By James Kwak
Yesterday I wrote an Atlantic column about Republican presidential candidates’ fondness for tax plans that transfer massive amounts of money from the poor to the rich. The main question, to my mind, is why people like Herman Cain and Rick Perry talk about transferring massive amounts of money to the rich when polls show that even a majority of Republicans think the rich should pay more in taxes.
Many of the readers here could probably have written that column themselves, but it does have a wonderful picture of Cain and Perry in all their well-dressed glory.
68 thoughts on “Who Wants Tax Cuts?”
James Kwak said, “There is no historical relationship between marginal income tax rates and economic growth.”
From Arthur B. Laffer, October, 1978
From Laffer Center Overview
Isn’t the real objective a stronger, growing, more vigorous economy? Are raising taxes, government guarantees and increasing regulation going to get us there?
Statistically, Laffer’s evidence are laughers as compared to James Kwak’s. Moreover, the answers to your questions: “Isn’t the real objective a stronger, growing, more vigorous economy? Are raising taxes, government guarantees and increasing regulation going to get us there?” are “yes.”
There is no question but that income taxes are too low:
From 1945 to 1980 income taxes averaged near 12% of GDP. Reagan reduced marginal tax rates so much that they fell close to 9%. Clinton increase them back to 12%; and Bush/Obama reduced them again to 9 %(and below). However, on budget expenses have remained 12%(+/-1%)) of normalized GDP throughout(except for the Reagan/Bush1 years, when they were higher) . The deficit in income taxes has been financed by borrowing, largely from the Social Security trust fund. But, not only can we no longer continue to borrow from the trust funds, we have to start paying money back as beneficiaries start relying on the trust funds. In the short term, we have to raise income taxes to 12%, simply to cover on budget expenses. In the long term, income taxes must rise above 12% in order to pay back the trust funds.
Tax Cuts, Not the Clinton Tax Hike, Produced the 1990s Boom
bmz states, “From 1945 to 1980 income taxes averaged near 12% of GDP. Reagan reduced marginal tax rates so much that they fell close to 9%. Clinton increase them back to 12%; and Bush/Obama reduced them again to 9 %(and below).”
Political Calculations makes a convincing argument
The most reliable way to increase government revenue is to expand the economy, not tax it. Wal-Mart didn’t become the world’s largest retailer by raising prices.
Speedy: you employed to typical Republicon devices–1) subtly changing the categories: I used all federal income taxes; you used only “personal” income taxes; 2) your use of the “average” of 1946 through 2006 begs the question–income taxes were sufficient to cover on budget expenses under Democrats, but were wholly insufficient under Republicans–which IS the issue.
(typo: “two” not “to”) Moreover, in contrast to your rhetoric, the facts are clear: the lower marginal income tax rates of Reagan and Bush produced income taxes below on budget expenses–creating deficits. The higher marginal income taxes on the wealthy by Clinton and all previous Democratic presidents, produced income taxes equal to on budget expenses–eliminating deficits.
Tax rates are not the essential drivers of economic growth. There has to be a structural reason for that growth to exist in the first place – i.e., a demand. The massive growth of the 1990s, particularly the late 1990s, was the result of the electronification and computerization of the economy that had been picking up steam as the costs of these new technologies dropped. The Y2K bug preparation buying binge contributed to this in 1997-1998. The 90s were one of those inflection points in history where our economy transitioned dramatically from a manufacturing/services base to an information processing base, and new opportunities for making money were created. A lot of real wealth (not rentier tribute) was created then. Unfortunately, a lot of that information technology also fueled the cancerous growth of the FIRE sector, but this abnormal growth was generated in no small part due to the unwise tax and regulatory decisions made during the previous decade.
The name of Laffer reminds me of a classic illustration provided by Martin Gardner of Scientific American fame. Two diagrams: Laffer’s simple bell curve of tax revenue vs. tax rate, and a second diagram like a tangled ball of twine labeled “real economy”. The point: tax revenues are the result of a complex interaction of causes. If we reduce the number of variables to a hideously unrealistic few, we may obtain something that looks a bit like the Laffer curve. What a deliciously ironic name, though, no?
No nation, in the history of the world, has ever taxed itself into prosperity.
It’s always interesting to see Kwak’s simpleton black and white view of the world: All Democrats are good whilst all Republicans are evil. (And yes, Virginia, both parties have done evil things.)
Never mind that reality is a lot more complex. For example, Kwak conveniently failed to mention that Corzine of MF Global fame, was a Democratic senator and governor and that most importantly the CFTC, under a Democratic administration, *failed to regulate* MF Global.
Kwak also never mentions that regulatory failure of derivatives happened under Clinton’s administration where Democrats Larry Summers and Robert Rubin deliberately stifled derivatives regulatory reform.
Kwak in fact reminds me of the Chinese emperor, Qin Shihuang who attempted to rewrite history by burning books and killing scholars.
PS, Kwak, unlike Qin Shihuang, you can’t burn or kill the Internet — or even overwrite it as you attempt to do in your columns and blog.
Cain’s 999 includes a 9% sales tax. This is regressive on earnings but it is extremely progressive on wealth.
For the rich, wealth is the key metric not earnings.
The poor do not pay taxes, so how can any tax plan “transfer money from the poor to the rich”?
@Munny: Post World War II United States, except for Reagan and Bush presidencies.
@ Nemo: the working poor pay payroll taxes; under Reagan and both Bushes, excess payroll tax receipts were used to subsidize deficient income tax receipts. All the Republicon tax plans oppose ever raising income taxes enough to pay back those subsidies, in other words, they truly want to steal the money the working poor have contributed towards their retirements.
Too many here are leaving comments rife with assertions that lack evidence to support them. As such, these assertions leave me unconvinced. In the limit of zero tax rates, government income drops to zero. This is an irrefutable mathematical truth. What is also true is that no amount of tax-breaks for the job-creators will spur demand for the goods that the little people buy. The rich get that way by the existence of a fertile marketplace in which demand for their goods makes them rich (military-industrialists and high-end financiers excepted). Most demand for goods stems from the presence of a vibrant middle class (unless you make bombs, or CDOs). If the rich were interested in preserving their station, I would expect them to work to preserve the middle class, as this is simply enlightened self-interest. But if off-shoring production means you don’t have to take care of the domestic peoples, well, then, you might not care about anything that happens stateside outside of the corporate office and your gated community.
There was an article in The Economist that I can’t find/reference unfortunately. It sheds some light on a question I was asking myself. If the inequalities are so vast, why is it that it is that politicians use tax break as a way to get into office.
When it comes to supporting tax increases, that’s the level of wealth relative to the people around you that matters; not the absolute level compared to the entire population. For example, a semi well-off person in a poor neighborhood is likely to vote against more tax for the rich not so much because he sees himself as rich but because additional tax is likely to make people around him better off for no sacrifice of their own. Conversely, the rich could just give away money to the government, yet they don’t do it unless the others in the group do it as well or it’s well publicized.
This is why it makes sense politically to call for less tax even though the rich do not support it. I think those candidate bet a significant portion of the not so well off will support them. One could even argue that the behavior is very rational indeed.
@jeff, which school did you get your mba in economics? talk about “assertions that lack evidence”. lol
James Kwak said, “There is no historical relationship between marginal income tax rates and economic growth.”
I gave evidence that there is such a relationship.
Then I asked, “Isn’t the real objective a stronger, growing, more vigorous economy? Are raising taxes, government guarantees and increasing regulation going to get us there?”
And without evidence, you said, “Yes.”
You then changed the subject from taxes to expenses saying that “ … on budget expenses have remained 12%(+/-1%)) of normalized GDP throughout(except for the Reagan/Bush1 years, when they were higher).”
I then presented evidence that higher taxes don’t increase revenue (as a percent of GDP) and that higher taxes dampen growth. Put in simpler terms, there is a limit to how much revenue (as a percent of GDP) can be raised through taxes implying that the only solutions are to reduce spending and/or grow GDP.
With respect to spending, you may find this interesting. John Taylor …
Uh Speed… have you forgotten something? Have you checked the State of California’s surplus perchance?
Obviously you weren’t living in the State during before, during or after the Prop. 13 idiocy, so I can see why you were seduced by the idiocy of the Laffer curve. Revenues accelerated due to a massive migration into the State (which had nothing to do with property taxes). This caused a major surge in property values, which in turn fueled the Prop. 13 rebellion. Even post-Prop 13 the State coffers gorged with cash, but that had nothing to do with your Laffer curve simplicity. The new residents needed living quarters (major demand increase) and housing couldn’t be build fast enough (technological constraint on supply). Thus higher property values resulted in higher state revenues even with Prop 13 ceilings.
What has happened since is the better question. The population increase resulted in ever-increasing demands for state government services which should continue considerably with the aging of the populace. Coupled with the crippled defense and aerospace industries, California experienced major deficits… again unrelated to the Laffer curve. Where are we now? The State of California has horrific deficits. Amazing how you skipped that conclusion, but then you were simply supplying dated, prefabricated quotes for support.
Great article if you care to read it……
How Much Can the 99% Squeeze Out of the 1%?
Point, most tax revenues come from the 99%, but Hmm…that top 1% of $1.3T is based on adjusted gross income. The first question one would ask is, “do we know how much was adjusted away?”. However, it is sequestered wealth rather than income that is really the issue. Equities and investment sales and dividends are the primary source of income for the top 1%, and this income is taxed at significantly less than earned-income households ( until it gets high enough for AMT ). That sequestered wealth creates power that low-wealth households (the majority of the public) cannot access. So the “tax the wealthy” argument should begin with an equalization of tax rates on all forms of income and on accumulated wealth as well as removal of most deductions. Then we can talk about true progressive taxation.
one wonders if those in favor of tax cuts. are those who will receive them, and of course they claim they will do some thing.
problem is we just tried that experiment for 8 years
we had lower taxes
and even stopped enforcing of regulations that did exist
treated regulated as customers (sort of like cops treating criminals as customer yes?)
and in that 8 years we got
job growth was below par, weakest recovery since they tracked starting tracking them many decades ago
and economic growth turned out to a phantom.
it was really based on easy credit
and we can tell thats the case because when easy credit died.
so did the economy
It just goes to show how the augment has shifted when letting people keep more of their own money is considered a wealth transfer, last time i checked when a person does not spend money it was called saving. i guess when a robber does not steal my wallet that is called a wealth transfer and not a mugging, strange world. Last time I checked wealthy people don’t use the same services that the poor do, in the insurance world the people that use the insurance pay more for the insurance, why shouldn’t the poor pay more for things they use. Liberals always talk about fairness and justice, I got a great idea how about a Constitutional Amendment that would require all laws to apply equally to all citizens and that would include taxes.
Edward, nice story. How about some numbers.
Nice piece on Prop 13 from KPBS …
A lot has changed since the late 1970s. Some lessons learned …
L.A. council votes to cut taxes for Internet-based firms
The decision, to be applied retroactively, comes after businesses threatened to leave the city following a change in their tax rates last year that moved them from the lowest bracket to the highest.
Some lessons not learned …
California Dreamin’—of Jobs in Texas
Hounded by taxes and regulations, employers in the once-Golden State are moving East.
Nice attempt at deflection, Speed. You failed to address any of my points.You really cannot argue can you?
Further, you appeal to the lowest, basest common denominator which unfortunately motivates too many selfish Republicans (“the hell with the societal or economic repercussions, lower my taxes”).
Here’s some other images of Herman Cain. I encourage all readers here to persist past the 1 minute commercial and then watch at least to the 2min 40sec mark to catch Cain’s most photogenic angles. Audio could be noteworthy as well…..
I have a question related to federal tax policy, if anyone happens to know the answer:
If a woman, well respected by her colleagues, receives $35,000 to settle and keep her mouth shut from thereon about a sexual harassment case, how much of that is tax deductible???
James asks, ” The main question, to my mind, is why people like Herman Cain and Rick Perry talk about transferring massive amounts of money to the rich when polls show that even a majority of Republicans think the rich should pay more in taxes.”
The answer to James’ query lies with “Authoritarian Personality” research.
A huge percentage of the Republican “base” fits the classic “Authoritarian Follower” personality profile. And one of the features of this personality type is an ability to live without being bothered by contradictions in their lives. Cognitive dissonance is not a problem in their world.
[ASIDE: Sadly, most red state Southerners – both Republicans and Democrats and many of these often having college degrees – with whom I have discussed this topic do not even know what the term “cognitive dissonance” means. Trying to get them to understand this and other concepts has been difficult.]
This also explains their inconsistent but enthusiastic positions on abortion (“all life is precious”) and capital punishment (recall the “taste for the jugular” applause Rick Perry garnered at the NBC debate when the audience learned of Texas’s execution record.). These folks do not see any inconsistency in expressing their approval for both of these positions.
Plain and simple – The Republican candidates learned after the civil rights era that they can lead their predominantly Southern Evangelical Authoritarian Followers anywhere and they will follow without thinking twice (or even once in many instances!). This is why the poor bigoted rednecks continue to vote against their financial self-interests… a little demagoguery by some skilled Authoritarian Leaders on the subject of religion and/or race keeps these corporate puppets in office year after year.
In the interest of full disclosure – I do not like most Democrats very much either!
What concerns me about several of these posts is that the liberals are not only after income but also property. Going after “rich” will not make the “poor”
Do you hold US treasury bonds? If you do, then you need to vote for tax hikes. If you are against tax hikes and you hold US treasury bonds you’re deluding yourself.
You either get assigned future real purchasing power by the US treasury, acquired through taxation or you get worthless printed paper. There is no free lunch.
Why do I write this? Because I think the well to do and wealthy and those the most prone to suffer higher taxation are most easily contacted via their portfolio.
@ Munny: this answers all your questions and allegations, if you care to read it: http://99percentmanifesto.blogspot.com/2011/10/manifesto.html
bmz, how much should “rich” get to keep? who gets to decide?
Munny and Speed,
How come in 1980 the US was the largest creditor nation in the world, today the opposite? Continual cutting of taxes for individuals(from 70% maginal after a mil for upper brackets to 36-37% today), captial gains tax reduction to 15%, absolutley none taken from big corps. Pretty simple actually.
Oh, and the reason the poor don’t ‘pay’ today:Bush’s two tax cuts and Obama’s one.
It is wonderful to see how our President gives taxpayer money to his blunders, his corporate cronies, and his communist convicted felon pal Soros. A president who has deceived his followers many times without
being held accountable.
The main question is why there is not anyone running against Mr. Obama from his own party?
The chaos created on 20 January 2009 is doing more harm than any tax cuts.
What was really interesting was to see the President, Reid, and Pelosi scheming to pass Health Care Reform when the majority of Americans did not buy it.
@Munny–as I said try reading: http://99percentmanifesto.blogspot.com/2011/10/manifesto.html
Please follow along. I’ll repeat part of what I posted above.
Washington’s view on spending can be summed up as, “We can’t be out of money, we still have checks.”
From The American Spectator
Edward sais, “Nice attempt at deflection, Speed. You failed to address any of my points.You really cannot argue can you?”
Please pay attention. I said above, “Edward, nice story. How about some numbers.”
Back up your assertions, then we’ll discuss.
Maybe you’re all right — we should tax the “rich” as much as needed to cover the $ 3.7 trillion of federal spending in the 2011 budget.
Lots more at the link.
@Speed– on budget spending as a function of normalized GDP has remained quite constant= 12%(+/-1%) over the entire period 1946 to date. Inasmuch as we are currently in the greatest contraction since the Great Depression, GDP has fallen significantly below the trendline; hence, it appears that spending has substantially increased. However, except for that contraction and contraction related expenses, spending is right on line. If you want to know what has really caused our deficit, see: http://99percentmanifesto.blogspot.com/2011/10/manifesto.html
@bmz, did you write/plagerize that “manifesto”?
Sounds like a speech for a middle school student council president……vote for me and we will have recess and snow days all year long…… It says aboslutely nothing or how you plan to accomplish your goal of taking property away from others.
What communist manifesto did you take that from?
Federal Gov’t Finances & Employment: Federal Budget–Receipts, Outlays, and Debt
469–Federal Budget–Receipts and Outlays
Total Receipts and Outlays (billions) Current Dollars
1962 92.5 92.2
1970 192.8 195.6
1980 517.1 590.9
1990 1,032.0 1,253.0
2000 2,025.2 1,789.0
2010 2,162.7 3,456.2
2011 (est.) 2,173.7 3,818.8
As you can see, spending in dollars has gone up considerably. Not included are state and local taxes.
@ Munny: I am pleased that you read the title; now read the rest and see if it doesn’t answer all your questions and allegations.
@ Speed: there isn’t anything in your figures which contradict what I said.
something in the air- thunderclap newman
Tax cuts are not enough! It is CLAW BACK time in America!
The Real News Network : TRNN
Bill Black:, Jail the Banksters
Voices from Occupy Wall Street
November 3, 2011
Voices from Occupy Wall Street
Senators Introduce Constitutional Amendment To Overturn Citizens United
By Zaid Jilani on Nov 2, 2011 at 9:50 am
“…Six Democratic senators — Tom Udall (NM), Michael Bennett (CO), Tom Harkin (IA), Dick Durbin (IL), Chuck Schumer (NY), Sheldon Whitehouse (RI), and Jeff Merkely (OR) — introduced a constitutional amendment that would effectively overturn the Citizens United case and restore the ability of Congress to properly regulate the campaign finance system.”
Proposing an amendment to the Constitution of the United States relating to contributions and expenditures intended to affect elections.
IN THE SENATE OF THE UNITED STATES
JOINT RESOLUTION (click link)
veterans march on wall street
Military vets march with Occupy Wall Street
16 hours ago
The Occupy Wall Street protesters also planned an afternoon march in solidarity with Occupy Oakland. Bordeleau is among thousands of veterans who have …
Wall Street Journal
Occupy Oakland general strike – as it happened
The Guardian (blog)
Occupy Oakland Violence: Peaceful Occupy Protests Degenerate Into Chaos
TERENCE CHEA, LISA LEFF and TERRY COLLINS 11/ 3/11 09:40 AM ET AP
The Occupy Oakland article (above: CHEA et. al.) includes a video which would not post here, and the link for video on the article opens to a general Huffingtonpost video page that is not directly related) If you go to the link on the article it has good coverage and the video too.
However, it attempting to get a direct link, It turns out that Huffingtonpost…has a full page of a wide variety of video coverages from acro9ss the Nation concerning Oakland that is of interest:
I applaud Gov. Perry’s daring courage to propose more taxes for those on food stamps and unemployment and less taxes for the wealthy. Have you ever seen a person on unemployment create a new job.
However, i propose an even bolder plan which would start with the good citizens of Texas who gave us the economic genius, Rick Perry. The good state of Texas would give up all its federal budget spending to lower the deficit. All the work done there would be re-assigned elsewhere to those lazy, over paid government workers. All federal retirement payments would end and you would have to move to another state filled with lazy people on the federal dole to get your SSI, medicare, military pensions.. All research grants from the feds for the universities would end. All defense contracts would have to move out of state. All military bases would close. When all this is done the rest of the lazy, shiftless Americans would reduce the federal taxes on Texas citizens to zero.
This presents a beautiful model experiment for the rest of the country.
Ballad Of A Thin Man Live 1966.
bmz said, “on budget spending as a function of normalized GDP has remained quite constant= 12%(+/-1%) over the entire period 1946 to date.”
Federal Gov’t Finances & Employment: Federal Budget–Receipts, Outlays, and Debt
469 – Federal Budget–Receipts and Outlays
Outlays as a percent of gross domestic product.
Often ignored is the State slice of the pie.
State & Local Gov’t Finances & Employment: State and Local Government Finances
435 – State and Local Governments–Summary of Finances
Direct expenditures ($ billions)
More tax cuts for oligarchs. Austerity for the masses especially children. Bail outs for the biggest players. Invade Iran.
Interesting post. The argument that you have used here is interesting although I have a different point of view! But if you can provide more evidences for your argument, it will have more thrust behind now. Now it seems more as opinion based.
Speed–1) those aren’t “on budget” expenses ( the only ones which are supposed to be covered by income taxes); 2) the GDP is not normalized (try least squares).
Business taxes in the US, or the lack thereof
November 4, 2011 peterradford
from Peter Radford
“That none of this conforms with the facts should surprise no one who listens to either modern politics or economics. Most all of economic theory has nothing to do with actual economies and the facts found within them. And no element of reality stands between our policy makers and their craven efforts to pander to those who pay for their election.”
full article (very well documented):
United States of corporate tax welfare
November 4, 2011 David F. Ruccio
from David Ruccio
In the United States, we don’t tax corporate profits. We give corporations lots of ways of not paying taxes. The result is the effective tax rate on corporations is less—in many cases, much less—than the much-ballyhooed official corporate tax rate of 35 percent.
The Citizens for Tax Justice has just issued a new report, “Corporate Taxpayers & Corporate Tax Dodgers, 2008-2010″ [pdf]. Their conclusion:
more from David Ruccio:
There is apparently no lie that a Republican will not tell in aid of cosseting the rich. It’s disgusting and will either stop or lead to a very nasty uprising. We are past the days of “views differ” and coming to the time of “lying b*st*rds got us here.”
How would the computer world do if it had to do it all over again? Without the Steves, or the Bills. Without the Jobs or the Gates. I’m certain it would be a snails pace considering it to todays accomplishments. But time is on your side, support wild life, donate to a politician.
On a planet with 7 Billion people, the FACT that conducting a decade long war in crazyville messupotamia is going to not bring you any “spoils of war” but rather will leave you broke is a lesson the global CRIMINAL cabal needs to be pinned to!
The FACT that now you are pawing over the personal records of individual USA citizens to STEAL everything they got (f*cking PATRIOT ACT is WHY you are not the USA government, just THUGS taking over in a coup) as the next option for getting “spoils of war” will not stand. It’s really simple why – the troglodite street gang dealors selling guns, drugs, human organs, slave labor and god-knows-what-else have MORE CASH to operate their *franchise* than do the people who BUILT USA THANKS TO YOUR INSANE CONNIVING – AKA “TAX LAW”!
Here’s one example of *rich* that is nothing more than scammy-ammy UNEARNED WEALTH – the CEO of United Health Care gave himself a 1.8 BILLION $$$$ package in 2005. How much in *taxes* should HE pay? He basically sucked 1.8 BILLION out of medical research and mano-et-mano caregiving – is that HONEST LABOR? How about all the enronistas? They erected a CORPORATION that sucked a river of FIAT money away from modernizing and maintaining the electrical grid across the whole USA…and the examples keep marching along about shell corps DESIGNED to steal! And then add in all the *think tanks*!!!! I should write a book :-))
Had a lovely conversation with the electric company customer service representative this past week (7 days without power while the argument about whether the tree was private property or public property raged on between the 1% and the electricity provider). I asked about the calculation of the rate – why there are 3 categories. The way I asked it was using the calculation of the TAX RATE for the people paying 35% as the example for how a different rate could be applied to people who use the least amount of electricity to make them pay more for using less. The rep said no one is doing anything that crazy that she knows of :-). I left it at that as it was a busy time for the company with a lot on their plate….
I stand by my observation that MOST of the people commenting on this blog are NOT born and bred USA citizens who come from the European back grounds of COMPETENT people who know how to build and maintain GREAT civilizations. And the endless blather from the RETHUG wrecking crew Nihilists trying to get their war booty from the *middle class* – I repeat out of fairness. We are at war because you have empowered the CRIMINALS by stripping the *middle class* of the fruits of their HONEST LABOR.
Let me repeat – you have empowered the psychos and the sociopaths – the liars thieves and murderers with their *franchise* businesses of selling weapons, drugs, slaves, etc etc etc. by weakening the *middle class*. Every time you repeat you propaganda – I will repeat the FACTS on the ground because it IS a war. Your mangy filthy bloody paws are getting cut off from access to the levers of civilization. Simple. And this comes from someone who not only has the TRUE historical records to how first the Teutonic Knighs were taken down a few notches – but then we had to turn around and save it all from the mongrel hordes with THEIR holy book in hand spewing the same *lords* hatred fro humanity. Yup, we’re still here among the 99%…
And a week in the quiet of the harvest time lengthening night like MY ancestors enjoyed – the 21st strategy came together easily. Now all I need is an army. :-))
And in the quest for PROVING how easy educating people IS – here’s some FACTS for you Rethug propagandists to SPIN OUT….
Was the Homestead Act “communism”?
And how about this next list – you can’t MISS the irony that *government* haters are the biggest THIEVES of someone else’s TAX DOLLARS!
“….If your state is receiving more than a $1.00 in federal funding for every dollar you spend in taxes, feel free to give it back to those of us funding your arrogance.
New Mexico $2.03
West Virginia $1.76
North Dakota $1.68
South Dakota $1.53
South Carolina $1.35
North Carolina $1.08
Rhode Island $1.00
New York $0.79
New Hampshire $0.71
New Jersey $0.61
@ Annie: WOW !!!! POW !!!
“Here’s one example of *rich* that is nothing more than scammy-ammy UNEARNED WEALTH – the CEO of United Health Care gave himself a 1.8 BILLION $$$$ package in 2005. How much in *taxes* should HE pay? He basically sucked 1.8 BILLION out of medical research and mano-et-mano caregiving – is that HONEST LABOR? How about all the enronistas? They erected a CORPORATION that sucked a river of FIAT money away from modernizing and maintaining the electrical grid across the whole USA…and the examples keep marching along about shell corps DESIGNED to steal! And then add in all the *think tanks*!!!!”
The question is raised here as to why “ECONOMISTS” have not significantly raised the question of “conflict of interest” in TBTF being swollen into monumental bubbles simply to increase the revenue flow to exploit greater claims to proportionate self-serving tribute (which actually is sabotaging real production not stimulating it…all in the name of “creative wealth”…). The measures are always linear profits and the paper mill grows more flammable each moment by historic moment. The complete cycle of cost based upon this “value distortion = revenue share” is claimed in the name of the shareholders…of which these CEO’s are the primary benefactor often with special “drawing” rights just like entire countries. The true cost is built into more and more exaggerated and rationalized market pricing which is also passed along to the consumer. True damages are = to “Externalities” and are simply passed along as text book technicalities in framing the business incentives (to be excluded). Social benefits are limited to a very narrow field of measuring “big business” success (in anthropology we have what are known as “big men” theories; these guys all are “little Cesarean” theories for a still born economy! Mobsters always have rationalized their behaviors, but these guys buy political positions and over time make laws that “break” laws to cover their stealth. The political equivalent to quantitative easing is “legislative easing” and it is orchestrated by these same characters who take absurd amounts of capital from society in order to compete in usurping power.
My compliments, Annie, on your Post:
Speed: “James Kwak said, “There is no historical relationship between marginal income tax rates and economic growth.”
“I gave evidence that there is such a relationship.”
No, you didn’t. For instance, see Angry Bear: http://www.angrybearblog.com/2011/11/kimel-curve-and-kitchen-sink-part-2.html
1 Kings: “How come in 1980 the US was the largest creditor nation in the world, today the opposite?”
That happened in 6 years under Reagan.
@Woych – “Mobsters always have rationalized their behaviors, but these guys buy political positions and over time make laws that “break” laws to cover their stealth.”
Their fatal flaw is that they used quotes from *holy* books to thunder from the bully pulpit their righteousness in changing the LAW….
It really is that SIMPLE. The most murderous among us have the most $$$$. That alone makes the *value* of the currency a whole other story.
Definitely not anything bordering on a real *economy*.
The cancervatives are out in full force.
They are quoting Arthuer Laffer!!! Way to go speedy gonzales.
We ran the experiment of supply-side economics for thirty years, and the result was a disastrously huge credit bubble that burst after transferring gratuitous levels of wealth away from the lower classes to the highest upper class. Now the conservatives tell us the cure to the problem is more of the same, even as we sit looking at the smoldering wreckage of evidence speaking to the contrary.
Do these guys just _want_ the masses to revolt, or are they stupid?
Where are the numbers to prove this is not so? Derivatives?
This is the accusation on which the Just War is being fought:
“Let me repeat – you have empowered the psychos and the sociopaths – the liars thieves and murderers with their *franchise* businesses of selling weapons, drugs, slaves, etc etc etc. by weakening the *middle class*. Every time you repeat you propaganda – I will repeat the FACTS on the ground because it IS a war.”
Keep repeating it. The CRIMINALS have more cash than honest labor THANKS TO THE TAX LAWS!
off topic, but not really :-)
Elizabeth Warren has MY permission to use “all options on the table” when dealing with snotty sociopaths calling her their nasty-boy misogynistic perjoratives – Moses on this blog lost my respect or willingness to work together *in spirit*…
Still say Ms. Warren should be running for President – we’d at least be able to clearly see if any institution is intact – CIA, FBI, NSC, State Department, etc. – based on whether they would supply her personal protection as a Presidential candidate (uh oh, another Madame Bhutto?) and also cough up all her *records* – every little thing she did in her personal life – I’m sure among the cancervatives (perfect term, btw) they could make a case for biblical immorality based on how much she spent buying Italian shoes :-))
Vetoing Democracy: In Athens or Washington, Elites Still Call the Shots
Posted: 11/4/11 06:20 PM ET
“In government offices in Athens, G20 meeting rooms in Cannes, and “Super Committee” chambers in Washington, we learned that there are still places where the will of the people can be overruled by the whims of the powerful.
From the Parthenon to the Potomac, it was the same story: Elites still hold veto power over the democratic process, and they’re not afraid to use it.”
Richard (RJ) Eskow
Consultant, writer and Senior Fellow, Campaign for America’s Future
186,000 mps is the ?
From your referenced John Taylor post:
“In 2000 spending was 18.2% of GDP. In 2007 it was 19.6%. But in the three years since 2009 it’s jumped to an average of 24.4%.
Second, and perhaps even more striking, the chart shows that Mr. Obama, in his budget submitted in February, proposed to make that spending binge permanent.”
Based on your other posts, in which you demonstrate a command of basic arithmentic and political economy, the fact that you find this quote from Mr. Taylor illuminating baffles me. I’m sure you know that calculating percentages requires both a numerator and a denominator, and that a change in either will preciptate a change in the relevant percentage. As pertains to your post, surely you realize that GDP declined dramatically in 2009 compared to 2007 or 2000, due to the second largest economic contraction in our history. And further, that the very nature of “welfare” programs requires them to expand during times of economic hardship, thereby automatically increasing the amount of spending on those programs (regardless of which party is in power). Furthermore, given that unemployment is projected to remain ~9% and GDP growth anemic for the forseeable future, it is not surprising that the Spending/GDP ratio will remain high by historical standards.
Any “analysis” of federal spending, taxation, and GDP that ignores these basic facts about our recent history and current situation is better described as at best an honest mistake, but more likely deliberate misdirection. I will assume you are participating in this discussion earnestly and with good intentions–I would suggest that the same cannot be said of Mr. Taylor, who is notorious for being an Establishment Hack.
Published on Truthout (http://www.truth-out.org)
Occupy Colleges Now: Students as the New Public Intellectuals
Monday 21 November 2011
by: Henry A. Giroux, Truthout | News Analysis
“The police violence that has taken place at the University of California campuses at Berkeley and Davis does more than border on pure thuggery; it also reveals a display of force that is as unnecessary as it is brutal, and it is impossible to justify. These young people are being beaten on their campuses for simply displaying the courage to protest a system that has robbed them of both a quality education and a viable future.
Finding our way to a more humane future demands a new politics, a new set of values, and a renewed sense of the fragile nature of democracy. In part, this means educating a new generation of intellectuals who not only defend higher education as a democratic public sphere, but also frame their own agency as intellectuals willing to connect their research, teaching, knowledge, and service with broader democratic concerns over equality, justice, and an alternative vision of what the university might be and what society could become.”
(Read it ALL)
Published on Truthout (http://www.truth-out.org)
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