On September 13, 1974, in the aftermath of Watergate, four men met at a restaurant in Washington, DC to discuss a new strategy for the Republican Party. One of them was Donald Rumsfeld. Another was Arthur Laffer.

Laffer had made a name for himself as chief economist in the Office of Management and Budget and was now working as a consultant to the secretary of the treasury. His ideas had been on the fringe of economic orthodoxy for most of his career. Unfortunately for the rest of us, that was about to change.

At that time, President Gerald Ford had just inherited an economy in the throes of a stagflationary crisis, unleashed by the 1973 OPEC oil embargo and a crashing dollar following the collapse of the Bretton Woods system. Rumsfeld had called upon Laffer to scrutinize Ford’s plan: reducing inflation and raising revenue by introducing a temporary 5 percent tax surcharge on corporations and high income individuals. Laffer ridiculed the idea.