Art Laffer

[Masshog]

I am meeting (along with 5-10 others) with him in the morning.  Any questions you want me to ask? 

[BlackKnightHogFan]

I am meeting (along with 5-10 others) with him in the morning.  Any questions you want me to ask? 

I guess you have already thought of these but as follows:

1.  His thoughts on the tax policies of BHO.
2.  Thoughts on the trade deficit
3.  His thoughts on corporate taxes and if they will come down.
4.  Thoughts on the national debt and Freddie/Fannie.
5.  And, of course, does he still have his leisure suit.

[Masshog]

I am particularly interested in #5....

[BlackKnightHogFan]

I am particularly interested in #5....

Is that game still out there anywhere.  Great fun!!

[Masshog]

He is a personable guy.... very amiable and very straight forward.  I liked him and I liked his approach to economics.  I had to leave for another meeting before he finished so some of this is second hand. 

Some highlights: He is pretty pessimistic.  He sees the economy as weak and predictably (given his belief in the Laffer curve) does not think that Obama's tax increases are going to do anything but hurt badly.  In terms of McCain (and I thought this argument was much weaker) he thinks that he will be too focused on foreign affairs to do whats needed to fix the domestic economy.  On a brighter note, he thinks that inflation is a non issue, that it will quickly peak and head lower.  Was surprised that he genuinely seemed to like (and maybe will even vote for) Obama.  I thought he might be very partisan given his background, but he talked a lot about how good a president (and how bad a person) Bill Clinton was. 

One of the points he made (and I thought it was timely given my comments in a thread in the politics forum last night) was that when he worked for Regan he was very young.  He loved the feeling of being close to the president and would have done and said almost anything in order to stay close.  He said that luckily Regan never asked him to do anything but to tell the truth about how he felt so he never had to.... but that he would have "lied through his teeth" if it was necessary to his continued access.  He was clearly making the point that many of the economists are really more political animals than they are serious economists. 

All in all, I came out with a very good impression of him..... 

[Masshog]

Oh, and he is looking for quite a nice rally in the DX.... lower commodities. 

[Masshog]

I should have brought my notes home... one other point that he made that was interesting...  They have changed the capital gains rate 16 times.  Each time they lowered it, revenue increased.  Each time they raised it, revenue decreased.  No exceptions. 

[SultanofSwine]

I should have brought my notes home... one other point that he made that was interesting...  They have changed the capital gains rate 16 times.  Each time they lowered it, revenue increased.  Each time they raised it, revenue decreased.  No exceptions. 

But isn't that a "well d'uh" kind of reality. Not that politicians can't see the forrest for the greenbacks.

Lower the rate and more folks will take more profits, increase it and folks will set on the gains. I'm no scientific rocket but that is not a hard concept to grasp.

[Masshog]

But isn't that a "well d'uh" kind of reality. Not that politicians can't see the forrest for the greenbacks.

Lower the rate and more folks will take more profits, increase it and folks will set on the gains. I'm no scientific rocket but that is not a hard concept to grasp.

He went on to say that it was just the kind of data point that many political economists disregard, because it isn't the kind of story their parties want to hear. 

[Biggus Piggus]

I should have brought my notes home... one other point that he made that was interesting...  They have changed the capital gains rate 16 times.  Each time they lowered it, revenue increased.  Each time they raised it, revenue decreased.  No exceptions. 

I'd like to see the data behind that.  Smells fishy.  Very much doubt the relationship is anything but coincidental.  Not that I believe there should be any taxation of capital gains.  It's just a kludge, a way to extract taxes from the people who have all the net worth.

[Masshog]

The only economic presentation that Ive ever been to where there were no handouts.  He spoke off the cuff for the 50 minutes that I was there.  I would think that cap. gains taxes received wouldn't be that hard to find.... should be easy (if I weren't so lazy) to verify. 

[Biggus Piggus]

The only economic presentation that Ive ever been to where there were no handouts.  He spoke off the cuff for the 50 minutes that I was there.  I would think that cap. gains taxes received wouldn't be that hard to find.... should be easy (if I weren't so lazy) to verify. 

Ohhh I get what you were saying, tax revenues.  Yes, I know that's right.  Tax revenues go down (at first) when you raise capital gains taxes, because you get fewer short-term capital gains (people hold longer), and tax revenues go up (at first) when you lower them, because it always triggers a burst of selling.

Beyond that, there's no insidious relationship between tax rates and capital gains.

[Masshog]

You may well be right.  I would want to look at the data in detail before I agreed or disagreed.  Again, I am way to lazy to do the leg work. 

[Fletch]

A reduction in the tax on capital increases the return on investment, providing for the increased accumulation of more capital. The increase in capital tends to yield greater spending and higher income which in turn would increase tax revenues. Just theory, no data to back it up.

[Biggus Piggus]

I just want to point out here that Laffer voted for Bill Clinton twice and regards him as a great president.

[BILLYBOB]

He is a personable guy.... very amiable and very straight forward.  I liked him and I liked his approach to economics.  I had to leave for another meeting before he finished so some of this is second hand. 

Some highlights: He is pretty pessimistic.  He sees the economy as weak and predictably (given his belief in the Laffer curve) does not think that Obama's tax increases are going to do anything but hurt badly.  In terms of McCain (and I thought this argument was much weaker) he thinks that he will be too focused on foreign affairs to do whats needed to fix the domestic economy.  On a brighter note, he thinks that inflation is a non issue, that it will quickly peak and head lower.  Was surprised that he genuinely seemed to like (and maybe will even vote for) Obama.  I thought he might be very partisan given his background, but he talked a lot about how good a president (and how bad a person) Bill Clinton was. 

One of the points he made (and I thought it was timely given my comments in a thread in the politics forum last night) was that when he worked for Regan he was very young.  He loved the feeling of being close to the president and would have done and said almost anything in order to stay close.  He said that luckily Regan never asked him to do anything but to tell the truth about how he felt so he never had to.... but that he would have "lied through his teeth" if it was necessary to his continued access.  He was clearly making the point that many of the economists are really more political animals than they are serious economists. 

All in all, I came out with a very good impression of him..... 

Thanks for the Cliff Notes version of your meeting.  I've heard Laffer speak as well...he's a very interesting guy.

+1.

[BILLYBOB]

I just want to point out here that Laffer voted for Bill Clinton twice and regards him as a great president.

The further away we get from the Clinton Administration, I must admit, the better it looks.  I wonder if we'll feel the same way about W in ten years. 

[SultanofSwine]

Outside of his affinity for skirts, he wasnt bad imo.

W on the other hand, I feel like was and still is simply a pawn for those responsible fro putting him in office.

[HognotinMemphis]

The further away we get from the Clinton Administration, I must admit, the better it looks.  I wonder if we'll feel the same way about W in ten years. 

The 90's were a great time for the economy. After all, Clinton won office based on the strategy of, "it's the economy, stupid." The federal gov't had a surplus after Clinton's time in office and there was no deficit spending. All that changed immediately with 9/11 and all that Bush has done since. In a decade, I don't know how anyone can look back at the Bush terms and think it was a good run or that Bush was a good president.

Bush is exactly the opposite of Clinton...a bad president and leader but a fine, moral human in control of his urges.

[Ash]

The 90's were a great time for the economy. After all, Clinton won office based on the strategy of, "it's the economy, stupid." The federal gov't had a surplus after Clinton's time in office and there was no deficit spending. All that changed immediately with 9/11 and all that Bush has done since. In a decade, I don't know how anyone can look back at the Bush terms and think it was a good run or that Bush was a good president.

Bush is exactly the opposite of Clinton...a bad president and leader but a fine, moral human in control of his urges.

Well put, I don't think anyone will ever look back at the Bush II presidency and regard it as successful.

[Hawgon]

Clinton was a great president for one reason, he basically did nothing.  None of his major programs ever got passed.  There was no national health care or any other number of big spending programs.  The one major thing he did was Welfare Reform.

But primarily, his administration became too bogged down in all the scandals and partisan wrangling with Congress to get much done.  Therefore, the economy rocked on.

Bush on the other hand, has passed Medicare Reform (the largest entitlement program ever), started a war and occupation that is costing billions per week, and lots of other stuff.  It really isn't his fault other than the fact that he is your standard issue dumbass.  It is just the nature of government and any politician to meddle meddle meddle and spend spend spend if given the chance.  Clinton would have been no better if he had gotten the chance.

But all that said, the late 90s and Bill Clinton look better every passing day.

[hog.goblin]

Would like to hear his thoughts 4 years later.  Make it happen Mass...

[Masshog]

Would like to hear his thoughts 4 years later.  Make it happen Mass...

He hasn't come around for awhile.