Imagine you’re in a coffee shop when a man you don’t know sits down uninvited next to you. Scribbling on a napkin and spouting something about “tax cuts pay for themselves,” the man then confidently proclaims:
“You really can't collect much money from upper-income people. They know how to get around taxes.”
You’d probably roll your eyes. You might suspect he was actually there to speak to the president of the local chapter of the College Republicans. You might even worry he was off his meds. Regardless, you would more than likely give him the cold shoulder.
Well, Donald Trump just gave him the Presidential Medal of Freedom, the nation’s highest civilian honor. He is Arthur Laffer, the economist whose supply-snake oil has metastasized into the single-most damaging public policy prescription in the last four decades. And he is just the latest in a parade of conservative charlatans, felons, and failures to be so recognized by the last two GOP presidents of the United States.
Thanks from a grateful nation? Which one?
Before his feting this week of the Trumponomics co-author, the 45th president had already bestowed the same honor on GOP mega-donor Miriam Adelson. (Miriam is the Israeli wife of casino billionaire and Bibi Netanyahu sugar daddy, Sheldon Adelson. While he served in his nation’s armed forces, he lamented in 2010 that it was the wrong one: “The uniform that I wore in the military unfortunately was not an Israeli uniform, it was an American uniform.”) By the time Trump celebrated Mrs. Adelson last November at the White House, the 21st century GOP had already started rewarding its loyalists with presidential medals.
Consider, for example, the late Charles Colson. On December 10, 2008, President Bush honored the convicted Watergate felon and Richard Nixon hatchet man with the second highest award for a civilian. The Presidential Citizens Medal recognizes Americans "who have performed exemplary deeds of service for the nation." Among those services rendered by the convicted Nixon aide turned born-again prison minister, as Slate's David Plotz neatly summarized them:
As special counsel to the president, he was Richard Nixon's hard man, the "evil genius" of an evil administration. According to Watergate historian Stanley Kutler, Colson sought to hire Teamsters thugs to beat up anti-war demonstrators, and he plotted to raid or firebomb the Brookings Institution. He eventually pleaded guilty to scheming to defame Daniel Ellsberg and interfering with his trial.
A Watergate felon returned to the scene of his crimes.
Since then, Colson has stayed active in conservative political causes. With no sense of irony, Colson appeared at the religious right's so-called "Justice Sunday" events. And when he wasn't extracting federal funds for his faith-based prison ministry, Colson was on the front lines of the conservative counterattack against Mark Felt.
When Felt was revealed to be "Deep Throat" in 2005, Colson was among the former Nixon henchmen and current Bush water carriers slandering the former FBI official. The future Bush award winner told the Washington Post on June 1, 2005, "Mark Felt could have stopped Watergate," adding, "Instead, he goes out and basically undermines the administration." Four days later, Colson blasted Felt's disclosure to reporter Bob Woodward in an interview with CNN's Wolf Blitzer, “I don’t think it was a noble act at all.” Other Nixon hagiographers agreed. Henry Kissinger protested, "I don't think it's heroic to act as a spy on your president when you're in high office," while Tricky Dick aide and then-MSNBC regular Pat Buchanan called Felt a "traitor." Monica Crowley, Rush Limbaugh, and Ann Coulter also hurried to defend Nixon's legacy (which his one-time aide Ben Stein glowingly described as a "lying, conniving peacemaker") from the media.
As it turned out, peacemakers did not rate a place among George W. Bush other presidential medal recipients. But the failed architects and leaders of Bush’s calamity in Iraq were richly rewarded.
Proof that nothing succeeds like failure.
On December 14, 2004, the just-reelected Bush staged a trifecta of tragedy at the White House. In one ceremony, President Bush presented the Presidential Medal of Freedom to CIA Director George Tenet, General Tommy Franks, and Ambassador L. Paul Bremer. Tenet, of course, had called the pre-war intelligence regarding Saddam Hussein’s weapons of mass destruction “a slam dunk.” Franks commanded the American forces that invaded Afghanistan and Iraq, and Bremer was the Viceroy of the Coalition Provisional Authority in Iraq. As the Washington Post reported at the time:
In the East Room of the White House, Bush said he had chosen the trio because they "played pivotal roles in great events" and made efforts that "made our country more secure and advanced the cause of human liberty."
But Tenet’s slam dunk had already been proven catastrophically wrong. Franks’s undersized force in Afghanistan failed to trap Osama Bin Laden in Tora Bora in December 2001; the woefully inadequate U.S. occupation force in Iraq was caught unprepared for the bloody insurgency that broke out within weeks of Bush standing in front of a “Mission Accomplished” banner aboard the USS Abraham Lincoln. And Bremer was responsible for the cataclysmic “De-Baathification” program in Iraq, most importantly the disbanding of the 400,000-man Iraqi Army. (Bremer later released letters confirming that Bush approved his decision to let those tens of thousands of armed and overwhelming Sunni men loose on the streets of Iraq.) It’s no wonder Paul Rieckhoff of Iraq & Afghanistan Veterans of America (IAVA) said Bush’s medals for the trio were "a slap in the face to the troops" from "an administration that loves the big PR move. … It validates how out of touch Washington is with the reality of what is on the ground in Iraq."
But then again, as Defense Secretary Donald Rumsfeld infamously said, “You go to war with the army you have, not the army you might want or wish to have at a later time.” As it turned out, he already had a Presidential Medal of Freedom from Gerald Ford in 1977. When he retired in late 2006 after a groundswell of opposition from top generals, Rumsfeld had to settle for a retirement ceremony attended by President Bush and Vice President Cheney.
Given that track record of rewarding loyalty and hyper-partisanship, it’s no surprise the Republican politicians and their water carriers began to routinely call for medals to be bestowed on the GOP’s miscreant of the month. In the fall of 2007, John Gibson of Fox News declared that the identity of covert CIA operative Valerie Plame “was about an anti-Bush cabal at the CIA" that needed to be "rooted out."
"I'm the guy who said a long, long time ago that whoever outed Valerie Plame should get a medal. And if it was Karl Rove, I'd pin it on him myself."
Well, Rove didn’t get indicted or a medal. But Dick Cheney’s chief-of-staff Scooter Libby did get indicted and convicted for perjury and obstruction of justice in the putting of Plame. Libby didn’t get a medal, either. But he got his sentence commuted by Bush and a pardon from Donald Trump.
The Bush administration regime of detainee torture, too, prompted right-wingers to call not for prosecution, but presidential medals. When it was revealed in late 2007 that Jose Rodriguez, then the head of the CIA’s clandestine service, had ordered the destruction of roughly 100 videos of prisoners undergoing enhanced interrogation techniques, Linda Chavez argued “Destroying CIA Tapes Deserves a Thank You.”
In the next few months, his name will likely be dragged through the mud, and he will be vilified as a rogue official engaged in a massive cover-up. I think he deserves a medal...
Even though he is likely to become a scapegoat, what he did was right. He protected not just his men but all of us. I, for one, thank him. [Emphasis mine.]
Supporting Rodriguez’s decision at the time was a CIA official named Gina Haspel. She is now the Director of the CIA.
You can’t discuss torture without mentioning Judge Jay Bybee, who along with John Yoo wrote the Bush administration memos authorizing enhanced interrogation techniques. Bybee was nominated and confirmed to a federal judgeship in 2003. But when President Obama ordered the public release of the “torture memos” in April 2009, some called for Bybee’s removal from the bench. But not Rep. Peter King (R-NY). King argued that Judge Bybee should be honored, not punished for his role in sanctioning the violation of U.S. and international law:
"I think that Judge Bybee should be given a medal for what he did. But even if I disagreed with those memos, these are memos written in good faith. These well written, well reasoned memos. People may disagree with them, but he belongs on the bench. He should stay on the bench. And I think talk of impeaching him or going after him is again the worst type of political vindictiveness." [Emphasis mine.]
As for the president himself, Rep. King concluded in 2010 that for the waterboarding of Khalid Sheikh Mohammed, Bush “should get a medal.”
All of which brings us back to President Trump’s civil deification this week of Arthur Laffer. As Trump put it during the Oval Office ceremony on Wednesday:
“Few people in history have revolutionized economic theory like Arthur Laffer. I’ve heard and studied the Laffer curve for many years. A very important thing you did, Art.”
Important, but not beneficial. Being influential and being correct are two very different things. Long before it mastered the mass production of "fake news," the Republican Party propagated its Ur-lie that "tax cuts pay for themselves." Almost from the moment that Arthur Laffer first sketched his now-famous curve on a napkin in 1974, right-wing pundits, politicians, and propagandists have declared as an article of faith the belief that tax cuts incentivize so much economic growth that revenues to Uncle Sam will be at least as high as they would have been without the reduction in rates.
Unfortunately for the American people, four decades of supply-side snake oil have produced only mushrooming national debt and record-high income inequality. Far from paying for themselves, the Reagan, Bush and now Trump tax cuts delivered a windfall only for the wealthy while unleashing oceans of red ink from the United States Treasury. (Of course, the other objective of draining Washington's coffers in order to add to the bulging bank accounts of the rich was to get government "down to the size where we can drown it in the bathtub.") It's no wonder that by 2015 even Keith Hall, the man handpicked by the Republican majority on Capitol Hill to head the nonpartisan Congressional Budget Office (CBO), acknowledged the obvious:
"No, the evidence is that tax cuts do not pay for themselves. And our models that we're doing, our macroeconomic effects, show that."
The passage of time has not made the GOP falsehoods any truer. Consider, for example, Senator Majority Leader Mitch McConnell. Despite a mountain of evidence to the contrary, McConnell declared himself “totally confident” that the TCJA passed by the Senate will not add to the deficit, adding:
“I think it's going to be a revenue producer.”
Now, there’s no need to stop me if you think you’ve heard this one before; you have. That’s because back in 2010, then-Minority Leader McConnell used the same talking point to defend the extension of the Bush tax cuts of 2001 and 2003 for the richest Americans. Defending that windfall for the wealthy that would drain $70 billion annually from the United States Treasury, the No.2 Senate Republican Jon Kyl of Arizona proclaimed, “You should never have to offset the cost of a deliberate decision to reduce tax rates on Americans." McConnell rushed to Kyl’s defense, announcing that his fiscal fraud was in fact now Republican orthodoxy:
"There's no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increased revenue because of the vibrancy of these tax cuts in the economy. So I think what Senator Kyl was expressing was the view of virtually every Republican on that subject."
But then as now, Republican agreement on that view doesn’t make it a fact. History tells us so. And that history starts, it turns out, with Ronald Reagan’s arrival in the White House in 1981.
The arc of the Laffer Curve is short, but it bends towards fiscal catastrophe.
As most analysts predicted, Reagan's massive $749 billion supply-side tax cuts in 1981 quickly produced even more massive annual budget deficits. Combined with his rapid increase in defense spending, Reagan delivered not the balanced budgets he promised, but record-setting debt. Even his OMB alchemist David Stockman could not obscure the disaster with his famous "rosy scenarios."
Forced to raise taxes 11 times to avert financial catastrophe, the Gipper nonetheless presided over a tripling of the American national debt to nearly $3 trillion. By the time he left office in 1989, Ronald Reagan more than equaled the entire debt burden produced by the previous 200 years of American history. It's no wonder that three decades after he concluded "the supply-siders have gone too far," former Arthur Laffer acolyte and Reagan budget chief David Stockman lamented:
[The] debt explosion has resulted not from big spending by the Democrats, but instead the Republican Party's embrace, about three decades ago, of the insidious doctrine that deficits don't matter if they result from tax cuts.
The history of the Bush years, too, shows that the arc of the Laffer Curve is short but bends toward fiscal catastrophe. After Ronald Reagan tripled the national debt, George W. Bush nearly doubled it again.
Inheriting a federal budget in the black and a CBO forecast for a $5.6 trillion surplus over 10 years, Bush quickly set about dismantling the progress made under Bill Clinton. In 2001, Bush signed a $1.4 trillion tax cut, followed by another $550 billion round in 2003, the first war-time tax cut in modern American history. (It is more than a little ironic that Paul Ryan at the time called the tax cuts "too small" because he believed the estimated surplus Bush would later eviscerate would be even larger than predicted.) In keeping with Republican orthodoxy that "tax cuts pay for themselves," Bush confidently proclaimed:
“You cut taxes and the tax revenues increase.”
As it turned out, not so much.
As CNBC summed it up, tax cuts only pay for themselves “in fairyland.”
Federal revenue did not return to its pre-Bush tax cut level until 2006. As a share of American GDP, tax revenues peaked in 2000—that is, before the Bush tax cuts of 2001 and 2003. Analyses in 2010 by the Center on Budget and Policy Priorities concluded that the Bush tax cuts accounted for half of the deficits during his tenure and if made permanent, over the next decade would cost the U.S. Treasury more than Iraq, Afghanistan, the recession, TARP, and the stimulus—combined. By the time he shuffled out of the Oval Office in January 2009, Bush bequeathed a $3.5 trillion budget and a $1.2 trillion annual deficit to his successor, Barack Obama.
Republican leaders were warned, but they persisted. "It's not the marginal tax rates,” future House Speaker John Boehner declared in 2010, “That's not what led to the budget deficit.”
“The revenue problem we have today is a result of what happened in the economic collapse some 18 months ago.
We've seen over the last 30 years that lower marginal tax rates have led to a growing economy, more employment and more people paying taxes.”
Of course, Boehner was wrong. It’s not just that the U.S. economy almost always does better under Democratic presidents (Barack Obama was no exception). As the historical record shows, America has enjoyed faster economic growth, higher incomes, and greater job creation when taxes are higher—even much higher.
Sorry, Laffer: GDP and employment grew faster when taxes were higher—even much higher.
A 2012 survey of many of the nation's leading economists conducted by the University of Chicago Booth School of Business gave Laffer’s thesis an F. In a nutshell, not a single one of the economists surveyed agreed that "a cut in federal income tax rates in the U.S. right now would raise taxable income enough so that the annual total tax revenue would be higher within five years than without the tax cut."
Zero economists surveyed agreed that tax cuts pay for themselves.
In his comments, David Autor of MIT pointed out, "Not aware of any evidence in recent history where tax cuts actually raise revenue. Sorry, Laffer." Former Obama administration economist and current University of Chicago professor Austan Goolsbee put it this way:
“Moon landing was real. Evolution exists. Tax cuts lose revenue. The research has shown this a thousand times. Enough already.”
Enough, indeed. As the Washington Post pointed out just this week:
Last month, the nonpartisan Congressional Research Service issued a report showing that the 2017 Trump federal tax cuts championed by Laffer have not led to higher economic growth. Laffer has said his policies simply need more time to bear fruit.
"Basically, it was a way to have your cake and eat it too,” fellow Reagan Revolutionary Bruce Bartlett explained this week. "So if you wanted to have a tax cut, you had to either pay for it by raising other taxes, cutting spending or come up with some gimmick like the Laffer Curve to simply assert that it wouldn't lose revenue.” Like David Stockman, Bartlett has sworn off the supply-side Kool Aid. Tracing its origins back to the 14th century, the tax historian speaks of the Laffer Curve as a type of alchemy which tried to turn bullshit into gold.
As for Stockman, he, too, has been mugged by reality when it comes to Arthur Laffer, the modern-day Lysenko of economics. As the Washington Post reported:
“He more than any single living person is responsible for the GOP’s cowardly betrayal of its historic commitment to fiscal rectitude,” former Reagan budget director David Stockman told NPR via email. He lambasted Laffer as “the greatest Fake Economist to ever come down the pike.”
Which leaves us with this lesson. If Arthur Laffer sits down next to you at that coffee house, just tell him this. “You shouldn’t have gotten a Presidential Medal of Freedom. You should have gotten life.”
