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Paul Krugman, June 18, 2019

  

Category:  News & Politics

Via:  bob-nelson  •  5 years ago  •  15 comments

 Paul Krugman, June 18, 2019
Laffer’s medal, like the appointment of the fundamentally ludicrous Larry Kudlow as chief economist and the attempt to install Stephen Moore at the Fed, is like putting up a sign saying “Only charlatans and cranks need apply.”

S E E D E D   C O N T E N T



original More than 20 years ago , Harvard’s N. Gregory Mankiw, who would later serve as George W. Bush’s chief economic adviser, published the first edition of his best-selling Economics 101 textbook. Early in the book, trying to explain why economists are often perceived as disagreeing about everything, he wrote about the role of “ charlatans and cranks .” When economists appear to be at odds, he wrote, you should be aware that sometimes the apparent dissent is coming from “some snake-oil salesman who is trying to sell a miracle cure.”

He was referring to the people who told Ronald Reagan that cutting taxes would pay for itself, above all a guy named Art Laffer. As Mankiw noted, the charlatans and cranks were wrong: Reagan’s tax cuts sharply reduced revenue. And the same thing has been true every time tax-cut proponents have promised a miracle. Most recently, the 2017 Trump tax cut has led to a precipitous  collapse in corporate tax receipts , twice as much as projected.

Yet decades of being wrong again and again has done nothing to reduce the influence of tax-cut cranks on the G.O.P. On the contrary, their grip has gotten ever tighter. Even supposed Republican moderates like Maine’s Susan Collins  justified their support for the 2017 bill by saying that it would pay for itself.

And on Wednesday, Laffer will receive the Presidential Medal of Freedom.

To be fair, Laffer is known for other things besides his utter faith in the miraculous power of tax cuts. He’s also known for  warning  about the dire effects of the Federal Reserve’s efforts to fight the financial crisis: “Get ready for inflation and higher interest rates,” he thundered a decade ago. Actually, no: Inflation has stayed low, and interest rates are close to their lowest levels in history.

Now, anyone with a long career of making economic pronouncements will have made some bad calls. God knows  I have . But what makes Laffer and others like them so special is both the utter consistency of their wrongness and the fact that their influence just keeps rising despite that wrongness.

Or maybe I should say that their influence grows because of their wrongness. Constantly predicting great results from tax cuts for the rich and catastrophe should top tax rates go up is a bad way to devise economic policy but a very good way to ingratiate yourself with wealthy political donors. Attacking any policy that might have helped the economy while a Democrat was president was a pretty good career strategy too.

What’s striking is that at this point the G.O.P. apparently has no use for economists who aren’t snake-oil salesmen. There are serious economists ­— like Mankiw — who happen to be conservatives, out of some combination of personal values and judgements about the proper role of government. I can respect their positions, even when I disagree. But they have no political home. Laffer’s medal, like the appointment of the fundamentally ludicrous Larry Kudlow as chief economist and the attempt to install Stephen Moore at the Fed, is like putting up a sign saying “Only charlatans and cranks need apply.”

Initial image: A Trump campaign rally at an amphitheater in Panama City Beach, Fla., in May.    Doug Mills/The New York Times



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Bob Nelson
Professor Guide
1  seeder  Bob Nelson    5 years ago

The Congressional Medal of Honor has been abused for a long time - Trump isn't the first.

It should be retired in favor of something else... with much stricter criteria.

 
 
 
Tacos!
Professor Guide
1.1  Tacos!  replied to  Bob Nelson @1    5 years ago
It should be retired in favor of something else... with much stricter criteria.

Nah, let's not make it so serious. These things are for fun. It's like when the governor hands out those paddle ball toys in lieu of pay.

 
 
 
Sparty On
Professor Principal
3  Sparty On    5 years ago

So i take it you're not a big "Laffer Curve" fan?

 
 
 
Bob Nelson
Professor Guide
3.1  seeder  Bob Nelson  replied to  Sparty On @3    5 years ago

How do you figure? I didn't write the seed.

 
 
 
Sparty On
Professor Principal
3.1.1  Sparty On  replied to  Bob Nelson @3.1    5 years ago

I didn't say you did.  

I simply asked you a question.

 
 
 
Bob Nelson
Professor Guide
3.1.2  seeder  Bob Nelson  replied to  Sparty On @3.1.1    5 years ago

Why don't you prime this pump with your own opinion of Art Laffer and his curve?

 
 
 
Sparty On
Professor Principal
3.1.3  Sparty On  replied to  Bob Nelson @3.1.2    5 years ago

Because i asked you the question.

 
 
 
Tacos!
Professor Guide
5  Tacos!    5 years ago

67670210.jpg

It's not like anybody is paying attention to the Medal of Freedom. Well, I guess somebody is. Now.

 
 

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