to economic policy. The White House described Laffer as "one of the most influential economists in American history" in announcing the award.
OK the Idiot-in-Chief did say that but repeat after me – Art Laffer is not an economist. Why did Trump debase the Presidential Medal of Freedom and the entire economics profession?
Laffer co-wrote a book published last year titled "Trumponomics: Inside the America First Plan to Revive Our Economy." His co-author was Stephen Moore, who earlier this year was nominated to serve on the Federal Reserve Board of Governors but withdrew amid bipartisan opposition from senators.
Well at least The Hill got this right. But this?
Laffer championed supply-side economics and gained prominence serving as a top adviser to then-President Reagan. He established what is known as the "Laffer Curve," which showed that increases in tax rates will eventually cause government revenue to decrease at a certain point. The model has been cited to argue for the benefits of tax cuts. Critics of supply-side economics argue that it has contributed to inequality and disproportionately benefits the wealthy.
The inequality critique is not the only issue with tax cuts that reduce national savings. Couldn’t The Hill note that the 1981 tax cut lowered investment via higher real interest rates as well as appreciated the dollar leading to large trade deficits? Enough with this weak account as Slate got this right!
Trump Gives World’s Worst Economist the Presidential Medal of Freedom
A better read and if you are going to dub Laffer as an economist please note he is a very poor economist. But at least he lavished Trump with praise.


Sandwichman said...

No true Scotsman!

Anonymous said...

The point is that Art Laffer is indeed an economist, and what is necessary is to explain how and why his ideas differ so from your own.

pgl said...

"explain how and why his ideas differ so from your own."

OK Anonymous Trumper. I believe that a reduction in national savings in a full employment economy drives up real interest rates and lowers investment. Laffer? He believes whatever his political masters tell him to believe. As I noted, the record from the 1980's support my view.

Unknown said...

"OK Anonymous Trumper."

Always but always resort to nutty name-calling. No matter, I will not bother reading on.

pgl said...

Angrybear likes to repost some of their favorite posts they see here to which we are grateful. This one got reposted and has already gotten one of the Trump style angry comment from someone named Bkrasting.

One has to wonder how much taxpayer money Trump is spending on this silly backlash. C'mon folks - Laffer's writing makes my case in spades. He is a bought and paid for advocate and not much more.

Barkley Rosser said...

I'm afraid he is an economist, just a very bad one. He has been repeatedly wrong in his forecasts about the revenue implications of cutting tax rates in the US and its states for nearly 40 years now. However, there are even worse economists around than him, such as his Trumpnomics coauthor, Stephen Moore, not to mention Peter Navarro, still in the administration, who like Laffer had a semi-respectable period early in his career but has simply gone completely off the rails.