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Thread: Trump Awards Kook Art Laffer for Inventing Fake Curve

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    Trump Awards Kook Art Laffer for Inventing Fake Curve

    Trump Awards Kook Art Laffer for Inventing Fake Curve

    Last year, famed Republican economist Art Laffer co-authored a hagiographic tribute to President Trump and his agenda. Trump habitually bestows his most slavish supporters with pardons or — in the event they have not been convicted of any federal crimes — awards. Laffer accordingly will receive the Presidential Medal of Freedom today.

    But Laffer’s place of honor within his party was settled long ago. In 1974, he and Jude Wanniski, then a Wall Street Journal editorial writer, began proselytizing among Republicans for a new theory the two had worked out together. The breakthrough moment, at least according to legend, came when Laffer scrawled a curve on a cocktail napkin for Dick Cheney. The Laffer curve, as it came to be known, showed that the tax rate at the bottom, zero percent, and the top, 100 percent, both yielded identical revenue of zero. The curve connecting these numbers indicated that a lower tax rate could produce higher revenue.

    Laffer’s more gentle critics, while noting that his curve fails to describe existing reality, have conceded that his curve is correct in the abstract. “There’s no question there’s a Laffer curve,” says Republican economist Douglas Holtz-Eakin. “There’s always a question as to where you are on it.”

    Even this limited defense of Laffer is provably untrue. Of course a zero percent tax rate yields zero revenue, but a 100 percent tax rate definitely does not yield zero revenue. Many governments have imposed 100 percent tax rates and have still managed to collect a great deal of revenue. (Ask yourself how the Soviet Union managed to control a vast empire for the better part of a century.) The conservative economist Casey Mulligan has found several examples of democratic states where some people, especially pensioners, faced marginal tax rates at or above 100 percent, and their labor did not disappear. I would personally prefer not to pay a 100 percent income tax, but under such circumstances, I would not cease working. Many other people would make the same choice.

    This is not merely a technical objection. It exposes a conceptual flaw underlying Laffer’s entire premise. People are not, in fact, utility-maximizing robots. They choose to work for reasons other than maximizing their incomes on the margin: habit, pride of craft, and so on. Most taxes probably produce the highest revenue at rates below 100 percent, but the curve does not resemble Laffer’s, and it does not hit zero.

    In the real world, Laffer’s contributions have built a streak of unbroken wrongness over a time and scale few policy entrepreneurs in history can match. Laffer predicted Ronald Reagan’s tax cuts would pay for themselves. When they instead produced historic deficits, Laffer continued to claim he was right. He predicted Bill Clinton’s attempt to reduce the deficit by raising taxes on the rich would backfire (“I think the plan will fail. It entails price controls, which have never worked. It calls for tax increases, and that’s exactly the wrong way to go. It makes no sense to raise taxes on people who work and pay more to those who don’t work. This is the Reagan revolution in reverse”). Instead, revenue growth exceeded projections.

    He likewise predicted President Obama’s plan would “destroy the economy” (it did not) and that President Trump’s tax cut would “pay for itself many times over” (it did not pay for itself at all), among many other failed predictions. Not content to botch his analysis of the federal budget, he has parachuted into several state governments and prodded Republicans into adopting his utterly false worldview. In Kansas and Louisiana, Republican governors listened to Laffer and produced fiscal catastrophe so comprehensive and undeniable Republicans in their state revolted.
    "Everything wrong with America is manifested in Trump. The hunger for power, the vile derision of people who don’t look like you, the cruelty, the privilege, the gleeful ignorance, and mendacious narcissism. Our revulsion at Trump is causing Americans to ask: How did we get to this place? And how do we get out? That will take time and hard work by well-intentioned people from every corner of American society."

    ~ Col. Curtis Milam

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    Next to Bernie Madoff, the person whose name is most likely to lead you to believe in the Simulation Hypothesis.
    "Everything wrong with America is manifested in Trump. The hunger for power, the vile derision of people who don’t look like you, the cruelty, the privilege, the gleeful ignorance, and mendacious narcissism. Our revulsion at Trump is causing Americans to ask: How did we get to this place? And how do we get out? That will take time and hard work by well-intentioned people from every corner of American society."

    ~ Col. Curtis Milam

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    I ran into Laffer about a week ago. There is literally no one on earth more grounded in reality than he is.

    If this idiot shitwagon Chait, who clearly thinks that the Lincoln Tunnel empties out onto the outer rings of Saturn, claims that Laffer is a kook, then it's one hell of a good bet that Laffer knows what he's about. Laffer has been thoroughly proven right time and time again, so some Leftist loon who claims that he's a kook clearly is little more than proof that Leftists themselves are just out to lunch. ALL of them.

    Jonathan Chait is very clearly a drooling moron who quite obviously thinks that life does not exist west of the Hudson, and therefore makes himself out to be the fool that he is.
    Leftists have unquestionably demonstrated their hatred for due process, and Democrats have undeniably obstructed justice for, and thoroughly victim-shamed and smeared, Karen Monahan.

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    Quote Originally Posted by Adam View Post
    I ran into Laffer about a week ago. There is literally no one on earth more grounded in reality than he is.

    If this idiot shitwagon Chait, who clearly thinks that the Lincoln Tunnel empties out onto the outer rings of Saturn, claims that Laffer is a kook, then it's one hell of a good bet that Laffer knows what he's about. Laffer has been thoroughly proven right time and time again, so some Leftist loon who claims that he's a kook clearly is little more than proof that Leftists themselves are just out to lunch. ALL of them.

    Jonathan Chait is very clearly a drooling moron who quite obviously thinks that life does not exist west of the Hudson, and therefore makes himself out to be the fool that he is.
    Your position on Laffer should easily be provable, then, with charts showing the deficits during and after Reagan, Clinton, Obama and Trump's tenures, and proving what he said would happen did happen.
    “Any sufficiently advanced capitalism is indistinguishable from rent seeking.” ~ =j

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    Quote Originally Posted by Tom Servo View Post
    Your position on Laffer should easily be provable, then, with charts showing the deficits during and after Reagan, Clinton, Obama and Trump's tenures, and proving what he said would happen did happen.
    That's not what he said. He said that revenues would increase. Deficits going down requires that the spending side of the equation be addressed, too, and no one has done that in a long time. W did it to some degree, though mostly that was just revenues greatly increasing; we were close to a zero deficit in 2005 (or 2006, I can't remember which now) because the money was just pouring into the treasury. Revenues increasing with tax cuts happens every time. It happened when Kennedy did it, it happened when Reagan did it, it happened when W did it, and it's happening right now with Trump's tax cuts. IIRC, I heard the other day that first quarter 2019 revenues were the most ever. But unless and until the spending is controlled, the deficits will continue to be there. That's mostly on Congress, but Trump certainly bears some responsibility there, too. Once upon a time, he made some effort to bring the spending under control, though he doesn't really seem to care about that as much now. Clinton was dragged kicking and screaming into controlling spending by Newt, Reagan made a pretty valiant effort at controlling spending despite being thwarted at every turn by Tip O'Neil (sp?), and God knows Obama didn't even make a hint of an effort at it.

    But one way or the other, revenues have risen dramatically each time there has been a cut in federal income taxes. This isn't even a question.
    Leftists have unquestionably demonstrated their hatred for due process, and Democrats have undeniably obstructed justice for, and thoroughly victim-shamed and smeared, Karen Monahan.

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