On March 26, 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 during the second presidential era of Donald Trump.
Laffer was a financial advisor for public figures including Ronald Reagan, Margaret Thatcher and Donald Trump during his first term. His Wednesday evening 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.
On top of his financial advising experience, Laffer 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, an associate professor and chair of MTSU’s Department of Economics and Finance, had concerns about the generality of Laffer’s 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.
Economists generally oppose tariffs, as they distort markets and prevent people from trading, Fowler said.
“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.”
To contact the News editor, email newseditor@mtsusidelines.com.
For more news, visit www.mtsusidelines.com, and follow us on Facebook at MTSU Sidelines and on X and Instagram at @mtsusidelines. Also, sign up for our weekly newsletter here.
