One of the great moments in economic history occurred in 1978 at a restaurant in Washington when supply side guru Art Laffer, whose economic ideas would contribute to the prosperity of the Reagan years, sketched his famous “Laffer Curve” on a napkin.
When asked to name his economic advisers the other night, Herman Cain was coy. But the Wall Street Journal reveals that Cain had some input from the guy with the napkin:
Mr. Cain's plan clearly has roots in the Reagan-era antitax movement. In constructing the proposal, [economic adviser Richard] consulted with conservative tax icon Arthur Laffer, often viewed as the father of supply-side economics. Many conservatives continue to espouse his view that lower tax rates and a wider tax base can accelerate investment and production, and even produce greater tax revenue in certain circumstances. Liberals say Mr. Laffer's ideas led to over-optimistic assumptions about how low tax rates could go.
In fact, Messrs. Cain and Lowrie were on a trip to Nashville to get Mr. Laffer's blessing for their plan when it was given its name, according to Mr. Lowrie. He said that during their meeting, Mr. Laffer wrote an "A+" on the document and signed it as a souvenir.
Mr. Laffer confirmed the meeting and said he "could well have done something like that," but doesn't specifically recall giving the plan a grade. He said Mr. Cain's principles on taxation are "really sound," and that Mr. Cain himself is a "world-class candidate," but he also praised several other GOP candidates.
In a statement Thursday, Mr. Laffer said Mr. Cain's plan "would be a vast improvement over the current tax system and a boon to the U.S. economy."
A Chris Christie endorsement is big!
But an Art Laffer endorsement? Wow! For many of us who have been inclined to dismiss Cain’s 9-9-9 plan as appealingly simple but amateurish (though none of us have been quite as nasty Jon Huntsman, who said he thought it was the price of a pizza), the kind words of Art Laffer carry weight.
It is also refreshing that Cain adviser Richard Lowrie doesn’t hail from academia. Lowrie is a wealth-management adviser who doesn’t have an advanced degree in economics. But he talks frequently to Laffer.