For those of you who thought that the bad old days of 1980's supply-side economics had disappeared forever you may have been rather shocked by the news that Arthur Laffer, the author of the founding idea for Reaganomics that a government could increase its tax take by cutting taxes to improve the supply-side of the economy, had come out against an economic stimulus package for the US economy. In a speech this week in Buffalo he described it as "one of the silliest things I've ever seen". Less shocking is Laffer's alternative, waive all capital gains taxes on any assets acquired for the next year and held for more than three years. Obviously the Wall Street analysts were still listening, as they rapidly ran off press releases about how taxes were stifling the economy rather than a potential lack of demand. This may have had something to do with Laffer now running an economic consulting service for city investment brokers.

However, once this rather tired argument was out of the way, Laffer went on to be fairly optimistic about the underlying long-term factors affecting the US economy, a much better reason for not pump-priming the economy than tired supply-side taxonomics. He even managed to praise Bill Clinton for leaving the US economy in a position where it could absorb the sudden economic shock of the terrorist attacks.