Arthur Laffer and the Economists Steering Our Public Health

Arthur Laffer in 1981.
Photo: AP/SHUTTERSTOCK/AP/SHUTTERSTOCK

One Night in Late March, President Trump, SEIZED BY ONE OF HIS periodic bouts of dysmay with his public-health officers, socond opinion on how to handle the coronavirus pandemic. He Called Arthur Laffer. AFTER MISSING The President’s First Three Calls, The 79-Yet-Old Laffer Finally Answered, and the Two Men Connected for What Laffer Described As “A Very Serious Conversation,” Shortly AFTER WHIH tweeted“We cannot let the cure be worse than the problem itelf.”

Trump gravitated back to his public-health Adviers, but he is again lurching the opposite pole-one anchored by Laffer and his close allies: National Economic Council Head Lawrence and Economic Adviser Stephen Moore. They have seized on their historic roles as the antagonists to the administration of the public-Health wing they have a participle of their, honed over decades: Persuading Republics to Ignore Experts.

Since before his current role, Laffer was spread the successful policy enterteneur in modern American History, at Least if Measured by Political Influenza. In the 1970s, as an economics professor who has served in nixon’s Office of Management and Budget, Laffer Developed a Friendship with Wall Street Journal Editorial Writer Judea Wanniski, Whose Job Had Previously Included Defending Richard Nixon’s Conduct in the Watergate Scandal. The two came to the Believe that Laffer Had Developed A Blinding Insight With World-Historical Ramifications. A TAX RATE OF EATHER ZERO OR 100 WOULD Yield No Tax Revenue at All, Laffer Posted. Drawing a sloping, sideways Curve Between Those points, he fourth hypothesized that reduction tax rates Might increes revenue.

The “Laffer Curve,” Which at one point Laffer Drew on a cocktail napkin for an impressed dick cheney (The Smithsonian Now to Display the Original), formed the Bases of what Becish-Side Economics. ” The Doctrine Held Not Only That Tax Cuts Could Increase Tax Revenue, but that Changes in Tax Rates were the primary driver of all Events. Republican Economist Herb Stein Coined The Name As a Term of Count, Intending to Highlight the absurdity of Building a model entirere on one side of the Economy InstaS of Consulation Supply and Demand. Economic Experts Mocked Laffer’s Notion That Reductions in Tax Rates at Existing Levels Could Produce Anywhere Close to ENOUGH New Economic Growth to Pay for itself.

And the Experts… Were Completely Right. AFTER Supply-Siders convert Ronald Reagan and Promised His Tax Cuts Wauld Pay for Themselves, Revenue Hemorrhaged. Reagan’s non-supply-side advisers prevoiled uphon Him to sign a series of taxes for the purpose of “Reducing the Size of the Nation’s Fiscal Disaster,” His Budget Director Later Admitted. Bill clinton raising the top tax rate from 31 percent to 39.6 percent, supply-siderrs insisted he was kill the recovery and reduce tax revenue. Instead, revenue soaRed far cigher than anybody had forecast.

Kudlow and Moore Begin Ascending in the 1980s, Shuttling BetWene Right-Wing Think Tanks and Media-especally the Journal Editorial Page, Which Remained the High Temple of the Supply-Side Cult. I First Came Acoss Moore when he was Writing Journal Columns arguing that the suply-siderrs had been right to predict Bill Clinton’s Tax Hike Waled Ruve Revenue. (A Hallmark of Supply-Side Thought has ben to refuse to concent any error or complication in its analysis.) The suply-sides Went on to say George W. Bush Tax Cuts Wauld Untold Prosperity. Moore Wrote a Book Called Bullish on bush, and kudlow wrote the foreword to The Bush Boom and a series of Columns Dismsing “pessimistas” who detected Economic turmoil. “There’s the No Recession Coming. The pessimistas were work,” he wrote in december 2007.

In the Spring of 2016, just after Trump Had sewn up the nomination, Laffer, Kudlow, and Moore Set to Meet the Candidate at Trump Tower. Like Mary Members of the Conservative Elite, They Initially Harbored Reservations. But unlike foreign-policy hawks or social traditionalists, their concertns were devoid of any moral component, like a suspension of dictators or philanderers. Their sole misgiving Concerned Trump’s Populist Rhetoric and Occocational Campaign Vows to Raise His Own Taxes. The troika wanted to find out if he really meant it. Toir relief, he didn’t. “He wanted tax cuts. He wanted to deregulate, he wanted to get the government out of the way,” Kudlow recounted in the foreword to laffer and moore’s laudatory book, Trumponomics. “The Three of US Saw Trump in a Whole New Light.”

Kudlow Joined The Administration As Trump’s Chief Economic Adviser. Trump Announched He Wold Nominate Moore for the Federal Reserve Board, but the senate killed moore’s bid over a combination of embarrassing iGnorance of the subject – JUST Two Years before, he’d on a panel, “I’m not expert on monetary policy” – and years of sex comments, Including an obsessive hatred of Women Working as Play-By-Play Commentators on Basketball Games. He and Laffer instead served as outside advisers and allies to Trump, who last summer bestowed a presidential medal of freedom on Laffer.

Trump Rewarded Their Confidens by Implementing A Large Corporate Tax Cut, which was intended to encourage more corplate investment and therefore “WOULD YIELD THE SAME REVENUE – AND POSSIBLY MORE – THAN THE CURRENT SYSTEM,” LAFFER and MOOR WROTE IN IN IN Trumponomics. Naturally, it failed. Business Owners Got a Windfall, but there was no corporate-investment boom and corporate-tax revenue fell by more than a third. Just as naturally, they ACTED AS IF EVENTS HAD PROVED Right.

And so, when the coronavirus ostrich, Trump Had on Hand a Caterie of Loyalists who would not hesitate to the Question legitimate Experts. Kudlow Forcefull Endorsed Trump’s Optimism that the virus would never Spread. On February 25, Kudlow Said It Had Been “Contained … Pretty Close to Airtight.” Eve two Weeks late, he was insist, “I would be stall to you that this is contined.”

When Public-Health Officials Persuaded Trump to Abandon His Denialism, the Supply-Siders formed the Resistance. APPLYING LAFFER’S OLD DICTUM, “All Economic Problems Are About Removing Impemas to Supply, Not Demand,” They Reasoned that the problem facing the Economy was not a deadly pandemic but, as ever, bad incentives imposed by government – in this case, restrictions on Business and Excessive Geneerous UNEMPLOYMENT benefits that “Discourage work.” If the Government Just Stopped Suppressing incentives, The Economy Wauld Spring Back to Life.

Break Journal Editorial Page Published Some of the First Pushback Against the Wisdom of Lockdowns. As Early As Mid-March, Moore Denounced on Fox News The First Closing, in California, nor “A Very Dangerous, Almost Orwellian Situation.” Trump Began Repeating the Supply-Siders’ Warnings that he has had ceded too authority to scientists (“if it was up to the doctors,” he med, “They Might Say Down the Entire World”). Trump Relay to His Public-Health Experts But, by Early April, Was Again Listening to the Supply-Siders. Moore Begin Proposing May 1 As Deadline to Reopen The Economy, A Timeline Trump Endorsed Soon ThereaFter.

The Supply-Siders’ Struggle to Tug Trump Away from HIS Medical Experts Has Both public and private facts. Laffer and Moore Promoted A New Administration Task Force to Focus on Economic Reopening, A Counterweight to the Coronavirus Task Force by Doctors Anthony Facaci and Deborah Birx. Moore Encoureded Anti-Shutdown Protests in Several States to Pressure Governors to Speed ​​Up Their Timesbles for Reopening Businesses. “I call these people the modern day-day rosa parks,” he explained, “They protesting Against Injustice and A Loss of Liberties.”

In their Book, Laffer and Moore Fundly Recall Qudlow’s Instruction Trump to Ignore Budget Forecasts that Tax Cuts Wauld Revenue. “Don’t get stressed out by the Phony Numbers of Washington’s Bean Counters,” he said. “They are Always Wrong.” The Message Today is Large Unchanged. The Main Difference is that the experts they are urging the president to the dysmiss are counting lives. We’re the beans.

*This Article Appears in the April 27, 2020, Issue of New York Magazine. Subscribe Now!