Saturday, October 18, 2008

Nom nom nom...

I am eating this up like Christmas candy.



To be fair, this is only a handful of the people at that rally. In fact, it was probably the same handful of people that were at the other rallies. A traveling caravan of troglodytes. Travelodytes, if you will.

Haha, no. Go, wingnuts, go! Drive right off that cliff and take your party with you.

I was kind of annoyed earlier this week when I read something on the comedy website 23/6. Jim David, in a column about the outrageous comments heard at recent McCain-Palin rallies, distilled a grand, eloquent argument I spent all goddamn weekend making into this:

I've heard plenty of liberals make nasty comments about Bush, but most of those were justified given his disastrous record and the fact that he's such a total doofus. The attacks on Obama are personal, racist, and fear based.


To think that I've spent all week with a sinus headache that I'm beginning to think was God's punishment for calling George Bush a war criminal when I could have just said Bush is a doofus with a disastrous record. Son of a bitch.

But today I'm not looking to debate exactly how much of the Republican party is comprised of Confederate Yokels, Backwoods Mouthbreathers and other assorted Travelodytes. (Forty percent? Sixty percent? All of them except Ron?) At the end of our last debate, Buck asked a question about the economic principles of Republicans and conservatives. By that point my sinus headache was in full swing so I figured I'd let Ron respond and maybe jump in with some counterpoint when I felt better. I feel better now, but the original post is down a bit so I'll do that here.

Buck asked why it is such a sin to pay taxes in America. Ron gave a decent view of Republican economic theory, but glossed over an important point when he said "it isn't that Republicans don't want to pay for things so much as Republicans want tax programs that keep the economy growing and aren't restrictive on private enterprise."

I have no doubt that if you gave the fiscal conservative wing of the Republican Party the opportunity to end Social Security, Medicare, Medicaid, and Federal Welfare without political repercussions, those programs would be gone before you ended the sentence. A result of their inability to significantly cut these programs without severe political consequences, such as probably never winning another election in any area with a sizable population of the not-wealthy and/or elderly i.e. everywhere, is the desire to reduce taxes on the wealthy and either correspondingly increase taxes on the middle classes or run a ridiculously huge deficit.

Ron makes the case for lower taxes on the wealthy leading to job growth with an anecdotal story about adding a position at Marcus G. Finkelstein's Office Emporium and Sundries due to increased purchasing in the wake of Bush's first tax cuts. But was that higher rate of spending was sustained in any meaningful way? After eight years of lower taxes on the wealthiest percentile we have had anemic job growth which has turned the corner into minor employment contraction. (We're also in a recession which may last into 2010, but I hear that has something to do with the lack of rules on how rich people invest their money. Apparently a bunch of people fell for a Nigerian email scam.)

Contrast this with the Clinton administration, where there were higher taxes on the wealthy and corporations than during the last eight years along with, as we all know, unprecedented economic ass-kicking and name-taking. Taking all this into account leads to two conclusions that are neither mutually exclusive nor directly corrrelated: A) marginal tax rates on the wealthy and corporations do not directly influence economic and job growth and B) there are more factors involved in economic and job growth than marginal tax rates on the wealthy and corporations.

In Ron's story, a job was created because businesses were buying furniture, which is pretty straightforward: a job is created when people are buying goods and/or services. But let's extrapolate that story out a bit. Franklin M. Spankington's Monocle and Top Hat Warehouse gets a tax break and uses that extra money to buy a new forklift. Billy Bob's Forklifts 'n' Shit uses the extra revenue to hire a new worker, Tommy B. Fuckedbythewealthy-Justyouwaitandsee. That new worker, due to eight years of wage stagnation and a tax burden shifted to the lower classes, finds that after paying bills and buying food and clothes, he doesn't have the disposable income to buy that new monocle he wanted. Spankington's revenue falls because the middle class no longer has the money to buy his goods and so he has to fire Mike R. Upshitcreekseriouslyfuckthepoor, plus he can't buy new equipment so Billy Bob's revenue falls and Tommy gets fired, too. The point here is that it is arguable that if the lower classes don't have money to spend on disposable goods and services, revenues fall in the private sector and jobs are lost. Actually, it seems pretty clear that this is exactly what happens.

But that's not the end of the story. It turns out that the CEOs of Spankington's and Billy Bob's are making approximately 362 times what their base employees are, which is like 20 times what CEOs were making 15 years ago and is well out of whack with inflation*. Some might consider this, along with wage stagnation and regressive tax rates, a sign of severe wealth inequality suggesting that since the CEOs weren't interested in taking pay cuts or reducing the dividends of shareholders in order to save Tommy and Mike's jobs, it doesn't really matter what the tax rates are for the wealthy and corporations because they're gonna do whatever the fuck they want regardless of what anyone thinks about it. And if it looks like economically liberal politicians might get another foothold in government and try to fix this fucked up situation, the party representing the wealthy and corporations will pander to otherwise abhorrent social conservatives and the terminally ignorant to win elections by a slim margin and then claim a "mandate" to do things that are detrimental to the vast majority of the country. At first we wonder if someone is confused about what "mandate" means until we remember that the wealthy and corporations are gonna do whatever the fuck they want regardless of what anyone thinks about it.

In the interests of full disclosure, I should note that by pointing this out I have exposed myself as a Communist and have all the credibility of a severe schizophrenic on a three-week meth bender. Don't bother evaluating your own financial situation and the financial situations of others like you and compare them to the financial situations of the fabulously wealthy. The fabulously wealthy have worked hard and earned every penny they have while you are a lazy roustabout. And while I'm on the subject, it should be noted that even though using Paris Hilton as an example of why we need a stronger estate tax is like using severe thirst to argue for a glass of water, the fact that I have even considered such a thing makes me very, very anti-American.

So what's the solution? Probably armed revolution, to be honest. Unfortunately the only people with enough guns to facilitate armed revolution think Obama is a secret Arab Muslim terrorist. Son of a bitch.

*I just pulled these numbers out of my ass because I don't feel like searching for the real figures, but if I recall correctly these numbers aren't far off. Either way, the real figures are less funny and just as disgusting.

3 comments:

Ron said...

No sale. I am completely rejecting your claim that it is appropriate to say things like "Kill Bush" and compare the man to Hitler over your disagreement with his policies. This is not to forgive the people who make racist attacks against Obama by any means, but the tone of both sets of attacks, to me, are equivalent. If you disagree with Bush's policies say so and argue the merits of the policies (which is what you did during our last debate). If you disagree with Obama's say so. But nothing, no matter how violently you disagree with either policies, justifies the use of the phrase "kill him" in political discourse. Bush's policies, no matter how misguided you think they are, do not justify that.

Regarding Bush v. Clinton v. Bush, Clinton lowered the taxes from the rates set by Bush 41 and, guess what, he spawned economic growth. He also benefited from a little thing called the internet boom which makes it very hard to judge his economic policies against those of GWB or Bush 41 because the conditions are completely different. When Reagan lowed the cap gains rate dramatically and also fought inflation he caused a horrific recession in 1982 and then we had about 8 years of sustained growth. GWB had 6 years of sustained growth from 2002-2008 largely, I would contend, due to his tax cuts. These methods help bring about growth, there is no denying that.

While your option B is largely correct, as the history of the Reagan administration shows tax cuts on the wealthy and corporations due grease the wheels of the economy and make the climate ripe for growth. Reagan used these economic policies to grow the hell out of the economy and, were he not pursuing a robust defense budget in the run-up to the end of the Cold War, he would not have had the kind of deficits he did. If GWB was not pursuing the war on terror and the war in Iraq, you would not have had the deficits. Is the lesson only cut cap gains tax during a peace time economy and revert back to other tactics during a military conflict? Possibly, but that doesn't mean that the tax cuts won't cause growth.

Now, after reading your examples here, you point out a weakness in the economy, namely that the CEOs and dividend holders should have invested more in the economy. After all, in your example, they made 362 times what their workers did. The thing about this is that markets are self-correcting. We are currently paying the price for a lack of reinvestment in the economy (and a lot of unstable business practices like triple mortgages and sub-prime lending that took advantage of people's greeds and built an unstable economy). Where you and I disagree is that I think the fundamental practices, namely cutting cap gains and corporate taxes, provide the best, most solid path to sustained economic growth. You can't manage for booms and busts, you can only prepare. The way you prepare is you take care of your employees and you invest back in the business so your business can survive (and you can continue to pay your people) when the lean times come.

My anecdotal example. Through work I know a prominent real estate developer here in town. He is friends with the name on my center and he has given us a large contribution to our program. He has not sold a house since February 2007. February 2007. Yet, he has not laid off a single employee. No one in his rental properties nor his commercial sales office nor in his construction arm has lost their job. Why? Because he kept his account books balanced, carried no debt, and saved up a surplus for such conditions. That is a well-run business and his people are not paying the price for the recession because he reinvested in the business to prepare it for a downturn. It sucks that people are getting cut in the examples that you use, but the businesses should have prepared better. It isn't that the CEOs worked harder or the poor folks didn't work as hard...the company managers should have taken better care of their folks. In the free market, the companies that do take care of their people will survive better than those that don't.

Why do I mention that? I would argue, and I think I would be right on this, that you can't fundamentally change the economy or its systems of operations because the CEO pay or economic distribution is too out of whack. Yes, the disparity of wealth is a tremendous shame and I don't deny that. There is no arguing that. That does not mean that you jack the taxes on the top 5% or whatever (many of that top 5% do not make 7 digits like the celebrity CEOs that we see trotted out on CNN) to make it somehow more fair or to share the wealth. You just can't move away from what works, from what causes growth, because it seems like it will be a good idea or it seems "more fair."

A cap on CEO pay? It would be unconstitutional but I think it would be a more economically viable solution than taxing them and redistributing it to the poorest people, especially since more of those ultra-wealthy people have found more holes in the system than a freezer case full of Swiss cheese and don't pay their fair share of taxes anyway. I would be in favor of closing those loopholes so that the CEOs are taxed appropriately but that will never pass because most Senators (of both parties) fall into those tax loopholes and enjoy their benefits. That is a travesty. Hell, the GSEs were ran by Democrats and gave huge amounts of campaign contributions to Democrats, so this isn't a partisan issue.

So, in short, you shouldn't change the system because of its faults. You work within the system to correct those faults. Companies that treat their people well and prepare for the future will be rewarded. Those that don't will suffer. I don't think we should trust the government to be able to manage the economic cycle because, to be quiet honest, I don't think anyone can get a handle on all of the transactions and factors and steer the ship through clear. You have to have up and downs.

Ron said...

Oh. I would also argue based on good evidence that no one in the Republican Party has seriously suggested ending Social Security since about 1948. Medicare and Medicaid? Well, Bush actually increased them during his administration with a Republican Congress. No one of any import in the GOP wants to go back to a total laissez-faire system, despite all their rhetoric for a free market. Ron Paul does, but he isn't important.

Rev. Joshua said...

Look, this is absurd. I certainly don't approve of calling for the death of political opponents and I don't think that was what David's "nasty things about Bush" encompassed in its entirety, but these bigoted, fear-based attacks on Obama, in the context of Obama being the first African-American presidential nominee from a major party, continue to be far more troubling than anything any liberal or Democrat has ever said about Bush.

There are also reports of physical attacks on Obama canvassers and journalists by people who probably aren't Obama supporters. This comes after incidents involving vandalism of ACORN offices and death threats to ACORN workers in the wake of comments from John McCain claiming that the voter registration irregularities surrounding ACORN's registration efforts was "one of the greatest frauds in voter history in this country, maybe destroying the fabric of democracy."

At some point these outrageous acts stop being isolated incidents and become an indictment of the nasty, divisive politics of the current Republican Party leadership and the McCain-Palin campaign as a whole. Hopefully that day will be November 4th.

But I digress.

Aside from Clinton lowering the capital gains tax five years into his presidency in exchange for tax credits for dependents, education savings, and retirement accounts, he raised income taxes pretty much across the board in 1993, with the majority of those increases going to the top brackets; Clinton also oversaw repealing the cap on Medicare taxes, raising the cap on Social Security taxes, and increasing fuel taxes, so I'm not sure why you claim Clinton lowered taxes from Bush 41 rates. Job growth remained steady under Clinton's entire eight-years and did not noticeably increase after the capital gains tax cut in 1997, suggesting that the 28% rate was just as conducive to job growth as the 20% rate and, given the anemic growth since the rate was lowered in 2003, better for job growth than the current 15% rate. Now that is obviously an oversimplification for the purposes of demonstrating that raising taxes does not directly and incontrovertably influence job growth or even economic expansion.

Reagan did lower income taxes considerably, but he also had a large budget deficit coming out of a recession and there is considerable debate as to which of these aspects of Reagan's economic policies led to the growth acheived during that period. Clinton's economic growth began by raising taxes to cover the costs of long-term investments like job training, educational expansion, and promoting expansion in the high-tech sector combined with numerous spending cuts. The internet boom of the 1990s was largely a part of the tail end of Clinton's second term and does not account for the growth of the first six years of Clinton's presidency. His balancing of the budget also led to investor confidence that fueled some of that late-end growth. But now again, under Bush 43 we've had lower taxes and a budget deficit and here we are with economic and job growth far lower than that of Reagan or Clinton. It's also arguable that the economic growth was the result of the subprime mortgage sham that is now reversing that growth.

You know what, fuck economics. This shit is a pain in the ass. Attack politics is much, much easier.

Basically, here's where my argument is going: given the current state of the economy, the best plan is probably going to be some sort of Reagan-Clinton hybrid, with emphasis on the Clinton. Raise taxes on the wealthy and cut taxes on the middle class to free up immediate funds for consumer spending while continuing federal deficit spending to create economic stimulus. Calmly and effectively reduce the budget by eliminating truly wasteful and inefficient programs while expanding education spending and creating legitimate benefits for small businesses that grow jobs, allowing for a gradual reduction in the deficit so that investor confidence will return. If circumstances allow for tax rate reductions then so be it, but as it stands continuing Bush's tax cuts doesn't look to be viable at all without massive spending cuts that McCain won't have the political fortitude or capital to make.

As far as the social programs, there is a viable wing of the Republican Party, led by people like Grover Norquist and his group Americans for Tax Reform, whose goal is for the dismantling of the federal government beyond defense spending and the basic functions as outlined by the Constitution. Granted, in the interests of winning elections the Republican Party finds itself often at least paying lip-service to social programs and occasionally adding to them, but I don't think the libertarian wing of the GOP is as marginal as you'd claim.