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The Classic Krugman Pushback


CNBC’s Joe Kernen: “It goes back to our forefathers, who said limited government, low taxes,”

NYT’s Paul Krugman: “I don’t remember actually hearing about that. I don’t think that’s in there.”

Federal income tax was created in 1913.

Krugman added: “People getting their news from sources like that are probably getting terrible advice about any kind of investment that depends on macroeconomics.”

(Source: The Huffington Post, via brooklynmutt)

The federal minimum wage of $7.25, adjusted for inflation, is $2.75 lower than it was in 1968 when worker productivity was about half of what it is today. There has been a steady decline in real wages for low-income workers. Meanwhile, corporations such as Wal-Mart and McDonald’s, whose workforce earns the minimum wage or slightly above it, have enjoyed massive profits. Executive salaries, along with prices, have soared even as worker salaries have stagnated or declined. But the call to raise the minimum wage is not only a matter of economic justice. The infusion of tens of billions of dollars into the hands of the working class would increase tax revenue, open up new jobs and lift consumer spending.

Romney’s Economic Closet

Beyond that, we know who he turns to for economic advice; heading the list are Glenn Hubbard of Columbia University and N. Gregory Mankiw of Harvard. While both men are loyal Republican spear-carriers — each served for a time as chairman of George W. Bush’s Council of Economic Advisers — both also have long track records as professional economists. And what these track records suggest is that neither of them believes any of the propositions that have become litmus tests for would-be G.O.P. presidential candidates.

Consider Mr. Mankiw, in particular. Modern Republicans detest Keynes; Mr. Mankiw is the editor of a collection of papers titled “New Keynesian Economics.” In an early edition of his best-selling textbook, he dismissed supply-side economics — the doctrine embraced by the sainted Ronald Reagan — as the creation of “charlatans and cranks.” And, in 2009, he called for higher inflation as a solution to the economic crisis, a position anathema to Republicans like Representative Paul Ryan, the chairman of the House Budget Committee, who warn ominously about the evil of “debasing” our currency.

Given his advisers, then, it seems safe to assume that what Mr. Romney blurted out Tuesday reflected his real economic beliefs — as opposed to the nonsense he pretends to believe, because it’s what the Republican base wants to hear.

And therein lies the reason Mr. Romney acts the way he does, why he is running a campaign of almost pathological dishonesty.

(Source: azspot)

How Ronald Reagan unwittingly laid the groundwork for the death of capitalism

Thanks to tireless efforts by historical revisionists over the past two decades, Ronald Reagan has gotten a lot of credit for achievements that he had nothing to do with. “Winning” the Cold War is a good example.

In reality, Reagan’s policies had little or nothing to do with the collapse of the Soviet Union. In fact, the last thing the Military Industrial Complex ever wanted was to see the Cold War’s end (and with it the trillion-dollar gravy train of “defense” contractor funding).

On the other hand, Reagan should get credit for something that he actually did achieve: laying the groundwork for the death of capitalism as we know it.

Capitalism had its first near-death experience during the Great Depression. Ironically, it was saved by the most progressive president that the U.S. ever had: Franklin D. Roosevelt. Although attacked by the business community at the time, FDR’s New Deal in fact resurrected capitalism and gave it new life. The New Deal created the Great American Middle Class: tens of millions of well-paid workers that actually had the money to buy the products that the system produced.

(Source: azspot)

How did American conservatism end up so detached from, indeed at odds with, facts and rationality? For it was not always thus. After all, that health reform Mr. Romney wants us to forget followed a blueprint originally laid out at the Heritage Foundation! My short answer is that the long-running con game of economic conservatives and the wealthy supporters they serve finally went bad. For decades the G.O.P. has won elections by appealing to social and racial divisions, only to turn after each victory to deregulation and tax cuts for the wealthy — a process that reached its epitome when George W. Bush won re-election by posing as America’s defender against gay married terrorists, then announced that he had a mandate to privatize Social Security. Over time, however, this strategy created a base that really believed in all the hokum — and now the party elite has lost control.

I didn’t cause this fucking deficit, old people who got sick didn’t cause this deficit, hungry children whose homes were foreclosed on illegally didn’t cause this fucking crisis, your damned war profiteering did, tax cuts for the super rich did, corporate welfare did.

I didn’t wreck the economy, the fucking bankers did.


You know who fucked this up? The very, very rich people! The politicians who are OWNED by very, very rich people. You fucked this up, not me, so you need to go first on the “Let’s sacrifice” diving board, because I am not in any position to sacrifice and you, dear rich people, have ALL THE FUCKING MONEY.

More Evidence of "Trickle-Down" Unfairness


I have presented many graphs and charts on this blog from reliable sources showing that the “trickle-down economic policies, instituted by the Republicans over thirty years ago, have favored the rich, while leaving most Americans stuck in a rut and falling further behind with each passing year. And the richer a person is the more the Republican economic policy favors them.


Now the Economic Policy Institute, using figures from the U.S. Census, has produced a graph showing what has happened with hourly wages in the last 36 years (from 1973 thru 2009). As you can see on the above chart, the median hourly wage for workers has grown from $14.73 in 1973 to about $15.96 in 2009 — a growth of only $1.23 (or 8.4%) in 36 years. The growth was much worse for lower-paid workers. A worker in the lowest 20% of earners had an average wage growth from $9.29 to $9.83 — a rise of only $0.54 (or 5.8%). And a worker in the bottom 10% saw growth from $7.70 to $8.05 — a rise of $0.35 (or 4.5%).


But the higher on the wage scale a person is, the better they are treated by “trickle-down” policies. A person in the highest 90th percentile of wage earners saw their wages go from $28.19 to about $37.49 — a rise of $9.30 (or 32.99%). And a worker at the 95th percentile saw wages climb from $35.37 to $48.08 — a rise of $12.71 (or 35.9%). But even these salaries pale in comparison to the rise experienced by the richest Americans of all — the top 1% of earners. The Congressional Budget Office pegged their rise in after-tax income at a whopping 275%.

And the congressional Republicans, and all of the Republican presidential candidates, feel that the richest Americans pay too much in taxes (even though their after-tax income has risen by 275%). They want to give these richest Americans even bigger tax cuts than they’ve already received (from the Bush tax cuts for the wealthy).

A perfect example of this is the ridiculous tax plan recently proposed by candidate Rick Perry. His plan would drop the rate on earned income (income actually worked for) for the rich from 35% to a flat rate of 20%. But it gets even worse. His plan would completely eliminate the tax on capital gains income (income derived from stocks, bonds, and other investments0 which is how most of the super-rich make their money. Under the Perry Plan, an investor like Warren Buffett (one of the richest men in the world) would only pay an effective tax rate of 0.2%. How can it possibly be fair for someone that rich to pay less than a 1% tax rate, when people who actually must work to earn an income much pay a much higher rate?

How much more evidence do voters need before they finally realize that the Republican Party cares only for the rich, and their policies benefit only the rich?

(via abokononist-deactivated20120714)

The 99%


One thing I really, genuinely enjoy about the Occupy Wall Street campaign (and this is also why I think that it will be successful in bringing about change) is the whole premise of the 99%. This is an extremely powerful message. By calling out the 99%, we’re bringing into light the reality of classical/trickle-down economics/capitalism.

See, I believe that most of the people who believe that deregulated business leads to a better economy are people who are either benefiting from it greatly (corporate execs.), and also anyone who believes in the “rags to riches” type of story. That in America, you either spend your whole life trying to make it, or you don’t. However, I believe that people put too much faith in that type of mindset to the point that they believe it’s common for poor people to become rich or at least financially comfortable. 

But because of this great campaign, we’re bringing into the light the real reality of our economic system. People that have massive amounts of debt and are struggling to pay for the necessities are what’s common. This idea that anyone can become rich if they try hard, or have the proper credentials, or try and pursue a career will be successful is just not true. And this Occupy Wall Street campaign shows that. With more people like this coming forward, people will begin to learn and realize that this economic system does not work, and it needs to be fixed.

(via abokononist-deactivated20120714)

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