Donald Trump Awards Medal Of Freedom To Art Laffer? REALLY?
There's a lot of crazy shit going on right now in Donald Trump's America, but we'd be remiss if we failed to mention that yesterday ART FUCKING LAFFER got the Presidential Medal of Freedom. Last year, Laffer and fellow crackpot Stephen "Too Wacko for the GOP" Moore authored the book Trumponomics to praise the Dear Leader's divinely inspired economic policies. But before that, he was famous -- or infamous -- for his Laffer Curve, sketched on a napkin in 1974 at a lunch meeting with Dick Cheney and Donald Rumsfeld, who dismissed it as simplistic twaddle. But simplistic twaddle was very on-brand for Ronald Reagan, and soon the Laffer Curve was embraced by Republicans as justification to further rig the economy to benefit the rich. Yes, of course, it was a cloth napkin. DUH.
Being a Republican requires a bedrock belief that whatever's good for rich people is good for the country as a whole, evidence to the contrary be damned. But it's pretty hard to find a reputable economist to say with a straight face that cutting taxes will actually increase government revenues. Enter Art Laffer, a Stanford-educated economist who taught at the University of Chicago and still somehow believes that putting the US government on starvation rations will cause it to become fat and happy.
Laffer's BIG IDEA goes like this: If the government collected a 100 percent tax on earnings, no one would ever work again and government revenue would be zero, the same as if the tax rate were 0 percent. Therefore, there must be some magic tax rate in the middle above which everyone stops working because why bother if the government is just going to take it all, right? Or, in economist arglebargle:
People do not work, invest, or engage in entrepreneurial activities in order to pay taxes. They engage in such economic activities in order to earn after-tax income. When the government increases its share of the income earned by its citizens, the incentive to engage in growth-enhancing economic activities falls; alternatively, the disincentive to these activities rises. The higher the tax on the next dollar earned (the marginal tax rate), the larger the disincentive.
Leave aside for the moment the questionable assertion that compulsive overworking Americans will toil away happily at say, a 23 percent tax rate, but at 24 they will throw off their shackles and go become self-sufficient hemp farmers. And let's just accept his (half) baked in assumption that no one ever gets anything back from the federal government for their tax money -- like, say, drivable highways or, in civilized countries at least, health care. Let's see whether that idea, better known as supply-side, trickle-down, Republican, tax-cutting dogma has born itself out in reality.
Lol, NOPE. The 2001 and 2003 Bush tax cuts, which gave the top one percent of American households an average $570,000 tax cut, did not increase government revenue. The deficit exploded and Bush's tax lunacy wound up whacking off at least two percent of the country's gross domestic product, aka GDP. And Donald Trump's recent tax boondoggle, which was theoretically going to "pay for itself" by unleashing the animal spirits of the sad, overtaxed rich corporations, thus spurring massive investment and wage hikes that would fill government coffers ... didn't. Corporate tax revenues fell by 31 percent last year, meaning the federal government collected almost $100 billion LESS after Trump's tax cut than before. At the same time, the budget deficit ballooned by $206 billion, GO FIGURE!
But if you really want to see pure Laffer-sonian principles in action, just look at Kansas, where then-Governor Sam Brownback paid the economist $75,000 for his vaunted expertise. The resulting 2014 Brownback tax cuts plunged the state into economic chaos. By 2017, the state's deficit was $900 billion, job growth had slowed to a trickle, and the schools were so tragically unfunded that the state's Supreme Court ruled them unconstitutional. It was so bad that the state's Republican legislators tapped out and banded together with Democrats to raise taxes. Laffer had a perfectly good explanation for all this, though, which was that Kansas just hadn't cut taxes ENOUGH, telling The Guardian:
When you put an atomic bomb on a place, it will materially change the place – but a cherry bomb probably won't change the buildings or anything else.
Naturally, the penalty for being consistently, laughably wrong about the economy is ... receiving the Presidential Medal of Freedom. And all you have to do is write a book pretending that Donald Trump is some kind of economic savant. It's a small price to pay when your credibility was already zero.
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Liz Dye lives in Baltimore with her wonderful husband and a houseful of teenagers. When she isn't being mad about a thing on the internet, she's hiding in plain sight in the carpool line. She's the one wearing yoga pants glaring at her phone.