Kansas Republican Gov. Sam Brownback arrives at a campaign event on Nov. 1, 2014, in Topeka, Kan.
Charlie Riedel/AP

In-demand GOP economist says Kansas ‘is doing fine’

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The first big hint that Kansas Gov. Sam Brownback (R) was pursuing a dangerous economic course was when he hired economist Arthur Laffer to help shape the plan. Laffer, of course, rose to GOP prominence in the 1980s pushing the celebrated-but-wrong idea that tax cuts can pay for themselves.
 
The Washington Post profiles the conservative economist today and notes that his influence has not waned, despite the real-world effects of his policies. In fact, Laffer is evidently a go-to source for many of this year’s Republican presidential candidates.
No one has influenced Republican candidates’ thinking on the economy for the past four decades as much as Laffer, who is now 75. Laffer says he believes that limiting government and cutting tax rates, especially the rate levied on top earners, will unleash faster economic growth. Since he sold then-candidate Ronald Reagan on that prescription, every Republican presidential nominee has run on a Laffer-inspired economic platform.
 
As the 2016 GOP primary season takes off, Laffer is more in demand than ever before, with Republican candidates embracing tax-cut-for-the-rich policies even as they bemoan economic inequality. Candidates have been meeting with him in recent weeks, and on Friday in Nashville, he says, his schedule includes Rick Perry at 10 a.m., Ben Carson at noon, Jeb Bush at 1:15 p.m. and Bobby Jindal at 5. Dinner is scheduled with Ted Cruz. He has already met at least once with Wisconsin Gov. Scott Walker.
And this does not include the meeting Laffer has already had with Rand Paul, who asked him to look over a tax-cut plan the Kentucky Republican likes.
 
The conversation turned to Brownback’s radical experiment, and the Post’s article added this gem: “ ‘Kansas,’ Laffer declared over a five-hour lunch interview in Washington, ‘is doing fine.’”
 
“Fine,” I suppose, is a relative term. For those of us who care about the details, the economic plan Laffer created for Kansas has resulted in debt downgrades, weak growth, and state finances in shambles. It’s reached the point in which two Kansas public school districts are wrapping up the school year early because they don’t have the money needed to finish a full school year.
 
“Fine” probably isn’t the first word that comes to mind.
 
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.
Looking ahead, Krugman added the broader question is “why this always-wrong economic doctrine now has a stronger grip on the GOP than ever before.” That need not be a rhetorical question. Indeed, it should matter quite a bit to the voting public given that so many Republican presidential hopefuls – including the entire current top tier – are eager to bring their economic plans in line with Laffer’s discredited thinking.
 
Or put another way, a wide variety of national GOP candidates are looking at recent developments in Kansas and thinking, “How can I impose this model on the entire United States?”
 
It’s a bit like turning to discredited neoconservatives for guidance on foreign policy and national security. Oh wait….
 

Kansas, Sam Brownback and Tax Policy

In-demand GOP economist says Kansas 'is doing fine'

Updated