Skip to main content

I've always called it "the Laffable Curve".  That is, the entirely bogus economic "theory" (less "theory" than assertion) that cutting marginal tax rates increases income tax revenues.  It never was true, it was an insult to common sense that it was ever rolled out on a public stage.  Unfortunately, the result of that rollout  was further proof of the accuracy of Mark Twain's observation, "The problem with common sense is that it isn't very common."

So it was with no little amusement that today surfing the web that I ran across this item at Gawker:

Supply-side Hero Arthur Laffer Sued for Hyping Ponzi Scheme.  It was with some disappointment that I discovered it wasn't for his public policy prescriptions, but rather a purely privatized "investment plan".

Excerpts below the Doodlebug.

Laffer gave us the Laffer Curve and was a prime architect of Reaganomics; he's so dreamy to tax-haters that Newt Gingrich speaks his name, and touts his endorsement, with reverence. Turns out he's also—at least according to 52 investors who are suing him in Texas for fraud, negligence, and breach of fiduciary duty—a con man who lent his name to a Ponzi Scheme.

The plaintiffs accuse an investment fund called Laffer Frishberg Wallace Economic Opportunity Fund, of which Laffer was a principal, of fraudulently funneling investor dollars into a radio company called BizRadio that the firm's managers were tight with.

Laffer, it turns out, was a radio personality for the failing network at the same time his investment firm was funneling other people's money into the venture—along with his partner (and fellow defendant) Daniel Frishberg, he offered "top-level insights into the world-wide markets...using language and stories that everyone can understand and enjoy." Frishberg, the complaint notes, was the target a fraud lawsuit from the Securities and Exchange Commission in 2009.

Still, our entire establishment continues to act as though they truly believe that his Economic Doctrine was anything but another predatory financial scheme.  To this day one repeatedly hears from the political class that "cutting tax rates increases revenues" and not solely from one side of the aisle.  Unfortunately, the doctrine of "sovereign immunity" makes it illegal to sue the federal government for practicing predatory financial fraud on the entire nation, so it is unlikely that anyone will ever be held accountable for that much greater crime fostered by Laffer.

Originally posted to Hic Rhodus, Hic Salta! on Sat Jan 14, 2012 at 07:29 PM PST.

Also republished by The Amateur Left.

Your Email has been sent.
You must add at least one tag to this diary before publishing it.

Add keywords that describe this diary. Separate multiple keywords with commas.
Tagging tips - Search For Tags - Browse For Tags


More Tagging tips:

A tag is a way to search for this diary. If someone is searching for "Barack Obama," is this a diary they'd be trying to find?

Use a person's full name, without any title. Senator Obama may become President Obama, and Michelle Obama might run for office.

If your diary covers an election or elected official, use election tags, which are generally the state abbreviation followed by the office. CA-01 is the first district House seat. CA-Sen covers both senate races. NY-GOV covers the New York governor's race.

Tags do not compound: that is, "education reform" is a completely different tag from "education". A tag like "reform" alone is probably not meaningful.

Consider if one or more of these tags fits your diary: Civil Rights, Community, Congress, Culture, Economy, Education, Elections, Energy, Environment, Health Care, International, Labor, Law, Media, Meta, National Security, Science, Transportation, or White House. If your diary is specific to a state, consider adding the state (California, Texas, etc). Keep in mind, though, that there are many wonderful and important diaries that don't fit in any of these tags. Don't worry if yours doesn't.

You can add a private note to this diary when hotlisting it:
Are you sure you want to remove this diary from your hotlist?
Are you sure you want to remove your recommendation? You can only recommend a diary once, so you will not be able to re-recommend it afterwards.
Rescue this diary, and add a note:
Are you sure you want to remove this diary from Rescue?
Choose where to republish this diary. The diary will be added to the queue for that group. Publish it from the queue to make it appear.

You must be a member of a group to use this feature.

Add a quick update to your diary without changing the diary itself:
Are you sure you want to remove this diary?
(The diary will be removed from the site and returned to your drafts for further editing.)
(The diary will be removed.)
Are you sure you want to save these changes to the published diary?

Comment Preferences

Angie in WA State, DeminNewJ, Chi, Odysseus, deben, pHunbalanced, emal, DebtorsPrison, LynChi, cotterperson, eeff, TX Unmuzzled, gjohnsit, wenchacha, jancw, tarminian, Gustogirl, bronte17, litho, Minerva, mrblifil, otto, MisterOpus1, farmerhunt, ivote2004, slatsg, mollyd, Bill Roberts, fumie, Cedwyn, hopeful, danthrax, Noodles, Bluehawk, inclusiveheart, zett, zerelda, Sembtex, jcrit, eve, Josiah Bartlett, rapala, gammarock, joanneleon, Bluesee, radarlady, Tinfoil Hat, NoMoreLies, Ckntfld, JohnB47, ChemBob, zamrzla, YucatanMan, jimstaro, Ice Blue, markdd, Shotput8, LivesInAShoe, peacestpete, mightymouse, Orinoco, Russgirl, mskitty, Lefty Coaster, erratic, gatorcog, CTLiberal, middleagedhousewife, llbear, SingerInTheChoir, Dianna, BB10, kurt, SD Goat, Statusquomustgo, andrewj54, BeerNotWar, DBunn, seabos84, timewarp, pfiore8, SpecialKinFlag, Matt Z, terabytes, ballerina X, Moderation, jhop7, pioneer111, Wreck Smurfy, bewild, Empower Ink, gfv6800, OleHippieChick, Involuntary Exile, KJG52, Its any one guess, Greyhound, Calamity Jean, tofumagoo, hwmnbn, pickandshovel, Jeff Y, catly, glendaw271, petulans, luckylizard, Mike Taylor, David Futurama, oldliberal, Bule Betawi, Throw The Bums Out, bobatkinson, h bridges, CamillesDad1, EquationDoc, MKSinSA, TheOpinionGuy, asym, kevinpdx, IreGyre, sfarkash, Amber6541, pyegar, DiegoUK, ZedMont, Onomastic, annieli, anyname, thomask, poliwrangler, randomfacts, MattYellingAtTheMoon, googie, aerie star, Azazello, Cordyc, Siri, molecularlevel, Eric Nelson, Trotskyrepublican, Celtic Pugilist, radical simplicity, Arahahex, Olkate, PowWowPollock, Kinak, Illinois IRV, The grouch, Markoff Chaney, Mr Jones

Subscribe or Donate to support Daily Kos.

Click here for the mobile view of the site