Supply side economics work...just not how we would like

Thats EXACTLy what it means. Supply Side economics, Trickle Down Economics, Reaganomics. All the same thing. It means give tax breaks to the rich so that they can reinvest that money which will in turn create more jobs.

Unfortunately, there are no barriers at our borders keeping the money inside the country. So that money moves overseas and creates jobs there instead of here. After all more profit to be made paying a worker 20 cents an hour as oppsed to 20 dollars an hour.


So big corps have money and it can go outside the country. Which number one, is an EXCELLENT reason to incentivize them not to do so. But it does not automatically follow that just because money can flow out that it necessarily will. And there are other factors besides the labor costs, which I think you might have overstated somewhat. For instance, is there a market for whatever you are producing in and/or near your foreign plant. Shipping costs are kinda growing quite significant, and as I said there are other things involved.


Taxes and regulations are a part of supply side economics, but not exclusively so. Anything that can be done to reduce costs or improve the quality and make it more valuable is what supply side is all about. It's not just taxes.


Youre ignoring the fact that its the most fundamental principle of Supply Side economics.

And if you fall back on the Supply creates demand argument. That is false and every manufacturer in America whos implemented lean manufacturing and just in time princiles over the last 20 years knows this.

THe old models don't work anymore. THis is not the age of Laffer/Reagan or FDR.. When the economy went global and America mistakenly relied on the Service Sector to carry us through -- we forgot what the Globalist are telling us.. Supply STILL creates demand. We have lower prices for consumer goods due to offshore manufacturing.. But handing out $100 bills to the public only causes CHINESE factories to ramp up.

We know what DOESN'T work anymore. I just mentioned "stimulating demand" by increasing consumer action. The other thing that doesn't work is having the GOVT leadership pick SPECIFIC jobs and industries and companies. Like the Green Jobs, or Shovel jobs or the old "internet superhiway" that you never hear about anymore. Those are failed LEFTIST policies.

On the right -- TAX breaks don't function like they did before. Because NOW tax SUBSIDIES are more important than tax RATES for creating wealth and capital. Subsidies for EXISTING products do NOTHING to generate growth. Both parties have this wrong. In the OLD textbooks, you could jack up taxes on corporations and they'd smile and take it. Because there were no other global markets that they could pack up and go serve. Today -- you try that trick and make it difficult to do business in the American market and any smart entrenprenuer will pack up and serve Eastern Europe or Asia instead.

Look at how China built their miraculous rise to power. They invited foreign capital and know-how in to build their job base and manufacturing. They didn't CHOOSE the products that would serve their interests. They didn't hand out "stimulus" to rice farmers and peons.

We cannot survive applying the OLD economics.. We WILL NOT survive putting everyone into a Service economy.. We SHOULDN'T EXPECT to be still making alarm clocks, tube socks and toys in a world economy.. We were SUPPOSED to be doing the jobs that the rest of the world couldn't do.. The HARD stuff. Science, Engineering, Innovation, Invention. And time is running to realize that our window to succeeding is rapidly closing.. And we were SUPPOSED to be attracting FOREIGN capital in because of our highly skilled and motivated workforce and easy access to capital and free market lack of overbearing regulations. To some extent, we now work for BMW, NESTLE, Philips, Siemens, and Toyota. But it's becoming harder for those companies to justify setting up N. American operations.

Service jobs and infrastructure FOLLOW the proper application of Risk Capital and Innovation. Just look at North Dakota and WHY THEIR recesssion is over.
 
Last edited:
This explains my POV very well. It also explains why Obama's plan is so poor.

The invisible depression is here - financial crisis - MSN Money


Can you eleaborate?

Its a fairly long article that agrees with my opinion on our economic situation. Elaborate?

Well as the article doesnt mention the President even once and only mentions his policy in passing, it seems a bit of a stretch to say it supports your view on Obamas "plan" without commenting further.
 
Edited

Let's start with your assertion that Keynesian economics have been in play for the last 30-50 years. You've completely ignored Milton Friedman with that statement and his effect on our economic policy. Prior to Friedmans influence on President Reagan, this country enjoyed its most prosperous 30 years. And that was when Keynesian economics were in play unfettered.

And you support the Austrian model? What model is that exactly?

As one of the fundamental principles of the Austria school is that all models are flawed and only logical thought based on illogical human action. According to that theory all test ability and mathematical modeling are impossible.

Basically, the Austrian school holds to the theory of Fuck it, we don't know, there's no way to know, let's try this.

Yeah, let's do that.

My point about the difference between the two schools of thought. You clearly like the Keynsian model as you state that "Without barriers to keep businesses here..." shows that you are for forcing them to do what you want, instead of incentivizing them. Folks don't like to do things at the point of a gun.

Austrian econ doesn't just throw it to the wind, they in fact argue why modeling, etc is inefficient:

Austrian School economists argue that they are a flawed, unreliable, and insufficient means of analyzing economic behavior and evaluating economic theories. Instead, they advocate deriving economic theory logically from basic principles of human action, a study called praxeology. Furthermore, whereas experimental research and natural experiments are often used in mainstream economics, Austrians generally hold that testability in economics and precise mathematical modeling of an economic market are virtually impossible. They argue that modeling a market relies on human actors who cannot be placed in a lab setting without altering their would-be actions.

Austrian School - Wikipedia, the free encyclopedia

So it still comes down to wanting centralized management, or letting people make their own decisions. I will argue that SOME regulation (smart regulation) is needed, but that over regulation coupled with the centralized management that yes, even happened under Reagan, is the cause of where we are today.

The government needs to shepard the economy, not try to run it. Amtrak anyone?

Again, you are asserting that a school of thought that says," Theres no way to know if this is correct unless we do it and find out." is the way to go.



Let me try this tact instead.

I assert that a national government cannot shepard a global economy. As long as we have open economic borders, any "tinkering" we do, keynesian, austrian or otherwise, are incapable of consistently creating desirable localized outcomes.

Ok, I understand your point of view better now. Thanks. See next post.
 
Taxes and regulations are a part of supply side economics, but not exclusively so. Anything that can be done to reduce costs or improve the quality and make it more valuable is what supply side is all about. It's not just taxes.


Youre ignoring the fact that its the most fundamental principle of Supply Side economics.

And if you fall back on the Supply creates demand argument. That is false and every manufacturer in America whos implemented lean manufacturing and just in time princiles over the last 20 years knows this.

THe old models don't work anymore. THis is not the age of Laffer/Reagan or FDR.. When the economy went global and America mistakenly relied on the Service Sector to carry us through -- we forgot what the Globalist are telling us.. Supply STILL creates demand. We have lower prices for consumer goods due to offshore manufacturing.. But handing out $100 bills to the public only causes CHINESE factories to ramp up.

We know what DOESN'T work anymore. I just mentioned "stimulating demand" by increasing consumer action. The other thing that doesn't work is having the GOVT leadership pick SPECIFIC jobs and industries and companies. Like the Green Jobs, or Shovel jobs or the old "internet superhiway" that you never hear about anymore. Those are failed LEFTIST policies.

On the right -- TAX breaks don't function like they did before. Because NOW tax SUBSIDIES are more important than tax RATES for creating wealth and capital. Subsidies for EXISTING products do NOTHING to generate growth. Both parties have this wrong. In the OLD textbooks, you could jack up taxes on corporations and they'd smile and take it. Because there were no other global markets that they could pack up and go serve. Today -- you try that trick and make it difficult to do business in the American market and any smart entrenprenuer will pack up and serve Eastern Europe or Asia instead.

Look at how China built their miraculous rise to power. They invited foreign capital and know-how in to build their job base and manufacturing. They didn't CHOOSE the products that would serve their interests. They didn't hand out "stimulus" to rice farmers and peons.

We cannot survive applying the OLD economics.. We WILL NOT survive putting everyone into a Service economy.. We SHOULDN'T EXPECT to be still making alarm clocks, tube socks and toys in a world economy.. We were SUPPOSED to be doing the jobs that the rest of the world couldn't do.. The HARD stuff. Science, Engineering, Innovation, Invention. And time is running to realize that our window to succeeding is rapidly closing.. And we were SUPPOSED to be attracting FOREIGN capital in because of our highly skilled and motivated workforce and easy access to capital and free market lack of overbearing regulations. To some extent, we now work for BMW, NESTLE, Philips, Siemens, and Toyota. But it's becoming harder for those companies to justify setting up N. American operations.

Service jobs and infrastructure FOLLOW the proper application of Risk Capital and Innovation. Just look at North Dakota and WHY THEIR recesssion is over.

I think without realizing it, this is where I was going with my posts, kindof. This brings up some good points, and make sense in today's worls. You have to attract businesses, and compete in the global economy. I guess what I was trying to say was that the "old" way of doing things (Keynsian) just don't work anymore. Obama is stuck in this since it dovetails so nicely into a socialist (Hamiltonian?) approach to government.
 
Please elaborate on a demand side economic policy you support.

One thing is plain. Taxes do not add value to a product or service, it is a pure cost and is passed on to consumers. Regulation frequently adds cost as well. For example, achieving 35 mpg in cars and trucks will raise the cost of cars about $3,000 per car and trucks $5,000. That will drive up the cost of a usedone as well, because more folks will defer to a used over the increased cost of new. Enjoy.

Liberty,

I owe you an apology. I totally missed this post. Sorry about that.

It is my opinion that It's not JUST supply side that will fail under the current conditions. ANY economic policy that allows for open economic borders will not consistently produce the desired localized results, again my opinion.
 
Please elaborate on a demand side economic policy you support.

One thing is plain. Taxes do not add value to a product or service, it is a pure cost and is passed on to consumers. Regulation frequently adds cost as well. For example, achieving 35 mpg in cars and trucks will raise the cost of cars about $3,000 per car and trucks $5,000. That will drive up the cost of a usedone as well, because more folks will defer to a used over the increased cost of new. Enjoy.

Liberty,

I owe you an apology. I totally missed this post. Sorry about that.

It is my opinion that It's not JUST supply side that will fail under the current conditions. ANY economic policy that allows for open economic borders will not consistently produce the desired localized results, again my opinion.

No apology necessary. I appreciate the response. Free trade is a great concept, but most countries cheat. The US thought globalization would mean access to more markets. The world discovered it means new jobs and a higher standard of living for them.
 
Please elaborate on a demand side economic policy you support.

One thing is plain. Taxes do not add value to a product or service, it is a pure cost and is passed on to consumers. Regulation frequently adds cost as well. For example, achieving 35 mpg in cars and trucks will raise the cost of cars about $3,000 per car and trucks $5,000. That will drive up the cost of a usedone as well, because more folks will defer to a used over the increased cost of new. Enjoy.

Liberty,

I owe you an apology. I totally missed this post. Sorry about that.

It is my opinion that It's not JUST supply side that will fail under the current conditions. ANY economic policy that allows for open economic borders will not consistently produce the desired localized results, again my opinion.

No apology necessary. I appreciate the response. Free trade is a great concept, but most countries cheat. The US thought globalization would mean access to more markets. The world discovered it means new jobs and a higher standard of living for them.

Who cares if other countries "cheat"? That isnt the point of free trade. The point of free trade is that it benefits all involved. If other countries want to make goods more expensive for their own citizens so they can subsidize our consumers, good. I'd want more of that.
 
Liberty,

I owe you an apology. I totally missed this post. Sorry about that.

It is my opinion that It's not JUST supply side that will fail under the current conditions. ANY economic policy that allows for open economic borders will not consistently produce the desired localized results, again my opinion.

No apology necessary. I appreciate the response. Free trade is a great concept, but most countries cheat. The US thought globalization would mean access to more markets. The world discovered it means new jobs and a higher standard of living for them.

Who cares if other countries "cheat"? That isnt the point of free trade. The point of free trade is that it benefits all involved. If other countries want to make goods more expensive for their own citizens so they can subsidize our consumers, good. I'd want more of that.

Except having a job to pay for all that neat stuff is sort of a sticking point.
 
Youre ignoring the fact that its the most fundamental principle of Supply Side economics.

And if you fall back on the Supply creates demand argument. That is false and every manufacturer in America whos implemented lean manufacturing and just in time princiles over the last 20 years knows this.

THe old models don't work anymore. THis is not the age of Laffer/Reagan or FDR.. When the economy went global and America mistakenly relied on the Service Sector to carry us through -- we forgot what the Globalist are telling us.. Supply STILL creates demand. We have lower prices for consumer goods due to offshore manufacturing.. But handing out $100 bills to the public only causes CHINESE factories to ramp up.

We know what DOESN'T work anymore. I just mentioned "stimulating demand" by increasing consumer action. The other thing that doesn't work is having the GOVT leadership pick SPECIFIC jobs and industries and companies. Like the Green Jobs, or Shovel jobs or the old "internet superhiway" that you never hear about anymore. Those are failed LEFTIST policies.

On the right -- TAX breaks don't function like they did before. Because NOW tax SUBSIDIES are more important than tax RATES for creating wealth and capital. Subsidies for EXISTING products do NOTHING to generate growth. Both parties have this wrong. In the OLD textbooks, you could jack up taxes on corporations and they'd smile and take it. Because there were no other global markets that they could pack up and go serve. Today -- you try that trick and make it difficult to do business in the American market and any smart entrenprenuer will pack up and serve Eastern Europe or Asia instead.

Look at how China built their miraculous rise to power. They invited foreign capital and know-how in to build their job base and manufacturing. They didn't CHOOSE the products that would serve their interests. They didn't hand out "stimulus" to rice farmers and peons.

We cannot survive applying the OLD economics.. We WILL NOT survive putting everyone into a Service economy.. We SHOULDN'T EXPECT to be still making alarm clocks, tube socks and toys in a world economy.. We were SUPPOSED to be doing the jobs that the rest of the world couldn't do.. The HARD stuff. Science, Engineering, Innovation, Invention. And time is running to realize that our window to succeeding is rapidly closing.. And we were SUPPOSED to be attracting FOREIGN capital in because of our highly skilled and motivated workforce and easy access to capital and free market lack of overbearing regulations. To some extent, we now work for BMW, NESTLE, Philips, Siemens, and Toyota. But it's becoming harder for those companies to justify setting up N. American operations.

Service jobs and infrastructure FOLLOW the proper application of Risk Capital and Innovation. Just look at North Dakota and WHY THEIR recesssion is over.

I think without realizing it, this is where I was going with my posts, kindof. This brings up some good points, and make sense in today's worls. You have to attract businesses, and compete in the global economy. I guess what I was trying to say was that the "old" way of doing things (Keynsian) just don't work anymore. Obama is stuck in this since it dovetails so nicely into a socialist (Hamiltonian?) approach to government.

Not only do we have to COMPETE in a global economy, but we have to LEAD it to keep our standard of living. With Billions of new qualified workers and huge new markets open to products, tossing Keynsian tactics into the mix AINT ever gonna create those market-leading events and institutions. There is so much wasted out there -- fighting over economic theories and models from a time when only mighty superpowers could engage in trade outside their borders, and education was just for the elites -- that these NEW REALITIES don't even get a public hearing in the debate. We better wake up.. Stop listening to politicians and start OBSERVING how the world has changed..

Eventually, the textbooks and the theories/models will get fixed. But probably NOT BEFORE the outcome of our failure to adjust to Globalism is written in the History books.. Sad..
 
Wow. Just wow. Edited.

For starters, the economy sucked before Reagan.

So, you're assertion is that the American economy of the 50's and 60's "sucked"? Seriously?

That was sort of a big reason he got elected.
Second, "supply side" policy targets the supply of items. The theory is if you make it profitable for people to produce and innovate then they will do that. If you punish them for doing that, they won't. And that is the case, demonstrably so. This has nothing to do with globalization.

But let's consider globalization. We have not seen the kind of inflation we saw in the 1970s since that time. In fact, inflation has been low for the last 20 years. Why? Globalization. Reduced costs. Increased efficiency. We have outsourced low skill manufacturing and insourced high skilled design, marketing, finance, and other functions. The US has been a net beneficiary of globalization, which is why unemployment was very low until the recent turn in the economic cycle. Few were complaining about globalization in 2005 when the UE rate was 5%.

We could erect tariffs and build everything here and it would cost double what it does now. Is that really what we want, destroying our export business in the process? I think not.

The US has NOT been a "net beneficiary" of globalization. At least, a vast majority of US citizens have not been "net beneficiaries".

The people who have benefited from globalization in the US have pretty much exclusively been the owners and major investors of multinational corporations.
 
No apology necessary. I appreciate the response. Free trade is a great concept, but most countries cheat. The US thought globalization would mean access to more markets. The world discovered it means new jobs and a higher standard of living for them.

Who cares if other countries "cheat"? That isnt the point of free trade. The point of free trade is that it benefits all involved. If other countries want to make goods more expensive for their own citizens so they can subsidize our consumers, good. I'd want more of that.

Except having a job to pay for all that neat stuff is sort of a sticking point.

Not a problem. There are an infinite number of potential jobs out there. With people spending less money on some stuff they have more to spend on other stuff.
 
Wow. Just wow. Edited.

For starters, the economy sucked before Reagan.

So, you're assertion is that the American economy of the 50's and 60's "sucked"? Seriously?

That was sort of a big reason he got elected.
Second, "supply side" policy targets the supply of items. The theory is if you make it profitable for people to produce and innovate then they will do that. If you punish them for doing that, they won't. And that is the case, demonstrably so. This has nothing to do with globalization.

But let's consider globalization. We have not seen the kind of inflation we saw in the 1970s since that time. In fact, inflation has been low for the last 20 years. Why? Globalization. Reduced costs. Increased efficiency. We have outsourced low skill manufacturing and insourced high skilled design, marketing, finance, and other functions. The US has been a net beneficiary of globalization, which is why unemployment was very low until the recent turn in the economic cycle. Few were complaining about globalization in 2005 when the UE rate was 5%.

We could erect tariffs and build everything here and it would cost double what it does now. Is that really what we want, destroying our export business in the process? I think not.

The US has NOT been a "net beneficiary" of globalization. At least, a vast majority of US citizens have not been "net beneficiaries".

The people who have benefited from globalization in the US have pretty much exclusively been the owners and major investors of multinational corporations.

We werent talking about the 1950s but the 1970s. Anyone who can say the economy was fine didnt live through that period.
The US has been a net beneficiary in many way. This is without question, except among people who don't get it.
 
We werent talking about the 1950s but the 1970s. Anyone who can say the economy was fine didnt live through that period.
The US has been a net beneficiary in many way. This is without question, except among people who don't get it.

Actually, the post you were apparently replying to, was from Vidi, and said:

Prior to Friedmans influence on President Reagan, this country enjoyed its most prosperous 30 years.

Which would include the 50's and the 60's.

As far as your "without question" statement, you're right, there's a whole lot of people that "don't get it", and by "it" I mean the benefits.

Real%20Hourly%20Earnings.png
 
Who cares if other countries "cheat"? That isnt the point of free trade. The point of free trade is that it benefits all involved. If other countries want to make goods more expensive for their own citizens so they can subsidize our consumers, good. I'd want more of that.

Except having a job to pay for all that neat stuff is sort of a sticking point.

Not a problem. There are an infinite number of potential jobs out there. With people spending less money on some stuff they have more to spend on other stuff.

Maybe not for you, unemployed Americans see it a bit different.
 
Wow. Just wow. Edited.

For starters, the economy sucked before Reagan.

So, you're assertion is that the American economy of the 50's and 60's "sucked"? Seriously?

That was sort of a big reason he got elected.
Second, "supply side" policy targets the supply of items. The theory is if you make it profitable for people to produce and innovate then they will do that. If you punish them for doing that, they won't. And that is the case, demonstrably so. This has nothing to do with globalization.

But let's consider globalization. We have not seen the kind of inflation we saw in the 1970s since that time. In fact, inflation has been low for the last 20 years. Why? Globalization. Reduced costs. Increased efficiency. We have outsourced low skill manufacturing and insourced high skilled design, marketing, finance, and other functions. The US has been a net beneficiary of globalization, which is why unemployment was very low until the recent turn in the economic cycle. Few were complaining about globalization in 2005 when the UE rate was 5%.

We could erect tariffs and build everything here and it would cost double what it does now. Is that really what we want, destroying our export business in the process? I think not.

The US has NOT been a "net beneficiary" of globalization. At least, a vast majority of US citizens have not been "net beneficiaries".

The people who have benefited from globalization in the US have pretty much exclusively been the owners and major investors of multinational corporations.

You can WHINE about how US businesses decided that given a Global economy, the US probably shouldn't be making its own tires, tubesocks, and TVs anymore and blame them for the mess ----

OR

You can focus on what we SHOULD be doing in a world where BILLIONs of workers and consumers have been added.. We went thru this in the 60s and 70s with Japan and how their embarrassingly cheap goods undercut our production. But I don't see anyone 25 years later griping about unfair Japanese practices. THEY (the Japanese) managed to exploit and EXPAND their advantages to maintain a leadership position in innovative and leading edge products.

We need to do the same.. Even cheap labor is a passing fad.. The Chinese know this and we COULD be on equal footing bringing 21st Century type manufacturing back to this country. That is -- if leftists would focus and stop trying to be victims.
 
You can WHINE about how US businesses decided that given a Global economy, the US probably shouldn't be making its own tires, tubesocks, and TVs anymore and blame them for the mess ----

OR

You can focus on what we SHOULD be doing in a world where BILLIONs of workers and consumers have been added.. We went thru this in the 60s and 70s with Japan and how their embarrassingly cheap goods undercut our production. But I don't see anyone 25 years later griping about unfair Japanese practices. THEY (the Japanese) managed to exploit and EXPAND their advantages to maintain a leadership position in innovative and leading edge products.

We need to do the same.. Even cheap labor is a passing fad.. The Chinese know this and we COULD be on equal footing bringing 21st Century type manufacturing back to this country. That is -- if leftists would focus and stop trying to be victims.

Or we can just implement a series of trade regulations like they have in Germany, and tell the corporations that would rather move their businesses, so they can pay their workers slave wages, to go fuck themselves.

Yep, I like that choice.

And, just for the record, that's not "being the victim". That's evening the playing field.

We BUY the products, after all. If people would just realize that they, as the consumer, hold all the cards, then this problem would disappear overnight.
 
Last edited:
Oh, and, also, I was not "whining" about anything...

I was pointing out that the statement of the poster I was replying to (that globalization has a net beneficial effect for the US) was incorrect.
 
The internet, paypal and UPS make that a littler harder than in the past Vast.
 

Forum List

Back
Top