Posted by
rycK on Friday, February 22, 2008 11:16:42 AM
The New York Times Calls for More Taxes [What else would they do?].
Books are an invaluable educational tool as no matter how many times you read them they never seem to change the word order or refuse to let you peek at the next page. The New York Times, aka the Walter Duranty Papers, are also a consistent resource on the fine points of political propagandizing as they offer frequent examples of this fine art every week. The reading of articles by Paul Krugman is a marvelous study case in the intricacies of leftist propaganda and provides a more interesting sport and challenge to sort out the cryptic elements of these political constructions and recover [and expose] buried slogans than the NYT crossword puzzle.
In today’s lesson, we are treated to an historical redaction that can be used to predict the future! In an article entitled Don’t Rerun That ’70s Show we read the following:
“Will the next president be the second coming of Jimmy Carter? Given Thursday’s economic headlines, full of dire warnings about the return of 1970s-style stagflation, you might think so.”
There are two embedded elements here, one a more than casual snip at religion and two a reflexive refection of stagflation, the economic aliment that trashed Keynesianism .
“Let’s talk first about the Carter-era economy….Jimmy Carter’s overall economic record was much better than most people realize — the average economic growth rate under his administration was 3.4 percent per year, slightly higher than the growth rate under Ronald Reagan and far better than growth under either Bush.”
Ah, back to the past and sifting of good news.
“That said, I don’t believe we’re really facing anything comparable to 1970s stagflation. For one thing, we’re less dependent on oil: America has more than twice the real G.D.P. it had in 1979, but consumes only slightly more oil. For another, there’s no sign of the wage-price spiral that once drove inflation into double digits — in fact, wage growth has been declining even as inflation rises.”
What he means here is that oil is a smaller cost component of our economy than it was during the Jimmy Carter Era.
“The first President Bush presided over the 1990-1991 recession. But his real problem came during the alleged recovery, which was hobbled by financial problems at many banks, which had been badly damaged by the collapse of the late-1980s real estate bubble, and by sluggish consumer spending, held down by high levels of household debt”
This was the Clinton-Gore Recession and is justified by using the same logic Krugman uses to explain that Jimmy Carter’s problems were inherited.
“The difference is that the problems look a lot worse this time: a much bigger bubble, more financial distress, deeper consumer indebtedness — and sky-high oil prices added to the mix. So if history is any guide, we should be looking at an extended period of economic weakness, probably extending well into 2010, and quite possibly even longer.
Can the next president do anything to avoid that outcome? In terms of straight economics, the answer is a clear yes.”[6] [Emphasis is mine in all quotes in this essay]
We have a solution!! Let us celebrate! Give it to us!!
“To this day, it’s not clear what Mr. Carter could have done differently: stagflation is a problem with no good solutions. But weak spending is a treatable condition. A serious fiscal stimulus plan — one that emphasized public investment and aid to Americans in economic distress rather than across-the-board tax rebates, which many people won’t spend — could do a lot to ease the country’s economic pain.”
Now, we get to the bottom line: Weak spending is allowed by higher taxes or higher debt!!
Didn’t Hillary and Obama both want to ‘balance the budget’ and give us low-cost socialized medicine? Where does this money come from?? Higher taxes??
If #1
“If the next president is a Republican, he will be captive to the doctrine that tax cuts are the answer to all problems, and therefore won’t seek an effective response to the economy’s troubles…. [If #2]…And even if the next president is a Democrat, any serious stimulus plan would face intense, ideologically motivated opposition in Congress.”
These are mysterious words inscribed here as in keeping with the construction of political and propagandistic slogans and assorted rabble-rousing speeches. Notice that there is only the negative commentary on tax policy and nothing else. Nothing specific is offered here by the NYT—only that tax cuts are probably inevitable in the next administration regardless of horns or stripes and the diametrically incorrect economic vector to pursue.
Then, from the pages of the iron-bound book of Fata we read the penalty:
“And if effective action isn’t forthcoming, the next president will suffer the fate of Jimmy Carter, who began his administration with words of uplift — “Let us create together a new national spirit of unity and trust” — and ended up delivering America into the hands of the hard right.”
So, what is this effective action? Where is the beef??
More is missing from this analysis. Where is the discussion and effects of growth on the economy? Ronald Reagan doubled revenue with his tax cuts and added 21 million new jobs. Bush has a similar record and looking at the SP 500 we can wonder what Bill Clinton did, other than pursue corporations with his Justice department, and attempt to institute socialized medicine at a horrendous cost. Using the Krugman time-scale predictions we could just assume that the Clintons merely unconsciously floated upon the Reagan Era economic corrections like an old wooden tub at a Newport Regatta and benefited from the earlier phenomenal growth-oriented solutions to the Jimmy Carter Malaise. Krugman probably looks at data like these below that allow a cherry-picking picnic for every specious theory one might dig up and proffer as truth.
Year Inflation Unemployment (1)
-------------------------------
1961 1.0% 6.7%
1962 1.0 5.6
1963 1.3 5.6
1964 1.3 5.2
1965 1.6 4.5 < Vietnam war spending increases
1966 2.9 3.8
1967 3.1 3.8
1968 4.2 3.5
1969 5.5 3.5
1970 5.7 5.0
1971 4.4 6.0
1972 3.2 5.6
1973 6.2 4.9
1974 11.0 5.6 < First oil crisis
1975 9.1 8.5
1976 5.8 7.7
1977 6.5 7.1
1978 7.6 6.1
1979 11.3 5.9 < Second oil crisis
1980 13.5 7.2
1981 10.3 7.6
1982 6.2 9.7
1983 3.2 9.6
1984 4.3 7.5
Federal tax receipts and spending (percent of GDP) (2)
Year Receipts Spending
-------------------------
Carter
1978 18.5% 21.3%
1979 19.1 20.7
1980 19.6 22.3
1981 20.2 22.9
Reagan
1982 19.8 23.9
1983 18.1 24.4
1984 18.0 23.1
1985 18.5 23.9
1986 18.2 23.5
1987 19.2 22.5
1988 18.9 22.1
1989 19.2 22.1
It is of interest to note that all 8 of Ronald Reagan’s budgets were ignored and 7 out of 8 times Congress spent more than his original budget targets suggested. Notice that growth is not a factor here in this data set and only the barrowing is shown in relative terms based on the current GDP for each year. Why not show the growth curve of the GDP? Such would defeat the arguments against spending and barrowing above revenues. Take a peek at the SP 500 for a clue.
The far left continues to demand that any tax cut is a ‘cost’ to the economy and this phony declaration ignores that very basic fact that tax cuts spur growth and increase tax revenues and also the fraction of taxes paid by the very rich increase. This is the leftist myth that is frantically plastered in every article that moans about the poor and substantiates the cliché that “The rich get richer and the poor get poorer.” That is the classic leftist phony slogan that keeps some of these leftist politicians at work.
The conclusion of this link is this:
“Tax cuts were supposed to have spurred economic recovery by liberating the tax dollars of entrepreneurs and allowing them to invest them in greater productivity and jobs. However, such greater investment never occurred. It appears that the rich simply pocketed the savings, because investment fell during the 80s:”
What??
This is a fantastic mangling of reality. Alice must have seen more reality in Wonderland than this fluff. We need to look at other factors and use a certain measure of truth here: Reagan had to deal with a leftist Congress and agreed to certain tax cuts and tax hikes and tax reforms and made adjustments to the 1981 Economic Recovery Tax Act.[10] This act reduced the astronomical tax rates, which penalized entrepreneurs from a high of 70% to 50% and lower the bottom rate to 11% from 14% to and [attempted to]index these rates for the effects of inflation.
The effect was:
“Between 1980 and 1983, the share of individual income taxes paid by taxpayers in the top 1 percent of the income distribution increased from 19.1 percent to 20.6 percent.”
So, a tax cut in the higher brackets results in more revenues?!! Where is this salient fact in this article by Krugman??
Looky here:
“The criticism that the tax payments of the rich would fall under ERTA was based on a static conception of human behavior. As a 1982 JEC study pointed out,… similar across-the-board tax cuts had been implemented in the 1920s as the Mellon tax cuts, and in the 1960s as the Kennedy tax cuts. In both cases the reduction of high marginal tax rates actually increased tax payments by "the rich," also increasing their share of total individual income taxes paid. Unfortunately, estimates of ERTA by the Democrat-controlled CBO continued to show falling tax payment by upper income taxpayers, even after actual IRS data had become available showing a surge of income tax payments by affluent taxpayers.”
The tax mongers have to cook the books to salvage their jobs and political power.
There is a reason for all this. By ignoring the facts of sound economics and always finding new ways to argue for increasing taxes the left betrays their intrinsic intent: They cannot gain power when individuals and corporations gather wealth and create growth. They must control every dollar they can and make the populace dependent upon the government. The far left have nothing but Bolshevik Revolutions, confiscation of private property disguised as ‘nationalization’, oppressive taxes and regulations and tangential antics like the Clean Air Act and Endangered Species Act that allow the ex-Marxists to be ‘giant killers’ and suppress growth. This is the leftist basis for blocking all attempts to drill for more oil, build new dams, erect new oil refineries, and more.
How can you redistribute the wealth when the system is growing? The economic might of the US crushed the phony USSR and its minions and showed the world that planned or command economies could not produce enough returns to maintain the economic levels of their citizenries much above the poverty level. Asia, in the cases of View Nam and China, have given in to capitalism and showed that their societies are overwhelming improved over the Marxist versions.
The far left have a Rule or Ruin mentality and that is reflected in the phony economic platforms espoused by the New York Times.
Hillary Clinton would penalize Exxon with a 50 billion dollar tax and ‘take away their profits.’ Karl Marx could not have said it better.
The NYT cannot tolerate a frank discussion on growth and tax cuts without foaming at their collective maws and scrounging up some redacted and slanted pile of rubbish from the past to show that a failure like Jimmy Carter was not all that bad. This is decrypted and exposed in this article published today and means: high taxes were the correct policy anyway!
Jimmy never met a Marxist he didn’t like and we can then explain much of the leftist reverence for this fool. The Navy wisely let him go back to his peanut farm to rescue the business and avoided problems in the nuclear submarine fleet. The Peanut actually kissed Premier Brezhnev on the cheek [about four feet above the proper place] and wept when Daniel Ortega lost his election in Nicaragua.
Some things never change and the mantras of the far left tax mongers at the New York Times just drone on in the face of reality. They have nothing else to try. The truth never works for the far left, so they spin such hokum and foam as we read toady in the instant krugmaniacal screed.
We can certainly avoid a rerun of the Carter Malaise: Vote against the liberals and cut some more taxes.
ryck
Comments: ryckki@gmail.com