The Republicans’ Winning Rallying Cry: Bring back the G.W. Bush policies! Yeah, THAT’s the ticket to prosperity for all!
The ticket to the middle class is not higher taxes on the very businesses that must create the jobs… Economic growth will come when we lower taxes for everyone, especially people who own businesses and create jobs.
— Rand Paul, last night
Absolutely. The G.W. Bush presidency was terrific for economic growth! It wasn’t a lack of financial-industry regulation; mortgage-backed-securities derivatives and a consequent real estate bubble; almost no wage increases for anyone other than Fortune 500 CEOs, Silicon Valley tech people, and hedge-fund folks; and a mass collapse of manufacturing, that caused the 2008 financial collapse and Great Recession. Uh-uh. It was the Dodd-Frank Act. And the return of higher taxes on some of the very wealthy. And the constant threat of an end to the carried-interest tax machination for hedge fund managers and private equity types. And of course Obamacare. Those were what caused wage/salary stagnation for almost everyone other than Fortune 500 CEOs, Silicon Valley tech people, and hedge-fund folks. And what caused the mass collapse of manufacturing during the Bush presidency. And caused the 2008 financial collapse and Great Recession. All of it retroactively.
Emphasizing the importance of a small government approach, he said wryly, “It’s not that the government is inherently stupid — although that’s debatable — it’s that the government” is on a different page than individual citizens when it comes to money.
— Katie Glueck, Politico, summarizing another Paul point from the same interview
Definitely. Most individual citizens who don’t offshore their income would prefer that those such as Mitt and Ann Romney, who do, be required to pay U.S. income taxes on the income they make in the U.S. The House and Senate Republicans–who I believe are part of the government–on the other hand, have other priorities when it comes to that money. Like allowing them to remain in offshore accounts as income from shell corporations, untaxed.
[Sen. Mike] Lee highlighted educational and economic inequality, but argued that government is a root cause of growing disparities.
–Glueck, in that Politico article
Yep. Right, again. See the above paragraphs. These folks are on a roll.*
[Lee] also included issues like abortion, same-sex marriage and National Security Agency surveillance as examples of big-government policies that lead to “real inequality.”
— Glueck
Well, if the National Security Agency is collecting my cellphone and email info but not Mitt Romney’s, the Koch brothers’, Jamie Dimon’s, or Tom Perkins’s, then Lee sure has a point. And since I’m assuming that he’s right about that, because Tea Partiers are notably meticulous about accuracy in the facts they cite, I’m now even angrier than I was about the NSA stuff. Is there absolutely nothing that can’t be bought in this country if you’re a zillionaire? Even exemption from NSA surveillance?
I’m just not quite sure, though, why Lee chose as another example of flagrant, concerted, government-precipitated inequality same-sex marriage rather than, say, access to Supreme Court review of an issue that glaringly needs Supreme Court attention but doesn’t receive it despite desperate requests, year after year after year after year, for decades, until it is, say, Sprint or ExxonMobil rather than ordinary-person-who-cannot-afford-to-retain-John-Roberts’-old-law-firm that is requesting the review. I guess it’s that same-sex couples are notoriously privileged in our society. Unlike the Koch brothers. And really, it’s not fair.
Well, maybe not, after all, unlike the Koch brothers and others like them, who Lee, to his credit, does seem to recognize have insidious political influence. Glueck writes:
“This inequality crisis presents itself in three principal forms,” Lee (R-Utah) said. “Immobility among the poor, who are being trapped in poverty by big-government programs; insecurity in the middle class, where families are struggling just to get ahead, and they can’t seem to get ahead; and cronyist privilege at the top, where political and economic insiders twist the immense power of the federal government to profit at the expense of everyone else.”
And cronyist privilege at the top, where political and economic insiders twist the immense power of the federal government to profit at the expense of everyone else. One of the three branches of the federal government is the judicial branch. Which indeed has immense power and which at its highest level uses its immense power, aggressively and regularly these days, to favor political and economic insiders, in ways mostly not known to most of the public. And in ways that are.
*Sentence originally said “Lee’s on a roll.” Corrected 1/30
Let’s just take one of your false assumptions (since there are so many): U.S. manufacturing.
Thanks to Wall Street, to a large extent (yes, it adds tremendous value to the U.S. economy in many ways), the U.S. offshored low-end manufacturing, imported those goods at lower prices and higher profits, and shifted freed-up (limited) resources into high-end manufacturing and into emerging industries. China, like Japan before it, is, to a large extent, a U.S. factory (not included in U.S. GDP).
U.S. Manufacturing: Output vs. Jobs Since 1975
Jan 24, 2011
Since 1975, manufacturing output has more than doubled, while employment in the sector has decreased by 31%. While these American job losses are indeed sobering, they are not an indication of declining U.S. competitiveness. In fact, these statistics reveal that the average American manufacturer is over three times more productive today than they were in 1975
Chart of U.S. manufacturing real output:
http://research.stlouisfed.org/fred2/series/OUTMS
Peak:
You conveniently forget the cost of idled labor which has not been able to find other labor intensive opportunities. In turn this becomes a cost to the nation as a whole. Service intensive jobs have not filled the gap either employment wise or salary wise.
Not quite sure why, PeakTrader, you’re patting Wall Street on the back for being a primary cause of the dramatic decline in U.S. manufacturing jobs. Unless, of course, you think the average American manufacturer, now being over three times more productive today than they were in 1975, and who now gets about half the hourly wages that his or her 1975 counterparts got, should be thrilled about who exactly is benefitting from this threefold increase in productivity.
Oh, I guess you’re trying to buttress my point. Well done.
Money talks and bullshit walks down to the overpass behind K-Mart and sets up a tent there. (Hint: a two liter soda bottle full of hot water placed in one’s sleeping bag by one’s feet, assures a safe and restful night’s sleep.)
Third Party, Folks. The other two seem somewhat corrupted by money.
Beverly, credit should be given where it’s due. Wall Street has redeployed capital, to maximize capital creation, diversified risk, globally, and facilitated massive efficiencies, for example.
The only way to move from one economic revolution into the next is through efficiencies. The U.S. leads the world in the Agricultural-Industrial-Information-Biotech revolutions (U.S. manufacturing, for example, is most efficient).
Export-led economies, like Germany and Japan, haven’t moved into the Information and Biotech revolutions as quickly as the U.S., where the U.S. not only leads the world, it leads the rest of the world combined (in both revenue and profit). Germany and Japan produce a lot of manufactured goods, but are much less efficient than the U.S..
Of course, Germany, for example, has more manufactured jobs per output that pay a little more than the U.S. (although, Western Europe per capita real income is over $10,000 a year less than the U.S.). I agree, wages could be higher in the U.S., because much more earnings flow into profits rather than wages.
Average Cost Of A Factory Worker In The U.S., China And Germany
03/ 8/2012
“U.S. factory workers…they’re really productive. In fact, U.S. factory workers produce $73.45 per hour in output, one-third more than German factory workers…German factory workers…their wages are 11 percent higher than those in the U.S…the average productivity of German factory workers is $55.21 per hour.”
This:
“U.S. factory workers…they’re really productive. In fact, U.S. factory workers produce $73.45 per hour in output, one-third more than German factory workers…German factory workers…their wages are 11 percent higher than those in the U.S…the average productivity of German factory workers is $55.21 per hour.”
is not cost, it is labor throughput tied to capital. The amount and subsequent cost of labor in a product has been decreasing has been decreasing over the years and in relation to Overhead and Materials. At the same time and while productivity has increased, labor wages have decreased and has been decreasing since the late seventies while capital has since the larger percentage of productivity gains. Direct Labor cost is the least costly of the cost of manufacturing. I would suggest in your Germany/US example, the real issue is Overhead.
Wall Street and TBTF screwed Main Street and Labor with the help of the Washington Pols. Without Main Street stepping in to rescue the Wall Street and TBTF gamblers and thieves, the economy would have collapsed. Labor is still paying for that rescue. I suggest you go back and reread our last exchange.
P.T., ” Germany and Japan produce a lot of manufactured goods, but are much less efficient than the U.S.”
How do you define “efficient” in that statement? Numbers of employees laid off? Reduction in hourly wages relative to productivity? Curiosity begs the question.
An example of slight off hand(or words as the case is here):
P.T. “Of course, Germany, for example, has more manufactured jobs per output that pay a little more than the U.S. (although, Western Europe per capita real income is over $10,000 a year less than the U.S.).” Note the switch from German/U.S. wage comment to Western Europe per capita wages in the supportive clause.
Run75441, I read your last statement and it made no economic sense, like your new ones. One reason U.S. manufacturing output is one-third higher than Germany is the U.S. has more market power.
Regarding costs, the U.S. has abundant labor and capital (including from the capital account surpluses). An increasingly higher-skilled or higher-educated U.S. manufacturing workforce, as it became smaller and produced more with less, and low interest rates, adds to productivity.
The federal government eventually made money on TARP. So, “Main Street” got its money back with interest. Also, note, the huge Obama budget deficits would’ve been even worse without the money flowing back to the federal government from TARP.
If you don’t like idle labor, then you can pay them to dig holes and fill them back up again, or better yet, reduce regulations, cut taxes, and cut government spending, to expand the economy at a much faster rate. We need to unleash growth. The unemployed deserve it.
Jack, if one person can produce the same level of output as 10 people, that’s one form of efficiency. Do you think that’s good, although nine workers lose their jobs?
I know the EU-17 has per capita real income over $10,000 a year less than the U.S.. I didn’t know Germany’s per capita real income. However, it seems, Germany’s per capita real income is over $10,000 a year lower than the U.S. too (it should be noted Germany is an export-led economy, unlike the U.S., which is a consumer-driven economy).
P.T.: “(it should be noted Germany is an export-led economy, unlike the U.S., which is a consumer-driven economy).”
That’s an interesting comparison. Do you not realize that you are demonstrating one of the basic factors in the U.S.’s economic stall. In fact both Germany and the U.S. are consumer driven economies given the simple fact that economics is is basically the production of goods and services. German economic success results from their products being consumed by both within and outside of their borders. Also, a far greater relative portion of their production occurs within German borders. The export of goods results in increased consumption of those goods. That is how the U.S. used to conduct its economic activity. Now we rely on consumption without production and without production there is far less reliance on the consumption of exported goods.
Excellent, excellent comments, run and Jack. I wish this post and comments thread were still “alive” and people would read them.