SHARE
Art Laffer, the “father of the Laffer Curve,” spoke on the Trump administration’s eco­nomic policies at Hillsdale College Monday night. Wiki­media Commons

Fully equipped with feel-good jokes and self-dep­re­cating humor, Arthur “Art” Laffer, econ­omist and former eco­nomic adviser to Pres­ident Reagan, spoke on campus Monday night.

Laffer is con­sidered the “father of supply-side eco­nomics,” and is most well-known for the “Laffer Curve,” which can predict the ideal tax rate to max­imize gov­ernment tax revenue by mod­eling the rela­tionship between the two.

His speech, “Trumpo­nomics: An Eco­nomic Overview of America Today,” cen­tered on the nation’s eco­nomic state under Pres­ident Trump, a topic on which Laffer recently wrote about. Working with Stephen Moore, current eco­nomic advisor to pres­ident Trump, Laffer co-authored the book, “Trumpo­nomics: Inside the America First Plan to Revive Our Economy.”

Sophomore Owen Macaulay chose to attend the speech after learning about him in school.

“After studying Laffer’s devel­op­ments as a student, it was inter­esting to hear such a renowned econ­omist give his thoughts about the current eco­nomic state of our country,” Macauley said

In between his story about fighting a kodiak bear and joking about his own height, he focused strongly on out­lining the five pillars of pros­perity: flat tax, spending restraint, sound money, good reg­u­latory policy, and free trade. He con­siders the fol­lowing pillars to be the fun­da­mentals of eco­nomic success for any gov­ernment, evi­denced by the flour­ishing economy during the Trump admin­is­tration.

The first pillar which he empha­sized was the necessity of a low-rate, broad-base, flat tax. This, he said, creates the lowest incentive to avoid reporting income. The broad base leaves room for the lowest amount of loop­holes, so there’s less places to put money aside from taxes. He praised the effort of the Trump admin­is­tration specif­i­cally in regards to this pillar.

“It’s the best first term of any admin­is­tration I’ve ever seen,” he said.

Although he thinks the greatest tax bill in history was Pres­ident Reagan’s, which he worked on, it was tech­ni­cally created during Reagan’s second term.

Sec­ondly, spending restraint is extremely important, Laffer said. Gov­ernment spending is tech­ni­cally tax­ation since the gov­ernment doesn’t create resources. This is where Trump is lacking.

“There’s been no change in gov­ernment spending,” he said. “But with taxes, he’s done a great job.”

Other important pillars are having sound money, meaning an interest rate that isn’t too low or too high, and good reg­u­latory policy, the latter of which  Laffer said Trump has outdone himself.

“There’s no place that Trump has been better than in reg­u­latory policy,” Laffer said. “This is the most amazing admin­is­tration with energy de-reg­u­lation that I’ve seen.”

The fifth pillar is free trade, which is critical to pros­perity, Laffer said. He views America’s free trade policy as a “work in progress.” Based off con­ver­sa­tions with Pres­ident Trump, he said he believes him to be a free trader, despite actions pos­sibly indi­cating oth­erwise. Once again, he echoed his high opinion of the Trump Administration’s eco­nomic achievement.

“Never in such a short period of time has the admin­is­tration accom­plished so much, even trade policy,” Laffer said.

Despite oppo­sition from many con­ser­v­a­tives, even some out­spoken Hillsdale pro­fessors, Laffer said Trump’s position does make sense. Many other coun­tries have more pro­tec­tions and Trump’s tariffs are a way of getting their attention to bring them to the table for the ultimate purpose of a free trade world.

“He is a nego­tiator,” Laffer said. “I think he will be suc­cessful.”

Laffer ended on a glowing overview of Pres­ident Trump’s eco­nomic accom­plish­ments, stating that from a purely eco­nomic stand­point, no admin­is­tration has ever done better. Focusing on the unem­ployment rate, growth rate, and tax revenue specif­i­cally, Laffer high­lighted the Trump administration’s achieve­ments with real-life examples of the tax plan ben­efits.

Sophomore Lindsey Mertz thought Laffer’s praise was sur­pris­ingly reas­suring.

“His optimism about the U.S. economy is important for our gen­er­ation to hear amongst neg­ative voices crying out about U.S. debt leading to our destruction,” she said.

Laffer said he’s extra­or­di­narily happy with how things are going, and he’s looking forward to see what else Pres­ident Trump can do.

“I really believe the best is yet to come,” Laffer said.

 

  • Rogue A.I.

    Too bad supply side eco­nomics don’t work and have failed us over and over since Reagan. This guy needs to be put out to pasture along with his failed ideas.