Early on in Jeb Bush’s ill-fated presidential campaign, the former Florida governor came up with an idea that would serve as the centerpiece of his entire candidacy: 4% GDP growth in his first term. The problem — well, one of the many problems — was that this wasn’t so much an idea as an outlandish goal that no modern president has achieved, even during economic booms.
Team Jeb admitted at the time that the 4% figure wasn’t based on any kind of meaningful policy analysis. Bush just liked the sound of it, so his aides built much of his campaign around the made-up figure.
Worse, it started a bidding war of sorts. Chris Christie, basing his projections on nothing but wishful thinking, said his plan would also create 4% growth. Scott Walker vowed to deliver 4.5% growth.
As it turns out, they’re not the only candidates who can pull meaningless numbers out of thin air. Ted Cruz told CNBC on Friday morning that his agenda will lead to “a minimum of 5% GDP growth.”
That, however, wasn’t the funny part. Rather, Salon‘s Simon Maloy highlighted the angle that stood out for me.
…Cruz has an influential ally in his corner: Art Laffer, the high priest of trickle-down economics, who helped craft Cruz’s plan. “Cruz’s tax plan is better than Reagan’s,” Laffer told CNN. “I think you’ll get growth rates higher than Reagan’s.” A good rule of thumb is that whenever you see Art Laffer extolling the amazing economic impact of a tax-cut package, assume the opposite will happen.
Yes, when Art Laffer endorses an economic plan, the appropriate response is, “Uh oh.”
Circling back to some of our previous coverage of Laffer’s reputation, regular readers may recall that the Republican economist rose to GOP prominence in the 1980s by pushing the celebrated-but-wrong idea that tax cuts can pay for themselves.
More recently, he served as the architect of Kansas Gov. Sam Brownback’s (R) failed right-wing economic experiment, which destroyed state finances and did little to improve the state’s economy. Laffer vowed that Brownback’s plan would generate “enormous prosperity,” which is largely the opposite of what’s actually happened.
When the the GOP governor’s agenda failed to deliver on any of the guaranteed results, Laffer was pressed for an explanation. “Kansas is doing fine,” he boasted.
About a year ago, Paul Krugman added some helpful context to Laffer’s record.
Since the 1970s there have been four big changes in the effective tax rate on the top 1 percent: the Reagan cut, the Clinton hike, the Bush cut, and the Obama hike. Republicans are fixated on the boom that followed the 1981 tax cut (which had much more to do with monetary policy, but never mind). But they predicted dire effects from the Clinton hike; instead we had a boom that eclipsed Reagan’s. They predicted wonderful things from the Bush tax cuts; instead we got an unimpressive expansion followed by a devastating crash. And they predicted terrible things from the tax rise after Obama’s reelection; instead we got the best job growth since 1999.And when I say “they predicted”, I especially mean Laffer himself, who has a truly extraordinary record of being wrong at crucial turning points. As Bruce Bartlett pointed out a few years ago, Laffer was even wrong during the Reagan years: he predicted that the Reagan tax hikes of 1982, which partially reversed earlier cuts, would cripple the economy; “morning in America” promptly followed. Oh, and let’s not forget his 2009 warnings about soaring interest rates and inflation.
Politics really isn’t supposed to work this way. When someone fails spectacularly, he or she is supposed to quietly go away, not offer guidance on the issue that left them looking ridiculous.
And yet, Art Laffer is not only still helping design economic policies that don’t work, he’s also publicly endorsing proposals from a 2016 presidential candidate — as if his credibility is intact.
Caveat emptor.
