Economists Debate Policy at Restaurant Finance Confab
Arthur Laffer is known for his Laffer Curve and supply-side economics.
Who knew economists could be so entertaining? In a debate to open the Restaurant Finance & Development Conference Monday, Arthur Laffer and Robert Reich mixed it up in a lively session, from a conservative and liberal point of view, respectively.
Laffer is best known for the Laffer Curve, which demonstrates the tradeoff between tax rates and actual tax revenue. He’s called the father of supply-side economics and advised President Ronald Reagan and Prime Minister Margaret Thatcher.
Reich, a professor at the University of California-Berkeley, was secretary of labor under Bill Clinton, and just published his new book, “Saving Capitalism for the Many, not the Few.”
Said Reich: “It is absolutely true average wages are going up, but there is a big difference between average and median. The median wage is actually going nowhere. This is a potential problem, because you need enough people who can buy stuff.”
Laffer said “it has been a disastrous 14 years” for the economy, and added for a strong economy you need five things: a low-rate, broad-based flat tax; spending restraint; sound money; free trade; and minimal regulation.
“Then get the hell out of the way and let the private sector solve the economy,” he said, to great applause.
Laffer, in fact, got the most applause from the conservative-leaning crowd of restaurant operators and financiers, gathered at the Wynn in Las Vegas. “You cannot tax an economy into prosperity,” Laffer said. “People respond to incentives. It’s not Democrats or Republicans. If you tax people who work, and you pay people who don’t work, do I really have to say the next sentence to you?” Again, the crowd roared its approval.
Reich shot back with the thing he likes about Laffer: “You can be so forceful and so persuasive—and so wrong.”
The annual Restaurant Finance & Development Conference, presented by the Restaurant Finance Monitor, continues through Wednesday noon at the Wynn hotel in Las Vegas.