Laffer's Ponzi scheme victims are not amused

In a sane world, this would be the end of Arthur Laffer's influence as an economic pundit. He would be laughed out of town.

HOUSTON (CN) - Fifty-two investors claim fund managers associated with supply-side economist Arthur Laffer took $3.1 million to prop up a Ponzi scheme, then said nothing as their money was "wasted with no reasonable expectation of recovery."

Lead plaintiffs Ronald and Lavonne Ellisor sued David Wallace, Costa Bajjali, and their entities Wallace Bajjali Development Partners LP, Wallace Bajjali Investment Fund II LP, the Laffer Frishberg Wallace Economic Opportunity Fund LP, and Arthur Laffer in Harris County Court.

Laffer is best known for the Laffer Curve, an economic theory that says reducing taxes will increase government revenue. He was a member of President Reagan's Economic Policy Advisory Board during the 1980s.

Sadly, we don't live in a sane world anymore, so I suppose nothing bad will happen to him. His spokespeople say he's no longer affiliated with the defendant firm. I expect he ran "laffing" to the bank with his endorsement fees and didn't lose a penny of his own money on the scam.

[More posts daily at the Detroit News.]