Last week, former Federal Reserve chairman Alan Greenspan called for allowing the Bush tax cuts he championed in 2001 to fully expire, as scheduled, at the end of the year. His reversal dealt a blow to Republicans who are calling for an unpaid-for permanent extension of the cuts for the rich, even falsely claiming that they increase government revenues.
Unsurprisingly, Greenspan’s comments have irked some right-wing pundits. The strongly discredited economist and former member of President Reagan’s Economic Policy Advisory Board Arthur Laffer criticized Greenspan on the Fox Business network, questioning his patriotism and accusing him of practicing “bad economics.” Media Matters has the transcript:
HOST: Hey, Alan Greenspan says let [all the Bush tax cuts] expire. The former Fed Chairman. Let ‘em all expire.
LAFFER: Good for him. I mean there he goes. Well, I guess he’s out of power. He’s a little old. I don’t think he has any kids. Heck, what does he care? You know, I have six kids. I have eleven grandchildren. You know, I really care about the future of this country and I really don’t want to be taxed into poverty. I really don’t think it’s smart in this day and age, with this type of unemployment, to tax people who work more and to pay people who don’t work more. That just is silly. It’s bad economics.
Actually, Laffer’s recent suggestion to suspend all federal taxes should be called “bad economics,” not Greenspan’s recognition that his suggested policy didn’t work. As Media Matters’ Walid Zafar points out, “No serious economist on the left, center or right actually believes this stuff [Laffer is saying]. It’s quackonomics. It resonates well with the Tea Party crowd, but is without a foundation.”
In the past, Laffer held a different view of Greenspan and his policies. Laffer “supported Alan Greenspan being reappointed [as Fed Chairman] twice” and, in 2004, called Greenspan’s work “exquisite,” saying that he “ha[d] done one of the best jobs on monetary policy ever.” Yet, now that Greenspan is “out of power” and “a little old,” Laffer apparently thinks his economic prowess is gone.
The Wonk Room’s Pat Garofalo asked a prescient question last week: “Greenspan at least seems to be coming around to the notion that the conservative economic philosophy is a big sham that doesn’t work in practice. Will the rest of the GOP ever follow?” Apparently not.