Why does anyone still listen to Arthur Laffer?

When I first started studying politics seriously, I read about Arthur Laffer. He is the economic guru behind supply-side economics. He was in fact the intellectual power behind Reagan’s plan to cut taxes for the wealthy so everybody will profit.  To be honest, I don’t know that he has been wrong about everything. Nobody can be wrong about everything, but he has been wrong about most things. Look, as far as I’m concerned, Arthur Laffer may be a great guy. He has, however, led us on a 30-year misguided adventure which has drained our public coffers and has simply killed the middle class. Trickle down economics has now been proven not to work. It never worked. It never made sense.

Paul Krugman has more:

Jim Tankersley has a good article on Arthur Laffer’s never-stronger influence on the Republican party, with just one seriously misleading statement:

Laffer’s ideas have also grown out of fashion with much of the mainstream economic community. There is an entire branch of economic literature that uses detailed equations to show cutting top tax rates does not spark additional growth.

No, Laffer hasn’t “grown out of fashion” with mainstream economics — he was never in fashion. There was never any evidence to support strong supply-side claims about the marvels of tax cuts and the horrors of tax increases; even freshwater macroeconomists, despite their willingness to believe foolish things, never went down that road.

And nothing in the experience of the past 35 years has made Lafferism any more credible. Since the 1970s there have been four big changes in the effective tax rate on the top 1 percent: the Reagan cut, the Clinton hike, the Bush cut, and the Obama hike. Republicans are fixated on the boom that followed the 1981 tax cut (which had much more to do with monetary policy, but never mind). But they predicted dire effects from the Clinton hike; instead we had a boom that eclipsed Reagan’s. They predicted wonderful things from the Bush tax cuts; instead we got an unimpressive expansion followed by a devastating crash. And they predicted terrible things from the tax rise after Obama’s reelection; instead we got the best job growth since 1999.

And when I say “they predicted”, I especially mean Laffer himself, who has a truly extraordinary record of being wrong at crucial turning points. As Bruce Bartlett pointed out a few years ago, Laffer was even wrong during the Reagan years: he predicted that the Reagan tax hikes of 1982, which partially reversed earlier cuts, would cripple the economy; “morning in America” promptly followed. Oh, and let’s not forget his 2009 warnings about soaring interest rates and inflation.

The question you should ask, then, is why this always-wrong economic doctrine now has a stronger grip on the GOP than ever before.

It wasn’t always thus. George W. Bush’s inner circle clearly had little use for the likes of Laffer; they engaged in a lot of deceptive advertising about the economy (and a few other things), but they never made extravagant supply-side claims — and remember that Greg “charlatans and cranks” Mankiw served as chairman of the Council of Economic Advisers. But since 2009 the GOP has swerved hard right into fantasy land — and it has done so despite a remarkable string of dead-wrong predictions by the people peddling that fantasy. (more…)

 

News Roundup: Sexual Assault, Darren Sharper, Iranian Nuclear Arms Deal

Sexual assault must stop. Kirsten Schofield has penned a thoughtful, emotional and powerful article on sexual assault. Unlike whatever that debacle was that the Rolling Stone reported and then retracted, Kirsten was sexually assaulted. She does not accept the writer’s apology. She does not accept the apology of Rolling Stone… nor should she. In her own words: I do not accept Erdely’s apology and neither should you. Erdely says she allowed her “concern for Jackie’s well-being…fear of re-traumatizing her, and…confidence in her credibility to take the place of more questioning and more facts” and that she won’t make these mistakes again, but it’s too late for a nicely-worded mea culpa. When Rolling Stone decided to “go ahead without knowing the lifeguard’s name or verifying his existence,” they contributed to the environment that allowed my assailant to walk up to me in a crowded public space and joke about trying to rape me. Erdely’s self-serving actions, and those of her editors, let college administrators, fraternities and police departments go back to pretending that sexual violence isn’t a problem. I’m sorry, but “sorry” isn’t good enough.

Darren Sharper: Sometimes when you read a story all you can do is shake your head. If you really get into the story, the hideousness is overwhelming. It appears that former NFL star Darren Sharper was a rape machine. With his good looks and charm it appears that he would lure unsuspecting women and then drug and rape them. He has pleaded guilty. He’s been pulled from William and Mary’s Hall of Fame.
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