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Revisiting the myth.

Last night President Obama gave a major speech on the economy to a joint session of Congress. As speeches go, it was all right, as long as one doesn't compare it to the speeches of, say, Franklin Roosevelt.  In the continuing battle between liberals and conservatives over FDR's legacy, the content of his speeches has been sadly neglected. The man possessed a gift for oratory - moving, eloquent, intelligent oratory - that few others in American history can match. To see for yourself, go to the Roosevelt Institute website at
 
 
A single sentence is enough to show the grace with which Roosevelt spoke. 
 
"The greatest tribute that I can pay to my countrymen is that in these days of crushing want there persists an orderly and hopeful spirit on the part of the millions of our people who have suffered so much. To fail to offer them a new chance is not only to betray their hopes but to misunderstand their patience. "
 
Roosevelt was referring to a nation that was, as he famously described it, "ill-housed, ill-clad, ill-nourished." It's difficult to imagine today the condition of the people who listened to those words. Comparisons of today's economic perils with the very real deprivation that gripped the nation during the Great Depression are inadequate. The most important thing to bear in mind is the possibility that, without effective action,  we and our families might learn what it was like through bitter experience. It's not impossible!  

Both before and after Obama's speech  the networks broadcast interviews with various politicians, which meant, of course, that we were subjected to the same "damned lies" about tax cuts that I discussed in my last post. Since repetition seems to be one of the favorite tactics of the right, I guess I'll have to respond in kind.  So here's a follow-up about the tax cut myth.
 
One of the most comprehensive sources for information about tax policy is a report from the Treasury Department’s Office of Tax Analysis. Published in September, 2006 the report is entitled: "REVENUE EFFECTS OF MAJOR TAX BILLS" and it can be found at: 
 
http://www.ustreas.gov/offices/tax-p...rary/ota81.pdf

Here’s a summary of the report's analysis of Reagan’s 1981 tax cut. During the four years following its enactment the "Economic Recovery Tax Act of 1981" produced the following decreases in federal revenue:

Years          Revenue loss

1                 -$54.9 Billion
2                 -$123.7 Billion
3                 -$178.9 Billion
4                 -$217.2 Billion

If that’s not enough, a more detailed discussion of the myth can be found at:
 
This one includes analysis of all three of the tax cuts that conservatives like to tout: Reagan’s, Kennedy’s, and Bush’s. As you can see, none of these produced the increases in revenue that the right wing politicians and talking heads would have us believe. 
 
Will the myth of tax cuts ever disappear? I doubt it. By now it's become part of conservative Gospel, immune to criticism. But at least you'll know better.
 
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Drip, Drip, Drip

 
Drip, Drip, Drip:
The Fallacies of Trickle Down Economics

     How often have you heard the claim that Ronald Reagan’s tax cuts stimulated the economy so much that federal tax revenue actually increased? A dozen times? A hundred? It doesn’t matter. The assertion's false. In fact the decreases in marginal income tax rates that Reagan promoted caused such massive federal debt that Congress had to pass an even larger tax increase - the largest in American history up to that time - in order to prevent an economic meltdown. This tax hike was disguised as an increase in FICA withholding, which had a number of advantages. It allowed Reagan and the Republicans to continue promoting their economic fantasies. It boosted an ailing Social Security trust fund. Best of all from the viewpoint of conservatives, it benefited the wealthy at the expense of the the poor and middle class, for whom FICA is a larger fraction of total taxes.

     Recently conservatives and libertarians have promoted a related myth: that tax cuts are the best way – indeed the only way – to stimulate the economy or to create jobs. Here’s a typical example of their reasoning:

     “Economic growth requires four main factors: 1) a motivated, educated and trained workforce; 2) sufficient levels of capital equipment and technology; 3) a solid infrastructure and 4) a legal system and rule of law sufficient to enforce contracts. High tax rates reduce economic growth because they make it less profitable to work, save and invest.”   -  Tax Rebates Will Not Stimulate the Economy – Brian M. Riedl -http://www.heritage.org/press/commentary/ed011008c.cfm

     What's missing from this analysis? In a word, demand! The four factors that Mr. Riedl identifies may be necessary for production of goods and services, but they do nothing to stimulate demand! What assurance is there that anyone will buy new goods and services, when these become available? The writer says nothing about this, apparently assuming that if goods and services are offered, consumers will magically appear in sufficient numbers, with sufficient resources, and with the desire to buy. Is there any guarantee that this will occur, because of a tax cut? Absolutely not, especially when the tax cut is slanted toward the wealthy!

     This is the epitome of “supply side” economics, the reigning philosophy of the far right since the days of Ronald Reagan. It's doubled our national debt several times - most recently under George W. Bush - and propelled our economy into the worst recession since the 1930s. Tax cuts benefit primarily those who pay the most taxes – that is, the rich. By channeling the nation’s wealth into the coffers of those who are already well off, these policies have decimated the American middle class and cut the heart out of the vibrant economy that we enjoyed in the mid-twentieth century. When there aren’t enough buyers and not enough spending money to purchase goods and services, sales fall, inventories rise, businesses cut back, and the economy spirals downward. We're watching it happen right now!

     Similar faulty reasoning is evident in the argument that tax cuts stimulate the creation of new jobs. Supply siders would have us believe that, when the wealthy receive a tax cut, they immediately run out and start new businesses or expand existing companies; but this violates basic business economics. Well run companies employ just enough workers to satisfy demand for their product. They expand, when changes in the marketplace create more demand than they can currently satisfy, and they don't require a tax cut in order to do it. They can borrow needed capital in the assurance that they will enjoy increased sales and therefore increased profits over the long term. On the other hand, if there's no market for the added productivity, it makes no sense for them to hire additional workers, even if they receive a cash windfall in the form of reduced taxes. They will lose that money and more, because they will be unable to sell the added goods or services that their larger workforce produces. The same applies to business start-ups.
 
   Let's look at the other side of this coin. Republicans claim that increased taxes invariably lead businesses to lay off workers. This is absurd. Remember, an efficient business employs just enough workers to satisfy existing demand for its product. Suppose the CEO of this company business learns that it must pay a higher tax. He can accept a smaller profit or reduce dividends to shareholders.  He can seek economies of one type or another to offset the added tax. But  if he lays off workers, he will no longer be able to satisfy demand for his product. Sales will drop. Profit will drop. He will lose even more money! Businesses don't do this!
 
   So much for theory. Let's examine the facts. Republicans boast that Bush’s 2001 and 2003 tax cuts stimulated the economy. According to the Congressional Budget Office they did nothing of the sort!  In fact, the CBO reports,  2007 should have produced a surplus; instead, thanks to those tax cuts, it produced a huge deficit. In the year 2000 (before Bush!) federal revenues amounted to 20.9% of  the country's Gross Domestic Product.   By 2005 this had fallen to 16.8%, lower than at any time since 1960. Half of that decrease was due to the Bush tax cuts! 

   How about job creation?  During 25 of the first 31 months of Bush's administration, the country lost jobs! By the end of his second term, Bush had racked up the worst record in 34 years, creating less than a tenth as many new jobs as Bill Clinton had. 

   This is not to say that the Bush tax cuts helped no one. According to the CBO, families earning more than $1 million per year made out handsomely. On the other hand, middle income families saw their incomes fall (assuming they had any!) and most of them wound up paying higher taxes.
 
   So the next time you hear someone holding forth about how wonderful tax cuts are, how they stimulate job creation, boost the economy, and make Americans bettter off, check you bank book. If you're raking in seven figures per annum, then clap that fellow on the back and say, "Right on, brother." But, if you're like the rest of us, maybe you should ask him why he's trying to pull the wool over your eyes.
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Dear Ms. Coulter

   Having watched some of your more notorious moments on video, I decided to sample your writing to look for a hint of substance. Surely your millions of fans are attracted to more than the extravagant one-liners you deliver during personal appearances. 

   Picking an essay at random, I read "Have You Hugged An Islamo-Fascist Today?", which can be found on the Human Events website at  http://www.humanevents.com/article.php?id=23038.
 
   Frankly, Ms. Coulter, I’m still baffled. If there's a cogent point somewhere in your piece, it eludes me. Here are some of the things I did find …

(1) Strained metaphor -
   You assert that "college campuses across the nation are … surgically removing the Ten Commandments from every public space in America."  How does one "surgically" remove the Ten Commandments, unless they're tattooed on people's bodies? I suspect you intended this statement metaphorically, but instead it's just strange.
   As an aside, I don’t recall approving the use of my tax dollars for wasteful religious displays in public facilities. Aren’t you one of the folks advocating fiscal responsibility by government?

(2) Inaccuracy -
   You report that during the Iraqi President's speech at Columbia University "Ahmadinejad was cheered by college students … at least until he expressed reservations about sodomy." 
   I listened to Ahmadinejad's speech and read the transcript too. He never mentioned "sodomy". He did claim that homosexuality doesn’t exist in Iran, at which point the audience laughed and jeered. Did you attend a different speech or just make this up?

(3) Poor judgment -
  At one point you refer to "American intellectuals like Dennis Prager and Michael Medved."
  I realize that pickings are slim on the right, now that Bill Buckley has gone to his reward, but Prager and Medved? Couldn’t you have picked someone even remotely plausible, like George Will, David Bruce, or Andrew Sullivan? (Whoops! Scratch Sullivan. He’s gay or, as you put it, a "f*g".)  
   Sticking with Will and Bruce, at least these gentlemen write lucidly and occasionally display a modicum of objectivity. (Well, Bruce does. Sometimes.) Prager and Medved, on the other hand, are ... like you!

(4) Stereotyping & sexual bias -
  You contend that people who try to hit right wing speakers with pies "are Democrats, so they throw like girls."
   I understand that you despise Democrats; but why derogate members of your own sex? Didn’t the American softball team win several gold medals in the Olympics? 
   Oh, that’s right: they were playing against other girls. 
   Getting back to the Democrats, let's assume you're correct. How does this work? Do people who throw poorly tend to become Democrats or do those who become Democrats somehow lose the ability to throw?  
 
(5) Doggerel -
   You evidently intended the fragment of verse in your essay as parody, but this is more difficult than most people realize. All too often it's just drivel or, at best, self-parody.
   If you can't even compose decent comic poetry, I suggest that you not write poetry at all! That way we all win.

(6) Confabulation
  
You inform us that "kindergarteners can be expelled from school for mentioning God."
   Really, Ms. Coulter! Something as bizarre as this would surely have made the news somewhere, but I’ve been unable to find even a single report of it.  
   I think - uncharitably, perhaps - that you invented this in order to stir up the religious crazies among your readers. 
 
(7) Ignorance -
   You refer more than once to "Islamofascism"  or "Islamofascists."  
   The term "fascist" has alarming connotations, which make it useful, when you're trying to stir up fear and hatred; but let's pretend for a moment that you’re an "American intellectual" like Dennis Prager!
   The primary characteristic of fascism, according to the political science literature, is the collusion of government with business and industry in order to control economic activity. This was the expressed opinion of Bennito Mussolini, who imposed the archetype of Fascism on Italy during the 1930s and ‘40s.
   There's little, if any, evidence of such collusion on the part of the Taliban or Al Qaeda. Does this make them less dangerous or worrisome? No.  It just means that they're not fascist. 
    The fact that you (and others on the far right) misuse this term so consistently shows either that you don't know what you're talking about or (more likely) that you know you're wrong and don't care.
 
(8) Misinformation -
You write: "Liberals claim to be terrified that the Religious Right is going to take over the culture in a country where more than a million babies are exterminated every year."
   The assertion about babies would be horrifying ... if it were true. But it isn't. The vast majority of abortions in the United States occur during the first trimester of pregnancy, when the so-called "baby" begins as a tiny "embryo" and turns into a froggy-looking three-inch "fetus." At no time during this period does it have a functioning brain, which means it has no consciousness, no behavior, no learning, memory, awareness, or personality.
   This raises important legal and ethical questions as to whether a first term fetus can be considered a person at all. The anti-abortion crowd want to avoid this discussion, so they assiduously - and inappropriately - refer to a microscopic dot of partially differentiated cells as a "baby". You obviously subscribe to this intellectual dishonesty, which tells me that you have nothing reliable to say on the matter.
 
 (9) Delusions of grandeur -
    "Every time Democrats call for me to be silenced, I feel a delicious surge of martyrdom. For a brief moment, I understand the thrill the left gets by going around claiming to be victimized all the time."
   Martyrdom?
   Martyrdom!
   The Democrats I know regard you as a sometimes amusing, but mostly repellant public spectacle, like the children we remember from gradeschool who picked "boogers" from their noses and ate them in order to shock their classmates. This kind of "humor" continues to be popular, even among some adults. You’ve evidently found your niche there and are doing well, at least financially; but to imagine that you're worth "silencing" is a grotesque exaggeration - unless it’s by pushing the "off" button or the channel selector. 
   As for claims of "victimization" you may have hit on something; but, as usual, you're looking at incorrectly. Like most Republicans, you see victimization as a kind of political parlor game. When Democrats talk about victimization, however, they mean having your right to vote cancelled by an illegal (Republican) caging operation, being crippled or killed, when a (Republican) political appointee fails to enforce safety regulations, or finding yourself unemployed and unable to support your family, when your job is sent overseas under a (Republican sponsored) trade agreement ... things like that.
   Real victimization, Ms. Coulter, is no laughing matter. If you ever decide to fit this and other inconvenient truths into your reality,  I'll give you another try. For the time being, I’ll just continue to ignore you.
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