In a move one can bet the President Trump himself doesn't really understand, he will later today confer the Presidential Medal of Freedom—our nation's highest civilian honor—on fraud economist Art Laffer:
Laffer's journey to this moment began 45 years ago with a round of drinks in a Washington cocktail lounge. At the time, Laffer was a young economist at the University of Chicago, trying to persuade President Ford's deputy chief of staff — a guy named Dick Cheney — that lowering taxes could actually boost government revenue.
"Art was trying to explain to Cheney how the Laffer Curve works," recalls Grace-Marie Turner, a journalist who later went to work on Ford's reelection campaign.
Cheney was struggling with the idea, so Laffer resorted to a visual aid.
"He sketched out this Laffer Curve on a paper cocktail napkin at the Hotel Washington, just across the street from the White House," Turner said.
Nobel laureate economist Paul Krugman has had a lot to say about Laffer over the years. For example:
Back in 1980 George H. W. Bush famously described supply-side economics — the claim that cutting taxes on rich people will conjure up an economic miracle, so much so that revenues will actually rise — as “voodoo economic policy.” Yet it soon became the official doctrine of the Republican Party, and still is. That shows an impressive level of commitment. But what makes this commitment even more impressive is that it’s a doctrine that has been tested again and again — and has failed every time.
Yes, the U.S. economy rebounded quickly from the slump of 1979-82. But was that the result of the Reagan tax cuts, or was it, as most economists think, the result of interest rate cuts by the Federal Reserve? Bill Clinton provided a clear test, by raising taxes on the rich. Republicans predicted disaster, but instead the economy boomed, creating more jobs than under Reagan.
Then George W. Bush cut taxes again, with the usual suspects predicting a “Bush boom”; what we actually got was lackluster growth followed by a severe financial crisis. Barack Obama reversed many of the Bush tax cuts and added new taxes to pay for Obamacare — and oversaw a far better jobs record, at least in the private sector, than his predecessor.
So history offers not a shred of support for faith in the pro-growth effects of tax cuts.
The recent history of Kansas also provides just the evidence you need to conclude the Laffer curve is laughable.
Essentially, then, the president is handing out a medal to a party stalwart, much as previous authoritarian rulers would have handed out the Order of Lenin. We can no doubt expect more of this over the next two years.