Art Laffer, a longtime financial adviser to President Donald Trump, urged Republicans in opposition to funding extra coronavirus relief even as an organization in which he held inventory cashed in on tens of millions in small enterprise aid.
Laffer, who popularized the thought of “trickle-down economics” and suggested Trump on tax cuts and coronavirus relief, referred to as for the president and Senate Republicans to “cut the [coronavirus] spending” in a letter launched on June 16.
“There is no limit to worthy causes, but there is a limit to other people’s money,” the letter addressed to Trump and Senate Majority Leader Mitch McConnell, R-Ky., and signed by 20 distinguished Republicans, together with Laffer, fellow Trump adviser Stephen Moore and tax-cut zealot Grover Norquist, mentioned. “The inside-the-Beltway crowd falsely calls these trillions of dollars a ‘stimulus’ to the economy. But government can only give money to some people, as Nobel-prize winning economist Milton Friedman taught all of us many years ago, by taking money from others.”
But an organization in which Laffer owned inventory and served as a director for years had no downside “taking money from others” when it introduced it obtained almost $20 million in forgivable loans underneath the Paycheck Protection Program (PPP). (Disclosure: Salon obtained a PPP mortgage to preserve our employees and impartial journalism at 100%.)
Laffer served on the board of administrators at GEE Group, a supplier of staffing and human assets options, till March. Laffer had been on the board since 2015.
At the tip of final 12 months, Laffer seems to have held almost $154,000 in GEE Group shares on the firm’s closing value of $0.39 per share on Dec. 23, in accordance to a Securities and Exchange Commission submitting. The inventory holdings had been in addition to the $26,000 in inventory awards he earned from the corporate final 12 months.
And the holdings are vital. The firm had greater than 13 million excellent shares, that means Laffer’s 394,140 shares amounted to about 3% of the corporate’s worth, in accordance to the SEC submitting.
GEE Group, a supplier of staffing and human assets options, mentioned it obtained $19.9 million in PPP loans, in accordance to an SEC submitting, even after it laid off staff, per a monetary report launched final month.
“Art Laffer waves his finger at federal relief spending for working families but doesn’t seem to mind when it benefits him personally,” Derek Martin, a spokesman for the progressive watchdog group Accountable.US, informed Salon. “His hypocrisy wouldn’t be so serious if it weren’t coming while millions of workers in desperate need of a lifeline continue to file for unemployment benefits. This is yet another example of the wealthy and well-connected getting ahead during this crisis.”
Accountable.US reviewed the paperwork as a part of its TrumpBailouts.org mission, which tracks recipients of PPP cash after Treasury Secretary Steven Mnuchin mentioned the division wouldn’t disclose who obtained the funds. The division on Thursday relented, agreeing to give Congress entry to the mortgage information.
Despite Laffer’s opposition to the coronavirus stimulus, the Small Business Administration touted the PPP as a “direct incentive for small businesses to keep their workers on the payroll.”
GEE Group argued in the SEC submitting that PPP loans had been “the only source of funding available to our companies” and had been “absolutely critical to our ability to maintain operations, including the employment of our temporary and full-time employees.”
The firm mentioned the loans had been mandatory to counter the “severe negative effects” of the pandemic. The firm indicated in its monetary report that the PPP loans “allowed the company to restore compensation levels and bring back furloughed employees and selectively add new talent.”
Shortly after shedding staff earlier this 12 months, the corporate introduced it could add three new members to its board of administrators. The firm’s SEC submitting confirmed that its board of administrators collectively personal millions in firm inventory, suggesting that the brand new hires are poised to earn lots of of 1000’s — if not millions — in inventory.
Laffer holds a variety of affect in the Trump administration. He “helped write” the Trump marketing campaign’s tax plan, in accordance to The New York Times, and mentored Larry Kudlow, the top of the White House financial council.
Trump praised Laffer, who wrote a fawning e book in regards to the president’s financial insurance policies titled “Trumponomics,” when he awarded him the Presidential Medal of Freedom final 12 months.
“Few people in history have revolutionized economic theory like Arthur Laffer,” he mentioned, claiming that “Art would go on to prove [critics] all wrong on a number of occasions.”
“Laffer’s relentless and sunny advocacy of tax cuts, deregulation and free trade have influenced decades of Republican policy proposals, most famously under President Ronald Reagan in the 1980s,” The Times reported. “Democrats have criticized him for repeatedly promising that tax cuts would deliver growth and revenues that did not appear, such as damaging state tax cuts in Kansas that produced a large shortfall in the state budget and prompted the Republican-controlled Legislature to ultimately reverse them.”
Since the pandemic hit, Laffer has suggested Trump, Mnuchin and Kudlow on financial points, in accordance to RealClearPolitics. But Laffer suggested the administration in opposition to supporting the CARES Act, which included the PPP, though Trump now brags that the invoice helped save “30 million American jobs.”
Laffer as an alternative urged Trump to impose taxes on non-profits, cut the pay of public officers and school professors and provides companies and staff a payroll tax vacation till the tip of the 12 months, in accordance to Reuters. Laffer claimed that the CARES Act would “only serve to deepen the downturn” and “disincentivize work,” in accordance to the outlet.
Economists and lawmakers largely agree that the CARES Act, and the PPP particularly, had been an enormous assist to millions of small companies and staff. However, many argue that this system wants extra funding as corporations proceed to battle.
Laffer was however floated as a possible candidate to serve on Trump’s activity pressure to reopen the financial system.
“Bring in minds like Art Laffer,” Fox News host Sean Hannity urged in April.
Sen. Brian Schatz, D-Hawaii, who sits on the Senate Appropriations Committee, mentioned that including Laffer to the duty pressure can be a horrible thought.
Laffer has “bad ideas that are even worse in a pandemic,” he informed RealClearPolitics. “It is a very crazy time to put someone like this in charge of economic policy.”