Showing posts with label supply side. Show all posts
Showing posts with label supply side. Show all posts

Monday, December 09, 2013

The Elites Do Not Create Jobs; They Export Them!

by Len Hart, The Existentialist Cowboy

Some years ago, I covered a news conference held in Houston by Milton Friedman, the darling of the U.S. right wing for his near laissez-faire economic perspective. Friedman was wrong but would never admit it. In fact, when someone raised the issue of "job exportation", Friedman was adamant: "jobs are not exported!" The working person knows better!

At last, a major media outlet is telling the truth about economics! "Business Insider" now says: "Sorry, Folks, Rich People Actually Don't 'Create Jobs'! They are a bit late! I was saying that in my very first economics class as a Freshman. I never believed that "wealth trickled down" or the focus group approved label: "supply-side economics". It was all bunkum when Reagan exploited it to float his tax cuts for the very rich; it is bunkum now but, alas, too late to prevent the decline of U.S. industry --steel, automobiles, radios, electronics. Those industries are now dominated by China and Japan. Wal-Mart may be their "agent" in the U.S.
"As America struggles with high unemployment and record inequality, everyone is offering competing solutions to the problem. In this war of words (and classes), one thing has been repeated so often that many people now regard it as fact.

"Rich people create the jobs."

Specifically, by starting and directing America's companies, entrepreneurs and rich investors create the jobs that sustain everyone else.

This statement is typically invoked to justify cutting taxes on entrepreneurs and investors. If only we reduce those taxes and regulations, the story goes, entrepreneurs and investors can be incented to build more companies and create more jobs.

--Business Insider, Sorry, Folks, Rich People Actually Don't 'Create The Jobs'
GOP right wing elitsts are wrong when they propose that wealth is the creation of ultra-super rich tycoons, robber barons, the top 1 percent. These folk do NOT create wealth; rather --they siphon (or suck) the wealth that is, in fact, created by labor. The very rich move money around --most often to offshore accounts. Even the conservative economist Adam Smith (the father of modern economics) believed that "value" was created by "labor".

Related is the fact that the U.S. is no longer a NET EXPORTING NATION. We occupy the very bottom of the CIA's own World Fact Book with the world's LARGEST NEGATIVE Current Account Balance (formerly called the Balance of Trade Deficit); Guess who is on top!! CHINA! It is easy enough to trace this trend to Nixon's trip to China. I have reason to believe that the trip had been set up by Bush Sr. It may have been the high price U.S. labor was forced to pay to get our sorry asses out of Viet Nam.

I must hasten to add that neither Obama nor Clinton is responsible for this outcome. The details of America's "new" relationship with China was worked out during the Nixon administration --most obviously by George H.W. Bush, Nixon's "special envoy" to China. The result of these U.S. trade concessions may be seen in in the aisles of Wal-Mart, the empty houses in Detroit, the stilled mills in Pittsburgh.


Friday, October 25, 2013

Why There is a Recession/Depression During Every GOP Regime

by Len Hart, The Existentialist Cowboy

Every major economist has espoused the 'LABOR THEORY of VALUE'. That includes the conservative Adam Smith and the left-leaning Karl Marx. ERGO: a declining "real' wage that should go to labor TRICKLES (in fact, FLOWS) upward to the ruling elite.

The Axis of Reagan/GOP are wrong. Wealth does not and has never trickled down. "Suppy Side Economics" was and remains a scam, a con sketched out, it is said, on a napkin by Arthur Laffer. Laffer is remembered for his "Laffer curve" illustrating the theory that reducing taxes for the very wealthy would result in increased production. That has never happened. It's either a lie or a fairy tale or both.

The GOP embraced it immediately! They claimed that by cutting taxes for their base of wealthy folk, wealth would trickle down and create jobs. The opposite occurred. A recession of some two years followed Reagan's tax cuts. It was the deepest, longest depression since H. Hoover's big one!

Not addressed with Laffers' curve is the fact that elites have the purchasing power to bid prices UP! That's not inflation! It's theft! At least since Ronald Reagan occupied the White House, the GOP has tried to peddle tax cuts that have benefited only the eilte classes with various forms of trickle down theory. No GOP plan has ever worked! By now, the wealthy (if not everyone else) knows that "trickle down" or "supply side theory" is bunkum. The elite classes, however, will always resurrect it if it is believed that they can milk it for another tax cut or "stimulus" as they often like to call it.

The elites know what the general public does not: wealth does not 'trickle down'. Rather --it is labor which creates value and 'value' is the very source of a nation's wealth. Windfalls/tax cuts are not re-invested in ways that create jobs. They are squirreled away offshore or, in other ways, removed from circulation. The results are obvious: a recession/depression or --at best --a slow down follows every GOP tax cut. Every GOP administration since 1900 has presided over a recession/depression. Just a fluke? Not a chance!

Sunday, September 08, 2013

Why GOP Regimes Create Recessions/Depressions

by Len Hart, The Existentialist cowboy

Every major economist has espoused the 'LABOR THEORY of VALUE'. That includes the conservative Adam Smith and the left-leaning Karl Marx. ERGO: a declining "real' wage that should be going to labor TRICKLES (in fact, FLOWS) upward to the ruling elites.

The Axis of Reagan/GOP are wrong. Wealth does not and has never "trickled down"."Suppy Side Economics" was and remains a scam, a con sketched out, it is said, on a napkin by Arthur Laffer. Laffer is remembered for his "Laffer curve" said to illustrate the theory that by reducing taxes for the very wealthy would result in increased production.

The GOP embraced it immediately! They claimed that by cutting taxes for their 'base' of wealthy folk, wealth would trickle down and create jobs. The very opposite occurred. Reagan's tax cuts were followed by a depression of some two years, the deepest, longest depression since Hoover's big one!

Not addressed with Laffers' curve is the fact that elites have the purchasing power to bid prices UP! That's not inflation! It's THEFT! At least since Ronald Reagan occuped the White House, the GOP has tried to peddle tax cuts benefiting only the eilte classes with various forms of trickle down theory. It has never worked! By now, the wealthy (if not everyone else) knows that 'trickle down" or "supply side theory" is bunkum. The elite classes, however, will always resurrect it if it is believed that they can milk it for another tax cut or "stimulus" as they often like to call it.

The elites know what the general public does not: wealth does not 'trickle down'. Rather --it is labor which creates value and 'value' is the very soruce of a nation'swealth. Windfalls and tax cuts are not re-invested in ways that create jobs. They are squirreled away offshore or, in other ways, removed from circulation. The results are obvious: a recession/depression or --at best --a slow down follows every GOP tax cut. Every GOP administration since 1900 has presided over a recession/depression. Just a fluke? Not a chance!

Sunday, July 11, 2010

Let Them Eat the "Higher Pie"

by Len Hart, The Existentialist Cowboy, Doug Drenkow, Communications Specialist

The U.S. right wing consistently mistakes bigger slices of a smaller pie for growth! In fact, wealth is the product of labor. Therefore, real growth creates larger pies, larger slices. Real growth is, by definition, egalitarian or not at all! America's ruling elite amounts to just one percent of the total population and they own more than the rest of us combined.

Economists call a 'shrinking pie' a 'contraction' but, since Ronald Reagan, the rich have enjoyed the growth of their 'slices' as the pie itself shank. With every GOP tax cut since 1900, the economy has contracted but the 'slices' owned by the elite increased. The rich decrease as a class but grow wealthier with bigger slices. If you can visualize this, you will have mastered right-wing, trickle UP economics.

The effect for everyone but the very, very rich is called 'depression' i.e, 'contraction'. This process can be modeled mathematically. Anyone not a member of the top one percent voting GOP votes against his/her own interests. Anyone voting GOP expecting to join them one day is insane. There is no 'higher pie' --only a shrinking one.

When I am charitable, I suspect that their perspective is myopic in the extreme. More realistically, I suspect that they just don't care! Or worse --the transfer of wealth upward to just one percent of the total population was deliberate and achieved with a carefully crafted program of GOP tax cuts beginning with Ronald Reagan's tax cut of 1982. Only the very richest people in America benefited. Everyone else got poorer in terms of dollars earned but also as a result of declining purchasing power as prices are bid upward by the wealthy.

Since 1900 the U.S. has 'experimented' with 'robber baron economics', 'supply-side economics', 'trickle down theory' and assorted 'stimuli' that also put the fat cats and so-called 'investor' class at the top of the pecking order with often tragic results --the Panic of the late 1800s, Hoover's Great Depression, Ike's 'Recession', Reagan's 'Tent City' Depression of over 2 years! Anyone not seeing the pattern is just not paying attention.

My thoughts along these lines are inspired by the following article by my good friend, Communications expert, Doug Drenkow.
Presently, there is a great debate in the United States and beyond: In this, the greatest recession since the Great Depression, should the government spend more money on putting more people to work -- or saving more jobs, as by the federal government helping our increasingly desperate state governments -- or helping unemployed workers pay their bills till the job market turns around? Or should the government of this and many other nations focus more on paying down our historic debts, by cutting spending and/or increasing taxes, to stabilize our economies and thus, presumably, turn them around?

Do we so soon forget where most of that debt came from, where most of our money went? In the United States, much has been spent bailing out institutions "too large to fail" as well as propping up the rest of our economy, although apparently not enough -- thanks in large part to fiscal "conservatives," in both parties, who slashed last year's stimulus bill in half.

But even more than that, our treasury has amassed massive debts due to tax cuts that went mostly to the wealthy, under the administration of the previous president, and that were unfunded, as were the wars that were then started, with or without just cause, and that rage on, although now with ends apparently in sight.

In short, as many "deficit hawks" propose, should the Social Security, education, public safety, and other programs benefiting the working people and middle class of America be dramatically cut? Should the wealth of the country -- the product of the work of the workers of the country -- be in (unstated) effect permanently shifted from the bottom to the top, exacerbating the already historic inequality of wealth?

Although such authorities as Nobel Prize-winning economist Paul Krugman do a better job of explaining the whys and wherefores, the bottom line is this: If the working families in America and beyond do not prosper, how can the nations we build and maintain and defend and support do anything but wither?

Never forget, America is ultimately no greater than the sum total of the hopes, dreams, aspirations, and everyday lives of all our "everyday" people.

From the Declaration of Independence ...
"We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed."
... and the Constitution ...
"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America."
... to the Four Freedoms, espoused by President Franklin D. Roosevelt ...
"In the future days, which we seek to make secure, we look forward to a world founded upon four essential human freedoms.
"The first is freedom of speech and expression -- everywhere in the world.

"The second is freedom of every person to worship God in his own way -- everywhere in the world.

"The third is freedom from want ... everywhere in the world.

"The fourth is freedom from fear ... anywhere in the world.

"That is no vision of a distant millennium. It is a definite basis for a kind of world attainable in our own time and generation."
... and the challenge issued by President Barack Obama ...
"I'm asking you to believe. Not just in my ability to bring about real change in Washington ... I'm asking you to believe in yours."
So as we celebrate America today, let us protect, nurture, and cherish all the extraordinary "ordinary" people who are Americans. And let that be the guiding principle in our negotiations over budget, unemployment, and all the other public business of America. If U.S. working families work and prosper, then so will America. If not, then God have mercy on us all.

Douglas Drenkow
Clearly, the U.S. remains powerless to address these issues as long as the government is literally owned by the dwindling few who benefit. It is simplistic and naive to expect a government beholden to the super-rich to work -in good faith --for those who are denied both a voice and a meaningful role in this 'government of the people." It is simplistic and naive to expect a robber baron class to simply bow to the will of what it must surely believe is but a great mob of unwashed masses to whom is left an absurd choice by elites and/or idiots: 'higher pies' or 'let them eat cake! It is folly to assist the theft of U.S. wealth by this robber baron class. It is America's death knell that so few care and that so many multitudes will suffer!