Laffer Laughs Last
Shorter Arthur Laffer:
Obama Should Forget About Energy Independence
The only way to get there is job-killing taxes.
- If you think misinforming the business community is easy, try being like, “Dudes, we must buy lots of oil from overseas because embargoes only make the Arabs mad,” and like, “Alternative energy sucks because carbon taxes will totally wreck our economy,” while acting the whole time like, “Duh, I have no idea that the point of creating alternative energy sources is to create so-called ‘alternative energy sources.'”
‘Shorter’ concept created by Daniel Davies and perfected by Elton Beard. We are aware of all Internet traditions.™
Note: Jude Wanniski was the intellectual architect of supply-side economics and a former editor of the Wall Street Journal editorial section. Before his death in 2005, the Falstaffan Wanniski spent the wingnut street cred he had accrued over a lifetime by writing powerfully against the war in Iraq and the ‘imperial’ presidency of George W. Bush, and against the phenomenon of neoconservatism in general, without fundamentally changing the politics that had made him an icon of the postwar conservative movement. Arthur Laffer, the colleague after whom Wanniski named the supply-side deus ex machina, the Laffer Curve, has proven infinitely more adaptable.
HTML adds: Quoth Laffer:
If a carbon tax increase were offset dollar-for-dollar with an income tax rate cut, I for one would strongly support the policy. The economy would benefit because the progressive income tax does far more damage than a carbon tax would, and we’d use less oil. It’s a win-win situation. Yet this perspective appears to be totally outside the Obama team’s ken.
Right. Incidentally, this proposal is also, um, central to the point of David Frum’s “new” Republicanism. “New” actually meaning it’s just the most recent way by which wingnuts hope to soak the poor and send a windfall to the rich. Or in G. H. W. Bush-speak, “progressive taxes, bad; regressive taxes, good.” But look at the cute little wingnuts, so eager to make deals, cooperate, be bi-partisan. Aren’t they trying? If only those meanie liberals would stop noticing the wingers’ transparent bad faith! If only those halitosic liberals, in their Bad Galbraith way, would stop huffing and puffing about wingnuts’ ill-disguised attempts to enoble the crudest kind of selfishness — which is too, is too, a virtue, just as St. Ayn said it was (not to mention St. Rush’s corollary: “Tax the Poor!” which just makes sense, you know?). If only! Well, say Frum and Laffer more in sorrow than anger, if you won’t work with us when we’re trying to reach out to you, we’ll be forced to work against you. Why can’t liberals be reasonable?
HTML adds MOAR: Garry Wills’s take on Arthur Laffer, from Reagan’s America.
Artemis Gordon! You bastard!
Jebus, Laffer is all over the map on this one.
He’s right on here. It’s a stupid symbolic, somewhat nationalistic, concern. Oil is sold in a global market, not nation to nation. What matters is that we develop non-carbon sources of energy, preferably widely and non-centrally distributed.
Ummm, but didn’t we just realize that independence doesn’t make any sense? So then who cares if they are anti-American since they don’t actually supply us with the oil but rather sell it on a global market?
Who the fuck is talking about embargoes?
This asshat has an economic theory named after him and he writes three consecutive idiotic sentences?
That picture is also in the dictionary next to the word “discredited”.
I was about to get angry (or rather fixin’ to get mad, since I’m from Georgia), but then I realized that you’re pretty much right. A lot of people who want “energy independence” want to drill in Alaska and the Gulf, so it’s not like supporting energy independence automatically means opposing our current ridiculous levels of carbon pollution.
So I agree, we definitely need to focus more on cleaner, more renewable energy, rather than “independent” energy.
Well, to be fair, it is a pretty asshattery sort of economic theory.
I still remember Martin Gardener’s (SP?) take down of the Laffer Curve in SciAm lo these many years ago. But I guess that being a joke and the subject of ridicule is something you get used to after thirty years. It’s all he has. If he had to survive on intellectual merit he’d being asking you if you’d like fries with that cheesburger.
Laffer, Wanniski? Look like a good time to do a refresher on The Feast of the Wingnuts.
slightly longer shorter Laffer: thank you ibn Saud may I have another.
The Platypus of world domination is not in the office this week please leave all your numbers to us and we’ll have you after the beep .
That cracked me up. Whoever you are, I love you.
Arthur Laffer, the colleague after whom Wanniski named the supply-side deus ex machina, the Laffer Curve
First drawn (possibly apocryphally) on a napkin – with no measure to the scales. So therefore worthless.
Caption:
Million to one chance, Doc. Million to one.
From Jennifer’s link:
“Laffer quickly suffered a bout with infamy when he made a wildly unconventional calculation about the size of the 1971 Gross National Product [at the Office of Management and Budget], which was far more optimistic than estimates elsewhere. When it was discovered that Laffer had used just four indicators to arrive at his figure– most economists used hundreds if not thousands of inputs–he became a Washington laughingstock. Indeed, he turned out to be horribly wrong. Laffer left the government in disgrace and faced the scorn of his former academic colleagues yet stayed in touch with Wanniski, whom he had met in Washington, and continued to tutor him in economics.”
This explains so much about his gleeful acceptance by wingnuts everywhere. Being horribly, laughably, panifully wrong is key to the wingers’ sense of who is qualified on any given topic.
Removed ‘somewhat’ from ‘Falstaffian,’ after looking at the Chait piece again.
I used to follow Wanniski’s stuff in ’03 and ’04, before and during the early phases of the war, and I think Chait was assing around in not mentioning any of the anti-war or anti-Bush Administration material. Wanniski was right about a lot of things that Chait (and TNR) got very wrong.
And yet, there’s no denying that Wanniski met the criteria of a crackpot in every respect.
Waal, it’s pretty clear that we can’t replace all our current oil use with oil and gas solely extracted in the continental US and the Gulf. So it seems to me that any “independence” must necessarily include non-carbon-based sources as well, and in large amounts.
Glad you picked up this jackass today Gav – I saw that in the WSJ this AM and promptly had to convince my eyebrows to leave my hairline and return to their normal station.
“Oh noes! If we use less oil gas will be $20/gal.”!!!
D00d obviously skipped a few Econ classes, here and there.
Or showed up stoned out of his mind to a few too many.
And yet, there’s no denying that Wanniski met the criteria of a crackpot in every respect.
and
Being horribly, laughably, panifully wrong is key to the wingers’ sense of who is qualified on any given topic.
This works especially well when you can deliver your crazy-ass crackpot idea right to the people who can make it happen.
Mencken! Dude!
(Agent Smith voice) “We…missed you…”
And yet, there’s no denying that Wanniski met the criteria of a crackpot in every respect.
and
Being horribly, laughably, panifully wrong is key to the wingers’ sense of who is qualified on any given topic.
This works especially well when you can deliver your crazy-ass crackpot idea right to the people who can make it happen.
Can’t we just start rendering these asshats into biofuel and kill two birds with one stone?
Laffer: “The platitude of “energy independence” makes zero economic sense.”
Three paragraphs later:
“Offshore drilling would also further the goal of decreasing U.S. reliance on oil from hostile nations without losing the beneficial gains from trade.”
Am I “nutz,” or does the second sentence contradict the first?
Am I “nutz,” or does the second sentence contradict the first?
Organic inconsistency is another hallmark of wingnuttistanianism.
But but but…isn’t Obama proposing significant income tax cuts? Of course, they’re only for worthless poor people making less than a paltry $200k, but still.
Though right now a carbon tax might not be the best idea. The extra cost will just wind up being dumped in the laps of energy consumers anyway. Hows about we withdraw from Iraq ASAP and use those billions of dollars saved to directly fund research, development, and production of renewable energy?
Some quick research and back-of-the-envelope calculation would suggest that mass production of (current technology) photovoltaic cells costs about $1 million per (peak) megawatt. Wind farms, about the same. Yer average fossil fuel or nuculur power plant produces about 1000MW. A billion a pop sounds like a pretty good deal to me.
“…look at the cute little wingnuts… Aren’t they trying?”
Very.
And what, besides naked-ass corporate whoring, would possess someone to lobby for renewable, cleaner, and ultimately, cheaper, energy?
Well, I guess I answered my own question…
And of course, I meant:
promptly had to convince my eyebrows to leave my hairline and return to their normal station.
eyebrows, huh? with me, it’s the permanent bruise in the middle of my chest from the jaw dropping there on a regular basis.
Laffer makes teh Baby Adam Smith cry.
It’s the most expensive way to make electricity that doesn’t involve literally burning wads of twenties, once you factor in the heinously expensive decommissioning process that all reactors must be subjected to after their all-too-brief useful shelf-life – & that pesky toxic/radiological waste issue (you know, the one that kills everything it touches & that today, half a century later, we still have NO FUCKING ANSWER for) … & by 2020 or so the level of global output from nuclear will likely be flat or will actually have FALLEN as by that time many plants in the west & the former Warsaw Pact will have gone offline.
One wonders if he’d be just as enthusiastic about cutting Pentagon spending by, oh, let’s say, 75%, in the hopes of somehow paying for tax cuts that’ll suckerpunch a debt-drowning government that just gave away three trillion or so to its fat-cat buddies on Wall Street – or just as delighted not to have those pesky road-crews, teachers, civil engineers & other riff-raff cluttering up his supply-side Utopia with their goofy essential services.
Or maybe he’d just tell Obama to sell ad space on Old Glory – the flag would look way happier with Golden Arches & Microsoft logos than those boring old white stars, amirite?
He drew his economic theory on a reastaurant napkin?
I’m surprised he didn’t use toilet-paper.
I’m surprised he didn’t use toilet-paper.
Maybe he did. I would not be surprised to find that Reaganomics were based on a misinterpreted poo smear.
“Offshore drilling would also further the goal of decreasing U.S. reliance on oil from hostile nations without losing the beneficial gains from trade.”
If I didn’t know better, I’d think these guys got all their information about trade from playing Civilization. Maybe they did.
halitosic liberals … Bad Galbraith
There’s some heavy-duty time to be served in Purgatory for that one.
i’m trying desperately to squeeze in a laff-olympics reference, but i’m going to withold until this website matches hanna barberra hits with a dollar-for-dollar income tax rate cut.
You won’t believe me, but I was going to caption the Cap’n Ed pic below with a Hair Bear Bunch reference.
Laffer demonstrates once again the profundity, depth, and intellectual consistency of conservative thought, particularly on economic issues. /s
Don’t these people get tired of being wrong all the time?
Galbraith had Laffer’s number with this:
“The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.”
The “Laffer” curve is perhaps the most aptly named item in all of economics, seeing as how it is truly a “laugher”. No serious economist actually believes it works the way Laffer et al. claim it does. To quote Nobel Economics Prize laureate James Tobin, “[t]he ‘Laffer Curve’ idea that tax cuts would actually increase revenues turned out to deserve the ridicule with which sober economists had greeted it in 1981.” Even Poppy Bush, in one of his saner moments during the 1980 Republican presidential campaign, called it “voodoo economics”.
The Laffer Curve is simply an inverted U-shaped graph, with government revenue measured on the vertical axis and tax rate on the horizontal axis. It is, indeed, generally acknowledged by economists that, at some point, the tax rate would be so high as to completely discourage working (e.g., if the tax rate is 100%, presumably nobody will work [not necessarily true, actually; that’s another discussion]). The difficulty is determining where that point is.
The adherents of “supply-side” economics (sometimes referred to, at least by me, as “Don’t piss on my leg and tell me it’s raining” economics) would have us believe that our current tax rate puts us on the right-hand side of the curve. If that were actually true, lowering the tax rate would indeed have the effect of raising taxes.
Problem is, real (i.e., non-“supply-side”) economists have calculated that the U peaks at a tax rate of roughly 65%. Given that our current maximum rate is 36%, and the effective rate is maybe half that, we are obviously nowhere near the point where lower rates will equal higher tax revenues, nor have we ever been, now will we be any time soon (certainly not in my lifetime).
The fact that there are nominally intelligent and/or well-educated folks who actually believe that we are on the right-hand side of the curve is primarily a testament to the culture of greed that Reagan et al. promoted in the 80s that most of the American populace seems to have adopted, and the effectiveness of the right-wing noise machine.
To be as polite as I can be, the Laffer Curve and its associated “supply-side” economics are complete and utter bullshit.
And here’s a really scary footnote: in Ferris Bueller’s Day Off, there is a scene where Ben “Darwinism Caused the Holocaust” Stein explains the Laffer Curve to a group of students at the high school. (No, he doesn’t mention “Intelligent” Design.)
Problem is, real (i.e., non-”supply-side”) economists have calculated that the U peaks at a tax rate of roughly 65%.
Funny how that wasn’t a problem during the Eisenhower administration when the economy boomed with a top marginal rate over 90%.
DrDick —
Indeed. The effect of high marginal is greatly overstated by those opposed to them.
Furthermore, the 65% peak of the U curve refers to the overall tax rate.
Supply-side/Laffer Curve economic analysis is roughly akin to saying that we should reduce the size of pigs because, if they had wings and could fly, they would block out the sun.
Obviously, that should be “high marginal rate” in the first graf.
chi-chi-chi-chia! chia-head.
I’ve always enjoyed Laffer’s bodice-ripping romanic novels….
How would a carbon tax that, uh, meant the total taxes payed by carbon-emitting sources went down, reduce the likelyhood of those sources continuing to emit carbon?
‘The more pollution I put out, the less taxes I pay! What a great idea!’
What?
The other thing that kills me is that otherwise intelligent people don’t understand why a progressive tax rate is fair, and a flat tax rate would be utterly unfair. I guess they figure if they have money left over to throw away on video games and shit*, poor people must, too!
*Not knockin’ it, I throw money away on video games.
We are witnessing the bureaucrats at their finest. They do not mean a word that they say, but they have learned how to say certain things that appeal to their audience’s prejudices, superstitions, ego, and greed. They paint a fantasy that fools can believe in, because they are plausible; though none of them want to be seen by their contemporaries hanging out with a person who believes them. There is one exception that permits associating with a fool – when one is using him. The use must serve a commonly known purpose or no one will believe he is using the fool, and the bureaucrat will be suspected of “associating”. The thought of associating is enough to send a cold chill down one’s spine, because of the unsubstantiated claim that foolishness is contagious. Most bureaucrats only experience a slight case of nausea, but some are diagnosed as clinically paranoid.
pOnion: Duh.
Mz,
Thank you for your time.
Mz,
Thank you. Time is precious.
I got nuthin’ except “hobbit televangelist”.
Laffer: “The platitude of “energy independence” makes zero economic sense.”
And:
“Offshore drilling would also further the goal of decreasing U.S. reliance on oil from hostile nations without losing the beneficial gains from trade.”
Once more with the game of pretending if we drill here, somehow those goodly oil companies will sell it to us for cheaper than the global market price, bein’ as its Murikan oil from Murikan ground. Plus Murikan oil is never, ever sold to a country other than Murika (see: pipeline, Alaska, oil sales to Japan). This was one of the top 3 stupid memes from McInsane/Nain’Palin 08, and every drooling wingnut fellow traveler bought it right down to the pole.
You know, if you’re to the right of Adam Smith, expect to get bitchslapped by the invisible hand.