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10 November 2011

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Will Reks

The whole debate about regulations and taxes is not really based on any evidence. It's purely ideological. Increased taxes in the 1990s did not kill the economy as many Republicans claimed it would. And lower taxes in the early 2000s did not usher in an era of growth.

Regulations should be viewed as consumer protections and not a pejorative. It's probably true that certain regulations prevent business from making a larger profit. That's a tradeoff that we have to live with but I'm sure there are regulations that can be safely eliminated.

I think there is plenty of evidence to show that the market does not effectively regulate itself. This includes meat-packing plants (Upton Sinclair), Enron, the oil industry, Wall Street and countless other industry failures that have made the news over the decades. The logic is that we should tolerate such aberrations. I don't think so.

graywolf

A tax increase means more money in the hands of venal politicians (both parties)who will ALWAYS spend every dollar they can wrest from the citizenry.....and more, to the tune of $15 tril.

The Democrats, especially, always want MORE money to pay off their parasitic constituencies.

The Republicans (the stupid party) haven't quite figured out the game, so they half-heartedly propose fiscal sanity but don't know what it means.

William R. Cumming

Great post with which I largely agree. By the way was not last night's debate supposed to focus on foreign policy and foreign relations? Did it? I did not listen except to the video of Governor Perry trying to name his third department for elimination. And the Texans elected this guy three times?

Where is a new Santa Ana when we need him?

And by the way does not the current economic situation also relate closely to US foreign policy?

Paul Escobar

Around 2004, I was sitting in my highschool econ class.

My teacher was instructing us all to use real estate speculation as a retirement plan. We were forced to watch a PBS documentary (commanding heights) deriding tariffs, labour standards, & taxes as antiquated. Wal-Mart was highly praised for reducing the cost of goods. My generation would enjoy service-sector employment at 'The Gap', rather than some dirty old manufacturing plant.

My classmates, in inarticulate & indirect ways, could only express concern that we were (they would never use this term) basically hollowing ourselves out.

Of course, their concerns were undercut by what Mr. Lifton points out in paragraph 5: "the availability of large amounts of money [credit] to the public".

Now it's 2011, and that informal welfare scheme created by the 1% has collapsed. Yet our politicians still speak in the old 2004 jargon of my highschool econ teacher. No surprise, as the 1% welfare scheme never ended for them.

We must reclaim what we blindly ceded:

Ha-Joon Chang in THE ECONOMIST

I propose that the state of a nation's manufacturing base (its size and competitiveness) is the most important determinant of its prosperity...


Byron Raum

I have read a lot about these mythical hoards of parasites, slobbering at the public trough. Never met a representative member of said constituency, though.

Republicans figured out the game a long time ago. Give away money to the rich, and they will give you lots of money to buy airtime to convince the average taxpayer that there's people just waiting to steal their cash.

The purpose of government is to protect the average from the ultra-rich. The ultra-rich don't need the government - they can buy their own protection and privilege. Insofar as the government is weakened, or refuses to do its job, it is certainly venal.

America's strength doesn't come from lower taxes. It comes from the prosperity of the middle class.

Fred

greywolf, it is sad that you think close to half of the citizens of the Republic are parasites and that the Republican leadership is stupid. Tuesday was election day, feel free to run for office some time.

walrus

As a former CEO who also spent a few years as an advisor to Government on manufacturing industry development, I am in broad agreement with Mr. Lifton - the Republican "Policy" is self serving hogwash, a gift to the 1% and it is based on deliberately specious reasoning. The Republicans have invoked John Stewart Mills "Confidence Fairy" argument as well as the "trickle down" idea that the virtuous rich will climb out of Galts gulch and save us all if we grease their palms sufficiently.

Better people than I have hung drawn and quartered the "business confidence" argument aka the existence of the Confidence Fairy on strict economic grounds.

http://krugman.blogs.nytimes.com/2011/09/13/the-death-of-the-confidence-fairy/

http://delong.typepad.com/sdj/2011/08/alfred-and-mary-marshall-and-the-confidence-fairy-annals-of-the-history-of-economic-thought.html


The reality is that America is stuck in a liquidity trap. There is a want of demand, and it cannot be stimulated by lowering interest rates because they are already cut almost to zero. The fastest way out is to stimulate demand by deliberate inflation. Naturally this is anathema to the Republicans and their donors.

http://en.wikipedia.org/wiki/Liquidity_trap

As for repeal of regulations, big business needs big regulators. But it is in the field of environmental regulation that Republicans and their backers reveal themselves to be guaranteed, certified brain dead idiots, starting with the Koch Brothers. The reason for that is because pollution is actually waste of resources you paid good money for, and the lowest polluting companies therefor make higher profits than heavy polluters.

To my knowledge, it was an American CEO who first made this observation, which has now been backed up by experience and research. By way of a trivial example, environmentalists here complained about Gold mine tailing runoff killing waterbirds. We fixed it, recycling Sodium Cyanide ($1300/ton) and recovering and selling Copper ($4000/ton). Very quick payoff and happy ducks to boot. You get the idea, it's a pity for them that the Koch brothers don't.

http://www.lightgreen.com/files/pc.pdf


The proper economic name for Americas problems is rent seeking behavior. My favourite example is the Louisiana Florists Licence.

http://www.usatoday.com/news/nation/2010-03-10-florists_N.htm


Until you tar and feather the legislators who enact such economic abominations, nothing can improve.

Overseas competition? Ignore the whiners. Tell them to either get internationally competitive or go out of business. Governments job is to remove barriers to allowing this to happen and to ease the pain of the workforce. Low value adding businesses will always go where labor is cheapest. Don't try to stop it. Focus on high value add activities and skill your workforce accordingly.

Deficits? Debt? Fix your economy, do what Keynes suggested and the problem goes away. Worked nicely here.

The entire American economy reminds me of an abused second hand Ferrari. Pull it apart, cut the rust out, polish it and it should hum nicely.


New Orleans

"A tax increase means more money in the hands of venal politicians (both parties)who will ALWAYS spend every dollar they can wrest from the citizenry.....and more, to the tune of $15 tril."

Nothing's as satisfying as more platitudes when faced with serious issues.

optimax

We need to strangle the financial sector until it is small enough to drown in a bathtub. Borrowing from Norquist or Freidman or some othe neoliberal.The financial sector has grown exponentially in the last sixty years. It skims our wealth off the top, it draws capital away from the real economy that creaTES A MIDDLE-CLASS to the already wealthy elite,it undermines democracy by giving a largewr voice to those with money (corporations are people and people are human resources) and will lead to financial collapse as it always does.

http://en.wikipedia.org/wiki/Financialization

E L

Having barely lived through one Texan, we now have a dimmer Texan running for President. Now is the time to read the US Constitution strictly as Perry demands and apply it to Texas. The Constitution does not expressly provide for the acquisition of territory from other governments. Thus, we should immediately return Texas to Mexico as it was acquired unconstitutionally. In addition, the Dallas Cowboys could not continue to promote themselves as America's team and Jerry Jones could be required to obtain a visa. He does remind me of an alien (cf., Men in Black).

turcopolier

EL

I think that Texas should be encouraged to divide itself int ofour states; Fandango, Houston, Panhandle and New Virginia. California should be three; Cloudcuckoo, Callahandia and Sasquatch. No, except for the panhandle we don't want West Virginia back. pl

MRW

Read this book:

Seven Deadly Innocent Frauds of Economic Policy

Buy at Amazon or read for free online here. (First page is blank in online version)
http://moslereconomics.com/wp-content/powerpoints/7DIF.pdf

Second page contains the testimonials. That will tell you whether you are interested in going further. You should. Prepare to have everything you believe in challenged, and to realize that you still think pre-1972, which his when we went off the gold standard.

Who said this isn't the 21st C. ;-)

Fred

West Virginia was the best thing that Lincoln and the Union did for Virginia. I'm not sure it has been the best for the people in West Virginia.

rkka

"The Republican program for bolstering the economy and creating jobs essentially focuses on two approaches: eliminating regulations and reducing taxes. "

That will work just as well as it did from 2001-2006, when a Republican President and the Republicann Congress held all power at the Federal level. After the brief, mild, shallow recession of early 2001, economic growth resumed by the 2nd quarter of 2001. In response, the Republican President and the Republican Congress cut taxes and reduced regulation.

Private sector job losses continued for another Two Full Years.

The number of private sector jobs did not recover to its January 2001 level until mid-2005.

There is nothing about Republican policies that increases private sector jobs. They are a fraud, nothing more.

confusedponderer

No, fraud? No, for the GOP their economic voodoo is gospel.

According to the creed, tax cuts are good for and against everything. They work economic miracles. Governance? Isn't that another word for cutting taxes, deregulation and getting the corrupt, incompetent and wasteful state off the back of corporate donors?

That's because what's good for Koch industries is also good for Joe Sixpack, or Plumber, or whatever. The benefits so generated trickle down, golden shower like, and ... fertilise the American economy.

Just suspend your disbelief and join the cult.

William R. Cumming

Perhaps time to refresh memories and read Thorstein Veblen's THE THEORY OF THE LEISURE CLASS [1899]! Check Wikipedia.

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