The central issues of the 2012 election are jobs and the economy. Under President Barack Obama's leadership unemployment has surged, despite his promises to the contrary, while the recovery remains positively anemic. It may be, as many have argued, that government can do little to create prosperity other than to get out of the way. In an ideal world job creators would be free to invest and innovate, start new businesses and expand existing ones, and to do the other things that entrepreneurs do well—which includes putting the country back to work. Unfortunately the tax, spending, and regulatory policies coming out of the White House actively discourage them from doing any of that.
As hard as it is to defeat an incumbent, Obama's record on these issues is so transparently poor that the Republican with the best plan to unleash the might of American productivity stands a good chance of winning the presidency in November. And that Republican just might be former House Speaker Newt Gingrich, whose campaign got a much needed shot in the arm Tuesday when it announced it had secured the endorsement of noted economist Art Laffer.
Laffer, a founding father of the modern supply-side movement said his reason for backing Gingrich was simple: "Newt has the best plan for jobs and economic growth of any candidate in the field." For anyone who follows the politics of economics, that's a close to a gold seal of approval as it gets.
A prominent member of former President Ronald Reagan's economic team, Laffer is most famous for his creation of the eponymous "Laffer Curve," which demonstrates there is a point at which a dollar less or a dollar more in taxation reduces the influx of revenue to the government. As the Reagan years proved, lower tax rates can change people's behavior, making them more productive by encouraging them to engage in economic activity they might otherwise avoid because, with higher tax rates leading to lower returns, the costs of the additional activity are not worth the potential reward.
Laffer said in a release put out by the Gingrich campaign,
Like Ronald Reagan's tax cuts and pro-growth policies, Newt's low individual and corporate tax rates, deregulation and strong dollar monetary policies will create a boom of new investment and economic growth leading to the creation of tens of millions of new jobs over the next decade. Plus, Newt's record of helping Ronald Reagan pass the Kemp Roth tax cuts and enacting the largest capital gains tax cut in history as Speaker of the House shows he can get this plan passed and put it into action.
Rebuilding the America we love requires returning to job creation and economic growth. We need big changes to fix the economy, and I am ready to stand up to Barack Obama's class warfare rhetoric to make the case that letting the American people keep more of what they earn is the best way to create jobs.
With the crucial Iowa caucuses just a few days away the endorsement could not have come at a better time for Gingrich, who continues to be at or near the top of the field in most national surveys but has seen his lead in the Hawkeye State slip away over the last two weeks. Critics who doubt Gingrich's conservatism, at least on economic issues, will be hard pressed to find a way to spin Laffer's endorsement into anything but a solid affirmation of his conservative credentials.
- See pictures of the GOP candidates heading to the Iowa caucus.
- See a collection of political cartoons on the economy.
- See a slide show of Mort Zuckerman's 5 Ways to Create More Jobs.