Reagan's Economic Boy Wizard (of Laffer Curve Fame) Indicted

[Herman74]

David Stockman charged with securities fraud:

http://www.chron.com/disp/story.mpl/front/4661566.html

Since Warren Harding and the Teapot Dome Scandal through McCarthyism, through Watergate, through Iran-Contra, and until the present Reign of The Chimp, one political party has been paramount with regards to corruption: The Republican Party. Why? Well, what comes to my mind are the words, "arrogance," "paranoia," and above all, "self-interest."

[whistle]

1. Laffer curve was more of the psuedo-economic science

[Hosnon]

4. The Laffer Curve seems to be generally legitimate to me.

Of course, Republicans always assume the tax rate is too high, which may or may not be the case.

[whistle]

7. Well, that was the part which always struck me as truly economics for dummies

...thus giving rise to Supply Side Shitconomics or SSS:

<snip>
This Laffer curve was based on the obvious assumption that if the tax rate was 100%, there would be no incentive to work and thus no government revenue; and if there was a 0% tax rate, there would similarly be no government revenue. It is not hard to extrapolate that a 99% tax rate would be almost as burdensome, just as a 1% tax rate would be almost as pointless. As one approaches 90% and 10% on either extreme of the curve, government revenue increases, by extrapolation, and grows larger at 80% and 20%.

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It is no exaggeration that this simple graph was used as the intellectual foundation of Reaganomics. Following Laffer's conclusions, the economic planners in the executive branch concluded that since the richest tax bracket had a rate on the upper end of the curve, lowering this rate would, as the Laffer curve predicted, actually increase government income until it reached a perfect "point" at the highest x-coordinate of the curve. This mathematical explanation seemed so simple and easy to follow that it was presented even by learned academics as uncontroversial proof of supply-side economics and the need to lower taxes immediately for the richest Americans.

<MORE>

http://everything2.com/index.pl?node_id=1225440

[bbinacan]

2. I thought he disagreed with the Laffer curve,

Am I remebering incorrectly?

[Herman74]

5. Your memory is okay. Perhaps at some point Stockman...

...had a change of heart, or perhaps I am completely wrong. My reference to Stockman and the Laffer Curve was based on statements I've seen like this one:

"Laffer's theory solved two problems for President Reagan and his Young Turk supporters in Congress (notably Jack Kemp and David Stockman) who were looking for ways to reinvigorate the conservative wing of the party." from http://hubpages.com/hub/Democrat_vs_Republican_Tax_Cuts_

It would appear, though, that at one point, Stockman's assessment about how useful the Laffer Curve was would change.

[bbinacan]

8. Thanks for the info. n/t

[elfin]

3. I remember Stockman being "taken to the woodshed" over

some misdeed that ultimately got his boss Ronnie off the hook for malfeasance - then he seemed to go straight. Apparently not.

[texanshatingbush]

6. Don't forget that Stockman tried to define ketchup as a "vegetable"

with regard to meeting nutritional requirements for school lunch programs !!!

Remember, also, Speaker Sam Rayburn's comment that the difference between Republicans and Democrats was that Republicans "poured with a jigger". Defining ketchup as a vegetable is yet another instance of "pouring with a jigger".