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Tuesday, July 9, 2019
Even The MRC Can't Make A Decent Case For The Laffer Curve
Topic: Media Research Center

Media Research Center intern Joseph Valle complains in a June 20 post:

President Donald Trump infuriated the left again on June 19, when he awarded supply-side economist Arthur Laffer the Presidential Medal of Freedom.

The left’s reaction was predictably vicious. An MSNBC analyst called Laffer one of the most “destructive forces” in economics since Herbert Hoover. New York Magazine writer Jonathan Chait minced no words about his anger over Laffer’s award ceremony, calling him a “kook” elevated to “metaphysical status” within the Republican Party. He ridiculed Laffer’s theory as “provably untrue” and based on a “fake curve.”

Laffer was an economic adviser for President Ronald Reagan in the 1980s and developed his namesake Laffer Curve in 1974 describing the relationship between tax rates and total tax revenue. Laffer has been a proponent of tax cuts to stimulate the economy and advised Trump to pass the Tax Cuts and Jobs Act of 2017. He’s also co-author of the book Trumponomics with fellow free-market economist Stephen Moore.

“Economists do not take Laffer’s claims seriously,” Chait sneered for NY Mag. Conservative economists would disagree with that claim, but the liberal media rarely give them the opportunity.

Oddly, neither did Valle -- at no point does he cite a conservative economist defending the Laffer Curve. Even the Investopedia explainer of the concept to which Valle links pointed out that "There are some fundamental problems with the Laffer Curve — notably that it is far too simplistic in its assumptions," and that "policy makers would be in practice unable to observe the shape of the Laffer Curve, the location of T* [the optimal tax level], whether multiple T*’s exist, or whether and how the Laffer Curve might shift over time."

Valle further undermined his case by citing conservative Noah Rothman pointing out that the Laffer Curve had "a lot against it over the years" -- making him sound not all that different from Chait (though Rothman went on to blame entitlement programs for federal deficit issues, like a good conservative).

If Valle can't even make a good case for the Laffer Curve while defending Laffer, that's probably a sign that no good case can be made.

Finally, Valle is silent on Laffer's flattery of Trump in the form of co-authoring a book on "Trumponomics" as a possible, if not likely, reason Laffer received his award from a vainglorious president (not to mention Moore's ill-fated nomination to the Federal Reserve board).

Posted by Terry K. at 5:53 PM EDT

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