A Conversation with Art Laffer

President Reagan’s Chief Economic Advisor

by Gary L. Fisher

Art Laffer.jpgArthur B. Laffer’s economic acumen and influence in triggering a world-wide taxcutting movement in the 1980s have earned him the distinction in many publications as “The Father of Supply-Side Economics.” The Laffer Curve is one of the main theoretical constructs of supply-side economics, illustrating the tradeoff between tax rates and actual tax revenues.

Dr. Laffer was a member of President Reagan’s Economic Policy Advisory Board for both of his two terms (1981-1989). He was a member of the Executive Committee of the Reagan/ Bush Finance Committee in 1984 and was a founding member of the Reagan Executive Advisory Committee for the presidential race of 1980. He also advised Prime Minister Margaret Thatcher on fiscal policy in the U.K. during the 1980s.

A 1999 Time Magazine cover story “The Century’s Greatest Minds” deemed the Laffer Curve one of “a few advances that powered this extraordinary century.”


Taken from a conversation in 2015.  

I had the opportunity to spend some time in Las Vegas with one of the giants of the economics field, Dr. Art Laffer. Initially I expected to maybe ask Dr. Laffer a few quick questions but after learning that I was a University of Michigan graduate he took the opportunity to razz me about Ohio State’s recent dominance of my alma mater’s football team (Laffer is an Ohio native). This led to a much longer conversation, and during it we talked about President Obama’s agenda, the similarities between Laffer’s hometown of Youngstown, Ohio and mine of Flint, Michigan.

Laffer feels strongly that the nation’s tax policy is both part of the problem and fixing it could be a signifcant step towards a real recovery. Dr. Laffer said “The principle of levying the lowest possible tax rate on the broadest possible tax base is the way to improve the incentives to work, save and produce—which are necessary to reinvigorate the American economy and cope with the nation’s fiscal problems.” When I asked him how we could take concrete steps to repair the national economy he said “We know how to fix it, by the way, a low rate at tax, spending restraint, sound money, free trade.”

“Have you ever heard of a poor man spending himself into prosperity? It`s just dumb on the outset. Government spending, as [economist] Milton Friedman always said, is taxation,” he continued. “Government doesn`t create resources, it redistributes resources. And this government spending stuff is why we had the Great Recession.”

Laffer declined to lay all the blame on President Barack Obama, noting that former President George W. Bush started the spending binge, which he said led to the so-called “Great Recession” beginning in 2008. (President George W. Bush) did just as bad a job as did Obama [President Barack Obama], but Obama has continued that bad job for four straight years. And this is the result,” he added.

Laffer stressed the importance of a low tax policy, one less onerous, in helping to stimulate the economy while increasing government revenues at the same time.

Recalling his years as one of President Reagan’s top economic advisers, Laffer said Reagan actually cut the highest tax rates. He said “we made a mistake” by phasing in the cuts, which he said caused the 1981-82 recession. But he said the economy took off in 1983 when the cuts went into full effect.

“This place just went like a rocket ship,” he said. “I think we had 7.5 percent growth in 1983 and 5.5 growth in 1984, just this boom that lasted for years and years.”

“We have the highest corporate tax rates in the world and one of the lowest corporate tax revenues as a share of GDP in the world. Go figure. It’s just you`re taxing them out of business.”

Laffer said the economy last year grew by about 2.1 percent, a poor performance that he described as “the worst single recovery in the history of the U.S.”

When I asked Dr. Laffer about the prospects for turning around rust belt cities like Flint, Detroit, and his own hometown of Youngstown he said , “It’s amazing, isn`t it? We spent $5.8 trillion in the last couple of years, and this is what we get for it? It’s tragic.”

 

The opinions voiced in this material are for general info only and are not intended to provide specific advice or recommendations for any individual.

A Conversation with Paul Krause: Pro Football Hall-of-Famer

A Conversation with Paul Krause: Pro Football Hall-of-Famer

by Gary Fisher

I have watched every single Super Bowl. Well at least that’s what my dad tells me. I honestly don’t recall the first one since I was only a little over a year old. But dad says he and I sat in front  of our old Zenith black and white and watched it with him, so I’ll have to take his word for it. I remember snippets of games after that, but it wasn’t really until I was about 8 years old that I really remember every single thing about a Super Bowl, that being the ’73 contest between my beloved Miami Dolphins and the Washington Redskins. I had liked the St. Louis Cardinals up to that point, mostly because they had cool helmets, but the Fins became my team for life during the ’72 season, and that was it.

Given this rumination, and the fact that at the time, we were in the year of the 50th Super Bowl, it was particularly notable that I had the unique opportunity to  accompany my dad to his 55th high school reunion. Not only did I meet a bunch of people my dad had been talking about for literally my entire life, I also got to put real people together with the faces that I had only seen in my dad’s dusty high school albums. It was great fun from start to finish, and I was particularly impressed by the turn out. Something like 75% of all living graduates attended this event, a fact made more impressive given the age (75) of the average graduate, and the reality that Bendle High School, in the 60’s, was a small school.  Dad had always been in the minority by not attending these events. For one reason or another he always had a reason why he couldn’t make it. He certainly had no shortage of good reasons as I recall – one year I was hit by a car, another year I had serious surgery, another time our house blew up (well only the top half), and one time he was in the hospital with surgery. In any event he was one of the MIA’s from Reunionville for decades. All of this made his surprise appearance an even bigger deal in this tight knit group. Having lost my mom a year and half prior, no one thought it likely he’d be there for this one either. But there he was.

All of this brings me back to the Super Bowl theme. One of the first people to approach my dad was one of his best friend’s growing up, a fella named Paul Krause. My dad had been telling me stories about Paul since I was old enough to remember tossing a football around. Paul was my dad’s running mate in junior high and high school in sports, and fun. When I was watching the 1970 Super Bowl which featured the Kansas City Chiefs against the Minnestota Vikings, dad pointed out that his buddy was wearing #22 for the Vikings. I remember thinking that he must have been talking about the Flint Northern Vikings, the local high school team we followed at the time. He had a hard time explaining to me that the Minnesota Vikings were a different set of Vikings. In any event, I thought it was pretty cool that my dad was pals with someone on that little black and white Zenith in our living room. It was clear this was an important game too, so that added to the coolness effect.

As I got older we had a lot of opportunities to watch Paul play on the tube, as he’d appear in three more Super Bowls- ‘74 against the Dolphins, ‘75 against the Steelers, and  ‘77 against the Raiders. Sadly, for Paul, all were losses, but as Krause told me during the reunion dinner ‘If you’re going to lose four games you can do a lot worse than have them be Super Bowls’!  I had to tell him that my favorite team growing up was the Miami Dolphins. “That Larry Csonka was a handful”, Paul said. “Really hard to tackle–he was like a freight train.” I asked him who were the toughest guys he competed against in the Super Bowl, and he laid out a litany of the greatest players of my youthful past: Terry Bradshaw, Ken “The Snake” Stabler, Franco Harris, Lynn Swann, Len Dawson, Mercury Morris, Paul Warfield, Freddie Biletnikoff, and John Stallworth.

In fact Krause was in town not just for the reunion, but also to present a “Golden Football” to his alma mater, a perk of having appeared in all of those Super Bowls with the Vikings, and something being done around the country by his fellow Super Bowlers. However, Krause is more than just a former NFL football player. He is quite likely the greatest athlete to ever come out of the Flint area. That’s saying an awful lot when you consider the almost unreal quality of talent to emanate from Flint.

His feats in high school are legendary. My dad and Paul were excitedly telling me the story of the night Krause set the county high school basketball scoring mark of 57 points in a single game. A record that still stands to this day, made even more remarkable in a pre-three point play era. They spoke of football games, and baseball games and how Krause once left a baseball game to jump the fence and win track events in the 440 and pole vault, then returned to the baseball game to pitch a no-hitter.

Krause went on to national prominence at the University of Iowa, and then played in all of those Super Bowls in the NFL. Along the way he was named All Pro 9 times, and elected to the NFL Hall of Fame in 1998. He also holds one of the NFL’s most hallowed records with 81 interceptions, making him the NFL’s all time pass theft king.  

While all of that is without question interesting,  I didn’t spend a lot of time asking NFL questions. At the time, the main topic at our table was the 85 yard pass play Krause tossed to my dad that helped them win a close game against Corunna in ’58. And that was just fine with me.•