Economist Arthur Laffer, the so-called father of supply-side economics, was based in San Diego for many years after leaving the Reagan administration. He left San Diego for Nashville in 2007.
During a speaking tour in Australia this week, Laffer uttered some truths about the United States: "Rich people can hire lawyers, accountants, deferred income specialists. They can hire congressmen. They can hire senators in the U.S. When you see a group of people hanging with the president, don't for a moment think that's a group of street people trying to explain to him what it's like being poor," Laffer told the media.
So true. But Laffer went on to blame the administrations of George W. Bush and Barack Obama for this sorry state of affairs. "If you look at all the people in the Bush [junior] administration and Obama [administration], they just shift between their private companies and back to the Treasury. They're all after favors to the rich people."
Laffer was partly referring to the "revolving door phenomenon," by which lawyers, accountants, and economists work for the government, then get high-paying jobs in the private sector — often after having done favors for their new bosses' clients. But the phenomenon of executives going into government and doing favors for business was around for more than a century before Bush Jr and Obama.
In his speeches, Laffer lauds tax policies of Andrew T. Mellon, who served as secretary of the treasury for almost 11 years in the 1920s. Mellon was from the famed Pittsburgh banking family and was one of the richest men in America (behind John D. Rockefeller and Henry Ford) when he was in office. Mellon's policies were strongly pro-business and pro-wealthy — and arguably destructive, because his reign ended in early 1932.
Laffer, who served in the administration of president Ronald Reagan, is often credited with fathering the tax cuts that brought the top rate down from 70 to 28 percent and the corporate rate from 46 to 34 percent (and drove up the deficit).
The major champion of these cuts was Donald T. Regan, former head of Wall Street's Merrill Lynch, who served as treasury secretary from 1981–1985 and Reagan's chief of staff from 1985–1987. A large number of business executives, of high and middle rank, served in the Reagan administration, as well as administrations going back to the 19th Century. The tax cuts of the Reagan and Mellon eras are generally considered to have favored big business and the wealthy.
Unfortunately, this door has been revolving for well over a century.