Access News Service: Cross-Posted from the Richistan WSJ Blog Comments ANS

Well, Brad Hicks has finally written something again. It's good. It's brutal. It's true. It's short. The comments are good too, so I've included them.
Find it here: http://bradhicks.livejournal.com/442491.html
--Kim

From:

kimchalister

Cross-Posted from the Richistan WSJ Blog Comments

Aug. 27th, 2010 at 7:40 PM

Robert Frank, the author of Richistan, writes a blog for the Wall Street Journal about Richistanis and their issues, and today posted a discussion of "bipartisan" economic analyst Mark Zandi's recent presentation in which he argued that the Bush tax cuts for the wealthiest 5% of households desperately need to be extended for at least one more year, because, "Normally, I would firmly agree that raising taxes on people who make over $250,000 a year would not make a meaningful difference in the way they spend money. But I worry that these aren't normal times and even this income group may be sensitive." Why is their sensitivity a problem? Because (also according to Mr. Zandi) the top 5% of Americans by income account for 37% of all consumer outlays, nearly equal to the outlays of the bottom 80% of Americans. (See Robert Frank, " Rich are More Sensitive to Tax Increases Today, Zandi Says," The Wealth Report, WSJ.com, 8/27/10.)

Here's what I said, in the comments (with a few minor corrections):

Maybe the fact that 5% of Americans make 37% of Americans' consumer purchases is part of the problem. Maybe it's not an inevitable fact of life, but evidence that 95% of Americans are too broke to buy anything. Maybe that's the problem we should be addressing.

Look, the wealthy (and the candidates they supported) have taken off the table the idea of doing something drastic to lower the unemployment rate, like the Reagan's Workfare proposal or another WPA. And they've just as firmly ruled out raising wages sharply across the board for working and middle class Americans, to increase purchasing power and thus give businesses a reason to hire people to make things again. With both of those ideas considered too radical to even discuss seriously, there are only three choices. Pay 22% of us not to work, and raise taxes on the other 78% to cover those payments. Pay 22% of us not to work, borrowing more and more money to do so until the dollar collapses. Or don't pay the 22% of us who are officially unemployed, listed as discouraged workers, counted out of the job pool because they haven't found work since the bubble burst in November of '07, or disabled but willing and able to work if employers were willing to hire the handicapped, that is to say, leave those 22% of us to starve … for exactly as long as it takes for those 22% of us, who outnumber the cops and the military by about 4 or 5 to 1, to kill and eat all the rich people.

You can pay higher taxes. Or you can "enjoy" runaway inflation that eats away at your living standard even faster than the taxes would. Or you can watch the whole country go up in flames. There is no fourth option. Are you still "too sensitive" to pay those taxes? Because if you are, then those first two options that you ruled out, either Workfare or the Living Wage, need to be re-opened for discussion.

Mood: good

Comments

( 12 comments Leave a comment )

darksumomo wrote:
Aug. 28th, 2010 01:12 am (UTC)
"Reagan's Workfare proposal"

A proposal by "St. Ronnie" is too radical for these people? Good Lord!
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tacky_tramp wrote:
Aug. 28th, 2010 01:29 am (UTC)
Yeah, there's basically no way Reagan could get the Republican party's Presidential nomination nowadays.
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dnwq wrote:
Aug. 28th, 2010 01:32 am (UTC)
Even with Zandi's higher figures, the impact of tax cuts on upper-income groups still has a low multiplier impact.

Here, have a textbook New Keynesian fiscal policy: increase taxes on upper-income groups and distribute the money to low-income groups via, say, food stamps. The multiplier is smaller on the former and larger on the latter, so the net short-run impact on national income is positive: we have stimulus. Nonetheless it is budget-neutral. We can employ a variety of similar methods on other things with low and high multipliers.

But we are very far from even fairly conservative textbook policy nowadays, for a variety of reasons...
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alobar wrote:
Aug. 28th, 2010 04:09 am (UTC)
Are you planning to re-post this into

the_recession?
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bradhicks wrote:
Aug. 28th, 2010 01:43 am (UTC)
That's how far we've moved to the right, that's how far corporate and investor funded politics have taken us: Ronald Reagan would now be considered a liberal Republican.

Workfare sounded draconian when he suggested it, but it now sounds good to me. The logic went like this: there's nothing unreasonable about it taking up to 26 weeks to find a job when your company goes under, or any of a half dozen other good reasons why you might need to find work. So as little as he liked it, he was willing to go along with unemployment insurance as it was originally written: everybody pays premiums, and when you're between jobs, you draw up to 26 weeks of reduced pay, paid for out of everybody's actuarily derived premiums.

But thus far and no farther. His reasoning was that after that, you should just plain be working, for Calvinist reasons. I'd be more inclined to go along with FDR advisor Harry Hopkins' reasoning: after that, no employer wants you, because your skills are no longer current. Either way, here was his proposal: after 26 weeks, the government will hire you for a job, if it has to make up one for you. It will pay the same reduced salary that your unemployment benefits were paying. The government reserves the right to retrain you for other work and assign you that job instead of your old one. But you will show up, you will work, or you will not get paid.

Once he got elected, united opposition from unions afraid of low-paid competition and country club Republicans to whom it too closely resembled the WPA derailed the proposal, and he adopted trickle-down economic theory in its place. And we now know the outcome of that: corporate welfare and tax cuts to the rich weren't invested in American jobs, they were invested in Chinese and Philippine and Indonesian and Mexican jobs.

I don't care whether we call it the WPA, or Workfare, I think both Harry Hopkins and Ronald Reagan were right: after 26 weeks of unemployment, a worker doesn't need support, he or she needs a damned job. I think that "emergency unemployment benefits extension" should be flatly outlawed. I'm even inclined to radically tighten the standards on disability: there are an awful lot of people who can work, they just can't be made pleasant to work with; if the private sector isn't hungry enough for workers to hire those people, it's better for them, better for the country, and better for the economy to pay them (myself included) to work than to pay them to stay home.

Edited at 2010-08-28 01:45 am (UTC)
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nebris wrote:
Aug. 28th, 2010 02:22 am (UTC)
I'm a firm believer in the basic income guarantee concept. Of course, I also believe in the Easter Bunny, who'll likely show up long before BIG ever does.

~M~

Edited at 2010-08-28 02:23 am (UTC)
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nebris wrote:
Aug. 28th, 2010 02:17 am (UTC)
I can only wonder if one of the reasons Hunter Thompson killed himself was seeing that even Richard Nixon had become too 'leftist' for the GOP...and despaired.

~M~

Edited at 2010-08-28 04:05 am (UTC)
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anfalicious wrote:
Aug. 28th, 2010 01:23 am (UTC)
I'm a full supporter of option 3: Eat The Rich.
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nebris wrote:
Aug. 28th, 2010 02:18 am (UTC)
Why do you hate America, etc etc?

~M~
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chipuni wrote:
Aug. 28th, 2010 02:48 am (UTC)
You forget a fourth option.

The rich, having used up the United States, just flee.

And I suspect that many will do that.
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drewkitty wrote:
Aug. 28th, 2010 03:41 am (UTC)
They are already enclaving up.
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harmfulguy wrote:
Aug. 28th, 2010 04:40 am (UTC)
Ever since the days of St. Ronnie, there is nothing more important to the Right than keeping labor cheap.
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( 12 comments Leave a comment )