George Shultz, Arthur Laffer, and the Economic Debate of the Nixon Years

On the death of legendary public servant George P. Shultz several days ago, the New Republic ran an extraordinary piece of historical reflection, Bruce Bartlett’s “George Shultz, the Godfather of the Discredited Laffer Curve.”

Bartlett’s piece uses Shultz’s death as the merest of pretexts for its principal purpose, which is to ridicule Arthur Laffer’s turn as Shultz’s chief economist at the Office of Management and Budget (OMB) from 1970-72. I take particular interest in this topic because I have been researching it intensively for the last three years, across all the relevant archives including the Richard M. Nixon Presidential Library in California, in preparation of a book I have now completed on the first years of Laffer’s career in economics. This book, The Emergence of Arthur Laffer: The Foundations of Supply-Side Economics in Chicago and Washington, 1966-1976, will be out next month from Palgrave Macmillan.

Bruce Bartlett has an impeccable sense of timing, in that this very moment, right before my book comes out, is the last possible occasion on which one can get away with making utterly untenable statements about Laffer’s time in his OMB position. Bartlett’s piece is a collection of such untenable statements, and they echo similar ones from over the years from source-deprived historical commentators who have tried to trash the work Laffer did at OMB. Let us now put to rest the claims.

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