Mr Laffer says the best part of his strategy is that there is no limit to the dynamic gains from lowering taxes. “Make sure you understand this is the beginning and the process never ends. Just when you think you’ve hit nirvana, something else goes on and you start the process all over again,” he adds.
Although tax rates in most countries rose throughout the 20th century, which was by far the best century in economic history, Mr Laffer is unbowed. “When [taxes] went up [countries] did very poorly and when they went down, they did very well,” he says.
Furthermore, the poor will gain, he insists, and whispers that incomes will “trickle down” from rich to poor — a conservative argument long maligned by liberals. “When you change the marginal rate of substitution between labour and leisure, do people choose different combinations of labour and leisure?” he asks rhetorically, “Duh — you can call that trickle down, but it’s not taxes that matter, it’s tax rates.”
“We went from a the highest marginal rate of 70 per cent to one of 28 per cent [in the Reagan administration]. Do you see what happened to employment? Boom.”
Trade is the one area in which Mr Laffer is concerned about the president-elect’s grip on economics, saying: “I don’t know if I’ve ever seen a politician who’s ever understood trade”.
“I don’t believe Donald Trump is nearly as protectionist as his quotes,” he adds, and he urges the president-elect not to worry about the US trade deficit. “Which would you rather have? Capital lined up on our borders trying to get into our country or trying to get out of our country?”
Since foreigners need to acquire dollars by selling goods and services to the US, he says, there are big benefits in a trade deficit. “Duh — you can’t have foreign investment without a trade deficit,” he says.
Just as Mr Trump has been ferociously critical of Ms Yellen’s chairmanship of the Federal Reserve, Mr Laffer is sure central bankers have got their strategies of ultra-loose monetary policy wrong. He thinks low interest rates fail to give people incentives to supply capital for housing and businesses, thereby constraining growth.
“Markets really know how to give you prices and Janet Yellen doesn’t. She’s never been forced to bear the consequences of her own actions,” he says, before warming to the theme. “[Central bankers] think they know better than God. She thinks she knows better how to change the economy better than the last four and a half billion years of evolution. How silly is that.”
Invoking the spirit of Charlton Heston in Planet of the Apes he adds: “Keep your stinking monkey paws off my economy, you dirty ape. That goes for [liberal economist Paul] Krugman, that goes for Yellen, that goes for all of these would-be dictators of the economy.”