MURFREESBORO, Tenn — Former presidential economic adviser Arthur Laffer visited Middle Tennessee State University recently to discuss the economic landscape produced by the Trump administration and questions surrounding its economic strategies.
Laffer, an economist, former professor and adviser to former President Ronald Reagan and President Donald J. Trump during his first term, spoke on March 26 to attendees in Room S102 of the Business and Aerospace Building.
The afternoon talk titled “America’s Economic Outlook in the Trump Era” focused on income inequality, trade and tariffs — with tariffs an increasingly used tool by the new administration that has resulted in strained relationships with longtime economic allies such as Canada and Mexico and some economists predicting it will have an adverse impact on U.S. consumers and businesses.
“This is about facts,” the 84-year-old Laffer told the audience. “Not how you feel.”
Part of the Distinguished Lecture Series, the talk was hosted by the Jennings A. Jones College of Business, Department of Economics and Finance, and the MTSU Political Economy Research Institute. It was sponsored by the Young America’s Foundation student group.
“Legislature (Congress) no longer is used for tariffs, it’s now done by executive order,” explained Laffer. “It’s become a much more flexible system than it ever had been.”
On March 26, Trump imposed a 25% tariff on all foreign automobiles and some automobile parts. The move highlights the flexibility of implementing tariffs that has not been seen in the past, Laffer noted.
A fiscal conservative, Laffer emphasized that he believes Trump is a free trader and is imposing tariffs “as negotiation tools to be able to get better deals, better trade, better other deals than that.”
During the Q&A session following the talk, the audience was curious about the implications of the highly controversial Department of Government Efficiency, more popularly known as DOGE and led by billionaire Elon Musk, and potential federal staff layoffs, along with government debt.
Laffer suggested that if DOGE implemented an incentive structure, like merit-based pay, the department would be able to further decrease federal spending.
“You need to get government employees to have skin in the game,” said Laffer.
Laffer, who has authored numerous books focused on the economy, earned a bachelor’s degree from Yale University and earned a master’s degree and Ph.D. from Stanford University. He was also awarded the Presidential Medal of Freedom by Trump in 2019.
He is perhaps most well-known for creating the “Laffer curve” in 1974 to explain the theory that there is an optimum tax rate to maximize government revenue. If the tax rate is too low or too high, government revenue decreases.
— Jordan Reining (Jordan.Reining@mtsu.edu)
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