Letters to the Editor
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Paul Krugman? That brilliant economist?
Okay, let me see if I have this straight: Paul Krugman, a former economist so brilliant that he once predicted the Bush's economic policies would produce a total economic disaster, when they have, in fact, brought Americans...
Stocks at an all-time high. An economy poised to grow by 3 percent in Q3 after growing nearly 4 percent in Q2. Highly competitive exporting at a 13 percent annual rate, including a 24 percent export gain to China, a 25 percent increase to South America, and a 15 percent export rise to Europe. Not to mention tax cuts that have fueled a thriving economy, producing $2.6 trillion of tax revenues and bringing the FY 2007 budget deficit to only 1.2 percent of GDP or $163 billion. Then there's the fact that tax collections for 2007 are currently $550 billion above the prior FY 2000 peak. Even spending in 2007 was held to 2.8 percent growth, with domestic spending less entitlement and security actually falling by nearly 6 percent from last year. And, oh yeah, since August 2003, the economy has added more than 8 million new jobs, meaning 49 straight months of economic growth. A new record. And did I mention that the unemployment rate is only 4.7%?
So excuse me if I have a great big belly laugh whenever Paul Krugman"dazzles" me with any future economic "predictions."
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@Uberfemme
LOL! I take it back. brickbat will probabaly have a tough time finding a survey that includes the attitudes "yellows and other colors".
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Uh-huh
Okay, let's see. . . Suspension of Habeas Corpus. Torture. Surveillance of all phone calls and e-mail. Transfer of $2 trillion of wealth in a war perpetrated under false pretenses. Creation of mercenary armies. Genocide of a million innocent citizens of a non-aggressor nation (who are of a different race, incidentally), not to mention gutting of the Constitution and the Bill of Rights, enabled, aided and abetted by the Democratic Party . . . . what was the part about conscience again?
I don't know whether to laugh or cry, but I'll certainly be reading Andrew Leonard with different eyes now. Sheesh.
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Why is liberal a dirty word?
The answer is very clear. Pat Robertson begin the attacks againist "liberal" on CBN's 700 club in the late 80s and it was really ratched up in the early 90s. He coined and gave more air time to the phrase "Bias Liberal Media" in order to justify the edited and misinformed news they presented. Under Reagan and a Democratic congress we got rid of the 'fairness and accuracy in the media" laws, which gave rise right-wing talks shows like Rush and , O'Rielly ect., which again jusified their misinfomriton by calling all other mediaa "biased liberal media". The Chrsitain right accused the "liberals" of starting a 'cultural war' when in fact it was the Christain Right who created, and promoted a non exsitent "cultural war". So like Hitler the right has built a case agnsit "liberalism" gradually by demonizing it, and misrepresenitng what it really stands for and encouragin voters to run from it. At the same time the Chrisitan right took over the Repbulican party, the "new rich" left the GOP to form the even more selfish "Libertarian" party. The "Libertarian" party also engaged in attacks on "liberalism" economic thinking, with thier suuport of "no taxes" and "privatization". Education was attacked as failing because of "liberal" eductional policies which relsuted in teh creation of "No child Left Behind" and privitaztion of public schools which led to mediocrity through testing instead craativiy and educating.
The right and the centrist worked together export jobs, break-up unions, and more imported labor through illegal slave-wage immigrants.
Liberals where slow to respond in an responsible manner to these attacks and the pulbic was not interested in listening. Both have seen the errors of ignoring "liberalism'.
The U.S. made the most progress when liberals were in power.
However the regressive Conservative and sefish libertarian policies are driving the U.S. to mediocrity. Other wealthy nations are passing us by because they invest in their citizens thourgh more advanced technolgy, new info structures, more creative and advanced educauton, national health care, government pensions, and improved enviromental programs. Ther citzne pay taxes becseu they understand the mportance of working for the greater good.
The U.S has lost much greatness over the past 8 years. We are viwed as arrogoant and selfish, and it will take along time to repair the damage. We start to can reapir this damage with a resurgence of "Progressive ideals".
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Be careful what you wish for...
As I remember the Reagan rationale for tax cuts (especially the original tax cuts) it was that higher income people would have more incentive to invest (or spend additional time working) if the highest marginal tax rates were reduced. At the time, the highest marginal rate was something like 80%.
I've always held that Reagan's original cuts were truly transformative in that they did spur investment and resulted in the unprecendented productivity and economic growth of the 1990s (as investments can take 5-10 years to become meaningful businesses).
Who benefitted the most? Well, the higher income people who were the targets of the tax cuts. Obviously. It was their investments that were paying off, by and large. However, everyone benefitted from the overall economic gains to some degree.
If that hypothesis is true, two questions are answered: 1) why we have a growing income disparity and 2) why further and further tax cuts by Republicans have had less and less marginal benefit.
#1 is self-evident - the investments themselves and the infrastructure for those investments (rise of venture capital, hedge funds, etc.) resulted in the rich getting richer. Whether everyone else is worse off, though, is still up for debate because we cannot know the alternate reality if the highest tax rates had not been cut.
#2 is fairly obvious as well. It is one thing to change the marginal rate from 80% to 50%. It is of far less utility to change it from 50% to 45% to 40% to 38%. While I expect an echo effect of the capital gains tax change from 50% to 20% (or less) sometime in the near future, it may be only an echo. The captial gains tax has its biggest effect on WHEN an investment is sold, not whether it makes to do it at all. An entrepreneur can simply take a larger salary or find plenty of lenders to finance his lifestyle without selling his or her company. If the business value is increasing, regardless of the tax rate, he or she can extract current value. The income tax rate change likely will prove to have had a large impact in the long run.
So...where does that leave us vis-a-vis Mr. Krugman's article. In my opinion, we need be very careful about efforts to rein in income disparity that seriously impact incentives to invest. Perhaps the New Deal did "improve" income disparity during the Great Depression. I tend to believe the Great Depression itself, along with WWII, did a significant amount of income levelling regardless of any New Deal policies.
Be careful what you wish for, then. Achieving income equality through another harrowing depression, caused by lack of investment and loss of jobs to countries where productivity is improving, would be a hollow victory. Sure, you may resent the hedge fund managers nine-digit bonus, but in lowering his or her income the extra dollars may not fall in everyone else's pockets. Those dollars simply may disappear or migrate overseas.