May 06, 2009

Re: Re: “Supply Side” RIP

As Dylan points out, the correct argument against high taxation is that the individual has the right to his property, legitimately earned income, and not that low rates might actually generate more revenue for the state, and thus be used to create bigger and better welfare/warfare programs. And beyond utilitarian justifications, supply-siders have come down on the wrong side, so to speak, on many other issues as well.

I?m reminded of the now famous Schiff-Laffer Debate of 2006, in which Peter called the housing collapse and Art Laffer bet him a penny it wouldn?t happen.

In this faceoff, Peter mentioned that one lamentable consequence of inflation is that since salaries and wages never keep up with prices, many middle-class wives and mothers have had to go to work just so their families could make ends meet. Laffer objected that, no, women have entered the workplace because of the self-actualization provided by part-time jobs in the service industry? One need not object in principle to women taking up careers to conclude that Laffer?s notion is utter hogwash.   

Turn to 6:30 to see the part I?m referring to, but the whole clip is worth watching. 

After the panic of ?08, Laffer went on Bill Maher?s Real Time and was confronted by the host about that pesky one-penny bet he made a year and a half earlier, causing Laffer to squirm about in his chair and evade the issue.

Even more interesting, Maher seemed to think that he?d invited on his show a real right-fanatic, someone who?d talk about soaking the poor and then start quoting from the Aphorisms of Gordon Gekko. What he got instead was a man who talked about how much he loved JFK and in his tax policies only desired to get government more and more money. He never really wanted to ?starve the beast,? as did Milton Friedman, and actually limit the scope of the state, but only wanted to help government create bigger and better programs.   

This section begins at 4:20. 

The supply-siders were statists, and on final inspection, there seems to be less contradiction than one might first imagine between their desires to lower marginal tax rates at home and support nation-building abroad. 


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