The Jones College of Business welcomed economist Arthur Laffer to the Business and Aerospace Building to discuss income and tax inequality, tariffs and the general economic outlook in the Trump era on March 26.
Laffer was a financial advisor for public figures such as Ronald Reagan, Margaret Thatcher and Donald Trump during his first term – but his lecture focused on making modern economics digestible for the average person.
Young America’s Foundation, a nonprofit organization that aims to inspire youth with “the ideas of individual freedom, a strong national defense, free enterprise, and traditional values,” sponsored the event.
He is also an expert in supply-side economics. This theory claims to increase profit and encourage economic growth by increasing the supply and output of products and lowering taxes for big corporations.
Laffer’s take on income and tax inequality is that nobody gains anything if you take from the rich and give to the poor.
“When you take some from those who have a little bit more, you reduce their incentives to produce, and they will produce a little bit less,” Laffer said. “By giving to those who have a little bit less, you provide them with an alternative source of income, other than working, and they will produce a little bit less.”
Stuart Fowler, a chairman in the economics and finance department, had concerns about the generality of that view.
“It was extreme … you have to have inequality for people to want to try to do something innovative,” Fowler said. “But you could end up at the extreme, where a few people have all the resources and the rest of us have nothing.”
Laffer also praised the Trump administration for the recent tariff negotiations, saying that tariffs entail flexibility, reciprocity and leverage. The Trump administration threatened to raise tariffs, which would tax imported goods like steel and aluminum from countries such as Mexico, China and Canada.
Fowler said that economists generally oppose tariffs, saying that they distort markets and prevent people from trading.
“Foreign tariffs hurt them and us,” Laffer said. “When I look at these [foreign countries], all they want is to have access to our markets … there are no winners in a trade war, but not all losses are equal.”
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