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Arthur B. Laffer, professor, businessman and possible candidate for next year’s Republican nomination for the U.S. Senate from California, speeds down the freeway in his telephone-equipped BMW 733i, sipping a can of Diet Pepsi and reflecting on his life in the fast lane.

The impatient energizer of the nationwide tax-cut movement–a tenured professor at age 28, chief economist of the White House Office of Management and Budget at 29–has long prided himself on his ability to keep several balls in the air at once. But he acknowledges that his high-speed juggling act can sometimes get him in trouble.

“When you move very fast, you rustle the fields,” said Laffer, whose choirboy looks belie his 44 years. “You cause a commotion. Without meaning to, you create squalls.”

Controversial Figure

As a result, his life has been marked by controversy as well as achievement. Squalls spawned by Laffer’s frenetic pace have cost him a marriage and two college professorships.

Most recently, the designer of the Laffer Curve–which illustrates his disputed theory that cutting taxes can actually increase government revenues while a tax hike might reduce them–relinquished his post at USC’s School of Business Administration last September after a bitter dispute with the school’s dean. Toward the end, Laffer, who by all accounts is an excellent teacher, and the dean, Jack D. Steele, refused to even speak to each other.

USC blames Laffer’s schedule for the rupture. “With all his outside affairs, he was spreading himself too thin,” said Cornelius J. Pings, USC’s provost and senior vice president for academic affairs. “He just wasn’t meeting his obligations on campus.”

He Disputes View

Steele confirmed that Laffer’s extracurricular activities were a problem, although Laffer disputed that view.

As if to prove that he can run his $2.7-million-a-year economic consulting business and explore the possibility of seeking public office and advise President Reagan and teach, Laffer recently joined the faculty of Pepperdine University’s School of Business and Management. It was a step down in the academic world, though in many ways he and his new employer are well matched.

Pepperdine, founded in 1937 by a conservative auto-parts magnate, shares Laffer’s passion for the free enterprise system and his knack for self-promotion. Indeed, Pepperdine recently ran advertisements picturing “the renowned originator of the Laffer Curve” in the Wall Street Journal and The Times.

Although Laffer’s economic views mesh well with those of the Church of Christ-affiliated school, he is no fan of Pepperdine’s strait-laced social scene. Drinking is banned on campus and chapel attendance is mandatory.

Laffer, on the other hand, maintains an extensive cellar of German and California wines at his Rolling Hills Estates home. And, though raised as a Presbyterian, he doesn’t attend church–and says he won’t start should he decide to run for office.

About the only concession the plump professor has made to the image makers while testing the political waters has been to shed 15 pounds by substituting Very Vanilla Sego, a diet drink (“Yuk–I hate it!”), for his beloved sushi. Currently weighing in at 175, the 5-foot, 7-inch Laffer figures he has another 15 or 20 pounds to go.

Although considering a run for the Senate, Laffer is openly contemptuous of Congress. “If you look at congressmen and senators,” he tells audiences across the state, “you see a group who invariably prefer complex error over simple truth.” It is his biggest applause line. “If you ever saw what those guys actually did for a living, you’d recognize their banality and you’d throw them out of office.”

Six Children

Laffer’s personal life is as packed with activity as his professional one. Besides Traci, the 25-year-old second wife he fondly calls “my Valley girl” (she grew up in Ontario), the Laffer clan includes six children ranging in age from 6 months to 20 years, 15 rabbits, 10 parrots, 4 macaws, 3 tortoises, 2 horses, a Jack Russell terrier and a Norwegian blue fox. Laffer, an amateur biologist who once considered forsaking economics for a career in biology, manages to find time for all of them.

The menagerie used to be bigger. Fern, a pet weasel, drowned in the Laffers’ swimming pool, though her place in family folklore is secure. Laffer cackles when he remembers the time his daughter, Rachel, then 6, tossed the wriggling creature onto First Lady Nancy Reagan’s lap at a 1980 dinner party.

“I don’t think I’ve ever come so close to heart stoppage,” said Laffer, who at the time was trying to sell his supply-side theories to presidential candidate Ronald Reagan. “Everyone held their breath waiting to see how she’d react, but Mrs. Reagan was quite the lady about it.”

Unconventional Ideas

The economist revels in his new and unconventional ideas. He would reward elected officials and the head of the Federal Reserve Board with big bonuses when the economy booms and slash their salaries during recessions. He would wipe out the capital gains tax. He would amend the Constitution to provide for national referenda. And he would give $15,000, tax free, to the top 5% of scorers on the Scholastic Aptitude Test.

“Can you imagine if all of a sudden you could get out of the ghetto by studying instead of by playing basketball?” Laffer asked. “If you play basketball 16 hours a day, you become a great basketball player. If we could get these kids to study 16 hours a day, they’d become great students.”

Such schemes have won Laffer the friendship of “new ideas” Democrat Sen. Gary Hart of Colorado and the grudging admiration of some fellow economists. “Whatever you think of Laffer’s ideas, at least he thinks,” said Lester C. Thurow, a liberal professor of management and economics at Massachusetts Institute of Technology whose views often differ from Laffer’s.

Some say Laffer’s boyish looks and small stature could prove a liability should he decide to seek office. Characteristically, Laffer employs humor to disarm the size issue. In speeches, he invariably mentions flat-tax advocate Sen. Bill Bradley (D-N.J.), the former New York Knicks basketball star. Then, in his best Joan Rivers delivery, he adds: “It’s disgusting how tall he is.”

Penchant for One-Liners

Indeed, Laffer’s penchant for jokes and one-liners (sample: “The British pound is so weak that they’ve started calling it the ounce”) have led some to question his seriousness. Samuel Armacost, president and chief executive officer of BankAmerica Corp., recently quipped that a speech by Laffer “isn’t economics–it’s entertainment.” Laffer says he uses humor to make complex subjects palatable.

Although he is a polished speaker, Laffer appears to be reining in his glib, shoot-from-the-hip style. He disavows a 1981 comment embracing “the freedom to smoke pot if we want to.” Laffer acknowledged having made the remark, but said: “I think I was probably showing off at the time–trying to show you don’t have to be a conservative on all issues to favor tax cuts.”

Other Laffer views reflect his coming of age as an undergraduate at Yale and a graduate student at Stanford during the turbulent ‘60s. He staunchly opposes the draft, contending that Vietnam-era draft resisters were the spiritual ancestors of today’s anti-tax movement. “The draft is a specific tax on your body,” Laffer said.

Still, Laffer rarely wanders from economic matters in his speeches and articles. He strongly supports the concept of a flat tax, predicting that some sort of bill equalizing personal-income tax rates will emerge from Congress this year.

‘Enterprise Zones’

Another Laffer idea that has been picked up and championed by the Reagan Administration is the establishment of inner-city “enterprise zones.” Corporations locating factories in such zones would get big tax breaks and relief from minimum-wage and other regulations. The economist argues that setting up such zones would break the cycle of poverty and dependency in urban ghettos.

Despite Laffer’s emphasis on economics, mainstream economists and even conservative allies question the quality of his scholarship. “He really wasn’t interested in the life of a scholar,” said George Stigler, a professor at the University of Chicago’s Graduate School of Business, where Laffer held his first teaching job. “Doing painstaking, detailed work wasn’t his game. He went for quick and glamorous results.”

It was a trauma at Chicago, Laffer said, that turned him away from academia and pointed him toward the business and public policy arenas. In 1971, some colleagues at Chicago accused Laffer, who hadn’t yet earned his Ph.D. from Stanford, of misleading a faculty committee that had earlier promoted him to full professor.

Laffer quickly finished up his Stanford doctoral dissertation and got the degree. “It was just a question of dotting the i’s and crossing the t’s,” Laffer said, explaining that he never finished in the first place because he got swept away by his other commitments. A university committee headed by Stigler investigated the matter and found Laffer guilty of nothing worse than “carelessness,” Stigler says.

Career at a Standstill

Nonetheless, as Laffer tells it, lingering suspicion from the incident “put a stop to my career.” For the next five years, he didn’t get a raise at Chicago and academic journals shunned his articles. Suddenly, the boy wonder was a pariah. “So what do you do?” Laffer asked, “sit there and commit suicide? No, you find new avenues of expression.”

It was during this period that Laffer in 1974 sketched his now-famous curve for former journalist Jude Wanniski and an aide to President Gerald R. Ford on a cocktail napkin in a Washington restaurant. “He just scribbled it out,” Wanniski recalled, “and I thought it was a useful device for getting the message across.” The message (see chart) was a simple one: that cutting taxes could actually result in an increase in government revenues by creating incentives for people to work harder and save and invest more.

The curve didn’t gain notoriety until 1978, when Wanniski included it in his book “The Way the World Works: How Economies Fail and Succeed.” “At first,” Wanniski said, “Art was embarrassed by the name Laffer Curve–until he started to make a lot of money off it.”

Indeed, Laffer has used his high visibility to build his consulting company, A. B. Laffer Associates, into a multimillion-dollar enterprise with 20 full-time and 15 part-time employees. The firm has about 300 corporate clients who pay between $6,000 and $8,000 a year for Laffer’s economic analyses; special contracts added another $200,000 to the firm’s 1984 revenues, and about 85 speaking engagements by Laffer himself yielded $433,000.

Two Homes

Business profits and Laffer’s Pepperdine salary afford the family a comfortable life style in their antique-filled Rolling Hills Estates home and a 17-acre mountaintop retreat in Rancho Santa Fe. Such wealth is nothing new for Laffer; his late father was chairman of the board of Gould Inc., the big electronics concern, and young Arthur attended private day school in a prosperous Cleveland suburb before going on to Yale.

Despite Laffer’s commercial success, the jury is still out on his celebrated curve. Donald W. Kiefer, an economist with the Congressional Research Service, calls it “an overly simplistic approach which ignores complex economic relationships.” Critics say that the huge budget deficits that followed the Laffer-supported Kemp-Roth bill that reduced personal income taxes by 25% underscore the shortcomings of Laffer’s theory.

Laffer, on the other hand, blames delays in the tax cuts and increased government spending for the deficits. Besides, he argues, this year’s $200-billion deficit is neither “a crisis” nor “a panic situation” given the U.S. economy’s underlying vigor. Like Reagan (and unlike most economists), he believes that economic growth eventually will take care of the problem. Laffer gets to promote his economic views at periodic meetings of the President’s Economic Policy Advisory Board, of which he is a member.

Moved to California

In 1976, with his academic career going nowhere, Laffer gave up on Chicago and moved to USC. In California, he became a key supporter of 1978’s landmark real-estate tax-cutting initiative, Proposition 13. A year later, his first marriage broke up, the victim of Laffer’s four-day-a-week travel schedule. “I came home from a business trip and the kids told me my wife had been gone for three days,” Laffer recalled.

He met Traci Laffer when she was a political science major at USC moonlighting as a secretary to Dean Steele. The pair hit it off when they realized they shared a love for exotic birds. Laffer proposed to her in Paris and they were married in 1982 in an elaborate Beverly Hills wedding attended by 800 friends.

“I got a package deal,” Traci Laffer said, referring to the four children from Laffer’s previous marriage and the large collection of animals.

Laffer still travels frequently, often sleeping on “red eye” flights to the East Coast, doing his business and flying home that day. “He has this idea that you can, in effect, live two lives by cramming as much as possible into your finite number of years on Earth,” said Wanniski, who now operates his own competing economics consulting firm.

None of Laffer’s friends expect him to slow down anytime soon.

WASHINGTON — Reporters assigned to travel aboard Air Force Two were told to prepare for an early morning departure on Tuesday for Islamabad until an unexplained delay — followed by a detour by Vice President JD Vance to the White House — revealed clues that something was wrong.

Iranian diplomats had not yet responded to U.S. proposals intended to form the basis of a new round of talks. Some were questioning whether they would attend at all. Had he departed as planned, Vance risked a humiliation, spending hours flying to Pakistan only to be stood up on arrival.

A crisis meeting at the White House led President Trump to announce an indefinite extension to a ceasefire deadline that had been set as a pressure tactic. Now, unable to bring the Iranians to heel, that pressure was suddenly off.

It was an early lesson for Vance in the many ways high-stakes diplomacy can veer off-course.

“There are obvious risks for Vance,” said Chester Crocker, who served as an assistant secretary of State in the Reagan administration, “being associated with failure or with a dubious deal.”

Trump’s aides are clear on the stakes in negotiations with Iran over its nuclear program and an end to the war. Control of the Strait of Hormuz could determine global oil prices for years. Any final deal will shape whether Americans ultimately conclude the fight was worth it — and could sway the outcome of the midterm elections.

But for America’s lead negotiator, the stakes are also personal.

Vance, a diplomatic novice, has found himself at the helm of an effort rife with political risk that has stymied seasoned diplomats ahead of an anticipated run for president.

The potential payoff is substantial, placing Vance at the center of an international stage with the power to end a historically unpopular war.

But he also may be forced to attach his name to a nuclear deal that provides Tehran access to billions of dollars in sanctions relief, in exchange for limits on its nuclear work that will ultimately expire over time, under conditional monitoring access for international inspectors — an agreement with striking echoes to a 2015 nuclear deal negotiated by a Democratic administration that was disparaged by his party for over a decade.

Vance is negotiating not on his own terms, but on behalf of a mercurial president whose decisions will ultimately determine whether an agreement can be reached. And the Iranians know that Trump’s days in office are numbered, with Vance, a war skeptic, possibly in line to succeed him.

One U.S. official familiar with the negotiations said the vice president is “a pragmatist,” realistic about the prospects of a deal.

“What he has to gain is an image that he can operate effectively on the world stage on a fraught issue. Even if he will give credit to the president, he will be seen as capable of resolving really hard, security-related problems,” said Dennis Ross, a veteran diplomat on the Israeli-Palestinian conflict who served in the George H.W. Bush, Clinton and Obama administrations. “What he has to lose is that he was given the role and did not succeed.”

Failure could raise doubts about his statecraft. But even success at the negotiating table could result in an agreement that turns off Republican voters he may need in a 2028 presidential bid.

“Vance is put in an impossible position,” said Arne Westad, a professor of history at Yale.

“Any deal with the current Iranian regime will be seen as problematic by many Republicans,” Westad said. “If he fails to secure a deal, he will be attacked by those who want an end to the U.S. war — and be seen as ineffective by the president.”

Reputation ‘on the line’

Trump has publicly acknowledged that Vance, a Marine Corps veteran who has consistently opposed U.S. military engagements in the Middle East, had reservations over launching the Iran war in the first place. “He was, I would say, philosophically a little bit different than me,” the president told reporters in March. “I think he was maybe less enthusiastic.”

For that reason, according to Iranian state media reports, Vance was seen by Tehran as their preferred interlocutor in negotiations. Iranian officials expressed gratitude when, during fevered talks ahead of the initial announcement of a ceasefire, they learned that Steve Witkoff, the president’s roving negotiator, had recommended that the vice president be included in the delegation — an exceptional gesture that marked Washington’s highest-level engagement with the Islamic Republic in history.

Republican strategists said Vance’s participation is a demonstration that Trump trusts him, an essential trait for any future Republican presidential nominee and aspiring heir to the MAGA movement.

“It’s rare that a vice president has been put in the position of directly negotiating with a foreign adversary,” said Terry Nelson, a longtime Republican media strategist. “We are engaging a very senior political leader in negotiations with a country that has killed U.S. soldiers and sown chaos in the region. I do think it’s an indication of our resolution and seriousness.”

Whit Ayres, a veteran Republican pollster who has consulted Republican senators and governors for more than three decades, said the vice president’s appointment as lead negotiator “elevates Vance as Trump’s heir-apparent even more than before.”

“Whether that becomes a plus or a minus depends on the outcome of the negotiations,” Ayres added, “and Trump’s ultimate standing with the Republican electorate, both of which are unknowns.”

Talks are currently deadlocked over long-standing demands from Tehran that its leadership has held since the early 2000s, when previously undisclosed nuclear activities first triggered international alarm over Iran’s expanding program.

Iran has periodically accepted temporary limits on its nuclear work — pausing uranium enrichment during talks and, under the 2015 deal, committing to a prolonged cap on enrichment at levels beyond any clear civilian need. But it has always insisted on a “right to enrich” on its own soil, rejecting U.S. attempts to permanently end the program as a foreign attempt to thwart Iran’s scientific progress.

Returning from the first round of ceasefire negotiations, Vance dismissed that position, articulated to him in Islamabad by the speaker of Iran’s Parliament.

“He said, ‘We refuse to give up the right to enrichment,’” Vance said. “And I thought to myself, you know what, my wife has the right to skydive, but she doesn’t jump out of an airplane, because she and I have an agreement that she’s not going to do that, because I don’t want my wife jumping out of an airplane.”

Echoes of a broken deal

The 2015 deal known as the Joint Comprehensive Plan of Action — negotiated by veteran, nonpolitical U.S. diplomats and nuclear scientists over two years of near-constant negotiations — removed roughly 98% of Iran’s nuclear stockpile from the country, while keeping the country’s nuclear infrastructure largely in place, save for the decommissioning of a heavy-water plutonium reactor that could have provided Tehran with a second path to a nuclear bomb.

Under the agreement, Iran consented to limit its use of advanced centrifuges for 10 years, and to restrict uranium enrichment to below weapons-grade levels for 15 years. Inspectors from the U.N.’s International Atomic Energy Agency were granted unprecedented access to monitor the program, though some of these enhanced inspection measures were set to expire after roughly two decades.

In exchange, Iran regained access to tens of billions of dollars of its frozen assets, and settled a long-standing legal dispute with Washington that led the Obama administration to transfer $400 million in cash to Tehran. The episode prompted scandal on the political right, which accused Democrats of fueling terrorism through the funding of Iran’s proxy militias.

Now, after just two weeks of negotiations, the Trump administration is already acknowledging that a final deal with Iran would rely on a familiar formula: temporary caps on Iran’s nuclear work in exchange for substantial sanctions relief. Trump withdrew from the JCPOA in 2018.

Iran comes to the talks with added leverage today, able and willing to disrupt the flow of 20% of the world’s energy through the Strait of Hormuz. And the United States is negotiating alone, without its former partners in the “P5+1” — Russia, China, France, the United Kingdom and Germany — at its side.

Anna Kelly, principal deputy press secretary at the White House, told The Times that “after Democrats like Joe Biden and Barack Hussein Obama weakened our country on the world stage, President Trump has effectively restored American strength with the help of Vice President Vance, who is doing a great job leading the United States in negotiations with Iran.”

“The president and his entire national security team have an incredible track record in making good deals for our country, and the American people can rest assured that the United States will not enter any agreement that does not put our national security interests first,” Kelly said.

Matt Gorman, a longtime Republican strategist and chief communications officer at Targeted Victory, said the JCPOA was viewed particularly critically because it “was negotiated in peacetime.”

“Vance would essentially be ending a war, if successful, and that allows him to make a very different argument,” Gorman said.

The vice president is currently polling as the front-runner for the 2028 Republican presidential nomination, ahead of Marco Rubio, who — despite serving as Trump’s secretary of State and national security advisor — is not directly involved in the Iran talks.

Vance’s role at the negotiating table could help position him as a peacemaker, Crocker noted, distinguishing him from advocates of the war entering the presidential primaries.

But Vance “has been tasked by a president incapable of staying on message, with limited stores of credibility with adversaries as well as allies and a disregard for the complexities of the issues,” said Barbara Bodine, former U.S. ambassador to Yemen. “His task? A credible end to the war without clear objectives.”

“At best, this will be a faux-gilded JCPOA 2.0. Victory will be declared to no applause. On the line is not just Vance’s own reputation, but a demerit in his run for the 2028 presidency,” Bodine added. “The Iran portfolio was no gift.”

What else you should be reading

The must-read: How a Trump-endorsed Republican could become California’s next governor
The deep dive: Palisades reservoir that was empty during fire is dry again. Residents aren’t happy about it
The L.A. Times Special: The Flores twins built a drug empire with El Chapo — then betrayed him

More to come,
Michael Wilner
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