TW: Have blogged about Larry Kudlow before as in do not pay any attention to him (http://treylaura.blogspot.com/2008/10/greatest-hits-larry-kudlow.html). One of his favorite guests is Arthur Laffer, of Laffer curve fame the one that purports to show that if u cut taxes total government receipts will go up. The Economist finds his latest diatribe similarly vacuous.
From the Economist:
"Mr Laffer has written a new book entitled The End of Prosperity. His co-authors on the book are Peter Tanous, and Stephen Moore. The latter, notably, published a book in 2004 called Bullish On Bush: How George Bush's Ownership Society Will Make America Stronger. As best I can tell, it was not written as parody.
The theme of Mr Laffer's column is that the Bush administration and the current Congress are equally culpable in dooming the American economy. They will be remembered, he writes, as new Herbert Hoovers. Why? Because they have acted excessively to intervene during this crisis. Their actions, he notes, are reducing expectations of long-run corporate profits and that—not global recession and a vicious cycle of deleveraging—is what's causing equity markets to sink.
What they should have done (to avoid being labled new Hoovers, recall) was allow those who made bad bets to take their lumps—to "Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate...purge the rottenness out of the system", in a manner of speaking. That, and emulate the "sound money" policies of Paul Volcker.
I have to tip my hat to Mr Laffer. I'm not sure I could author something this wonderfully, artistically wrong, were I to labour at the effort for months. Bravo."
http://www.economist.com/blogs/freeexchange/2008/10/the_wrong_get_wronger.cfm
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