Last week, Republican economist Art Laffer told Fox News that Barack Obama “was the reason why we had the Great Recession.” As Laffer argued, there was a global economic crisis because investors were panicked by the prospect of an Obama presidency.
This morning, the Republican economist returned to Fox News, where he peddled the same ridiculous line.
“[I]f you’ll remember, coming into the election in 2008, when Obama started rising in the polls and doing well in the polls, the stock market crashed. And the stock market tells you what will be, not what has been. The stock market looks forward.
“And if they see an Obama coming into office, they’ll crash, and that’s what led to the Great Recession.”
Laffer added that if he thinks Donald Trump is likely to lose, he’ll start moving his investments away from the market.
I have so many, many questions.
If the Great Recession started in December 2007, and Barack Obama was widely seen as an underdog for the Democratic nomination at the time, how exactly would any sensible observer think he caused the downturn?
Is Art Laffer familiar with the word “causation”?
Does Laffer understand the actual causes behind the 2008 crash?
Does he recognize the differences between stock-market indexes and the economy at large?
Following the reasoning he shared with a national television audience, does Laffer look at stock-market growth from 2009 and 2010 – in percentage terms, Wall Street gains were faster in Obama’s first two years than in Trump’s first two years – as proof of the Democratic president’s economic genius?
Why in the world do Republicans still listen to Laffer?
Circling back to some of our previous coverage of Laffer’s work and 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 pay for themselves.
More recently, he served as the architect of Sam Brownback’s (R) failed right-wing economic experiment in Kansas, 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 expected results, Laffer was pressed for an explanation. “Kansas is doing fine,” he boasted.
In 2015, 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.
And yet, despite all of this, Laffer not only continues to present himself as a credible expert, his guidance is often sought out by Republican officials and candidates.
He even has a fan in the Oval Office.