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Arthur Laffer

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Arthur Laffer
WorksSupply Side Economics
Era20th-century economists
RegionWestern economists
SchoolWestern Economics
Main interests
Economics, Taxation
Notable ideas
Laffer Curve

Arthur Betz Laffer, Sr. (born August 14, 1940) in Youngstown, Ohio, is a supply side economist who became influential during the Reagan administration as a member of Reagan's Economic Policy Advisory Board (1981-1989).

Contribution to Economics

Laffer is best known for the Laffer curve, a curve illustrating tax elasticity which asserts that in certain situations, a decrease in tax rates could result in an increase in tax revenues. Although he does not claim to have invented this concept (Laffer, 2004), it was popularized with policy-makers following an afternoon meeting with Dick Cheney and Donald Rumsfeld in which he reportedly sketched the curve on a napkin[[1] to illustrate his argument (Wanniski, 2005). Economists now refer to this napkin as the "Laffer's napkin of eponymity."[citation needed] 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.[1]

The gist 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 innovation was to conjecture 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 famous napkin[[2] 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. An example of his recent work is an article entitled "Destination USA" concerning the trade deficit, which appeared in the January 3, 2005 The Wall Street Journal. The article argues that the trade deficit is an artifact of the American economy's strong structural features.

Laffer received a BA in economics from Yale University in 1962. He graduated from Stanford University with an MBA in 1965 and a PhD in economics in 1971. He has six children and 4 cats.

Free Enterprise Fund ("FEF"): Arthur Laffer is Policy Co-Chairman (with Lawrence "Larry" Kudlow) of the FEF. FEF has listed five "take action" campaigns on their website (https://www.myfef.org/bin/action.center.election). Four of these campaigns are common conservative financial reforms themes (Repeal Estate Tax, Reform Social Security, Reform Sarbanes-Oxley and Budget Reform). The fifth campaign is to Stop MoveOn.org, an organization formed during the Clinton administration's Monica Lewinsky scandal to promote "moving on" to favorite "progressive" causes, as President Clinton's only really failings were said to be "just about sex." 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

Unbeknownst to him, the computer game character Larry Laffer of the famous Leisure Suit Larry series of games was named after him. Arthur Laffer for years had no idea about the existence of the games until much later when Larry's creator, Al Lowe sent him a letter. Lowe planned to program a new application under the name Laffer Utilities featuring Larry and Lowe asked his permission about it. Laffer's secretary had played the games for years, but never made a connection. Laffer gave the permission and also paid a visit to the Sierra On-line studios.

Professional Activities

Arthur Laffer is the founder and CEO of Laffer Associates in Nashville, 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. Dr. Laffer has been appointed to the advisory board of Sonenshine Partners, a leading independent investment bank focused on providing integrated strategic, financial and corporate advisory services. In 2004 Dr. 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, Dr. 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 [3].

Publications by Arthur B. Laffer

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 Age of Prosperity Is Over", Wall Street Journal (October 27, 2008).
  • Arthur B. Laffer and Stephen Moore, "New Evidence on Taxes and Income", Wall Street Journal (September 15, 2008).
  • Arthur B. Laffer, "That Stimulus Nonsense", Wall Street Journal (February 13, 2008).
  • Arthur B. Laffer, "The Tax Threat to Prosperity", 'Wall Street Journal (January 25, 2008).
  • Arthur B. Laffer, "You don't need to read this Bush's lips," Wall Street Journal p. A18 (February 14, 2005).
  • Arthur B. Laffer, "Destination USA," Wall Street Journal p. A8 (January 3, 2005).
  • Arthur B. Laffer, "The Laffer Curve: Past, Present, and Future," Heritage Foundation Backgrounder #1765 (1 June 2004).
  • Arthur B. Laffer, "Mowed down by taxes," Wall Street Journal p. A16 (October 2, 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 and Stephen Moore, "A tax cut: The perfect wartime boost," Wall Street Journal p. A10 (April 8, 2003).
  • Arthur B. Laffer, "California Drainin'," Wall Street Journal p. A10 (January 13, 2003).
  • Arthur B. Laffer, "We've cut rates, now let's cut taxes," Wall Street Journal p. A12 (November 11, 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, "A buying opportunity," Wall Street Journal p. A12 (15 July 2002).
  • Arthur B. Laffer, "Keep the dollar strong," Wall Street Journal p. A20 (20 May 2002).
  • Arthur B. Laffer, "Real stimulus: A national sales-tax holiday," Wall Street Journal p. A14 (21 November 2001).
  • Arthur B. Laffer, "The Fed needs help from a cap-gains cut," Wall Street Journal p. A22 (3 October 2001).
  • Arthur B. Laffer, "Europe must reverse the Euro's slide," Wall Street Journal p. A22 (19 July 2001).
  • Arthur B. Laffer and Thomas J. Martin, "Bullish on Japan," American Spectator p. 28-30 (1 June 2001).
  • Arthur B. Laffer, "How to make Dubya a winner? The flat tax," Wall Street Journal p. A16 (31 May 2001).
  • Arthur B. Laffer, "So you thought the Fed set interest rates?" Wall Street Journal p. A22 (22 March 2001).
  • Arthur B. Laffer, "Tax cuts work—and Ireland proves it," The Scotsman p. 14 (21 February 2001).
  • 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 and Stephen Moore, "To soak the rich, cut their tax rates," Wall Street Journal p. A26 (24 October 2000).
  • Arthur B. Laffer, "Economist of the Century," Wall Street Journal p. A16 (15 October 1999).
  • Arthur B. Laffer, "Japan rises again," Wall Street Journal p. A22 (11 October 1999).
  • Arthur B. Laffer, "The Reagan-Clinton Presidency," International Economy 12 (2), 22-24 (1998).
  • Arthur B. Laffer, "Creating wealth, not just 'savings'," Wall Street Journal p. A22 (15 October 1996).
  • Arthur B. Laffer, "Reaganite's view of Bush," San Francisco Chronicle p. A16 (17 October 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 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, "Is the California Tax Revolt Over? An Analysis of California's Proposition 111," ibid., p. 157-167.
  • Arthur B. Laffer, "Golden State swings its ax at golden goose," Wall Street Journal p. A14 (16 July 1991).
  • Arthur B. Laffer, "Water, water everywhere, not a drop at market prices," Orange County Register p. K01 (3 March 1991).
  • 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 and Martin G. Laffer, "Yes, tax the guy behind the tree," Wall Street Journal (6 September 1988).
  • Arthur B. Laffer and Truman Clark, "Don't blame deficit for market problems," USA Today p. 10A (26 October 1987).
  • Arthur B. Laffer, "Heightened foreign competition only route for American prosperity," The Journal Record (9 June 1987).
  • 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, "The Complete Flat Tax," ibid., p. 108-140.
  • Arthur B. Laffer, "The Tightening Grip of the Poverty Trap," ibid., p. 141-159.
  • 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, "A High Road for the American Automobile Industry," World Economy 8 (3), p. 267-286 (1985).
  • Arthur B. Laffer, "Vindication," Wall Street Journal (25 May 1984).
  • Arthur B. Laffer, "Reinstatement of the Dollar: The Blueprint," Economic Notes 0 (2), p. 158-176 (1982).
  • 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 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).
  • 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 R. David Ranson, "A Formal Model of the Economy," J. Business 44 (3), p. 247-270 (1971).
  • Arthur B. Laffer, "Trade Credit and the Money Market," J. Political Economy 78 (2), 239-267 (1970).
  • Arthur B. Laffer, "Vertical Integration by Corporations, 1929-1965," Review of Economics and Statistics 51 (1), p. 91-93 (1969).
  • Arthur B. Laffer, "The U.S. Balance of Payments—A Financial Center View," Law and Contemporary Problems 34 (1), p. 33-46 (1969).

References

  1. ^ The Laffer Curve: Past, Present, and Future

(See also Laffer's publications, above.)

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