Is The Supply Side Economics Experiment Over?

[AVG-JOE]

How do you feel about Trickle Down Economics? Has Bush Jr. proved his father was right about Reganomics being 'Voodoo' economics?

Should America change course economically, or continue to put resources into the hands of big corporations and the wealthiest few, counting on them to create jobs for the middle class with those resources?

-Joe

 

[Red Dawn]

How do you feel about Trickle Down Economics? Has Bush Jr. proved his father was right about Reganomics being 'Voodoo' economics?

Yes, Poppy Bush was right. The numbers don't lie. The middle class has been stagnating for three decades under the Chicago School of trickle down economic theories, and corporate-inspired "free trade" agreements. There was a slight reprieve for the middle class in the 1990s, but wages have pretty much been falling for three decades. Our manufacturing base has all but been outsourced. And the only reason we've even been able to maintain a large, functioning middle class is that most families need two bread winners now. Husband and wife. 30 or 40 years ago, a family could live comfortably with one bread winner working a good blue collar job. Those days are pretty much gone.

Should America change course economically, or continue to put resources into the hands of big corporations and the wealthiest few, counting on them to create jobs for the middle class with those resources?

-Joe

America was not founded on the premise of corporate power, or an elite oligarchy. Most of the prominent founders were philosphically opposed to the concentration of wealth in the hands of a few individuals, in some powerful banking and financial institutions, and in a few large corporations.

I don't things are going to fundamentally change. The monied interests hold too much sway over our government with their vast financial resources. This country rarely undergoes any form of radical change, unless there is a complete meltdown, and the pain for average americans become unbearable.

Do I think a more egalitarian and equitable society is preferable? Perhaps one like the Scandinavian model; one in which there aren't vast extremes in wealth, or concentrations of power and wealth in the hands of a few? Yeah, that's what I think. But the republicans, and precious few of the Democratic politicians see it that way.

 

[xsited1]

Read this: Fiscal Policy, Profits, and Investment

This paper evaluates the effects of fiscal policy on investment using a panel of OECD countries. In particular, we investigate how different types of fiscal policy affect profits and , as a result, investment. We find a sizable negative effect of public spending -- and in particular of its public wage component -- on business investment. This result is consistent with models in which government employment creates wage pressure for the private sector. Various types of taxes also have negative effects on profits, but, interestingly, the effects of government spending on investment are larger than the effect of taxes. Our results have important implications for the so called 'Non-Keynesian' (i.e. expansionary) effects of fiscal adjustments.

 

[editec]

IF...

we intend to continue having a mixed economy, one where we have capitalism as the main driving engine of the economy, but one moderated by social welfare programs like having a military, a courts system social programs, and so forth...

THEN...

we need to insure that capital accumulation continues to be possible (in other words we cannot rape the wealthy by taxation)

AND

we need to start taking care of the working classes, too.

What happened in the last thirty years or so is we went too far in the direction of taking care of the wealthy, and we FORGOT(!?!) that our system is a consumer driven economy, and those consumers could ONLY be consumers if they made enough money to pay their bills, save some money, and take care of their own, too.

Now we attempted to serve both masters to some extent

We cut taxes on the upper classes, we allowed corporations to move offshore so that the super wealthy could get ever superIER wealthy, but we forgot that when people go from industrial jobs paying decent wages, to service jobs paying crap wages, that the consumer driven economy would falter.

Oh, we attempted to mitigate what was happening to the WORKING class somewhat by making money cheap, but the FED's real purpose there (contrary to the supply-siders current explaination for that move) was to insure that WALL STREET could sell too many stocks (on margin).

So now here we are with the WORST of BOTH worlds trying to figure out how in hell to correct nearly 40 years of STUPID STUPID national trade and taxation and worker rights policies.

We have GOT to put our working class back to work making stuff so that this nation stops sending 30% of its consumer driven purchase-profits OFFSHORE.

That, and that more than any other thing ANY of you have ever complained about on this board, is the ROOT CAUSE of every financial problem this nation currently faces.

We cannot continue sending American wealth offshore (in the form of consumer puchasing AND in terms of American investment in industries offshore) and expect any POTUS to fix the economic mess we're in.

No NATIONAL economy will long thrive under those conditions.

 

[Toro]

I think its wrong to make a broad-based proclamation about "supply side" economics being over.

"Supply side" is really a catch-all for tax cuts, de-regulation and productivity increases.

Some supply side initiatives were good and some were not. The idea that taxes can be cut and budgets balanced was rightly branded as "voodoo economics" by Bush I. There have been a few instances where tax cuts have increased revenues in specific parts of the economy but it is a strange fallacy to believe the example can be applied to the broad economy.

De-regulation has generally been successful with a few glaring disasters. De-regulation of the transportation industry has been very successful, at least for consumers, while de-regulation of the financial system was successful to a point, and then catastrophic after that point.

So "supply side" is not going by the wayside. Rather, economic policy will evolve away from what has not worked.

 

[editec]

I think its wrong to make a broad-based proclamation about "supply side" economics being over.

"Supply side" is really a catch-all for tax cuts, de-regulation and productivity increases.

Some supply side initiatives were good and some were not. The idea that taxes can be cut and budgets balanced was rightly branded as "voodoo economics" by Bush I. There have been a few instances where tax cuts have increased revenues in specific parts of the economy but it is a strange fallacy to believe the example can be applied to the broad economy.

De-regulation has generally been successful with a few glaring disasters. De-regulation of the transportation industry has been very successful, at least for consumers, while de-regulation of the financial system was successful to a point, and then catastrophic after that point.

So "supply side" is not going by the wayside. Rather, economic policy will evolve away from what has not worked.

Yup.

Assuming that the REAL agenda (as opposed to the pablum they keep feeding us) is to GET AMERICA back into some kind of fiscal sanity, then we're going to have to think seriously about many of the policies which have been the premise upon which most of our economy has been based in the last four decades.

The Monied Class does not create wealth....ALONE

The WORKING CLASS does not create wealth ....ALONE.

It takes the concerted effort of BOTH classes (working together!) to make a nation truly affluent.

Enough of the wealthy seem to have forgotten that, and they bought off congress in order to have their way.

Well, those of us who are nationalists (and there are nationists in both parties and in both classes, too) have GOT to wrest control away from those selfish government hating AMERICA WORKJING CLASS HATING, folks or this nation is going DOWN, folks.

Bad business practices drive ourt good ones.

NO monied patriot could afford NOT to go offshore if enough of his competition did.

And that is what happened to many of them, you know.

They stayed as long as they could, and then they had no choice BUT TO, move their opertions offshore or go belly up competing against what was essantially a slave-wage paying competitior who was importing against them.

Remember, you young Republicans, it was the REPUBLICANS who were screaming bloody murder about how STUPID FREE TRADE POLiCIES were back in the late 50s and early 60s.

They saw waaaaaaaaaaaaaaaaaaaaaaay back them, what was going to happen if we allowed too much foreign chacha to come into this nation.

Yeah that's right the CONSERVATIVES used to be the people who objected to free trade, not the so-called liberals.