Arthur Laffer

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Arthur Betz Laffer (pronounced /ˈlæfər/^[1]) (born August 14, 1940 in Youngstown, Ohio), is an American "supply-side" economist who became influential during the Reagan administration as a member of Reagan's Economic Policy Advisory Board (1981-1989). Laffer is also known for the Laffer curve, an illustration of tax elasticity which asserts that, in certain situations, a decrease in tax rates could result in an increase in tax revenues.

Contribution to economics

Although he does not claim to have invented the Laffer curve concept (Laffer, 2004), it was popularized with policy-makers following an afternoon meeting with Nixon/Ford Administration officials Dick Cheney and Donald Rumsfeld in 1974 in which he reportedly sketched the curve on a napkin^[2] to illustrate his argument (Wanniski, 2005). The term "Laffer curve" was coined by Jude Wanniski (a writer for the Wall Street Journal), who was also present. The basic concept was not new: Laffer himself says he learned it from Ibn Khaldun and John Maynard Keynes.^[3]

A simplified view of the theory is that tax revenues would be zero if tax rates were either 0% or 100%, and somewhere in between 0% and 100% is a tax rate which maximizes total revenue. Laffer's postulate was that the tax rate that maximizes revenue was at a much lower level than previously believed: so low that current tax rates were above the level where revenue is maximized.

At the time of the napkin incident, Laffer was on the faculty of the Marshall School of Business at the University of Southern California. Earlier in his USC tenure, Laffer played a key role in the writing of Proposition 13, the California property tax cap initiative that spawned a host of similar laws around the United States and is generally credited with launching the tax revolt of the 1970s and 1980s.

During the mid-1980s, Laffer and many other conservative USC faculty members decamped to Pepperdine University in nearby Malibu; Laffer remained on the faculty for several years.

In 1986, Laffer was a Republican primary candidate for the US Senate in California. (Congressman Ed Zschau won the nomination and lost in the general election to the incumbent Democrat, Alan Cranston).

Laffer is the author and co-author of many books and newspaper articles, including Supply Side Economics: Financial Decision-Making for the 80s.

Laffer received a BA degree in economics from Yale University in 1962. He graduated from Stanford University with an MBA in 1965 and a PhD degree in economics in 1971.

Laffer is Policy Co-Chairman (with Lawrence "Larry" Kudlow) of the Free Enterprise Fund. Despite being identified as a staunch conservative, Laffer has repeatedly enthusiastically admitted on CNBC's Kudlow & Company that he supported Bill Clinton in 1992 and 1996^{[citation needed]}

Professional activities

Arthur Laffer is the founder and CEO of Laffer Associates in Nashville, Tennessee, an economic research and consulting firm that provides global investment-research services to institutional asset managers, pension funds, financial institutions, and corporations.

He sits on the board of directors of several public and private companies. Laffer has been appointed to the advisory board of Sonenshine Partners, an independent investment bank focused on providing integrated strategic, financial and corporate advisory services. In 2004 Laffer joined the Board of Pillar Data Systems, a non-public Data Storage Company funded by Tako Ventures, a funding arm of Larry Ellison. In 2008, Laffer joined the Board of Alpha Theory, a non-public Fundamental Portfolio Optimization software for hedge and mutual funds.

He was named a Distinguished University Professor of Economics by Mercer University (Georgia) in 2008 [1].

On 28 August 2006 Peter Schiff predicts the US Economic crisis on CNBC Channel's Kudlow & Company. Laffer dismissed Schiff's economic worries; he said there was continuing increases in household wealth as a result of good economic, monetary and trade policy. ^[4]

Publications

The following is a partial list of publications for which Arthur B. Laffer is an author (mainly focusing on articles for which he is first author), in descending order by date.

• Arthur B. Laffer, "The U.S. Balance of Payments—A Financial Center View," Law and Contemporary Problems 34 (1), p. 33-46 (1969).
• Arthur B. Laffer, "Vertical Integration by Corporations, 1929-1965," Review of Economics and Statistics 51 (1), p. 91-93 (1969).
• Arthur B. Laffer, "Trade Credit and the Money Market," J. Political Economy 78 (2), 239-267 (1970).
• Arthur B. Laffer and Eugene F. Fama, "Information and Capital Markets" J. Business 44 (3), p. 289-298 (1971).
• Arthur B. Laffer and R. David Ranson, "A Formal Model of the Economy," J. Business 44 (3), p. 247-270 (1971).
• Arthur B. Laffer and Eugene F. Fama, "The Number of Firms and Competition", American Economic Review 62 (4), p. 670-674 (1972).
• Arthur B. Laffer, "Monetary Policy and the Balance of Payments," J. Money, Credit, and Banking Part I 4 (1), 13-22 (1972).
• Arthur B. Laffer and Richard Zecher, "Some Evidence on the Formation, Efficiency and Accuracy of Anticipations of Nominal Yields," J. Monetary Economics 1 (3), p. 327-342 (1975).
• Victor A. Canto, Douglas H. Joines, and Arthur B. Laffer, Foundations of Supply-Side Economics—Theory and Evidence (New York: Academic Press, 1982).
• Arthur B. Laffer, "Reinstatement of the Dollar: The Blueprint," Economic Notes 0 (2), p. 158-176 (1982).
• Arthur B. Laffer, "Vindication," Wall Street Journal (25 May 1984).
• Arthur B. Laffer, "A High Road for the American Automobile Industry," World Economy 8 (3), p. 267-286 (1985).
• Arthur B. Laffer, "Congress throws curve at supply-side cure," Chicago Sun-Times (26 August 1985). Also published as "Supply side: It works," Washington Post p. A15 (20 August 1985).
• Arthur B. Laffer, "The Tightening Grip of the Poverty Trap," ibid., p. 141-159.
• Arthur B. Laffer, "The Complete Flat Tax," ibid., p. 108-140.
• Arthur B. Laffer, "The Ellipse: An Explication of the Laffer Curve in a Two-Factor Model," The Financial Analyst's Guide to Fiscal Policy, p. 1-35 (New York: Greenwood Press, 1986).
• Arthur B. Laffer, "Heightened foreign competition only route for American prosperity," The Journal Record (9 June 1987).
• Arthur B. Laffer and Truman Clark, "Don't blame deficit for market problems," USA Today p. 10A (26 October 1987).
• Arthur B. Laffer and Martin G. Laffer, "Yes, tax the guy behind the tree," Wall Street Journal (6 September 1988).
• Arthur B. Laffer, "America in the World Economy: A Strategy for the 1990s: Commentary," America's Global Interests: A New Agenda, p. 122-125 (London: Norton, 1989).
• Arthur B. Laffer, "Water, water everywhere, not a drop at market prices," Orange County Register p. K01 (3 March 1991).
• Arthur B. Laffer, "Golden State swings its ax at golden goose," Wall Street Journal p. A14 (16 July 1991).
• Arthur B. Laffer, "Is the California Tax Revolt Over? An Analysis of California's Proposition 111," ibid., p. 157-167.
• Arthur B. Laffer and Christopher S. Hammond, "Either California's Housing Prices Are Going to Fall or California's in for One Helluva Rise in Personal Income," Investment Strategy and State and Local Economic Policy, p. 49-64 (London: Quorum Books, 1992).
• Arthur B. Laffer, "Trading Policy Outlook," Industrial Policy and International Trade, p. 175-186, Volume 62 in Contemporary Studies in Economic and Financial Analysis (London: JAI Press, 1992).
• Arthur B. Laffer, "Reaganite's view of Bush," San Francisco Chronicle p. A16 (17 October 1992).
• Arthur B. Laffer, "Creating wealth, not just 'savings'," Wall Street Journal p. A22 (15 October 1996).
• Arthur B. Laffer, "The Reagan-Clinton Presidency," International Economy 12 (2), 22-24 (1998).
• Arthur B. Laffer, "Japan rises again," Wall Street Journal p. A22 (11 October 1999).
• Arthur B. Laffer, "Economist of the Century," Wall Street Journal p. A16 (15 October 1999).
• Arthur B. Laffer and Stephen Moore, "To soak the rich, cut their tax rates," Wall Street Journal p. A26 (24 October 2000).
• Arthur B. Laffer, "Tax Cuts, Then and Now; A veteran of Ronald Reagan's 1981 cuts looks at the Bush plan," Newsweek Web Exclusive (9 February 2001).
• Arthur B. Laffer, "Tax cuts work—and Ireland proves it," The Scotsman p. 14 (21 February 2001).
• Arthur B. Laffer, "So you thought the Fed set interest rates?" Wall Street Journal p. A22 (22 March 2001).
• Arthur B. Laffer, "How to make Dubya a winner? The flat tax," Wall Street Journal p. A16 (31 May 2001).
• Arthur B. Laffer and Thomas J. Martin, "Bullish on Japan," American Spectator p. 28-30 (1 June 2001).
• Arthur B. Laffer, "Europe must reverse the Euro's slide," Wall Street Journal p. A22 (19 July 2001).
• Arthur B. Laffer, "The Fed needs help from a cap-gains cut," Wall Street Journal p. A22 (3 October 2001).
• Arthur B. Laffer, "Real stimulus: A national sales-tax holiday," Wall Street Journal p. A14 (21 November 2001).
• Arthur B. Laffer, "Keep the dollar strong," Wall Street Journal p. A20 (20 May 2002).
• Arthur B. Laffer, "A buying opportunity," Wall Street Journal p. A12 (15 July 2002).
• Arthur B. Laffer, "Wall Street woes—Long-term trends suggest a stock market undervalued," San Diego Union-Tribune p. G1 (21 July 2002).
• Arthur B. Laffer, "We've cut rates, now let's cut taxes", Wall Street Journal p. A12 (November 11, 2002).
• Arthur B. Laffer, "California Drainin'," Wall Street Journal p. A10 (January 13, 2003).
• Arthur B. Laffer and Stephen Moore, "A tax cut: The perfect wartime boost", Wall Street Journal p. A10 (April 8, 2003).
• Arthur B. Laffer, "State of the economy: Tax amnesty—A win-win for everybody", Wall Street Journal p. A15 (June 23, 2003).
• Arthur B. Laffer, "Mowed down by taxes", Wall Street Journal p. A16 (October 2, 2003).
• Arthur B. Laffer, "The Laffer Curve: Past, Present, and Future," Heritage Foundation Backgrounder #1765 (1 June 2004).
• Arthur B. Laffer, "Destination USA," Wall Street Journal p. A8 (January 3, 2005).
• Arthur B. Laffer, "You don't need to read this Bush's lips" Wall Street Journal p. A18 (February 14, 2005).
• Arthur B. Laffer and Stephen Moore, "The (Tax) War Between the States", Wall Street Journal (December 10, 2007).
• Arthur B. Laffer, "The Tax Threat to Prosperity", Wall Street Journal (January 25, 2008).
• Arthur B. Laffer, "That Stimulus Nonsense", Wall Street Journal (February 13, 2008).
• Arthur B. Laffer and Stephen Moore, "New Evidence on Taxes and Income", Wall Street Journal (September 15, 2008).
• Arthur B. Laffer, "The Age of Prosperity Is Over", Wall Street Journal (October 27, 2008).
• Arthur B. Laffer, "Obama Should Forget About Energy Independence", Wall Street Journal (December 17, 2008).
• Rep. Bob Inglis & Arthur B. Laffer, "An Emissions Plan Conservatives Could Warm To", New York Times (December 28, 2008).
• Arthur B. Laffer, "Spend it in Vegas or Die Paying Taxes", Wall Street Journal (April 2, 2009).
• Arthur B. Laffer and Stephen Moore, "Soak the Rich, Lose the Rich", Wall Street Journal (May 19, 2009).
• Arthur B. Laffer, "Get Ready for Inflation and Higher Interest Rates", Wall Street Journal (June 11, 2009)
• Arthur B. Laffer, "The Prognosis for National Health Insurance: A Colorado Perspective, The Independence Institute (August 2009)
• Arthur B. Laffer, "Taxes, Depression, and Our Current Troubles", Wall Street Journal (September 22, 2009)

References

External links

• Arthur Laffer Biography
• Background history of Laffer curve and neoconservative connections
• Jude Wanniski, "Sketching the Laffer Curve," The Yorktown Patriot (14 June 2005)