Economist Dr. Arthur Laffer’s famous curve provided an earlier era with the recipe for prosperity. It was a simple, irrefutable, axiom, showing that too high tax rates, by throttling economic activity, would stifle government revenue. (President Kennedy made the identical point.)
The Laffer Curve powered America out of the horrible stagflation of the 1970’s—an economy even worse than today’s.
We now enter a new political epoch. It demands a fresh axiom, Schramm’s Law: “The single most important contributor to a nation’s economic growth is the number of startups that grow to a billion dollars in revenue within 20 years.”
We seek to emerge from the Great Recession while the incumbent administration flounders about with ineffectual and counterproductive remedies. President Obama squandered so much political capital that the voters gave his entire party a “shellacking” (his word).Voters gave the Republicans a new and massive majority in the House — the constitutional source of taxing and spending.
Profits up, rates down, tax cuts, and a stock rally. How about some optimism.
In fact, since 2001, business profits have doubled, even while the stock market dial has hardly moved. If Washington can just keep its paws off of business and let market processes work, firms will continue to prosper domestically and internationally and will eventually pick up their hiring.
I hate to sound too much like Calvin Coolidge, who after Reagan is my favorite 20th century president, but the business of America is business.