Posts Tagged ‘economy’

Myth Busting: Lower Top Margin Taxes Don’t Prevent Recessions

March 16, 2009

John Cole recently posted a very informative graph of the top tax rates since 1920. I added to that red lines to indicate depressions and recessions to make another, related point: most of America’s recessions occurred after the top margin taxes were lowered, with the worst recessions taking place during or after the top tax rates were at their lowest. The recessions of 1953, 1957, and 1960 were one-year recessions while the others lasted 2 or more years. The Great Depression, the 73-75 recession, and our current recession are arguably our worst of the last 100 years and came when the top margin taxes were at their lowest rates.

While it is foolish to argue cause and effect between lower tax rates and economic hardships, the counter argument that lower taxes on the wealthiest are better for everyone is equally foolish, proven wrong by this chart. Lowering tax rates at the top margins are far more likely to hurt the country than help it.

Top margin tax rates & recessions

Top margin tax rates & recessions


GOP: Opposing Economic Recovery Over 2%

February 4, 2009

My U.S. representative sent email first falsely claiming that 2/3 of the stimulus package would be spent after 2012. Then, in another email, he detailed all the horrible pork that is this list. Yet, these items amount to a total of 2% of the overall stimulus package. The Republicans are playing party politics and obstruction over 2% of the proposed spending.

You see, the de facto head of the GOP has already said that he hopes that Obama fails because, if he succeeds, then the Republicans would be in danger of being a minority party for years to come.

The Republicans have taken “opposition party” to heart: They oppose Obama for any reason they can conjure, even if it means hurting Americans.

When Tools Speak

February 3, 2009

I guess when you find some “regular” guy outside the Beltway that still likes the GOP, you ride him into the ground. The guy used as a campaign mouthpiece is now taken as some font of knowledge.

When GOP congressional aides gather Tuesday morning for a meeting of the Conservative Working Group, Samuel Joseph Wurzelbacher – more commonly known as Joe the Plumber — will be their featured guest. This group is an organization of conservative Capitol Hill staffers who meet regularly to chart GOP strategy for the week.

Wurzelbacher, who became a household name during the presidential election, will be focusing his talk on the proposed stimulus package. He’s apparently not a fan of the economic rescue package, according to members of the group.

What, a republican tool who’s not endorsing a Democrat-led proposal? Who would imagine such a thing.

Wurzelbacher is the mythical Joe Six-Pack who is paraded around as what regular guys think, which makes him whoring him far worse than following polls and focus groups, which at least involve several people. Wurzelbacher is treated as if his opinion is somehow informed when, in fact, he’s just a guy with, at best, a cursory understanding of the issues. (Then, again, the same can be said of conservatives like William Kristol.)

Like Sarah Palin (and so many liberal celebrities that conservatives often criticize), Wurzelbacher thinks his fame means that he has something to say.

Watching the Money and Power Move to the East

January 2, 2009

Imagine the scenario in which the U.S. government decided that building our own weapons was no longer important. Instead, we bought weapons from China, India and Europe.  Would this be a smart thing as a superpower? To depend on competitors, even potential combatants in a conflict, for the majority of our weapons and technology? No, it isn’t. It would be asinine, and I daresay that Americans would fire every politician that supported such a proposal.

Yet, in truth, we have done a very similar thing with our economy. Economies are like armies in that countries depend on them and gather their strength through them, the strength to defend, to deter, and to build. Yet, we have amassed debt, which we have done before, but now we find our debt being held by foreign governments such as China. We have allowed American companies to depend on foreign workers, confusing the idea that profitable companies means a profitable America. It doesn’t work that way, however, because the vast majority of Americans are workers, not high-level managers in corporations.

Over the last few years, our political leaders have done little to ensure that the American economy and American workers are secured. The Iraq war, for all its billions of dollars, has in a very real sense been a case of robbing Mary to pay Paul. Regardless of the success of our military intervention there, we have weakened our economy and financial security in doing so.

The National Intelligence Council has published a reported titled 2025 Global Trends: A Transformed World that paints a weakened U.S., based largely on economic developments in recent years.  Our greatest challenges in the coming years are economic, not military, which is unfortunate as the Bush administration has focused on the latter to the great detriment of the former.

In terms of size, speed, and irectional flow, the global shift in relative wealth an economic power now under way–roughly from West to East–is without precedent in modern history. [p. 7]

The scarcity of resources should be taken as seriously as weapon development in years past. I encourage you to read the report yourself, to scan the different sections at least. And then ask yourself this question: is the U.S. in a better or worse position than it was 8-12 years ago to deal with the economic competition in the East and elsewhere? Are we in a better position to be energy independent so that we are not dependent on countries like Russia and Saudi Arabia? Do we want to be able to determine our own policies, our own future, or do we want to be dependent upon or limited by other countries?

Full of provocative quotes, the one on page 94 jumped out to me:

The dollar is vulnerable to a major financial crisis and the dollar’s international  role is likely to decline from that of the unapralleled “global reserve currency,” to something of a first among equals in a basket of currencies by 2025. This could occur suddenly in the wake of a crisis or gradually with global rebalancing. This decline will entail real tradeoffs and force new, difficult choices in the conduct of American foreign policy. [my emphasis]

If you are familiar with the idea of cutting jobs to appease stockholders, then you have some idea of what it could mean to have our country’s debt held by countries like China, although I doubt China will be as understand and sympathetic as stockholders.

I’m not reimagining the “Buy American” campaign. Instead, we should learn from conservationism, the idea that we strengthen our (economic) environment and resources: use but replenish and grow. We have focused so much on the profits of our companies that we left a weakened American worker pass without notice, let alone concern, even rage.

More importantly, we should look at the whole of our economy. America and Americans prospered for so long because we had both opportunity and plentiful resources.  And I think from the larger perspective, American workers are part of those resources. To interchange them with foreign workers is to look at it from a corporate, not an American, persepective.

Opposition Politics

November 24, 2008

Conservatives like Sean Hannity have been blaming Obama for our economic problems because, of course, the sitting president can’t be blamed for anything. Regardless, we now see a Wall Street rally after Obama announced his economic team as well as plans for an economic stimulus package. The bounce started late Friday afternoon:

Stocks erased a decline Friday and managed a massive rally after reports surfaced that the New York Fed Bank president [Timothy Geithner] was Obama’s pick.

I’m just curious how tired these conservative talking heads get from always being wrong. Or do they just say their lies and move on to the next thing.

After years of approving deficit spending, Republicans now get cheap when it comes to saving our economy. More precisely, they’re filling their role as the opposition party by opposing anything Obama supports, even if it means voting against helping Americans.