Rush Interviews Dr. Arthur Laffer

RUSH: We welcome to our program Dr. Arthur Laffer, ladies and gentlemen, who has prepared a research paper on the Obama health care plan. I’ve admired your work, Dr. Laffer, ever since I first heard of you back in the late seventies, early eighties. It’s great to have you here.

LAFFER: Well, thank you very much, Rush. It’s a pleasure.

RUSH: By the way, I want to share something with you. You may not know this, but you are partially responsible for Obama becoming a community organizer, from chapter 7, page 54 of his book, Dreams from My Father: ‘There wasn’t much detail to the idea of community organizer. I didn’t know anybody making a living that way. When classmates in college asked me just what it was that a community organizer did, I couldn’t answer them directly instead I’d pronounce on the need for change, change in the White House where Reagan and his minions were carrying on their dirty deeds.’

LAFFER: (chuckling)

RUSH: You were a minion doing dirty deeds.

LAFFER: A minion? Minion, minion! Oh, my gosh!

RUSH: (laughs)

LAFFER: I don’t know if you remember, Rush, but I was on your show in studio in Sacramento, California, many, many years ago.

RUSH: Oh, that’s right. You know, you’re exactly right.

LAFFER: You impressed me enormously then as well as today.

RUSH: Well, I thank you very much for that. It’s mutual, then. I have a summary here of your findings. Let me just run through a couple bullet points and then you can take it and expand on this. ‘The current proposals being discussed in Washington, House and Senate, would raise the total federal government expenditures by 5.6% more than otherwise, adding $285.6 billion to the deficit in 2019, would increase national health care spenders by an additional 8.9%. After all this, it would still leave 30 million Americans uninsured.’ Fill in the blanks here for us.

LAFFER: Well, you know, it’s a fairly straightforward thing. Without going through the specific numbers — although I’d be more than happy to do that — you know, whenever you separate people from the purchases they make… If you walked into a store and weren’t told what anything cost and you could pick out whatever you wanted free, you’re going to be squanders, you’re going to buy things that are way too expensive that you don’t want. I mean, one of the ways controlling costs is making people responsible for their own money, for their own expenditures and that is exactly what this program does not do. It makes the separation between the patient and the doctor and health services further and further removed, and takes away all control of costs. And, frankly, as P.J. O’Rourke put it, he said, ‘If you think health care is expensive now, just wait ’til you see how much it costs when it’s free,’ and that’s exactly what we’re doing here.

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Episode Transcript

Speaker 1 (00:00):
We welcome to our program, Dr Arthur Laugher, ladies and gentlemen,
who has prepared a research paper on the Obama health
care plan. I've i've I've admired your work, Dr Laugher,
ever since I first heard of you back in the
late seventies early eighties. It's great to have you here. Well,
thank you very much. Right by the way, I want
to share something with you. You may not know this,
but you are partially responsible for Obama becoming a community organizer.

(00:25):
From chapter seven, page fifty four of his book Dreams
of My Father, there wasn't much detail to the idea
of community organizer. I didn't know anybody making a living
that way. When classmates in college asked me just what
it was that a community organizer did, I couldn't answer
them directly. Instead, I'd pronounced on the need for change.
Change in the White House where Reagan and his minions
were carrying on their dirty deeds, you were a minion

(00:47):
doing dirty deeds a million million. Oh my god. I
don't know if you remember, Rush, but I was on
your show in studio in Sacramento, California, many many years ago.
Oh that's right, that's that you know you're exactly right.
You impressed me enormously then as well as today. Well,
I thank you very much for that. It's mutual. Then
I have a summary here of your findings. Uh, let

(01:11):
me just run through a couple of bullet points and
then you can take it and expand on this. Uh.
The current proposals being discussed in Washington House and Senate
would raise the total federal government expenditures by five point
six percent more than otherwise, adding two out and five
point six billion dollars to the deficit in twenty nineteen
would increase national healthcare expenditures by an additional eight point

(01:34):
nine After all this, it would still leave thirty million
Americans uninsured. Uh fill in blanks here for us. Well,
you know it's a it's a fairly straightforward when without
going through the specific numbers, although I'd be more than
happy to do that. You know, whenever you separate people
from their purchases, they make If you walked into a

(01:55):
store and weren't told what anything would cost and you
can pick out whatever you wanted free, you know you're
going to be squandrous. You're going to buy things that
are way too expensive that you don't want. I mean,
one of the ways you control costs is making people
responsible for their own money, for their own expenditures. And
that is exactly what this program does not do. It
makes a separation between the patient and the doctor and

(02:16):
health services further and further removed and takes away all
control of costs. And frankly, if if I p J.
O'Rourke put it, he said, if you think healthcare is expensive,
now just way do you see how much it costs
when it's free? And that's exactly what we're doing here.
You know, you're you're a you're an economist, accomplished economist,

(02:36):
and you obviously need a lot of research here. Uh.
One of my bugaboos is in a in a political
sense that when somebody like it Obama or any Democrat
proposes something massive like this, the premise, which is we
have to have healthcare reform, is automatically accepted and we
start analyzing the numbers and we said, well, that's too

(02:57):
much hair is too much in there? Do you do
you get into the motivation for people who are behind this? Uh?
This monster? Did that interest you at all? Why? It
interests me? But it's not in this paper. I mean
that's not our purpose. As you say, I'm an economist.
I worry about the cost of the program, which are
going to be a lot more than anyone else suggests.
I'm worried about the access and the availability of the

(03:18):
services of the health care and I'm worried about the
quality of it. I mean, that's what economists really worry
about in this program. It's it's a real problem. Well,
your first point about separating people from the cost of
things is right on the money. It's uh, you know,
it started fifty years ago with Medicaid Medicare, and it's
just expanded and now people consider it a right that

(03:40):
their employer has to provide for them. But Dr Laugher,
your research is going to add to what people have
already learned on their own by reading what's in the
House bill. Uh, and they're they're outraged by it. Um.
Do you think that your research paper has an opportunity
to stop this? Well, I I hope it provides the

(04:01):
information in the fodder basically to really make it a
lot better. If not stopping it, I mean, I'd love
to see it stopped. You know, our healthcare system has
things that can improve it a lot, But it's not broken.
It provides great health care for many people. And frankly,
I think this type of reform, and especially in the
direction I think these people are going for having a
single pair, I think it's it's really the wrong direction

(04:23):
for America to go. I think it will really add
costs and up provide a lower quality product. Now you
have in your paper a lot of solutions, uh that
make health care more available, make it better without destroying
what's already good in the system. What are some of those, Well,
you know, some of the obvious ones that I think
are really big. I mean, I think healthcare providers who

(04:43):
aren't doctors, allowing them to do things they're competent to do, uh,
and not prohibiting them from doing it. The nurses and
other healthcare technicians shots and other things, and prescribing low
level medicines and that type of stuff. I think port
reform is another one rush that really is a huge
increase in costs. I mean, the insurance costs the doctor
has just for practicing medicine and how that feeds through

(05:06):
and expenses. Uh, it's amazing all of these things. There
are lots of things we can do to make our
system better. H s A is Health savings accounts is
another good example there vstly struck. However, from this from
both both houses of the House and the Senate, the
h s a s are going to be gone precisely
because they do give power and control of the patients. Sure,

(05:29):
and it gives you the power of your own money.
It's it's money that you put in there. I mean,
you know, individual ownership of masurance policies, that's an obvious one.
I mean the h s a s as you say,
are clear. Uh. You know, interstate purchasing of insurance that
that's another one that can easily be done. There are
lots of other ones that are in there that really
will make the system a lot better. But making it

(05:50):
the post office of the Department of Motor Vehicles or
making a doctor's employees of government really doesn't make it better. Honest,
let me move to the general economy if I can't.
For just I love it. We saw the news yesterday
tax receipts, corporate and personal near record laws since the nineties. Surprise, surprise,
Well it does it the personal question. Uh. The author

(06:13):
of the Laugher curve the principle that uh, to a
certain point lowering marginal tax rates stimulates economic activity and
generates more revenue to the treasury has been proven twice
Kennedy and Reagan. It has been and well Bush bush
Bush has been proven three times. Does it frustrate you personally?
That's something you know works that has been demonstrated to

(06:35):
work to the world constantly attacked and tried to be overthrown. Yeah,
but it's it's silly because, I mean, everyone knows that
you can overcharge for something and collect less money, and
everyone knows you can undercharge for it and collect less money.
You know, there's a pricing mechanism there and taxes are
no different. And it just let's take the healthcare one here, Rush.

(06:57):
You know, the President wanted to put a five point
four sir a charge on millionaires thinking he'd collect more money.
That's about the dumbest idea I've ever heard. If you
raise taxes on those people, you're gonna get a lot
less people, and they're gonna fig your ways around it,
and you're going to collect a lot less money. Dr Laugher,
This gets to a question that the point that really
really bugs me. You just said it's stupid. Anybody with

(07:20):
any economic literacy has to conclude by now, and many
knew before it was implemented that the whole stimulus theory
was bound to fail. It had no chance. It's never
worked whenever you get something for nothing, because you're probably so,
I'm back to motivation. I'm back in. This may be

(07:40):
an area you might not want to get into, but
I'm gonna chance to question. I don't believe they're stupid.
I think it's being done purposely for a reason. Nobody
is this stupid, not with the history of the world,
in the history of this country. Within twenty years as
a guide, there's a blueprint how to get an economy
going again. It's called get out of the way of
the American people, and saddvised them this is the exact opposite.

(08:03):
We're losing five or six hundred thousand jobs every month.
Consumers spending was up point four percent, but the incomes
are down one point three percent. Nothing is working. There
is no rescue, there is no recovery. And they're talking
about doubling down on this. And I, for one, as
someone who understands how wrong this is dangerous, don't understand
why it is being continued. Well, I'm not really sure

(08:25):
but if you've ever been at the university with fellow professors,
I mean, they may be able to manipulate a Fineman
diagram or inverted matrix over a Banach space, but they
don't know how to pay their lunch bill, and they
can't tie their shoes. And what you see here are
these types of mistakes are classic professorial mistakes, lawyer mistakes.
They think that I could change a lot rush all

(08:46):
of a sudden things are working in that direction. It's
not true. And they have no idea of the real world.
They've never made a bad trade, They've never suffered the
humility of their own ideas being wrong, because in their classroom,
their ideas are always right. And that's the trouble with
this administration. They really don't have a clue. Well, you're

(09:07):
being generous. I am. I like I like the people
very much. I know a number of them very well.
They're good friends. Does Laurens have a clue? I don't
think he has a clue. He may be the one
that you're right on, by the way, if the other ones.
Jared Bernstein, I know him very well. He's a great guy,
an honest man. I think he's wrong but he's a
great guy. Christina's Romer, She's terrific. Her research before has

(09:29):
been great. Christina Romer is an acolyte of you. Yeah,
but she's great on that stuff. And she's just sitting
there now in a position where she has to mouth
the the the the party line, which is very sad.
I watched Austin Gouldsby defend Obama's firing of the chairman
of the board of GM. Hello, that's not what a

(09:49):
president the United States is supposed to do. Rush, but
that's what they were doing. And and the economist was justifying, well,
we're a big shareholder now and we Oh my goodness,
it's crazy, isn't it. It is, Well, it's crazy and
dangerous because you know when you start attaching motive to
this um. I granted you that their prophetsorial and academically stupid, ignorant,

(10:13):
but something about this is so bad and so wrong.
And there when you look at something that this bad,
there there are people going to benefit from it. And
when you look at who, then you say, okay, how
and but who benefits from this? I see? I don't
see the who benefits from these types of classic mistakes
unless you're just a power hungry dictating Well, I mean,
would Kim Jung Ill do this? I mean, seriously, he

(10:36):
has done it. His people are eating dogs, they're starving
to death. They're doing it in Venezuela. It's the history
of the world is a pretty bad guy. They're they're
they're not many worse than it. The history of the
world is this. That's why the United States is such
an exception. If you have a guy who's, for whatever reason,
as a chip on his shoulder about how the immoral
and unjust this country was. I tell you what I think.

(10:56):
Put in economic terms, I think that the objective Barack
Obama is via redistribution, to return the nation's wealth to
its quote unquote rightful owners. But you know he's destroying
it for the poor, for the minorities, for the disenfranchise. Yeah,
but he's no. No one's doing better with nine and
they have tem percent unemployment rate and the participation rates,
the average hours, the average wages, the quality of jobs.

(11:18):
It's declining like a like a submarine. Well, well, positive
positive theory. If your number one signature issue is healthcare
and you want it because with it you'll be able
to regulate every aspect of every American's life. That's true.
What better event could you have the massive unemployment and
people losing their health insurance, clamoring for more, clamoring for
their health because they're scared to death, they're going to

(11:38):
get sick. I think there's a lot of fraud and
deceit that accompanies the professorial stupidity. But there is a
lot of that. It's hubris, I mean, is what it
really is. And their inability to admit they're wrong, because frankly,
they don't have to bear the consequences of their own
hubris and their own mistakes. That that's the problem. That's
a good points. Dr Laugher. This is a great talk

(11:58):
to you against It's wonder we're talking with you. You're
doing a great job. Thank you very much. You bet haven.
You're going to present this paper a two o'clock this afternoon, right,
all right, well we'll have were you doing that in
New York? I'm in New York? Okay, good well, good luck,
and thanks very much for your time. Thank you very much,
Dr Arthur Laugher.