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Blast From The Past: Laughing With Laffer

Tyler Durden's picture




 

Or, rather, make that 'at'. Suffer us this brief detour into history, when hilarity ensues as we watch how Arthur Laffer, one of the "world-renowned", "greatest economists" of his generation and inventor of the Laffer curve, describes the US economy as of August 2006, indignantly making wagers with Peter Schiff that the bums bears will always lose, and otherwise validating the cardinal flaw canon of modern economics, namely that unsustainable debt is really just very  much sustainable wealth.

h/t Sudden Debt

 

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Thu, 04/19/2012 - 19:26 | 2359836 azzhatter
azzhatter's picture

Someone should Laffer in a room and force him to watch this on a continuous reel for the rest of his life

Thu, 04/19/2012 - 19:27 | 2359838 ejhickey
ejhickey's picture

I know Peter Schiff says we are headed  for another financial collapse in 2013-2014.  Only one problem with this prediction.  The Mayan calender says the world is going to end in 2012.  So that pretty much makes listening to him unnecessay.   Same goes for Laffer

Thu, 04/19/2012 - 19:41 | 2359866 TWSceptic
TWSceptic's picture

I wouldn't call Laffer an idiot as some here have. I have heard him say many sensible things. Unfortunately also many stupid things. He's a mixed bag, but most of all, he's a douchebag.

Thu, 04/19/2012 - 20:11 | 2359922 Ox
Ox's picture

I admire Schiff's patience, Laffer comes across as a truely obnoxious human being. When people act as smug as Laffer in this clip, it normally means they are wrong.

 

Economists make me embarrassed about my economics degree.

Thu, 04/19/2012 - 20:31 | 2359966 besnook
besnook's picture

what makes this even more laffable is that anyone who didn't know by august 2006 that the end was near reached profoundly stupid from just plain stupid.

Thu, 04/19/2012 - 21:26 | 2360053 JustACitizen
JustACitizen's picture

If you are foolish enough to believe in the "Right" vs. the "Left" thing - please ignore this comment.

How lucky are we to have had an economist (Laffer) tell the politicians that they should cut taxes and they would receive more revenue - that would allow more spending? I mean what are the odds that we would get more deficit spending then ever before?

Followed by the deregulation and free trade boys (Summers and Rubin et al) that told our politicians that they could do everything the "big boys" wanted - and it would all be great - miracle of the marketplace etc.

That way - our fellow citizens could get it stuck up their arses from both directions - and then they get blamed by the intelligentsia - for voting for either side. Yup, economics is a science alright...

The science of rogues, scoundrels and liars.

Thu, 04/19/2012 - 21:34 | 2360064 TapperIsTicked
TapperIsTicked's picture

I was looking through the post to see if someone already noted Gold @ 623 and Silver at 12 on the ticker.

Oh, to reminisce about the good 'ol days.

Thu, 04/19/2012 - 22:57 | 2360236 ReligiousAtheist1
ReligiousAtheist1's picture

I wonder if he ever got the penny

Thu, 04/19/2012 - 23:18 | 2360262 nah
nah's picture

the world needs more famous people

.

-kim kardashiun

Fri, 04/20/2012 - 00:10 | 2360321 lenitivelea
lenitivelea's picture

You know someone's spouting bullshit when all the money they're willing to put on their opinion is a penny.

Fri, 04/20/2012 - 01:17 | 2360376 destroyer of mo...
destroyer of moonbats's picture

OMG! have u seen Mike Normans youtube channel??? i feel sooooooo sorry for him!!! his accounts must have been wiped out!! what an idiot!

Fri, 04/20/2012 - 09:24 | 2360793 Shizzmoney
Shizzmoney's picture

"The neat thing about this economy is that we have alot of flexibility in what we produce and what we have in wealth".

lulz

Also, to the woman on this show spouting the "I think it's reat women get out of the house to be productive" propaganda that the fascist state brainwashed into her head - shame on her. 

Sure, is it *nice* that a woman could work? Yes.  But when she *has* to work - that's not the option of productivity.  That's the obligation to serve the NeoFeudal serfdom state. 

Remember, the Federal Reserve and the US Govt gave woemn the right to vote.....so they would also have their labor taxed.

If you have a child, the first 5 years of that kid's life is the most important.  The fact is, we have so many little shitheads running around b/c women are spending TOO much time at the workplace, and NOT enough time with their kid(s).  And the kids are unhealthy because maternity leave laws are so piss poor in this country. 

My mom was a hard wokring nurse, and through "fortune" (meaning, she had a accident at work that resulted in blowing out her hip), she was able to raise me and be with me every minute, everyday for those 5 years.  Her reading to me at 1,2 years old, taking me to the Children's and Science Muesums, influences me now, because god forbid unlike most Americans, I actually think for my fuckin' self thanks to that time well spent, instead of sitting in some day care being watched by a paid social worker who half-assing it.

The dude's last name is Laffer.  God *does* have a sense of humor.

BTW, the other thing I got from this vid? Wow, has Peter Schiff aged!

Fri, 04/20/2012 - 16:46 | 2362339 Temporalist
Temporalist's picture

There is a key that hasn't been mentioned and that is Laughter's comment that it's the "seniorage" of the debt that makes it valuable to foreign countries.

Interesting thing about seniorage, it is derived from true money, ie gold and specie.

https://en.wikipedia.org/wiki/Seigniorage

 

Seigniorage as a tax

Some economists regarded seigniorage as a form of inflation tax, redistributing real resources to the currency issuer. Issuing new currency, rather than collecting taxes paid out of the existing money stock, is then considered in effect a tax that falls on those who hold the existing currency.[3] The expansion of the money supply may cause inflation in the long run.

This is one reason offered in support of free banking, a gold standard, or at a minimum the reduction of political control over central banks. The latter could then take as their primary objective ensuring a stable value of currency by controlling monetary expansion and thus limiting inflation. Independence from government is required to reach this aim - indeed, it is well known in economic literature that governments face a conflict of interest in this regard[citation needed]. In fact, "hard money" advocates argue that central banks have utterly failed to obtain the objective of a stable currency. Under the gold standard, for example, the price level in both England and the US remained relatively stable over literally hundreds of years, though with some protracted periods of deflation[citation needed]. Since the US Federal Reserve was formed in 1913, however, the US dollar has fallen to barely a twentieth of its former value through the consistently inflationary policies of the bank. Economists counter that deflation is hard to control once it sets in and its effects are much more damaging than modest, consistent inflation.

Banks or governments relying heavily on seigniorage and fractional reserve sources of revenue can find it counterproductive.[citation needed] Rational expectations of inflation take into account a bank's seigniorage strategy, and inflationary expectations can maintain high inflation . Instead of accruing seigniorage from fiat money and credit most governments opt to raise revenue primarily through taxation and other means.

 

So the amazing "monetary policy" that Laughter was talking about is the one that, instead of allowing occasional deflation a few times every hundred or so years, makes it so unstable that there can be both inflation and deflation simultaneously (stagflation or whatever) and possibly hyperinflation or just high inflation or deflation (which they won't allow but is possible) within just a few years or throughout a number of years and requires massive debt by a 70% consumer polulation to blow bubbles in specific sectors and the 1% grows in wealth while the middle class shrinks and the food stamps surge.

 

An interesting note on that wiki link:

The American $100 bill has some competition, primarily from the €500 note. The larger value of the banknote makes it easier to transport larger amounts of money. As an example, to carry $1 million in currency on board an airplane, and it is in $100 bills, the weight of the money is 22 pounds. It is difficult to carry this much without a briefcase and some physical security. Since it is against authority of Title 26 of the United States Code (U.S.Tax Code) regulations to carry more than $10,000 without reporting it (31 USC 5311), it is unlikely to pass security unnoticed. The same amount in €500 notes would weigh less than three pounds, and it could probably be dispersed in clothing and in luggage without attracting attention or alerting a security device. For many illegal operations the problem of transporting currency is more difficult than transporting cocaine because of the size and weight of the currency. The ease of transporting banknotes makes the euro very attractive to Latin American drug cartels.[17]

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