October 29, 2025 • 43 mins
US economist Arthur Laffer — the man behind the famous “Laffer Curve” — joins Merryn Talks Money to explain why he thinks Western economies, especially the UK, have pushed taxes too far. As Chancellor Rachel Reeves prepares for her next budget, Laffer warns Britain is heading for stagnation, not growth. He makes the case for a radical rethink: lower taxes, less red tape, and a return to pro-growth policies inspired by Reagan, Kennedy, and Thatcher. Tune in to hear why he believes the UK could be on the brink of an economic revival — if it dares to change course.
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:08):
Hello, Maren Talks Money.
Speaker 1 (00:09):
Listeners, We are recording an episode of Maren Talks Money
in front of an audience the morning after Rachel's Reeve's
UK Budget. I want you to join us for quassas
and conversation. We've got Helen Thomas of Blonde Money as
one of our guests. We've also got John Steppitt. You're
gonna love it. Well, you might not love it. It'll
be right after the budget, but you'll find it interesting
at the very least. Find the registration link in the
(00:29):
show notes.
Speaker 2 (00:30):
Space is limited, always limited, so.
Speaker 1 (00:32):
Sign up soon. Now on to today's show, which may
well cover some of those very same topics. Welcome to
Maren Talks Money, the podcast in which people who know
the markets explain the markets.
Speaker 2 (00:53):
This week I am speaking with Arthur Laffer.
Speaker 1 (00:55):
Arta is an American economist famous for his work on
supply side economics and the invention of the Laffer curve.
We'll come back to that, actually, because it's not really
the invention of the concept.
Speaker 2 (01:05):
It's the invention of the curve, isn't it. So we'll
come back to that.
Speaker 1 (01:07):
This illustrates the relationship between tax rates and government revenue.
In the late seventies, he founded Lafer Associates is an
economic research and consulting firm as well as LA for
investments and investment management firm. We might come back to
that too. Recently, Art has co authored a book called
Prosperity through Growth, Boosting Living Standards in an Age of
Autocracy and AI this is a primer for reviving the
(01:31):
UK economy. Not everyone agrees with that, by the way,
but I think we're going to talk about the ideas
that he and his co authors put forward in that book,
and we're going to get us take on the UK
economy and the US economy as well. Arthur, welcome to
Marin Talks Money.
Speaker 3 (01:44):
Thank you very much.
Speaker 2 (01:48):
Let's go on to defining the Laugher curve.
Speaker 1 (01:51):
So this idea that there is a relationship between tax
rates and the amount that you raise and there is
a point at which you have put up a tax
rate by too much and revenue and you will then
start to fall. That's an idea that it has been discussed,
You know that thousands of years because it is absolutely obvious, right,
or it seems as to me. But what you did
was you do a curve that gives us more of
(02:13):
a sense of how it really works.
Speaker 3 (02:15):
More than that. In the sixties and seventies, they were
literally looking at no relationship with if you raise tax
rates by ten percent, revenues would rise by ten percent.
Now everyone knows they didn't know it then. They really
didn't and they just used that everywhere. So they were
always overestimating revenues for tax increases and underestimating revenues for
tax declines. And that's true. It's been around forever though,
(02:37):
as you say, it's in the Mukadema by IMN Caldoon.
By the way, I also didn't name it the laugh
for curve. That was Judwinisky of the Wall Street Journal
who did. And again I love the name. I just
love it, and I love to keep it myself.
Speaker 2 (02:49):
Look at this modesty. You didn't name your own current.
Speaker 3 (02:52):
Now, yeah, I know, but I'm trying to get some
sort of victimhood there so you feel sorry for me
in the days that follow. But if you look at it,
it's really important to the relationship between tax rates and
total revenues. A lot of things come between those two. Now,
it's true when you raise tax rates, you do increase
the amount of revenue per dollar of tax base. That's true,
(03:13):
but it's also true that when you raise tax rates
on a tax base, you cause that tax base to
be less attractive and you shrink the tax base. Now
you may shrink it because people work less hard because
they invest less, but you also shrink it because people
move offshore, because people change the composition their income, the
volume of their income, the timing of their income, and
also they use tax shelters Marin. And that's probably the
(03:36):
biggest slip TwixT the cup and the lip here between
tax rates and total revenues. And that's why it's such
a powerful concept, especially today. When Gordon Brown raised your
tax rate in Britain from forty P to fifty P,
revenues actually fell, the economy, people left the country, they
fell and all that. And that was a classic case
(03:57):
of the lapper curves.
Speaker 1 (03:58):
Stick with that for a moment because that looked like
clear evidence. At the latter CEV we say it's common sense.
Not everyone believes it. I'm holding up the book for
the pups of the video. Everyone go by the book.
One of the things that you say in the beginning
of this is that these aren't opinions that lafa cev
is not an opinion, it's a provable truth. So you
have tens and tens of years worth of American tax
(04:21):
data which you can use in a very granular way
to show that it's not an opinion, it's a reality.
Speaker 3 (04:28):
Thank you. That's true. It's exactly true, and no one
should care about your opinion or my opinion. This is
about facts, not how we feel. What happens when you
raise tax rates in the rich. We know what happens now.
This is from my prior book of two and a
half years ago. Taxes have consequences, which is the entire
history of the US income tax. We have every single
tax return for every year, okay, and every single time
(04:49):
we raised the highest tax rate on the top one
percent of income earners, three things happened. The economy underperformed,
tax revenues from the rich from the top one percent
dropped all not rows, and the poor got hammered. Every
time we've cut tax rates on the rich, the economy
is outperformed, tax revenues from the rich have gone up,
(05:09):
and the poor have found jobs, output, employment, production, and
had their lives improved. So those are the facts, and
I go through it with the States as well. In
the opening section of the book. Here, it's just blast
set you barn. It is facts, and it is facts
in Britain, it's in facts in all these other countries.
It's just shocking, and yet politicians invariably ignore it because
(05:30):
they want to virtue signal rather than do what's good
for the poor. If you want to use the poor
create growth, that's the answer, okay.
Speaker 1 (05:38):
But one of the reasons why politicians are able to
ignore it and pretend that it doesn't exist is because
it's imprecise. You can't say the leaf of curve proves
to us that income tax at this level is the
correct level. This is the correct level above this, that
this happens in a below it that happens.
Speaker 2 (05:54):
And there is also a sense.
Speaker 1 (05:55):
That it shifts right depending on politics, depending on whether
it's woar time or peace time, depending on how people feel,
depending on vibes, right, it could shift around.
Speaker 2 (06:04):
With that. Well, it's a very clear idea.
Speaker 1 (06:07):
It's hard to make it precise enough to persuade a
politician to be clear on it.
Speaker 3 (06:11):
I don't think you're right on that. I really don't
you're correct. All of those statements you say are true,
but they aren't materially very true. Now, it's true, the
smaller the tax base, the more likely it is that
you're in the prohibitive range of the Laffer curve. The
longer you're willing to wait, the more likely it is
you're in the Laugher curve. The elasticities do change to
respond to this. That's all true, but we have very
(06:33):
precise measures of how these effects are. Now. All of
these other effects undoubtedly do impact it, but they don't
change the direction merit.
Speaker 2 (06:42):
No, no, no, I didn't mean that.
Speaker 1 (06:43):
I just mean that it's hard to say sety two
percent is the correct rate for income time.
Speaker 3 (06:48):
Raising correct reefs. Let's take Rachel Reeves right now. Let's
talk about her tax increase. Now, I have not seen
the budget, so I don't know if she did, but
I assume she's going to raise taxes in her budget.
I assume that's going to case. We know that it's
the wrong thing to do in Britain. We know that
with perfect certainty. Britain has been declining in its growth,
Britain's declining in its revenue. It's been declining in its
(07:09):
ability to provide a good living for the poor, the
minority of the disenfranchised. We know all of that, and
we know it's because of the disincentives in part of
the tax codes, of regulatory policy and monetary policy, and
of trade policy. And yet she goes and does the
wrong thing, period and they all cheer and whoop as
they pass it through. And it's not just the Labor Party,
(07:30):
it's the Conservative Party too. By the way, you can
go back and look at them, you can look at
all these others. They want a virtue signal him for
the poor. I'm going to raise tax on the ridge. Yeah,
that's the elephant in the living room. If you want
to help the poor, you've got to create job opportunities
and economic growth so they can earn income. And they
all know that, the numbers all show that, and yet
(07:50):
they go the wrong direction. And by the way, it's
no different here except for Trump. Trump has been very
good on this. But Biden and all these people, I mean,
they're just crazy there, going against all data and against
all logic, and they push the thing and then stand
on stage and I'm here for the poor. And it's
this posturing that that really bothers me.
Speaker 2 (08:11):
It does slightly fail doesn't.
Speaker 1 (08:12):
It as though for some time now the tax system
in the UKA is being used less as a revenue
raiser than a virtue Signala.
Speaker 3 (08:18):
Exactly, that's exactly true, thank you, And it's wrong. It's
just wrong because these are real people, maren that, they
are people and children and lives and happy. You're destroying
their futures. You're ruining a whole generation of people who
are just like you and me and have hopes and aspirations.
Every single brit I know loves the National Lottery. They
all want to be rich, and the greatest way of
(08:40):
being rich is not having a lottery. For God's say,
he says, cutting tax rates and allow them to fly
with their own wings and with their own skills. But no,
they don't do that. But then they provide the lottery
to give the people who don't work hard the chance
to become super rich. But they all want to be rich,
and yet the government hates the rich, and their policies.
Speaker 1 (08:58):
Would be much better for everyone to be better, often
a couple of people to be super RECOI exactly, it
doesn't work for us.
Speaker 2 (09:03):
Now, So let's go back a little.
Speaker 1 (09:05):
So let's pretend our country was not the mess up
that it is, and we were starting from scratch with
the taxes. What we want, presumably is a very broad based,
reasonably flat taxes.
Speaker 2 (09:19):
Is that right?
Speaker 1 (09:20):
And if we were looking only at income tax where
would you pitch it?
Speaker 3 (09:23):
What I would do is I'd have the lowest possible
tax rate on the broadest possible tax base. The reason
for that is the lowest rate is so you provide
people with the least incentives to evade, avoid, or otherwise
not report taxable income. And you have the broadest base
with the least deductions, exemptions, exclusions or credits, write offs, whatever,
those things are loopholes, so that they don't have easy
(09:43):
places to go into to avoid paying taxation. Now, I
did Jerry Brown's flat tax here in the US a
long while ago, and the number week came out with
a static revenue flat tax. It came out to about
eleven point eight percent. If you got rid of all
federal taxes and replace them with two flat rate taxes,
one on business net sales that's your vats, and one
(10:04):
on personal on adjustin gross income. Those two taxes, that's it.
No other taxes. Starting with the first dollar to the
last dollar. It came out to eleven point eight percent.
I rounded it up for Jerry to twelve just to
make sure, and he was scared because politicians don't understand
all this stuff. He rounded up to thirteen percent. And
we could replace every tax, every federal tax in the US,
with that, every single one. Marin. Can you imagine what
(10:27):
the economy would look like. No one would have to
file a tax return. If you earn one hundred bucks,
the company sends in thirteen bucks into the treasury gives
you eighty seven bucks. That's it.
Speaker 2 (10:38):
Bank.
Speaker 3 (10:39):
No, you don't even have file returns or any There
are no lawyers, no accountants, nor deferit income specialists. There
are no tax dodges, there are no loopholes, there are
no schemes. All of that stuff just disappears. I mean,
it's just amazing how high we could fly with those wings.
It would just be great.
Speaker 1 (10:54):
There any accountant listening to this, any tax specialists, most
of the legal profession they're listening to and they're.
Speaker 2 (11:00):
Going, please, no, don't do this to us. Imagine the unemployment.
Speaker 1 (11:04):
You're not just talking about a low taxes and you're
talking about a simple taxes.
Speaker 2 (11:09):
The awful lot of people who don't want.
Speaker 1 (11:11):
A simple taxis tax code that's longer than the complete
work through Shakespeare that works with them.
Speaker 3 (11:16):
Yeah, let me Also, it's just like all those people
who love COVID nineteen, the undertakers, the morticians, the people
who ran hospitals, they love COVID nineteen. Even though it
killed lots and lots and lots of people. They loved
it because it provided them with jobs output employment. By
the way, they can go straight to hades if you
forgive my French and you can get good jobs that
create wealth rather than good jobs to dodge im moral
(11:38):
government policies. I just cannot allow myself to be swayed
by people who do makeshift projects that don't help the world.
Forgive me for that.
Speaker 2 (11:47):
So how do we get an economy like that of
the UK? I think the UK we are. This is
a disaster on every single level.
Speaker 1 (11:57):
As you say, we barely grown, not just as the
financial crisis, but actually sent several years before the financial crisis.
We have got every single kingdom that you suggest that
the book, by the way, everyone talks about the five
kingdoms of growth and taxation, government spending, monetary policy, regular
trade policy.
Speaker 2 (12:12):
All of these are wrong.
Speaker 1 (12:13):
And I would add to that, by the way, Arthur,
if you didn't mind me adding a kingdom, I would
add energy policy because of cheap energies.
Speaker 2 (12:19):
Drivers, I would add a six to that. So you
know we have all those We've done them all wrong.
Speaker 1 (12:24):
We've got this appalling deficit, unbelievably awful level of public debt,
a level of taxation that is already I would say,
very clearly on the wrong side of your curve. We
have a budget coming up where we have rumors all
over the place that she's going to break every manifested
promise and the son add to two p to the
basic rate of income text five P to the top
(12:45):
rate sects. We hear all these kinds of things. This
is going in the wrong direction. How an earth do
you get an economy in a state like this to
a position where it can conceivably introduce a low, flat,
broad based rate of times.
Speaker 2 (13:03):
I don't want to be transition field like hell.
Speaker 3 (13:05):
Transitions are not bad. They are not They're really good,
they're really easy. But let me just say this. I
worked with one of your prime ministers very closely, a
young lady named Margaret Thatcher from nineteen seventy on through
the whole term. There she dropped the highest tax rate.
Now I'm obviously picking and choosing and cherry picking, but
ninety eight percent on the income dropped it down to
(13:26):
forty percent. You can see what happened during there. We
moved towards it. A north star that you describe is
something to guide us the direction we should be moving there.
Now with the US, with Ronald Reagan, we cut the
highest marginal income tax rate from seventy eight percent, seventy
percent to twenty percent to twenty eight percent. Excuse me.
We caught the corporate rate from forty six percent to
(13:47):
thirty four percent. We went from fourteen tax brackets to
two tax brackets. We got rid of all the deduction's exemptions, exclusions,
so it was revenue neutral. Marrin. Now, what we've done here,
what I would like to Don and Britain, is you
can make these tax codes revenue neutral, so there is
no fear of losing revenues and all you have is upside. Now,
(14:09):
this is really a very easy way to do it
within the States here because we have so many deductions, exemptions.
If you get rid of those at lower the rates,
you can do it so that the static revenue is
the same, but you now have all the incentives working
in the right direction. And Britain can do that too,
it really can. And then once it starts, Miren, once
the growth model starts, it hits the wind at your back.
(14:31):
It's like Thatcher, It's like Reagan. Once you starts, then
they start doing all these things. They privatized all these companies,
they sold them off, they deregulated, they had the trade
policy of the inflation. All of that happens, and it's
a virtuous cycle rather than a death spiral. And that
I think is what Britain can do if they get
the right person. It happened with Thatcher, It's happened with Reagan,
it happened with Kennedy. We've had four or five episodes
(14:53):
in the US where it really happened. It lasts only
for a generation, but hell, I'm eighty five. I'll take
a generation generation.
Speaker 2 (15:00):
Because they forget, you mean.
Speaker 3 (15:02):
Yeah, they do. They forget and then they start virtual
signaling again. There's nothing wrong with being rich. There is
something very wrong with being poor. People who are poor
and need to have their opportunities increased. They need to
become ridge. They need to have more income. Rich people
are fine. Poor people need to be having the opportunities
provided to them. And that's why I did enterprise zones,
which I did in the seventies here and I did it,
(15:24):
and Reagan put it through you. Reagan and Jack Kemp
did where we have tax free zones in the inner
cities where these people are the poorest of all. So
they have no income tax, no VAT tax, nothing in
the inner city. You have to live there, live there
in your primary residence, and also work there and no
income tax and no VAT. And you can imagine how
the jobs would be created, and these people would be
(15:45):
able to earn their way into prosperity, which is what
everyone wants. No one wants handouts, Amaron, They really don't.
They'll take them because they have to, but it's much
better to earn an income. I mean. Jack Kennedy put
it as so well. He said, the best form of
welfare is still a good high paying job, and jobs
are created because of returns on capitol and returns on labor.
Speaker 2 (16:06):
That's all, yeah, But.
Speaker 1 (16:07):
You do have an incentive problem with welfare systems across
Very often you can earn as much on welfare as
you can earn an ad because we have an oversupply
of loved You do.
Speaker 3 (16:18):
Not need to interview you. I would interview you and
get your because you're exactly right on all this, and
it's so damned hobbyist Marin, it's so damned obvious. Yet
these people avoid it like the plague, and they claim
it's going to be catastrophic, the cutt and welfare. Ever,
my foot, it will be getting rid of this because
you create jobs is not going to hurt you at all.
(16:39):
Everyone will be better off, the poor, the rich, the middle,
all the left, the right, East coast, west coast, North, South,
up down. Everyone will be better off. A rising tide
that raises all boats.
Speaker 1 (16:50):
Now, the pushbank you would get in the UK from
pretty much every politician would be okay, Butler's trust, okay,
butt Bond, talk about look at the next budget and
they'll say if she does not put up taxes very significantly,
which I think you would say, is that with a
terrible idea, because it just makes the economy even worse,
makes growth even lower, makes it even harder to pay
back the debt. But what most people would say is
(17:12):
if she doesn't put up taxes forty fifty sixty billion,
whatever it is, the bond market will punish the UK
and then our interest bill goes up and there were
even more trouble than we were before in hello fiscal crisis.
Speaker 3 (17:23):
Can I respond to that if I could?
Speaker 2 (17:24):
Absolutely?
Speaker 3 (17:25):
The first place, she never got a policy and she
was thrown out so quickly before even she in quasi
could get a chance to put it in. And all
that my telling you this, and I know you won't
believe me, and I know they don't believe me. If
her policies had been put in, she would have increased
tax revenues enormously.
Speaker 1 (17:42):
But isn't the key point that she didn't have time.
If Rachel Reeves were to follow your advice, she probably
she may also not be given the time.
Speaker 3 (17:49):
Yeah, she might. I don't think it will take time
for the effects to occur. To be honest with you,
these people are waiting at her moving out of Britain
all over the place in Abodati find Brits all over
the world except in Britain. And the thing about trust
is she didn't prepare the environment. I don't think now
I'm talking politics now where I'm really ignorant. But she
didn't prepare the groundwork to get it there, to get
it so that you could go to each of these
(18:11):
different groups and get buy in on their part. Now
with US at the US, with Reagan and with Trump,
we got all these different groups to get buy it.
For example, in the one where we dropped the highest
tax rate from fifty percent to twenty eight percent, we
raised the lowest rate from twelve and a half to
fifteen percent. We cut the corporate rate from forty six
to thirty four percent. We did all the deductions, when
(18:33):
we did all the lobbying with all the groups, we
passed that bill in the Senate in the US by
a vote of ninety seven to three. Now let me
say that again, every comedy in the US Senate voting
for it except for three of them. That was Simon
in Illinois, Eleven in Michigan, and Merkland, Montana. But Teddy
(18:54):
Kennedy voted for it, Tall and Pink Bill Browdley voted
Joe Biden voted for it. Al Gore voted for it.
All these guys because they were primed as to how
it would work. They love America, they love good budgets.
And it was past ninety seven to three. If you
do your groundwork well politically, you go through and explain it,
and you go through the numbers with all these people.
They're not dumb, they're smart. But build up this consensus
(19:16):
and then put the bill in and make them co authors.
It's amazing how far you can go if you give
other people credit.
Speaker 2 (19:23):
You let people put their name on stuff.
Speaker 3 (19:25):
Let them put their names on it. And that's what
Liz Trust did not do. And she called it the
blob and all this other sort of stuff. And the
blob doesn't make blob people feel good about their role
in life. You know what I'm saying. No American has
ever made better off by pulling a fellow American down.
Every American's made better off if any one of us
is made better off. This is not rich versus poor,
(19:45):
Black versus white, old versus young, male versus female. Hate
never wins. Love always wins. These tax codes should be
tax codes that the rich think are right and that
the poor think are right. Maren, If you make ten
times as much as I do, you should pay ten
times as much in taxes as I do, but not
a thousand times as much. Yes, And once you start
(20:06):
exploiting one group and making a class warfare. You're done.
It's cooked, it's fried, it's baked. It'll never work. And
you've got hateful people all over the place, and I'm
sick and tired of hate.
Speaker 2 (20:35):
Now, Arther, let me take this from the other side.
Speaker 1 (20:37):
We spent a lot of time so far talking about
taxes which are too high, that on the wrong side
of the curve. Are there any taxes that you look
at that you think, actually, we can get these a
bit higher, these are too low. I'm thinking specifically of
land taxes. There's quite a big lobby group in the UK,
and I know there is in the US as well,
for the land value tax for Georgism. Is there anything
that you can see a type of tax that could
(20:59):
go up?
Speaker 2 (21:00):
I'm still raise more revenue.
Speaker 3 (21:02):
When I was over there last week, one of the
podcasts asked me if you were Rachel Reeves and you
had the choice of doing little bity taxes all over
the place of raising the principle, what would you do
if you forced me to that choice. I'd raise one
of the three primary taxes. Yeah, all right. When it
came out, laughers in favor of raising one of the
three primary tax, which is not quite the correct I'm not.
Speaker 2 (21:23):
Going to use that headline.
Speaker 1 (21:25):
I'm not going to use that headline. I'm just interested
in looking and looking at the bottom of.
Speaker 3 (21:29):
The curve, rid of all of your little diddley taxes
and put them all into the two taxes there. It's
what I do. I get rid of all these little
squirrely taxes, all of this, that, and the other thing.
People focus on doing business and paying tax once and
for all and having it collected by the government directly
from the companies. That's the way I go back. I
think land taxes are really bad. There are three types
(21:50):
of taxes that for this discussion. One are income, sales
and value added taxes. There's a total GDP. Then there's
what we call turnover taxes, which are on transactions, and
then they're wealth taxes. For every one percent transactions tax
is equivalent to about a four percent on the income
taxes or the broad based tax, and every one percent
(22:13):
on a wealth tax is equivalent to three and a
half percent on the transaction tax or twelve or thirteen
of the others. Wealth taxes are extraordinarily bad because the
value of the asset falls and the people are all
poor in property taxes here. Every one percent increase in
the property tax rate all right, reduces property values by
about twelve and a half percent. Now that's getting big.
(22:36):
So if you have two, three four percent property taxes,
you're really dropping the value of assets. And then it
doesn't work. I think your tax system on property is
probably better than ours by a substantial amount. But i'd
get rid of all these little diddly things all over
the basis clean that. Get your leaf blower and blow
them all out of here, put them in the garden.
Speaker 1 (22:57):
That you're demanding a level of honesty and straightforward and
as a life of complication and fight on tag system
that I do not think how politicians are anyway.
Speaker 3 (23:03):
But you and I working together and do we can
get it. And we've gotten in a lot of other countries.
We did it in Argentina under menim and maybe we'll
do it under my lay. I've been down there a
couple of times. I love it. I think there's a
chance we did it. And I did it in Chile
back in the seventies with Sarajo, Dicostro and Ralph Luda's
Pinochet period. Yes it wasn't democratic, but we got it
(23:24):
the best economy in South America for thirty five years.
Really amazing. Under Thatcher, we did it pretty well. We
did it under Reagan, and we did it. We're doing
it under Trump. Come and join the club. Let's have
a big dance hall together, and all of us love
each other and lower taxes and all of us become
rich together.
Speaker 2 (23:41):
That's what the dream is having. Like I'm in the microwave. Look,
let's look at the let's look at some of the
other things.
Speaker 1 (23:47):
So the next thing we got to You've got these
groups that we were talking about elia UK government spending.
I don't think we need to talk about that, Like
we can just agree that maybe there should be less
of it, Yes, I think we could, Okay, And then
we can look at UK Reagan's re policy regulation. I
think again we can probably just agree, could be hardly, don't.
And then UK monetary policy, perhaps we can disagree on that.
Speaker 2 (24:07):
It could be less awful.
Speaker 3 (24:08):
It could be less awful, but it needs to be
less awful. Britain is not a country like the US
or like some of these others. Britain has to worry
about its trade accounts and it has to worry about
monetization and currency boards to do it. It's much more
subject to the vagaries of the world economy than is
the US. We are a big elephant. Britain's not as
(24:28):
big an elephant. It's like Argentina thinking they can have
their own separate currency. They can't. Now Britain is much
better than that. But Britain needs to be very careful
to make sure they get things like stable coins. If
you like the crypto world, I would suggest that Britain
try to put in something like stable coins in the
British pound and make it to the dollar or to
the pound. And they could do this like tether and
some of these others that they could really take advantage
(24:51):
of the monetary policy of cryptocurrencies and circumvent all this
political garbage out of the Bank of England and the
Federal Reserve. Excuse me, it's not just you. We are
equally as guilty in that as you are. But you're
guilty too.
Speaker 2 (25:04):
What do you mean by political garbage?
Speaker 3 (25:05):
Well, the Bank of England should not be independent. Who
gets blamed for inflation in Britain? The government does not
the Bank of England and so they're not held responsible
for the things they cause. And you always want to
align authority with responsibility with accountability, and they don't in Britain.
It's just not right now the government.
Speaker 2 (25:22):
That's the case across the world right.
Speaker 1 (25:24):
The central banks are remarkably undemocratic organizations that they put
in place policies that shift wealth around the place are
effectively fiscal policies in the end rather than month, and
they're not accountable and not accountable in any way for this.
Speaker 3 (25:35):
That's in your right, And you're right again, you're the
expert on this one. Not only do you see it,
I think you're lecturing me on it being correct.
Speaker 2 (25:41):
I reckon I should get that Nobel price.
Speaker 3 (25:43):
Yeah, you can have the one I don't have. How
about that one?
Speaker 2 (25:45):
Excellent? There we go, right, listen. Okay, so that's a
matter of pe policy.
Speaker 1 (25:49):
Out of the way, the living room perfect, And we
agreed on energy policy.
Speaker 2 (25:54):
Make it cheaper. So that takes us to trade policy.
Speaker 3 (25:58):
Yes it does.
Speaker 2 (25:58):
Now this isn't interesting.
Speaker 1 (25:59):
A big believer in free trade, and I think that
you also believe that Trump is a big believer in
free trade. And what we have here is effectively a negotiation.
Is tariff policy is a negotiation to bring us to
a much less mucin tillist world over maybe a four
or five year period.
Speaker 2 (26:16):
Is that right?
Speaker 3 (26:17):
One hundred percent? You've got every word of my thoughts
completely encapsulated in that conversation.
Speaker 1 (26:23):
Okay, let me ask you this, then, are there limits
to free trade? If we look back over the last
decade when we live in a world that we talked
about it being a globalized world of free trade, and
of course it was nothing of the sort, because some
economies were running a mucintilist policy, a very self interested policy,
and other economies such as say, for example, the UK
in the US were running what they believe to be
real free trade policies, and that of course has led
(26:45):
to serious disadvantages for the economies that were operating actual
free trade policies.
Speaker 2 (26:50):
How do we work our way through that?
Speaker 3 (26:52):
The North Stars free trade moving in that direction? Right,
But no matter how much I believe in free trade,
I would not sell nuclear weapons to Kim John. I'm
just not going to do it, all right, that there's
a limit right there. Now, that's obviously extreme. There are
all sorts of things that you want to do in
oil reserves, this type of stuff, but the market would
do a lot better job on these arbitrage conditions and
(27:15):
the supply chains then the government does. And I'm reading
mean that, for example, we have huge amounts of gold
and silver and Fortknox. What the hell is it doing there?
It's sitting there. Government when it tries to interfere in
free trade accept in the extreme examples of Kim Joe
on Onen, that stuff does not do a good job.
If you need inventories for critical materials and stuff, private
(27:35):
sector can do those inventories better. They know how to
do the calculations better than government does. So when you
see a problem on trade, and we all see lots
of problems on trade, we all do. When you see
a problem, the question to ask is not, oh, by God,
there's a private sector problem. Let's put the government. The
question is would the government solution to this problem be
better or worse than the private error being made? Right now,
(27:59):
that's the right question question. And in some cases, of course,
you're right when you look at it. If I could
break free trade and get Russia and the Ukraine to
agree on a peace plan, I do it every day
of the week and twice on Sunday. I am so
happy with the results in the Middle East with Gaza.
It was horrible what was going on there. I think
Trump did a great job in Africa with the Three Wars.
(28:19):
He stopped the Pakistan Afghanistan, and he did it all
with trade, all of it with trade. That's the brilliance
of Donald Trump's negotiation. Now, is it all moving it
towards free trade? No, it isn't. But if it's moving war, god,
I do that. Ronald Reagan did the same thing with Gorbachev.
We invited them in. It was called peace through strength,
invited them into our prosperity. But if it don't come in,
(28:42):
we've got a big stick here. We're going to hitch
in the head. And that stuff works. And I do
understand not going always at all times, in every which way.
Free trade negotiations for peace, etc. Is also a very
important characteristic of trade negotiations. And I'm not an expert
in this. I'm a woos maarn I'm eighty five. When
(29:02):
I see negotiations going on, I get all scared. I
start crying. I wet myself, I climb and roll in
a fetal position. I climb under my bed and cry.
Donald Trump does not. Ronald Reagan did not. They didn't
do that. They really went at it and they were successful.
We got world peace under Reagan with Corbachov, Cosiesion and
Bresneff and all that, and it lasted for a long time.
(29:24):
And I think Trump's going to do the same thing.
And so I am much less harsh on my criticism
of Trunk for violating free trade and peanut butter oil
because he's really using the trade issues very very effectively
to get a lot of other objectives we need desperately
in this world. So I support him one hundred percent
(29:45):
so far.
Speaker 2 (29:45):
And what he's done, what would you criticize him for
so far?
Speaker 3 (29:49):
Oh, he's a human And let me just say it
this way. You gotta trade Donald Trump seriously, but not literally.
Some of the grandiose things he says does or not
my style. He's much more like my godfather was, who
is Reagan's top and friend in California, head of the
kitchen cabinet, barh blah blah. Donald Trump is a CEO,
(30:10):
and he's a great CEO. Sometimes he creates unnecessary hostilities
by his conversation, but bottom line, I think he's just
doing a great job. If he yelled at me, I
would cry, and I would, but I wouldn't stop loving
his policies and what he does.
Speaker 1 (30:26):
And passing though, isn't it And we're already getting well
into his second term.
Speaker 2 (30:30):
What happens next?
Speaker 3 (30:31):
I don't know. I'm eighty five. I don't give it
damn to be honest, No I do, I do so
do I do? I think that once he's get locked
into stone, once he gets through his third first year,
which will be in another four months something like that,
then we got three years left. He's got another almost
year of control of all the House and Senate, and
(30:54):
he controls the Supreme Court, he controls the state legislatures
mostly and governorships, and he will by then have the
Fed under control. They have his own chairman in there,
and we'll be able to lock these things into stone.
So it's very difficult to undo them. But believe me,
when I'm coming up to my one hundred and twentieth birthday, Maren,
when I come up there, I expect to see a
(31:15):
whole new set of problems that we'll have to re
educate the world again on supply set economics. But it works,
and economics is all about incentives, and the government can
change the attractiveness of activities. And if you tax people
who work and you pay people who don't work, don't
be surprised if a lot of people stop working. What
(31:37):
you need to do to create a prosperous, well functioning
society is reward things that are good. We tax speeders
in the freeway to get them to stop speeding. We
tax smoking to get them to stop smoking. In the
same breath, why do we tay it tax people who
are an income? Why do we tax people who employ
other people? Why do we tax businesses that make wonderful
(31:58):
products at low cost and make lots of profits. We
don't tax them to get them to stop earning income,
or stop employing other people, or stop making great products.
But don't think for a second that those same consequences
don't occur because our motive is different. That's just crazy stuff.
And it goes with regulations, spending, it goes with taxes,
(32:19):
it goes with oh, because we're trade, it goes with everything,
and it also goes with energy policy, and it goes
with privatization of industries.
Speaker 1 (32:28):
You are such an optimistic man, and I'm sure we're winning,
and we're win okay, all right, And Hopefully that will
happen to the UK as well, though not maybe not
in November. I think we have to go a little
lower before baking. That probably got to scrape the bottom
before we get.
Speaker 3 (32:44):
Because you're gonna get ready. I'm ready money.
Speaker 2 (32:47):
But it's fun.
Speaker 1 (32:48):
So we've talked a lot on the podcast over the
last couple of months about the debasement trade, about the
general collapse of fit money, and how the endless public
debts mean that you can't really trust trust money anymore,
can't trust fit money, and so the gold price rise
and rise and rise. And you've talked about crypto already.
Where do you stand on that you a lot of
gold sitting in your portfolio?
Speaker 3 (33:07):
No, no, of course I don't. I don't have any
crypto either.
Speaker 2 (33:10):
But what I do is I have crypto.
Speaker 3 (33:12):
I don't. Currency holdings is a long term investment. If
you look at bitcoin or some of these other they
are a good store of value, but they've had a
huge rise, and so is gold. But when you look
at my portfolio, my portfolio is from my grandchildren, my
great grandchildren, and that's where I'm at. When I look
at the world at large, I see cryptocurrencies as being
a private solution to a government problem. They are trying
(33:35):
to circumvent the bad currencies that have been put into
place since nineteen thirteen and going to drive them out.
What we should do is have a government that welcomes
a private solution to a bad public problem, and that's
a bad currency. The pound is terrible. It's gotten so bad.
It's gotten so bad mare and that they're now calling
it the ounce in other countries. You don't mind my joke. Sorry,
(34:00):
I thought it'd be really good.
Speaker 2 (34:02):
It is quite good. It just took me a beat
to get it.
Speaker 3 (34:05):
But I gotta know you about that.
Speaker 2 (34:06):
My audiences are cleverer than me that I got it
much smoke quickly.
Speaker 3 (34:08):
Well, you know, when you look at all these currencies,
I think these cryptocurrencies, especially the stable coins, are going
to replace the currencies. So it's a private solution to
a government problem. Do you know what blockchain does to
transactions costs? When you send a check, give someone a check,
they send it into the bank, it takes seven days
to We.
Speaker 2 (34:26):
Didn't do that in Europe anymore. That's early. In the US.
None of us have seen a check in a decade.
Speaker 3 (34:30):
When you use a credit card, same thing. They go,
you can pull your card out and it's all clearing.
It's all the double payment problem. Blockchain takes care of
that instantaneously. I'm on the board of this one company
called soul Meat, which deals with Solana, and it's a
phenomenal thing. We can do forty thousand transactions in a
second bingo. You don't need banks, you don't need any
(34:51):
of this other stuff, you don't need energy. You just
need the crypto and you just go in there and
do it. You can do it in secrecy because you
know of all the code breaking. You can keep it.
It's just wonderful stuff. And the government should allow it
to come in and replace the pound, will replace the
dollar and put us on a very stable value currency.
(35:11):
For attorney, why not.
Speaker 1 (35:14):
So with your longtime confidence in the US, your longtime
confidence in everybody and everything.
Speaker 3 (35:18):
I mean in humans by the way, really.
Speaker 2 (35:21):
Very gratifying me too.
Speaker 1 (35:22):
With that confidence, then your long term portfolio for your grandchildren,
and one in US equities.
Speaker 3 (35:27):
That's one hundred percent equity. Not all us, but there
a lot of them are. But I like a little
bit down there and Argentina. I think some other stuff
in the world is cool. I've got a mining company
stock which is gold and it's also bitcoin, but I've
had it for a while, but it's in Africa, So
I have some fun stuff and there. I think I
do those just because I'm excited by them. I'm on
a lot of boards, and I love being on the
(35:49):
boards because I learned so much about this modern world.
I'm not modern. If you speak any German Marin.
Speaker 2 (35:56):
I don't know some of the languages, but no job
needs to learn.
Speaker 3 (36:00):
In nick fun gesternik bin Funfogest, I'm not from yesterday.
I'm from the day before yesterday. I'm in the ancient
kingdoms of the Goths or whatever it may be. I
love love modernity, the technology that's coming through immunology, all
the physics that's going through. Oh but much more than
AI and the genetic stuff, the crisper, all of that stuff.
I'm really into this stuff big time. And it's just
(36:22):
such a wonderful world that we're looking out at all
these problems that have been falling humanity and animal kingdom
for four plus billion years. We're solving My daughter. I
can tell you about my daughter for my number four.
She lives in Britain, she's a British subject and she
got metastatic melanoma force stage. They claimed that she had
(36:44):
sixteen weeks left to live. After I stopped crying, we
went to work on this. Her roommate at Yale was
head of Wisconsin's medical like also used a justin Stepping
in London, whose world's expert I went down to went
down to Houston Anderson Hospital. There we did. We found
this immunotherapy and that Jimmy Carter had used and brought
(37:06):
him back out of hospice. That gave it to the
tumors who are all stopped growing. They're all killed. Now
she has seven legions in her bag. They had to
have surgeons remove it, but she's alive because of immunotherapy
and they didn't have to cut her all up. And
tell me it doesn't make you really optimistic about this world.
Speaker 2 (37:25):
No, it does. I have a sad story about my father. Amazing.
Speaker 1 (37:29):
I was going to ask you, Arthur, at the end
of this interview, what it was that kept you so
optimistic and energetic, But I think we already have the
answer to that one.
Speaker 3 (37:37):
Yeah, And immortality is this Having offspring is the second
best thing next to immortality, And I'm so proud and
so pleased with my kids, and I just love life.
The older I get, the more I love life. And
I'm not afraid of dying. I know it's going to
happen one of these days. And I figured out how
(37:57):
I want to die, Maren. I want to die the
exact same my uncle did, peacefully in his sleep, not
like the three passengers in the car he was driving.
Speaker 2 (38:05):
Oh very good, thank you, thank you.
Speaker 3 (38:07):
I have to thank you.
Speaker 2 (38:08):
You're definitely giving that one in.
Speaker 3 (38:10):
You don't mind be having a little humor with you, guys,
But it's a deadly serious topic that you're doing. But
humor is always important to let it get through. I'm
no one's enemy. I know I get all sorts of
hate mail and all this stuff, but I'm no one's enemy.
I'm just sitting here. If you don't like my advice,
throw me out. I've had a lot of experience. I've
been going to the Oval office now for fifty five years.
I've gone through all of this stuff. If I have
(38:31):
anything of any experience that would make you guys better off,
it's yours for the taking. And if you don't like
what I say, I'll go home. I'll sit out there
on the farm, I'll drink my bourbon and forget about
all you people.
Speaker 1 (38:44):
Anyone ever contacted you from the Scottish government to ask.
Speaker 3 (38:47):
You, yes, the exact thing that several times. And I'm
Scott's Irish German, like all of us in Appalasha, I'm
fifty to fifty. I'm not I'm much more German, but
my kids are all fifty to fifty Presbyterian, Scott's Irish
and German. That's Appalasha. And they did and I was
what were the people that the lady fish and the
lady was salmon, you remember those. And they came to
(39:08):
my office and we talked, and I had been advising
the Irish government and the tax cuts at the time.
And when they found that, they were offended by it
and left. And you can see how well they've done.
They've done a horrible job, and horrible to my home country.
My grandfather. We're all from the Ulster Union, Belfast and
Dalwhynie area is where we're from there, and of course
(39:28):
we're from Koenigsberg in Germany and eat West Prussia as well.
It's a shame what's happening in Scotland. Gordon Brown's about
as dour as they get, and he's a cheerful fellow
in Scotland. Just joking. You know.
Speaker 2 (39:43):
Well, I'm in Scotland at the moment while we're speaking.
Speaker 3 (39:45):
Where are you?
Speaker 2 (39:47):
I'm in Edinburgh.
Speaker 3 (39:48):
Do you know Brecon.
Speaker 2 (39:54):
And a half to us drive away?
Speaker 3 (39:55):
Ye was up up up the Glenn there to breakon
And I was married in the church there up in Edsel,
up the tanty road as they say there, And.
Speaker 2 (40:06):
I know that shit well.
Speaker 3 (40:08):
I was married there in nineteen sixty three and my
first wife was Scottish Highlander. We had four kids, then
I got we got the drifted apart, and then we
got divorced. I raised the four kids and then we
got two more kids.
Speaker 2 (40:19):
And I know too, so I got one war against
the fertility crisis.
Speaker 3 (40:24):
Yeah, Scotland is such a wonderful place that people are
so wonderful, But there's a reason why they populated the
rest of the world because they were getting the hell
out of Scotland. And that's unfortunately the truth. And Scotland
needs to welcome its citizens by providing them with opportunities,
and that's just doesn't seem to be in the cards
right now.
Speaker 2 (40:43):
I don't want to end on that note.
Speaker 3 (40:45):
Can I tell you one story?
Speaker 2 (40:47):
Yes?
Speaker 3 (40:47):
Okay, Now this is pretty close to being literally true.
About every seven days in a year on average, there's
a country that celebrates its independence from Britain. Now think
of that. Now, that statement says two things. Number one,
it says how Britain has lost all this stuff, but
(41:08):
it also says how much Britain once had and we
can reverse that flow in terms of prosperity. I am
never been more excited about a country becoming prosperous and
reclaiming its authenticity. It's authorship of the capitalist revolution and
of industrialization and prosperity and elimination of poverty than Britain did.
(41:32):
And it was all by the way in Greyfriars Churchyard.
You remember that John Knox and the Church of the
Covenant there and you look there and false Loon Fuda,
y spach Maas and my lug and it's all the
birthplace of Adam Smith, the Revolution, the grave of.
Speaker 2 (41:46):
Adam Smith right there.
Speaker 1 (41:48):
We do a show every year, Arthur, I'm found I'm
going to send you an invitation to this. Every summer
we do a show at Pameo House, which is Adam
Smith's house in Edinburgh where he died, where he lived
with his mom or ald On pull him.
Speaker 2 (42:00):
I don't know. One of them was poor for a
long time.
Speaker 1 (42:02):
Where you did the second the final editions of Wealth
Ofmasons and Moral Sentiments. Every year during the Edinburgh Fringe
Festival we do a show there and we get on
an economist, a comedian, politician.
Speaker 2 (42:13):
We both and you can you can be the whole
lot and we chat.
Speaker 1 (42:18):
We try and recreate the fill of Adam Smiths salons
and we just chat.
Speaker 2 (42:21):
It's great fun and you're going to come to.
Speaker 3 (42:23):
And I'd love to and that we can have a
little session there in Great Friars Churchyard. We do sit
down there with Jenny, get us from the whole thing,
and it's just so much fun. It's just so cool.
I love it there and we need to reconstitute the
prosperity the Britain one's head and it's just such a
wonderful country and I just love being there. And if
(42:44):
there's anything I can do to help you re establish
and recreate the prosperity and the elimination of poverty in
the country, I'd be more than happy to do anything.
I can.
Speaker 2 (42:53):
I'm hoping that this podcast may have made a start.
Speaker 3 (42:55):
Let's hope.
Speaker 1 (42:56):
So thanks, thank you so much for joining us stakedn'teppreciate
it more my pleasure. Thanks for listening to this week's
Maren Talks Money. If you like us, show, rate, review,
and subscribe wherever you listen to podcasts, and keep sending
your questions or comments some Merrior Money at Bloomberg dot net.
You can also follow me and John on Twitter or X.
(43:17):
I'm at marins w and John is John Underscore Step X.
Speaker 2 (43:20):
This episode was hosted.
Speaker 1 (43:21):
By Me Maren's Unset Webbers, produced by some Mesadi and Moses,
and sound designed by Blake Mabel's and Robert Williams. A
special thanks, of course to Art Laffer, who I believe
is also on X or Twitter at Arthur Laffer.
Speaker 2 (43:33):
I think so you can find him there.
Speaker 1 (43:34):
He may not know you can find him there, but
I know you can find him there
Bloomberg Audio Studios, Podcasts, radio News.
Speaker 2 (00:08):
Hello, Maren Talks Money.
Speaker 1 (00:09):
Listeners, We are recording an episode of Maren Talks Money
in front of an audience the morning after Rachel's Reeve's
UK Budget. I want you to join us for quassas
and conversation. We've got Helen Thomas of Blonde Money as
one of our guests. We've also got John Steppitt. You're
gonna love it. Well, you might not love it. It'll
be right after the budget, but you'll find it interesting
at the very least. Find the registration link in the
(00:29):
show notes.
Speaker 2 (00:30):
Space is limited, always limited, so.
Speaker 1 (00:32):
Sign up soon. Now on to today's show, which may
well cover some of those very same topics. Welcome to
Maren Talks Money, the podcast in which people who know
the markets explain the markets.
Speaker 2 (00:53):
This week I am speaking with Arthur Laffer.
Speaker 1 (00:55):
Arta is an American economist famous for his work on
supply side economics and the invention of the Laffer curve.
We'll come back to that, actually, because it's not really
the invention of the concept.
Speaker 2 (01:05):
It's the invention of the curve, isn't it. So we'll
come back to that.
Speaker 1 (01:07):
This illustrates the relationship between tax rates and government revenue.
In the late seventies, he founded Lafer Associates is an
economic research and consulting firm as well as LA for
investments and investment management firm. We might come back to
that too. Recently, Art has co authored a book called
Prosperity through Growth, Boosting Living Standards in an Age of
Autocracy and AI this is a primer for reviving the
(01:31):
UK economy. Not everyone agrees with that, by the way,
but I think we're going to talk about the ideas
that he and his co authors put forward in that book,
and we're going to get us take on the UK
economy and the US economy as well. Arthur, welcome to
Marin Talks Money.
Speaker 3 (01:44):
Thank you very much.
Speaker 2 (01:48):
Let's go on to defining the Laugher curve.
Speaker 1 (01:51):
So this idea that there is a relationship between tax
rates and the amount that you raise and there is
a point at which you have put up a tax
rate by too much and revenue and you will then
start to fall. That's an idea that it has been discussed,
You know that thousands of years because it is absolutely obvious, right,
or it seems as to me. But what you did
was you do a curve that gives us more of
(02:13):
a sense of how it really works.
Speaker 3 (02:15):
More than that. In the sixties and seventies, they were
literally looking at no relationship with if you raise tax
rates by ten percent, revenues would rise by ten percent.
Now everyone knows they didn't know it then. They really
didn't and they just used that everywhere. So they were
always overestimating revenues for tax increases and underestimating revenues for
tax declines. And that's true. It's been around forever though,
(02:37):
as you say, it's in the Mukadema by IMN Caldoon.
By the way, I also didn't name it the laugh
for curve. That was Judwinisky of the Wall Street Journal
who did. And again I love the name. I just
love it, and I love to keep it myself.
Speaker 2 (02:49):
Look at this modesty. You didn't name your own current.
Speaker 3 (02:52):
Now, yeah, I know, but I'm trying to get some
sort of victimhood there so you feel sorry for me
in the days that follow. But if you look at it,
it's really important to the relationship between tax rates and
total revenues. A lot of things come between those two. Now,
it's true when you raise tax rates, you do increase
the amount of revenue per dollar of tax base. That's true,
(03:13):
but it's also true that when you raise tax rates
on a tax base, you cause that tax base to
be less attractive and you shrink the tax base. Now
you may shrink it because people work less hard because
they invest less, but you also shrink it because people
move offshore, because people change the composition their income, the
volume of their income, the timing of their income, and
also they use tax shelters Marin. And that's probably the
(03:36):
biggest slip TwixT the cup and the lip here between
tax rates and total revenues. And that's why it's such
a powerful concept, especially today. When Gordon Brown raised your
tax rate in Britain from forty P to fifty P,
revenues actually fell, the economy, people left the country, they
fell and all that. And that was a classic case
(03:57):
of the lapper curves.
Speaker 1 (03:58):
Stick with that for a moment because that looked like
clear evidence. At the latter CEV we say it's common sense.
Not everyone believes it. I'm holding up the book for
the pups of the video. Everyone go by the book.
One of the things that you say in the beginning
of this is that these aren't opinions that lafa cev
is not an opinion, it's a provable truth. So you
have tens and tens of years worth of American tax
(04:21):
data which you can use in a very granular way
to show that it's not an opinion, it's a reality.
Speaker 3 (04:28):
Thank you. That's true. It's exactly true, and no one
should care about your opinion or my opinion. This is
about facts, not how we feel. What happens when you
raise tax rates in the rich. We know what happens now.
This is from my prior book of two and a
half years ago. Taxes have consequences, which is the entire
history of the US income tax. We have every single
tax return for every year, okay, and every single time
(04:49):
we raised the highest tax rate on the top one
percent of income earners, three things happened. The economy underperformed,
tax revenues from the rich from the top one percent
dropped all not rows, and the poor got hammered. Every
time we've cut tax rates on the rich, the economy
is outperformed, tax revenues from the rich have gone up,
(05:09):
and the poor have found jobs, output, employment, production, and
had their lives improved. So those are the facts, and
I go through it with the States as well. In
the opening section of the book. Here, it's just blast
set you barn. It is facts, and it is facts
in Britain, it's in facts in all these other countries.
It's just shocking, and yet politicians invariably ignore it because
(05:30):
they want to virtue signal rather than do what's good
for the poor. If you want to use the poor
create growth, that's the answer, okay.
Speaker 1 (05:38):
But one of the reasons why politicians are able to
ignore it and pretend that it doesn't exist is because
it's imprecise. You can't say the leaf of curve proves
to us that income tax at this level is the
correct level. This is the correct level above this, that
this happens in a below it that happens.
Speaker 2 (05:54):
And there is also a sense.
Speaker 1 (05:55):
That it shifts right depending on politics, depending on whether
it's woar time or peace time, depending on how people feel,
depending on vibes, right, it could shift around.
Speaker 2 (06:04):
With that. Well, it's a very clear idea.
Speaker 1 (06:07):
It's hard to make it precise enough to persuade a
politician to be clear on it.
Speaker 3 (06:11):
I don't think you're right on that. I really don't
you're correct. All of those statements you say are true,
but they aren't materially very true. Now, it's true, the
smaller the tax base, the more likely it is that
you're in the prohibitive range of the Laffer curve. The
longer you're willing to wait, the more likely it is
you're in the Laugher curve. The elasticities do change to
respond to this. That's all true, but we have very
(06:33):
precise measures of how these effects are. Now. All of
these other effects undoubtedly do impact it, but they don't
change the direction merit.
Speaker 2 (06:42):
No, no, no, I didn't mean that.
Speaker 1 (06:43):
I just mean that it's hard to say sety two
percent is the correct rate for income time.
Speaker 3 (06:48):
Raising correct reefs. Let's take Rachel Reeves right now. Let's
talk about her tax increase. Now, I have not seen
the budget, so I don't know if she did, but
I assume she's going to raise taxes in her budget.
I assume that's going to case. We know that it's
the wrong thing to do in Britain. We know that
with perfect certainty. Britain has been declining in its growth,
Britain's declining in its revenue. It's been declining in its
(07:09):
ability to provide a good living for the poor, the
minority of the disenfranchised. We know all of that, and
we know it's because of the disincentives in part of
the tax codes, of regulatory policy and monetary policy, and
of trade policy. And yet she goes and does the
wrong thing, period and they all cheer and whoop as
they pass it through. And it's not just the Labor Party,
(07:30):
it's the Conservative Party too. By the way, you can
go back and look at them, you can look at
all these others. They want a virtue signal him for
the poor. I'm going to raise tax on the ridge. Yeah,
that's the elephant in the living room. If you want
to help the poor, you've got to create job opportunities
and economic growth so they can earn income. And they
all know that, the numbers all show that, and yet
(07:50):
they go the wrong direction. And by the way, it's
no different here except for Trump. Trump has been very
good on this. But Biden and all these people, I mean,
they're just crazy there, going against all data and against
all logic, and they push the thing and then stand
on stage and I'm here for the poor. And it's
this posturing that that really bothers me.
Speaker 2 (08:11):
It does slightly fail doesn't.
Speaker 1 (08:12):
It as though for some time now the tax system
in the UKA is being used less as a revenue
raiser than a virtue Signala.
Speaker 3 (08:18):
Exactly, that's exactly true, thank you, And it's wrong. It's
just wrong because these are real people, maren that, they
are people and children and lives and happy. You're destroying
their futures. You're ruining a whole generation of people who
are just like you and me and have hopes and aspirations.
Every single brit I know loves the National Lottery. They
all want to be rich, and the greatest way of
(08:40):
being rich is not having a lottery. For God's say,
he says, cutting tax rates and allow them to fly
with their own wings and with their own skills. But no,
they don't do that. But then they provide the lottery
to give the people who don't work hard the chance
to become super rich. But they all want to be rich,
and yet the government hates the rich, and their policies.
Speaker 1 (08:58):
Would be much better for everyone to be better, often
a couple of people to be super RECOI exactly, it
doesn't work for us.
Speaker 2 (09:03):
Now, So let's go back a little.
Speaker 1 (09:05):
So let's pretend our country was not the mess up
that it is, and we were starting from scratch with
the taxes. What we want, presumably is a very broad based,
reasonably flat taxes.
Speaker 2 (09:19):
Is that right?
Speaker 1 (09:20):
And if we were looking only at income tax where
would you pitch it?
Speaker 3 (09:23):
What I would do is I'd have the lowest possible
tax rate on the broadest possible tax base. The reason
for that is the lowest rate is so you provide
people with the least incentives to evade, avoid, or otherwise
not report taxable income. And you have the broadest base
with the least deductions, exemptions, exclusions or credits, write offs, whatever,
those things are loopholes, so that they don't have easy
(09:43):
places to go into to avoid paying taxation. Now, I
did Jerry Brown's flat tax here in the US a
long while ago, and the number week came out with
a static revenue flat tax. It came out to about
eleven point eight percent. If you got rid of all
federal taxes and replace them with two flat rate taxes,
one on business net sales that's your vats, and one
(10:04):
on personal on adjustin gross income. Those two taxes, that's it.
No other taxes. Starting with the first dollar to the
last dollar. It came out to eleven point eight percent.
I rounded it up for Jerry to twelve just to
make sure, and he was scared because politicians don't understand
all this stuff. He rounded up to thirteen percent. And
we could replace every tax, every federal tax in the US,
with that, every single one. Marin. Can you imagine what
(10:27):
the economy would look like. No one would have to
file a tax return. If you earn one hundred bucks,
the company sends in thirteen bucks into the treasury gives
you eighty seven bucks. That's it.
Speaker 2 (10:38):
Bank.
Speaker 3 (10:39):
No, you don't even have file returns or any There
are no lawyers, no accountants, nor deferit income specialists. There
are no tax dodges, there are no loopholes, there are
no schemes. All of that stuff just disappears. I mean,
it's just amazing how high we could fly with those wings.
It would just be great.
Speaker 1 (10:54):
There any accountant listening to this, any tax specialists, most
of the legal profession they're listening to and they're.
Speaker 2 (11:00):
Going, please, no, don't do this to us. Imagine the unemployment.
Speaker 1 (11:04):
You're not just talking about a low taxes and you're
talking about a simple taxes.
Speaker 2 (11:09):
The awful lot of people who don't want.
Speaker 1 (11:11):
A simple taxis tax code that's longer than the complete
work through Shakespeare that works with them.
Speaker 3 (11:16):
Yeah, let me Also, it's just like all those people
who love COVID nineteen, the undertakers, the morticians, the people
who ran hospitals, they love COVID nineteen. Even though it
killed lots and lots and lots of people. They loved
it because it provided them with jobs output employment. By
the way, they can go straight to hades if you
forgive my French and you can get good jobs that
create wealth rather than good jobs to dodge im moral
(11:38):
government policies. I just cannot allow myself to be swayed
by people who do makeshift projects that don't help the world.
Forgive me for that.
Speaker 2 (11:47):
So how do we get an economy like that of
the UK? I think the UK we are. This is
a disaster on every single level.
Speaker 1 (11:57):
As you say, we barely grown, not just as the
financial crisis, but actually sent several years before the financial crisis.
We have got every single kingdom that you suggest that
the book, by the way, everyone talks about the five
kingdoms of growth and taxation, government spending, monetary policy, regular
trade policy.
Speaker 2 (12:12):
All of these are wrong.
Speaker 1 (12:13):
And I would add to that, by the way, Arthur,
if you didn't mind me adding a kingdom, I would
add energy policy because of cheap energies.
Speaker 2 (12:19):
Drivers, I would add a six to that. So you
know we have all those We've done them all wrong.
Speaker 1 (12:24):
We've got this appalling deficit, unbelievably awful level of public debt,
a level of taxation that is already I would say,
very clearly on the wrong side of your curve. We
have a budget coming up where we have rumors all
over the place that she's going to break every manifested
promise and the son add to two p to the
basic rate of income text five P to the top
(12:45):
rate sects. We hear all these kinds of things. This
is going in the wrong direction. How an earth do
you get an economy in a state like this to
a position where it can conceivably introduce a low, flat,
broad based rate of times.
Speaker 2 (13:03):
I don't want to be transition field like hell.
Speaker 3 (13:05):
Transitions are not bad. They are not They're really good,
they're really easy. But let me just say this. I
worked with one of your prime ministers very closely, a
young lady named Margaret Thatcher from nineteen seventy on through
the whole term. There she dropped the highest tax rate.
Now I'm obviously picking and choosing and cherry picking, but
ninety eight percent on the income dropped it down to
(13:26):
forty percent. You can see what happened during there. We
moved towards it. A north star that you describe is
something to guide us the direction we should be moving there.
Now with the US, with Ronald Reagan, we cut the
highest marginal income tax rate from seventy eight percent, seventy
percent to twenty percent to twenty eight percent. Excuse me.
We caught the corporate rate from forty six percent to
(13:47):
thirty four percent. We went from fourteen tax brackets to
two tax brackets. We got rid of all the deduction's exemptions, exclusions,
so it was revenue neutral. Marrin. Now, what we've done here,
what I would like to Don and Britain, is you
can make these tax codes revenue neutral, so there is
no fear of losing revenues and all you have is upside. Now,
(14:09):
this is really a very easy way to do it
within the States here because we have so many deductions, exemptions.
If you get rid of those at lower the rates,
you can do it so that the static revenue is
the same, but you now have all the incentives working
in the right direction. And Britain can do that too,
it really can. And then once it starts, Miren, once
the growth model starts, it hits the wind at your back.
(14:31):
It's like Thatcher, It's like Reagan. Once you starts, then
they start doing all these things. They privatized all these companies,
they sold them off, they deregulated, they had the trade
policy of the inflation. All of that happens, and it's
a virtuous cycle rather than a death spiral. And that
I think is what Britain can do if they get
the right person. It happened with Thatcher, It's happened with Reagan,
it happened with Kennedy. We've had four or five episodes
(14:53):
in the US where it really happened. It lasts only
for a generation, but hell, I'm eighty five. I'll take
a generation generation.
Speaker 2 (15:00):
Because they forget, you mean.
Speaker 3 (15:02):
Yeah, they do. They forget and then they start virtual
signaling again. There's nothing wrong with being rich. There is
something very wrong with being poor. People who are poor
and need to have their opportunities increased. They need to
become ridge. They need to have more income. Rich people
are fine. Poor people need to be having the opportunities
provided to them. And that's why I did enterprise zones,
which I did in the seventies here and I did it,
(15:24):
and Reagan put it through you. Reagan and Jack Kemp
did where we have tax free zones in the inner
cities where these people are the poorest of all. So
they have no income tax, no VAT tax, nothing in
the inner city. You have to live there, live there
in your primary residence, and also work there and no
income tax and no VAT. And you can imagine how
the jobs would be created, and these people would be
(15:45):
able to earn their way into prosperity, which is what
everyone wants. No one wants handouts, Amaron, They really don't.
They'll take them because they have to, but it's much
better to earn an income. I mean. Jack Kennedy put
it as so well. He said, the best form of
welfare is still a good high paying job, and jobs
are created because of returns on capitol and returns on labor.
Speaker 2 (16:06):
That's all, yeah, But.
Speaker 1 (16:07):
You do have an incentive problem with welfare systems across
Very often you can earn as much on welfare as
you can earn an ad because we have an oversupply
of loved You do.
Speaker 3 (16:18):
Not need to interview you. I would interview you and
get your because you're exactly right on all this, and
it's so damned hobbyist Marin, it's so damned obvious. Yet
these people avoid it like the plague, and they claim
it's going to be catastrophic, the cutt and welfare. Ever,
my foot, it will be getting rid of this because
you create jobs is not going to hurt you at all.
(16:39):
Everyone will be better off, the poor, the rich, the middle,
all the left, the right, East coast, west coast, North, South,
up down. Everyone will be better off. A rising tide
that raises all boats.
Speaker 1 (16:50):
Now, the pushbank you would get in the UK from
pretty much every politician would be okay, Butler's trust, okay,
butt Bond, talk about look at the next budget and
they'll say if she does not put up taxes very significantly,
which I think you would say, is that with a
terrible idea, because it just makes the economy even worse,
makes growth even lower, makes it even harder to pay
back the debt. But what most people would say is
(17:12):
if she doesn't put up taxes forty fifty sixty billion,
whatever it is, the bond market will punish the UK
and then our interest bill goes up and there were
even more trouble than we were before in hello fiscal crisis.
Speaker 3 (17:23):
Can I respond to that if I could?
Speaker 2 (17:24):
Absolutely?
Speaker 3 (17:25):
The first place, she never got a policy and she
was thrown out so quickly before even she in quasi
could get a chance to put it in. And all
that my telling you this, and I know you won't
believe me, and I know they don't believe me. If
her policies had been put in, she would have increased
tax revenues enormously.
Speaker 1 (17:42):
But isn't the key point that she didn't have time.
If Rachel Reeves were to follow your advice, she probably
she may also not be given the time.
Speaker 3 (17:49):
Yeah, she might. I don't think it will take time
for the effects to occur. To be honest with you,
these people are waiting at her moving out of Britain
all over the place in Abodati find Brits all over
the world except in Britain. And the thing about trust
is she didn't prepare the environment. I don't think now
I'm talking politics now where I'm really ignorant. But she
didn't prepare the groundwork to get it there, to get
it so that you could go to each of these
(18:11):
different groups and get buy in on their part. Now
with US at the US, with Reagan and with Trump,
we got all these different groups to get buy it.
For example, in the one where we dropped the highest
tax rate from fifty percent to twenty eight percent, we
raised the lowest rate from twelve and a half to
fifteen percent. We cut the corporate rate from forty six
to thirty four percent. We did all the deductions, when
(18:33):
we did all the lobbying with all the groups, we
passed that bill in the Senate in the US by
a vote of ninety seven to three. Now let me
say that again, every comedy in the US Senate voting
for it except for three of them. That was Simon
in Illinois, Eleven in Michigan, and Merkland, Montana. But Teddy
(18:54):
Kennedy voted for it, Tall and Pink Bill Browdley voted
Joe Biden voted for it. Al Gore voted for it.
All these guys because they were primed as to how
it would work. They love America, they love good budgets.
And it was past ninety seven to three. If you
do your groundwork well politically, you go through and explain it,
and you go through the numbers with all these people.
They're not dumb, they're smart. But build up this consensus
(19:16):
and then put the bill in and make them co authors.
It's amazing how far you can go if you give
other people credit.
Speaker 2 (19:23):
You let people put their name on stuff.
Speaker 3 (19:25):
Let them put their names on it. And that's what
Liz Trust did not do. And she called it the
blob and all this other sort of stuff. And the
blob doesn't make blob people feel good about their role
in life. You know what I'm saying. No American has
ever made better off by pulling a fellow American down.
Every American's made better off if any one of us
is made better off. This is not rich versus poor,
(19:45):
Black versus white, old versus young, male versus female. Hate
never wins. Love always wins. These tax codes should be
tax codes that the rich think are right and that
the poor think are right. Maren, If you make ten
times as much as I do, you should pay ten
times as much in taxes as I do, but not
a thousand times as much. Yes, And once you start
(20:06):
exploiting one group and making a class warfare. You're done.
It's cooked, it's fried, it's baked. It'll never work. And
you've got hateful people all over the place, and I'm
sick and tired of hate.
Speaker 2 (20:35):
Now, Arther, let me take this from the other side.
Speaker 1 (20:37):
We spent a lot of time so far talking about
taxes which are too high, that on the wrong side
of the curve. Are there any taxes that you look
at that you think, actually, we can get these a
bit higher, these are too low. I'm thinking specifically of
land taxes. There's quite a big lobby group in the UK,
and I know there is in the US as well,
for the land value tax for Georgism. Is there anything
that you can see a type of tax that could
(20:59):
go up?
Speaker 2 (21:00):
I'm still raise more revenue.
Speaker 3 (21:02):
When I was over there last week, one of the
podcasts asked me if you were Rachel Reeves and you
had the choice of doing little bity taxes all over
the place of raising the principle, what would you do
if you forced me to that choice. I'd raise one
of the three primary taxes. Yeah, all right. When it
came out, laughers in favor of raising one of the
three primary tax, which is not quite the correct I'm not.
Speaker 2 (21:23):
Going to use that headline.
Speaker 1 (21:25):
I'm not going to use that headline. I'm just interested
in looking and looking at the bottom of.
Speaker 3 (21:29):
The curve, rid of all of your little diddley taxes
and put them all into the two taxes there. It's
what I do. I get rid of all these little
squirrely taxes, all of this, that, and the other thing.
People focus on doing business and paying tax once and
for all and having it collected by the government directly
from the companies. That's the way I go back. I
think land taxes are really bad. There are three types
(21:50):
of taxes that for this discussion. One are income, sales
and value added taxes. There's a total GDP. Then there's
what we call turnover taxes, which are on transactions, and
then they're wealth taxes. For every one percent transactions tax
is equivalent to about a four percent on the income
taxes or the broad based tax, and every one percent
(22:13):
on a wealth tax is equivalent to three and a
half percent on the transaction tax or twelve or thirteen
of the others. Wealth taxes are extraordinarily bad because the
value of the asset falls and the people are all
poor in property taxes here. Every one percent increase in
the property tax rate all right, reduces property values by
about twelve and a half percent. Now that's getting big.
(22:36):
So if you have two, three four percent property taxes,
you're really dropping the value of assets. And then it
doesn't work. I think your tax system on property is
probably better than ours by a substantial amount. But i'd
get rid of all these little diddly things all over
the basis clean that. Get your leaf blower and blow
them all out of here, put them in the garden.
Speaker 1 (22:57):
That you're demanding a level of honesty and straightforward and
as a life of complication and fight on tag system
that I do not think how politicians are anyway.
Speaker 3 (23:03):
But you and I working together and do we can
get it. And we've gotten in a lot of other countries.
We did it in Argentina under menim and maybe we'll
do it under my lay. I've been down there a
couple of times. I love it. I think there's a
chance we did it. And I did it in Chile
back in the seventies with Sarajo, Dicostro and Ralph Luda's
Pinochet period. Yes it wasn't democratic, but we got it
(23:24):
the best economy in South America for thirty five years.
Really amazing. Under Thatcher, we did it pretty well. We
did it under Reagan, and we did it. We're doing
it under Trump. Come and join the club. Let's have
a big dance hall together, and all of us love
each other and lower taxes and all of us become
rich together.
Speaker 2 (23:41):
That's what the dream is having. Like I'm in the microwave. Look,
let's look at the let's look at some of the
other things.
Speaker 1 (23:47):
So the next thing we got to You've got these
groups that we were talking about elia UK government spending.
I don't think we need to talk about that, Like
we can just agree that maybe there should be less
of it, Yes, I think we could, Okay, And then
we can look at UK Reagan's re policy regulation. I
think again we can probably just agree, could be hardly, don't.
And then UK monetary policy, perhaps we can disagree on that.
Speaker 2 (24:07):
It could be less awful.
Speaker 3 (24:08):
It could be less awful, but it needs to be
less awful. Britain is not a country like the US
or like some of these others. Britain has to worry
about its trade accounts and it has to worry about
monetization and currency boards to do it. It's much more
subject to the vagaries of the world economy than is
the US. We are a big elephant. Britain's not as
(24:28):
big an elephant. It's like Argentina thinking they can have
their own separate currency. They can't. Now Britain is much
better than that. But Britain needs to be very careful
to make sure they get things like stable coins. If
you like the crypto world, I would suggest that Britain
try to put in something like stable coins in the
British pound and make it to the dollar or to
the pound. And they could do this like tether and
some of these others that they could really take advantage
(24:51):
of the monetary policy of cryptocurrencies and circumvent all this
political garbage out of the Bank of England and the
Federal Reserve. Excuse me, it's not just you. We are
equally as guilty in that as you are. But you're
guilty too.
Speaker 2 (25:04):
What do you mean by political garbage?
Speaker 3 (25:05):
Well, the Bank of England should not be independent. Who
gets blamed for inflation in Britain? The government does not
the Bank of England and so they're not held responsible
for the things they cause. And you always want to
align authority with responsibility with accountability, and they don't in Britain.
It's just not right now the government.
Speaker 2 (25:22):
That's the case across the world right.
Speaker 1 (25:24):
The central banks are remarkably undemocratic organizations that they put
in place policies that shift wealth around the place are
effectively fiscal policies in the end rather than month, and
they're not accountable and not accountable in any way for this.
Speaker 3 (25:35):
That's in your right, And you're right again, you're the
expert on this one. Not only do you see it,
I think you're lecturing me on it being correct.
Speaker 2 (25:41):
I reckon I should get that Nobel price.
Speaker 3 (25:43):
Yeah, you can have the one I don't have. How
about that one?
Speaker 2 (25:45):
Excellent? There we go, right, listen. Okay, so that's a
matter of pe policy.
Speaker 1 (25:49):
Out of the way, the living room perfect, And we
agreed on energy policy.
Speaker 2 (25:54):
Make it cheaper. So that takes us to trade policy.
Speaker 3 (25:58):
Yes it does.
Speaker 2 (25:58):
Now this isn't interesting.
Speaker 1 (25:59):
A big believer in free trade, and I think that
you also believe that Trump is a big believer in
free trade. And what we have here is effectively a negotiation.
Is tariff policy is a negotiation to bring us to
a much less mucin tillist world over maybe a four
or five year period.
Speaker 2 (26:16):
Is that right?
Speaker 3 (26:17):
One hundred percent? You've got every word of my thoughts
completely encapsulated in that conversation.
Speaker 1 (26:23):
Okay, let me ask you this, then, are there limits
to free trade? If we look back over the last
decade when we live in a world that we talked
about it being a globalized world of free trade, and
of course it was nothing of the sort, because some
economies were running a mucintilist policy, a very self interested policy,
and other economies such as say, for example, the UK
in the US were running what they believe to be
real free trade policies, and that of course has led
(26:45):
to serious disadvantages for the economies that were operating actual
free trade policies.
Speaker 2 (26:50):
How do we work our way through that?
Speaker 3 (26:52):
The North Stars free trade moving in that direction? Right,
But no matter how much I believe in free trade,
I would not sell nuclear weapons to Kim John. I'm
just not going to do it, all right, that there's
a limit right there. Now, that's obviously extreme. There are
all sorts of things that you want to do in
oil reserves, this type of stuff, but the market would
do a lot better job on these arbitrage conditions and
(27:15):
the supply chains then the government does. And I'm reading
mean that, for example, we have huge amounts of gold
and silver and Fortknox. What the hell is it doing there?
It's sitting there. Government when it tries to interfere in
free trade accept in the extreme examples of Kim Joe
on Onen, that stuff does not do a good job.
If you need inventories for critical materials and stuff, private
(27:35):
sector can do those inventories better. They know how to
do the calculations better than government does. So when you
see a problem on trade, and we all see lots
of problems on trade, we all do. When you see
a problem, the question to ask is not, oh, by God,
there's a private sector problem. Let's put the government. The
question is would the government solution to this problem be
better or worse than the private error being made? Right now,
(27:59):
that's the right question question. And in some cases, of course,
you're right when you look at it. If I could
break free trade and get Russia and the Ukraine to
agree on a peace plan, I do it every day
of the week and twice on Sunday. I am so
happy with the results in the Middle East with Gaza.
It was horrible what was going on there. I think
Trump did a great job in Africa with the Three Wars.
(28:19):
He stopped the Pakistan Afghanistan, and he did it all
with trade, all of it with trade. That's the brilliance
of Donald Trump's negotiation. Now, is it all moving it
towards free trade? No, it isn't. But if it's moving war, god,
I do that. Ronald Reagan did the same thing with Gorbachev.
We invited them in. It was called peace through strength,
invited them into our prosperity. But if it don't come in,
(28:42):
we've got a big stick here. We're going to hitch
in the head. And that stuff works. And I do
understand not going always at all times, in every which way.
Free trade negotiations for peace, etc. Is also a very
important characteristic of trade negotiations. And I'm not an expert
in this. I'm a woos maarn I'm eighty five. When
(29:02):
I see negotiations going on, I get all scared. I
start crying. I wet myself, I climb and roll in
a fetal position. I climb under my bed and cry.
Donald Trump does not. Ronald Reagan did not. They didn't
do that. They really went at it and they were successful.
We got world peace under Reagan with Corbachov, Cosiesion and
Bresneff and all that, and it lasted for a long time.
(29:24):
And I think Trump's going to do the same thing.
And so I am much less harsh on my criticism
of Trunk for violating free trade and peanut butter oil
because he's really using the trade issues very very effectively
to get a lot of other objectives we need desperately
in this world. So I support him one hundred percent
(29:45):
so far.
Speaker 2 (29:45):
And what he's done, what would you criticize him for
so far?
Speaker 3 (29:49):
Oh, he's a human And let me just say it
this way. You gotta trade Donald Trump seriously, but not literally.
Some of the grandiose things he says does or not
my style. He's much more like my godfather was, who
is Reagan's top and friend in California, head of the
kitchen cabinet, barh blah blah. Donald Trump is a CEO,
(30:10):
and he's a great CEO. Sometimes he creates unnecessary hostilities
by his conversation, but bottom line, I think he's just
doing a great job. If he yelled at me, I
would cry, and I would, but I wouldn't stop loving
his policies and what he does.
Speaker 1 (30:26):
And passing though, isn't it And we're already getting well
into his second term.
Speaker 2 (30:30):
What happens next?
Speaker 3 (30:31):
I don't know. I'm eighty five. I don't give it
damn to be honest, No I do, I do so
do I do? I think that once he's get locked
into stone, once he gets through his third first year,
which will be in another four months something like that,
then we got three years left. He's got another almost
year of control of all the House and Senate, and
(30:54):
he controls the Supreme Court, he controls the state legislatures
mostly and governorships, and he will by then have the
Fed under control. They have his own chairman in there,
and we'll be able to lock these things into stone.
So it's very difficult to undo them. But believe me,
when I'm coming up to my one hundred and twentieth birthday, Maren,
when I come up there, I expect to see a
(31:15):
whole new set of problems that we'll have to re
educate the world again on supply set economics. But it works,
and economics is all about incentives, and the government can
change the attractiveness of activities. And if you tax people
who work and you pay people who don't work, don't
be surprised if a lot of people stop working. What
(31:37):
you need to do to create a prosperous, well functioning
society is reward things that are good. We tax speeders
in the freeway to get them to stop speeding. We
tax smoking to get them to stop smoking. In the
same breath, why do we tay it tax people who
are an income? Why do we tax people who employ
other people? Why do we tax businesses that make wonderful
(31:58):
products at low cost and make lots of profits. We
don't tax them to get them to stop earning income,
or stop employing other people, or stop making great products.
But don't think for a second that those same consequences
don't occur because our motive is different. That's just crazy stuff.
And it goes with regulations, spending, it goes with taxes,
(32:19):
it goes with oh, because we're trade, it goes with everything,
and it also goes with energy policy, and it goes
with privatization of industries.
Speaker 1 (32:28):
You are such an optimistic man, and I'm sure we're winning,
and we're win okay, all right, And Hopefully that will
happen to the UK as well, though not maybe not
in November. I think we have to go a little
lower before baking. That probably got to scrape the bottom
before we get.
Speaker 3 (32:44):
Because you're gonna get ready. I'm ready money.
Speaker 2 (32:47):
But it's fun.
Speaker 1 (32:48):
So we've talked a lot on the podcast over the
last couple of months about the debasement trade, about the
general collapse of fit money, and how the endless public
debts mean that you can't really trust trust money anymore,
can't trust fit money, and so the gold price rise
and rise and rise. And you've talked about crypto already.
Where do you stand on that you a lot of
gold sitting in your portfolio?
Speaker 3 (33:07):
No, no, of course I don't. I don't have any
crypto either.
Speaker 2 (33:10):
But what I do is I have crypto.
Speaker 3 (33:12):
I don't. Currency holdings is a long term investment. If
you look at bitcoin or some of these other they
are a good store of value, but they've had a
huge rise, and so is gold. But when you look
at my portfolio, my portfolio is from my grandchildren, my
great grandchildren, and that's where I'm at. When I look
at the world at large, I see cryptocurrencies as being
a private solution to a government problem. They are trying
(33:35):
to circumvent the bad currencies that have been put into
place since nineteen thirteen and going to drive them out.
What we should do is have a government that welcomes
a private solution to a bad public problem, and that's
a bad currency. The pound is terrible. It's gotten so bad.
It's gotten so bad mare and that they're now calling
it the ounce in other countries. You don't mind my joke. Sorry,
(34:00):
I thought it'd be really good.
Speaker 2 (34:02):
It is quite good. It just took me a beat
to get it.
Speaker 3 (34:05):
But I gotta know you about that.
Speaker 2 (34:06):
My audiences are cleverer than me that I got it
much smoke quickly.
Speaker 3 (34:08):
Well, you know, when you look at all these currencies,
I think these cryptocurrencies, especially the stable coins, are going
to replace the currencies. So it's a private solution to
a government problem. Do you know what blockchain does to
transactions costs? When you send a check, give someone a check,
they send it into the bank, it takes seven days
to We.
Speaker 2 (34:26):
Didn't do that in Europe anymore. That's early. In the US.
None of us have seen a check in a decade.
Speaker 3 (34:30):
When you use a credit card, same thing. They go,
you can pull your card out and it's all clearing.
It's all the double payment problem. Blockchain takes care of
that instantaneously. I'm on the board of this one company
called soul Meat, which deals with Solana, and it's a
phenomenal thing. We can do forty thousand transactions in a
second bingo. You don't need banks, you don't need any
(34:51):
of this other stuff, you don't need energy. You just
need the crypto and you just go in there and
do it. You can do it in secrecy because you
know of all the code breaking. You can keep it.
It's just wonderful stuff. And the government should allow it
to come in and replace the pound, will replace the
dollar and put us on a very stable value currency.
(35:11):
For attorney, why not.
Speaker 1 (35:14):
So with your longtime confidence in the US, your longtime
confidence in everybody and everything.
Speaker 3 (35:18):
I mean in humans by the way, really.
Speaker 2 (35:21):
Very gratifying me too.
Speaker 1 (35:22):
With that confidence, then your long term portfolio for your grandchildren,
and one in US equities.
Speaker 3 (35:27):
That's one hundred percent equity. Not all us, but there
a lot of them are. But I like a little
bit down there and Argentina. I think some other stuff
in the world is cool. I've got a mining company
stock which is gold and it's also bitcoin, but I've
had it for a while, but it's in Africa, So
I have some fun stuff and there. I think I
do those just because I'm excited by them. I'm on
a lot of boards, and I love being on the
(35:49):
boards because I learned so much about this modern world.
I'm not modern. If you speak any German Marin.
Speaker 2 (35:56):
I don't know some of the languages, but no job
needs to learn.
Speaker 3 (36:00):
In nick fun gesternik bin Funfogest, I'm not from yesterday.
I'm from the day before yesterday. I'm in the ancient
kingdoms of the Goths or whatever it may be. I
love love modernity, the technology that's coming through immunology, all
the physics that's going through. Oh but much more than
AI and the genetic stuff, the crisper, all of that stuff.
I'm really into this stuff big time. And it's just
(36:22):
such a wonderful world that we're looking out at all
these problems that have been falling humanity and animal kingdom
for four plus billion years. We're solving My daughter. I
can tell you about my daughter for my number four.
She lives in Britain, she's a British subject and she
got metastatic melanoma force stage. They claimed that she had
(36:44):
sixteen weeks left to live. After I stopped crying, we
went to work on this. Her roommate at Yale was
head of Wisconsin's medical like also used a justin Stepping
in London, whose world's expert I went down to went
down to Houston Anderson Hospital. There we did. We found
this immunotherapy and that Jimmy Carter had used and brought
(37:06):
him back out of hospice. That gave it to the
tumors who are all stopped growing. They're all killed. Now
she has seven legions in her bag. They had to
have surgeons remove it, but she's alive because of immunotherapy
and they didn't have to cut her all up. And
tell me it doesn't make you really optimistic about this world.
Speaker 2 (37:25):
No, it does. I have a sad story about my father. Amazing.
Speaker 1 (37:29):
I was going to ask you, Arthur, at the end
of this interview, what it was that kept you so
optimistic and energetic, But I think we already have the
answer to that one.
Speaker 3 (37:37):
Yeah, And immortality is this Having offspring is the second
best thing next to immortality, And I'm so proud and
so pleased with my kids, and I just love life.
The older I get, the more I love life. And
I'm not afraid of dying. I know it's going to
happen one of these days. And I figured out how
(37:57):
I want to die, Maren. I want to die the
exact same my uncle did, peacefully in his sleep, not
like the three passengers in the car he was driving.
Speaker 2 (38:05):
Oh very good, thank you, thank you.
Speaker 3 (38:07):
I have to thank you.
Speaker 2 (38:08):
You're definitely giving that one in.
Speaker 3 (38:10):
You don't mind be having a little humor with you, guys,
But it's a deadly serious topic that you're doing. But
humor is always important to let it get through. I'm
no one's enemy. I know I get all sorts of
hate mail and all this stuff, but I'm no one's enemy.
I'm just sitting here. If you don't like my advice,
throw me out. I've had a lot of experience. I've
been going to the Oval office now for fifty five years.
I've gone through all of this stuff. If I have
(38:31):
anything of any experience that would make you guys better off,
it's yours for the taking. And if you don't like
what I say, I'll go home. I'll sit out there
on the farm, I'll drink my bourbon and forget about
all you people.
Speaker 1 (38:44):
Anyone ever contacted you from the Scottish government to ask.
Speaker 3 (38:47):
You, yes, the exact thing that several times. And I'm
Scott's Irish German, like all of us in Appalasha, I'm
fifty to fifty. I'm not I'm much more German, but
my kids are all fifty to fifty Presbyterian, Scott's Irish
and German. That's Appalasha. And they did and I was
what were the people that the lady fish and the
lady was salmon, you remember those. And they came to
(39:08):
my office and we talked, and I had been advising
the Irish government and the tax cuts at the time.
And when they found that, they were offended by it
and left. And you can see how well they've done.
They've done a horrible job, and horrible to my home country.
My grandfather. We're all from the Ulster Union, Belfast and
Dalwhynie area is where we're from there, and of course
(39:28):
we're from Koenigsberg in Germany and eat West Prussia as well.
It's a shame what's happening in Scotland. Gordon Brown's about
as dour as they get, and he's a cheerful fellow
in Scotland. Just joking. You know.
Speaker 2 (39:43):
Well, I'm in Scotland at the moment while we're speaking.
Speaker 3 (39:45):
Where are you?
Speaker 2 (39:47):
I'm in Edinburgh.
Speaker 3 (39:48):
Do you know Brecon.
Speaker 2 (39:54):
And a half to us drive away?
Speaker 3 (39:55):
Ye was up up up the Glenn there to breakon
And I was married in the church there up in Edsel,
up the tanty road as they say there, And.
Speaker 2 (40:06):
I know that shit well.
Speaker 3 (40:08):
I was married there in nineteen sixty three and my
first wife was Scottish Highlander. We had four kids, then
I got we got the drifted apart, and then we
got divorced. I raised the four kids and then we
got two more kids.
Speaker 2 (40:19):
And I know too, so I got one war against
the fertility crisis.
Speaker 3 (40:24):
Yeah, Scotland is such a wonderful place that people are
so wonderful, But there's a reason why they populated the
rest of the world because they were getting the hell
out of Scotland. And that's unfortunately the truth. And Scotland
needs to welcome its citizens by providing them with opportunities,
and that's just doesn't seem to be in the cards
right now.
Speaker 2 (40:43):
I don't want to end on that note.
Speaker 3 (40:45):
Can I tell you one story?
Speaker 2 (40:47):
Yes?
Speaker 3 (40:47):
Okay, Now this is pretty close to being literally true.
About every seven days in a year on average, there's
a country that celebrates its independence from Britain. Now think
of that. Now, that statement says two things. Number one,
it says how Britain has lost all this stuff, but
(41:08):
it also says how much Britain once had and we
can reverse that flow in terms of prosperity. I am
never been more excited about a country becoming prosperous and
reclaiming its authenticity. It's authorship of the capitalist revolution and
of industrialization and prosperity and elimination of poverty than Britain did.
(41:32):
And it was all by the way in Greyfriars Churchyard.
You remember that John Knox and the Church of the
Covenant there and you look there and false Loon Fuda,
y spach Maas and my lug and it's all the
birthplace of Adam Smith, the Revolution, the grave of.
Speaker 2 (41:46):
Adam Smith right there.
Speaker 1 (41:48):
We do a show every year, Arthur, I'm found I'm
going to send you an invitation to this. Every summer
we do a show at Pameo House, which is Adam
Smith's house in Edinburgh where he died, where he lived
with his mom or ald On pull him.
Speaker 2 (42:00):
I don't know. One of them was poor for a
long time.
Speaker 1 (42:02):
Where you did the second the final editions of Wealth
Ofmasons and Moral Sentiments. Every year during the Edinburgh Fringe
Festival we do a show there and we get on
an economist, a comedian, politician.
Speaker 2 (42:13):
We both and you can you can be the whole
lot and we chat.
Speaker 1 (42:18):
We try and recreate the fill of Adam Smiths salons
and we just chat.
Speaker 2 (42:21):
It's great fun and you're going to come to.
Speaker 3 (42:23):
And I'd love to and that we can have a
little session there in Great Friars Churchyard. We do sit
down there with Jenny, get us from the whole thing,
and it's just so much fun. It's just so cool.
I love it there and we need to reconstitute the
prosperity the Britain one's head and it's just such a
wonderful country and I just love being there. And if
(42:44):
there's anything I can do to help you re establish
and recreate the prosperity and the elimination of poverty in
the country, I'd be more than happy to do anything.
I can.
Speaker 2 (42:53):
I'm hoping that this podcast may have made a start.
Speaker 3 (42:55):
Let's hope.
Speaker 1 (42:56):
So thanks, thank you so much for joining us stakedn'teppreciate
it more my pleasure. Thanks for listening to this week's
Maren Talks Money. If you like us, show, rate, review,
and subscribe wherever you listen to podcasts, and keep sending
your questions or comments some Merrior Money at Bloomberg dot net.
You can also follow me and John on Twitter or X.
(43:17):
I'm at marins w and John is John Underscore Step X.
Speaker 2 (43:20):
This episode was hosted.
Speaker 1 (43:21):
By Me Maren's Unset Webbers, produced by some Mesadi and Moses,
and sound designed by Blake Mabel's and Robert Williams. A
special thanks, of course to Art Laffer, who I believe
is also on X or Twitter at Arthur Laffer.
Speaker 2 (43:33):
I think so you can find him there.
Speaker 1 (43:34):
He may not know you can find him there, but
I know you can find him there
Host
Merryn Somerset Webb
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