Originally Posted by TimWalker

I recall one bargaining tactic - require the other side to make two concessions for every one you make.

Blackmailers have a very effective method of bargaining: make the consequences for failure to make quick concessions an even-harsher and more exploitative transaction. Such requires no sophistication -- just a predatory knowledge of the weaknesses of the other side.

That is what the Tea Party is -- political blackmailers. They are severely weakened as a political force in 2012 or America is in for a horrific 4T. These people do not play fair; they have no conscience or even sentimentality; they are not amenable to rational argument. They are more like Commies or Fascists than they are like the people that they pretend to be -- conservatives.

Originally Posted by Odin

But the size of the pie is now running into physical constraints imposed by Nature, so now the only way to eliminate poverty is to even out income inequalities.

Anyone who thinks infinite exponential growth is possible and a good thing is either insane, or an economist.

-Oh good God. I imagine that the Self-Proclaimed One-Eyed God of Wisdom is calling to explain what these magical restraints to growth, which have only appeared in the past 30 years might be?

Originally Posted by 85turtle

Taxes on the top are the lowest since 1930's and Wall Street is making huge profits...

-Wrong. The marginal income tax rate in late 80s was 28%:

http://www.taxfoundation.org/publications/show/151.html

http://www.heritage.org/budgetchartb...income-earners


As for the typical class envy, the hated "rich" pay even more in income taxes with Bush's lower tax rates:

http://www.heritage.org/budgetchartb...income-earners

..so cheer up! You're getting what you want!

Originally Posted by 85turtle

...Yet no trickle-down...

-We had great growrth in the 80s once we stopped pumping the Keynesian bilge. This time we did, as we had in the 70s, and the result is the same: High debt (with incipent inflation) and low growth. Even the Europeans got wise (at least a little). Obamacare regulations aren't encouraging employers to take on new employees, either.

I have noticed that the discussions on this thread have devolved to

"I'm a liberal and I say the Democrats have to win. Here's the numbers to prove it"
"I'm a conservative and I say the Republicans have to win. Here's the numbers to prove it."
"Well, the liberals COULD win if they only moved more to the left and took a strong stand."
"Well, the conservatives WILL win because we the Tea Party have moved to the right and have taken a strong stand."

And - people - have you really run this scenario out to the endgame? The endgame of a *hard* game?

[My mind is running a soundtrack from a famous PBS historical series right now. And it's not from the Hitler Channel.]

Originally Posted by The Grey Badger

I have noticed that the discussions on this thread have devolved to

"I'm a liberal and I say the Democrats have to win. Here's the numbers to prove it"
"I'm a conservative and I say the Republicans have to win. Here's the numbers to prove it."
"Well, the liberals COULD win if they only moved more to the left and took a strong stand."
"Well, the conservatives WILL win because we the Tea Party have moved to the right and have taken a strong stand."

-There's nothing wrong with people looking for evidence that more of people of their poltical flavor might get elected (or not get elected) in the future.

If you're making a point about "4T anger," perhaps.

Originally Posted by TimWalker

I recall one bargaining tactic - require the other side to make two concessions for every one you make.

My sense is this was closer to the game of chicken than anything else. In the game of chicken, sometimes acting limiting your options can give you an advantage in negotiations.For instance, if two drivers are heading towards each other in a game of chicken, if one takes off the steering wheel and holds it out the window, that makes it more likely that the other driver will turn away.

That's kind of what the Tea Party did when they would not get in line for Boehner last week. There became no one for the Democrats to negotiate a tough deal with, just a careening car headed straight for the economy with the driver holding the steering wheel out the window.

James50

Originally Posted by The Grey Badger

I have noticed that the discussions on this thread have devolved to

"I'm a liberal and I say the Democrats have to win. Here's the numbers to prove it"
"I'm a conservative and I say the Republicans have to win. Here's the numbers to prove it."
"Well, the liberals COULD win if they only moved more to the left and took a strong stand."
"Well, the conservatives WILL win because we the Tea Party have moved to the right and have taken a strong stand."

And - people - have you really run this scenario out to the endgame? The endgame of a *hard* game?

[My mind is running a soundtrack from a famous PBS historical series right now. And it's not from the Hitler Channel.]

Some of what we thought was true yesterday about the prospects of the 2012 election has suddenly become unreliable. Everyone has some convincing to do to hold onto any elected office except in an ultra-safe district.

Originally Posted by Brian Rush

You have just contradicted yourself here. The second paragraph is the mechanism whereby the idea that making the rich richer benefits the rest of us as well is supposed to operate. The only sense in which your first paragraph is true is that the name "trickle-down economics" is (of course) a pejorative name applied to the idea by its opponents, rather than one employed by its advocates. The essence of the idea remains the same, however, whether you call it "trickle-down" or "supply-side," and although in the interest of being serious more or less I prefer the latter, the former is actually not a bad description.

Since you're essentially mischaracterizing conservative policy in the same way that the "trickle down" moniker does, I'm not surprised you find it an accurate description. I suppose I should be shocked that liberals always fall back on the same lazy platitudes rather than looking at the real facts. But, I'm not. Not anymore. But, you make some interesting arguments. When you can actually produce a fair evaluation of conservative thought rather than a leftist caricature, let me know. We'll talk.

Originally Posted by Brian Rush

The problem with the idea is that it is based on a false premise: that the economy will grow better if income gaps are wider and the rules of the economic gain favor the rich and the accumulation of personal fortunes.

Again. Leftist caricature. This is not the premise of conservative thought. Once again, conservative economists merely wish to set the conditions for the most rapid growth. The idea that we consider widening income gaps to be a prerequisite to growth is patently false. In fact, I would argue that the widening of income gaps you cite is the result of the loss of bargaining power of the working class rather than the result of conservative policies. The loss of bargaining power that labor is experiencing now is more due to the high availability of low cost foreign labor than it is to political ideology. I submit that the same effect would have occurred even if your demand siders remained in control. Conversely, in a strong economy with an absence of foreign competition, one would expect that labor can demand higher salaries - also regardless of political ideology.

We do, however, think that growth will not occur if the federal government pursues policies that absolutely crush the life out of the nation's businesses - as the current administration is doing. The entire wealth of the nation depends on the health of that nation's industry. Everything that a nation can possibly do for its people is dependent on the wealth generated by its business. This is basic economic theory, going all the way back to Adam Smith. I'd like to think you're not ignorant of this.

By focusing on the few who have abused the system to become obscenely wealthy, you have deliberately ignored the fact that thousands and thousands of American businesses are in fact genuinely hurting. You sweep under the carpet the fact that hundreds of them are closing their doors forever because they cannot even begin to pay their bills. Have you ever stopped to consider - even for a moment - that perhaps keeping the taxes low for these businesses is the least we can do to protect them in these troubled times? Or, like many liberals, are you too obsessed with the idea that anyone who runs a business is just E-V-I-L to even consider such a fact?

Originally Posted by Brian Rush

If that were true, then the poor and middle class would stand to benefit because, although they would be receiving a smaller slice of the pie, it would be a slice of a bigger pie.

Well, at least you have some limited understanding of the intended result. There may be hope for you yet. I might add that, when the economy is booming, jobs are plentiful, making labor a much more valued commodity (due of course to the law of supply and demand). In those conditions, the bargaining power of the poor and the middle class may actually increase. So, labor may actually end up with a larger slice of a larger pie.

Originally Posted by Brian Rush

In reality -- and this is historically demonstrable fact -- an economy run according to demand-side principles, with narrow income gaps, rules that favor high wages, and rules that discourage the accumulation of private fortunes, grows faster per capita than one run according to supply-side principles by more than two to one. We can see this by comparing the rate of annual per capita GDP growth from 1940 to 1980, when demand-side economics was in place, to the same measure for the years 1900 to 1940 or 1980 to the present, both of those periods being governed by supply-side rules. U.S. economic history since industrialization looks like a sandwich with two supply-side bread slices surrounding demand-side meat.

You're forgetting the entire 19th century, when laissez faire economics were the rule. The average annual GDP growth for that entire century was 7%, which far exceeds the average growth for the 20th.

And, BTW, isn't it a little disingenuous to quote growth figures for the post war boom as if they were solely due to political ideology? It's a well documented fact that the rapid growth during that period was due to pent up demand. Folks who had not been able to buy things during the war because they simply weren't available or because life in the military had caused them to defer putting down roots were suddenly able to buy them.

Isn't it also true that the majority of our potential competition from overseas had been smashed during the war and wasn't able to effectively compete with us until at least the 1970s? (Japan, in fact, chose not to export until it considered itself ready to compete.) Isn't it also disingenuous to imply that the enormous benefit American industry gained from that situation was due to political ideology?

Isn't it a bit inconvenient for your theory that the post war period you quote also includes the 70s, a disaster for the American economy, often referred to as "stagflation?" Isn't it therefore true that once America faced real competition from abroad, your demand-side theories FAILED MISERABLY? Isn't it in fact true that in the period from 1969 to 1981, America suffered from THREE recessions, each one worse than the previous one? Isn't it true that unemployment hit 10.2% in that last recession? Isn't it true that that the prime lending rate peaked at a ludicrous 21.5% in 1980? Isn't it true that the poverty rate started increasing in 1978, eventually climbing by an astounding 33%, from 11.4% to 15.2%? Isn't it true that real median family income began to fall in 1978 (two years before your supply side period began) and then snowballed into an overall decline of about 10% by 1982? Isn't it also true that from 1968 to 1982, the Dow Jones industrial average lost 70% of its real value, reflecting an overall collapse of stocks?

It is in fact VERY convenient for a supply side argument that the second supply side era you quote begins more or less with Reagan, the quintessential supply sider. You're attempting to hide Reagan's success by burying him amongst Democrats and a couple of Republicans who paid a lot of lip service to Reagan, but were at best half hearted supply siders. (Bush 41 in fact re-regulated almost everything Reagan deregulated.) Lets pull out those facts you're trying to hide.

• The Reagan recovery started in 1982. It went 92 months straight without a recession, setting a record as the largest peacetime expansion in US history and beating the previous record (of 58 months) handily.
• During this seven year period, the economy grew by nearly a third, adding the equivalent of West Germany (then the third largest economy in the world)
• In 1984 alone, real economic growth boomed by 6.8%, the highest in 50 years (and that includes your entire glorified demand side period).
• Unemployment fell to 5.3% by 1989.
• Inflation from 1980 was reduced by more than half by 1982, to 6.2%. It was cut in half again for 1983, to 3.2%. Moreover, it stayed low until very recently.
• Real per-capita disposable income increased by 18% from 1982 to 1989, meaning the American standard of living increased by almost 20% in just seven years.
• The poverty rate declined every year from 1984 to 1989
• The stock market more than tripled in value from 1980 to 1990, a larger increase than in any previous decade.

To quote Reagan economist Arthur Laffer:

"We call this period, 1982-2007, the twenty-five year boom–the greatest period of wealth creation in the history of the planet. In 1980, the net worth–assets minus liabilities–of all U.S. households and business … was $25 trillion in today’s dollars. By 2007, … net worth was just shy of $57 trillion. Adjusting for inflation, more wealth was created in America in the twenty-five year boom than in the previous two hundred years."

And, I might add, that Reagan accomplished all this in the midst of the worst onslaught of foreign competition (the rise of Japan) American had seen in at least a century.

Originally Posted by pbrower2a

Some of what we thought was true yesterday about the prospects of the 2012 election has suddenly become unreliable. Everyone has some convincing to do to hold onto any elected office except in an ultra-safe district.

Yesterday, Boehner admitted that both parties signed off on the plan, so if this fails, I don't see how they can play the name blaming game in 2012. The only people that may able to complain is us, the public. We should vote them all out. Of course there is still the issue of who and what agenda should replace them.

Originally Posted by Odin

But the size of the pie is now running into physical constraints imposed by Nature, so now the only way to eliminate poverty is to even out income inequalities.

Anyone who thinks infinite exponential growth is possible and a good thing is either insane, or an economist.

Now this is actually a valid argument. I don't think you're correct. But, it does at least merit further exploration. Thanks.

Originally Posted by millennialX

Yesterday, Boehner admitted that both parties signed off on the plan, so if this fails, I don't see how they can play the name blaming game in 2012. The only people that may able to complain is us, the public. We should vote them all out. Of course there is still the issue of who and what agenda should replace them.

How will it fail? Most of the cuts are back-ended (which is as it should be -- you don't want to be slashing government spending and throwing more people out of work when unemployment is already at 9 percent), so it shouldn't have much impact on anything.

Originally Posted by stilltim

Again. Leftist caricature. This is not the premise of conservative thought. Once again, conservative economists merely wish to set the conditions for the most rapid growth. The idea that we consider widening income gaps to be a prerequisite to growth is patently false.

Well, then perhaps you can inform us as to what the conditions that lead to high growth are, in your opinion. I see many claims about what conservative philosophy is not, but nothing about what, in your opinion, it is. "Creating the conditions for high economic growth" is not a conservative philosophy, it is a universal one; specify exactly what you believe those conditions are and you will have something that may be specific to economic conservatives.

In fact, I would argue that the widening of income gaps you cite is the result of the loss of bargaining power of the working class rather than the result of conservative policies.

The loss of bargaining power of the working class is itself a result of conservative policies. Here's a bit of evidence for you:

http://en.wikipedia.org/wiki/File:Il...952_-_2007.svg

Observe that from 1951 to 1975, when liberal, labor-friendly policy prevailed (regardless of which party controlled the White House or Congress that remained a constant), the occurrence of illegal firings in union elections never topped eight percent. Jimmy Carter shifted government policy to the right, towards supporting capital instead of labor, and during his term this figure shot up to 14%. Ronald Reagan pushed things further that direction and illegal firings shot up to 31% of union elections. Since then they have never dropped below 16% -- the Clinton years were comparable to the Carter years, which is still not good although better than under the Republican presidents. (No figures yet for Obama, but I don't see evidence that he has dramatically changed things in this regard.)

This exactly coincides with the decline in union membership. What it says to me is that the government is failing to enforce labor law as aggressively as it once did, and employers are taking advantage of that laxity.

The loss of bargaining power that labor is experiencing now is more due to the high availability of low cost foreign labor than it is to political ideology.

The availability of low-cost foreign labor is itself in part a result of political ideology. That is, the shift to the right has created tax policies and trade agreements that encourage taking advantage of cheap foreign labor. True, poor people would exist in foreign countries anyway, but the conditions encouraging employers to outsource are political.

We do, however, think that growth will not occur if the federal government pursues policies that absolutely crush the life out of the nation's businesses - as the current administration is doing.

Such intemperate language: "absolutely crush the life out of the nation's businesses." Well, frankly, that can be dismissed out of hand as baseless hyperbole. Drop the florid talk and get objective, please. Exactly what policies are you talking about? What policies would you prefer, and why? When you state things that are obviously untrue ("crush the life" my ass, get real), why should anyone take you seriously?

The entire wealth of the nation depends on the health of that nation's industry. Everything that a nation can possibly do for its people is dependent on the wealth generated by its business. This is basic economic theory, going all the way back to Adam Smith. I'd like to think you're not ignorant of this.

I'm not, but as you've stated it, it is also vague and unspecific. We are left with the question of what benefits a nation's businesses. That may not be as obvious as you seem to think; for example, is business benefited by high wages or low ones? By regulations that encourage competition or by encouragement of monopoly? By wise husbandry of natural resources or by encouraging business to make a quick profit no matter the long term cost? By tax policies and regulatory policies that drive investments into production of goods and services or by those that encourage financial manipulation for quick returns? Is policy that is good for business the same as policy that business owners like? Or not necessarily?

By focusing on the few who have abused the system to become obscenely wealthy

By doing that, one would be doing something completely different from what I am doing. I will therefore snip this part of your response as non-relevant.

You're forgetting the entire 19th century, when laissez faire economics were the rule. The average annual GDP growth for that entire century was 7%, which far exceeds the average growth for the 20th.

I'm not forgetting that, although it's true I didn't mention it. There's a reason why I didn't. In the 20th century we had an industrial economy. In the 19th, we had an industrializing one. Different rules apply, and an industrializing economy always experiences high growth rates which are inherently deceptive in appearance. Let me illustrate why with a couple of hypothetical examples.

Consider a town that has no factories. Everyone in the town (setting aside government services and such) works either in farming or in some service capacity such as a general store. Let's say that the entire town has a GDP of $100,000 divided among 100 people -- $1,000 per capita. (That includes a high rate of unemployment.)

In comes a company and builds a factory to produce, say, farm equipment. The factory hires the out of work and produces a half million dollars worth of farm equipment in its first year, raising the town's GDP to $600,000, or $6,000 per capita -- representing 600% growth.

The second year, the factory again produces half a million dollars worth of farm equipment, but now the farms which have been modernized have tripled their output, so we add another $200k to the total bringing GDP to $800,000, or $8,000 per capita. Over these two years, we see growth in per capita GDP, in absolute dollars, of $700,000 -- which represents 400% per year.

Now, consider a town of similar size but one that's fully industrialized, with several factories producing various goods and a per capita GDP in year 1 of $25,000. (That's $2,500,000 total GDP.) Let's say that over the course of two years, it adds the same absolute dollar amount to GDP that the first town did, $700,000. In year three, it has a GDP of $3,200,000. Growth in per capita GDP is, over those same two years, fourteen percent, where the same growth in absolute dollar amount was 400% per year in the first town.

That's why the 19th century shows such high rates of growth, measured as a percentage. It's the same reason why the Soviet Union in the 1930s or China in recent decades showed very high growth rates. An industrializing country always grows fast. That doesn't mean that the policies it's pursuing are good ones, it just means that it's in the process of industrializing. For example, the Soviet Union, which continued to follow Stalinist economic policies long after industrialization was complete, did not perform well.

To be meaningful, one must compare apples to apples. I chose 1900 because the United States' economy was clearly fully-industrialized by that year. I could have taken it back maybe as much as a decade, but certainly no further than that.

And, BTW, isn't it a little disingenuous to quote growth figures for the post war boom as if they were solely due to political ideology? It's a well documented fact that the rapid growth during that period was due to pent up demand.

I remind you that the period in question was four decades long, from 1940 to 1980. Pent-up demand certainly explains the "postwar boom" properly so called, i.e. the immediate aftermath of the war, but it cannot account for forty years of unprecedented prosperity.

Isn't it also true that the majority of our potential competition from overseas had been smashed during the war and wasn't able to effectively compete with us until at least the 1970s?

No. It is true that the majority of our potential competition was smashed during the war, but Europe and Japan were fully rebuilt by the mid-1950s at latest. U.S. prosperity did not decline as foreign competition gained a footing, it actually increased. The 1960s represents the peak of the Golden Age. Also, the premise behind your statement is "beggar thy neighbor," which is generally considered to be fallacious. In fact, I would suggest that you consider it fallacious yourself in other contexts. You probably have no use for mercantilism or blanket protectionism, right? So if the premise is false in those contexts, why would you consider it sound in this one?

Isn't it a bit inconvenient for your theory that the post war period you quote also includes the 70s, a disaster for the American economy, often referred to as "stagflation?"

Not in the least. Certainly the years from 1973 to 1980 drag the numbers down a bit. However, they remain, overall, better than what came before and after by more than two to one, as I said. There is also a perfectly obvious (though often ignored) explanation for stagflation: the cartel-induced spike in oil prices and artificial oil shortages. The years of both poor economic performance and oil crisis exactly dovetail: 1973 to 1982 in both cases.

It is in fact to avoid weather-vane events such as these that I consider such broad swathes of time. One can write off the Great Depression as an anomaly, for instance, but one cannot dismiss the fact that the entire period of laissez-faire (relatively speaking -- of course we have never had absolute laissez-faire) from 1900 to 1940 performed dismally by comparison to the 40 years that followed. One can, similarly, find boom times under laissez-faire, such as the 1920s, 1980s, or 1990s (there were others, too), and one can find recessions under demand-side policies, as you noted. But that does not change the fact that, overall, comparing the total performance of both regimens, demand-side wins by more than two to one. That's true when comparing it to what went before and also when comparing it to what came after.

If you want to assess supply-side economics, you cannot cherry pick the Reagan boom years or those under Clinton, but must also consider the slack performance of the '00s, the Great Recession and our current Lesser Depression. The government's economic policies were substantially the same all through those decades, except for minor tweaks. If you want to assess demand-side economics, similarly, you cannot cherry-pick the postwar boom or the 1960s mega-boom, but must also include the much weaker 1970s, because again the policies were essentially the same.

And that of course is the answer to your list of facts about the Reagan years. They amount to cherry-picking. Yes, under those policies at that time, those results ensued. But under the same policies at other times, much worse results ensued. And so we must compare the periods of similar policies in toto, and not fixate on the details of any small portion of any of them.

Originally Posted by stilltim

Since you're )Brian Rush) essentially mischaracterizing conservative policy in the same way that the "trickle down" moniker does, I'm not surprised you find it an accurate description. I suppose I should be shocked that liberals always fall back on the same lazy platitudes rather than looking at the real facts. But, I'm not. Not anymore. But, you make some interesting arguments. When you can actually produce a fair evaluation of conservative thought rather than a leftist caricature, let me know. We'll talk.

Trickle-down economics is not a mere caricature; it is a meaningful concept. It implies that the greater concentration of wealth, income, and economic power in a smaller number of people implies greater competence in the management of capital that others would waste on 'riotous living'. The super-rich, who have no need to spend as large a share of their income on basic necessities and a few luxuries (the latter to make life pleasant and meaningful) can thus invest more efficiently than the rest of us, especially if they get lower taxes or (an alternative) if they can enforce cartel or monopoly prices. In essence, a rich fellow who isn't going to spend $50 on a radio can invest as a poor person can not and will not.

Does it work? Not at all. The market is the test of the worthiness of investments and business decisions. If people do not buy the added production because what is produced is either worthless or priced far out of reach, then the added production isn't quite so profitable. Supply-side economics, because it effectively keeps the proletariat from participating in the market as it otherwise might, invariably leads to production in excess of the market. The only good that it does for the customer is to ensure that much stuff sells cheaply on remainder racks. The free market ultimately makes its judgment of supply-side economics -- and it is now a failure.

Remember well -- the mark of economic modernity is that the working class becomes not so much the sullen, over-worked, exploited proletariat of Marxist rhetoric but instead a market in itself. I will make a comment on that observation where convenient.

Productivity isn't enough to create prosperity. Such was the failure of the Soviet economy; it was capable of producing (sure, schlock, unless it was for the military or for export) huge quantities. Productivity measured in volume led nowhere.

This is not the premise of conservative thought. Once again, conservative economists merely wish to set the conditions for the most rapid growth. The idea that we consider widening income gaps to be a prerequisite to growth is patently false. In fact, I would argue that the widening of income gaps you cite is the result of the loss of bargaining power of the working class rather than the result of conservative policies. The loss of bargaining power that labor is experiencing now is more due to the high availability of low cost foreign labor than it is to political ideology. I submit that the same effect would have occurred even if your demand siders remained in control. Conversely, in a strong economy with an absence of foreign competition, one would expect that labor can demand higher salaries - also regardless of political ideology.

1. The weakening of the economic power of labor is a conservative policy and an objective of America's ruling elite of plutocrats and executives.

2. It is possible to ascribe falling wages to the competition by labor overseas to cheap and swift transportation of finished goods as to anything else. But that should work the other way, too.

3. A closed economy is impossible except during a war or under mad rule.

We do, however, think that growth will not occur if the federal government pursues policies that absolutely crush the life out of the nation's businesses - as the current administration is doing. The entire wealth of the nation depends on the health of that nation's industry. Everything that a nation can possibly do for its people is dependent on the wealth generated by its business. This is basic economic theory, going all the way back to Adam Smith. I'd like to think you're not ignorant of this.

It is the giant businesses that have been crushing competition, morphing from manufacturers to importers, and corrupting the political process. Do you really believe that the high-cost political process brings out the best leaders? The corporate-purchased politicians seem the absolute worst in America.

By focusing on the few who have abused the system to become obscenely wealthy, you have deliberately ignored the fact that thousands and thousands of American businesses are in fact genuinely hurting. You sweep under the carpet the fact that hundreds of them are closing their doors forever because they cannot even begin to pay their bills. Have you ever stopped to consider - even for a moment - that perhaps keeping the taxes low for these businesses is the least we can do to protect them in these troubled times? Or, like many liberals, are you too obsessed with the idea that anyone who runs a business is just E-V-I-L to even consider such a fact?

So with which of these can someone reasonably compete as a small operator? Wal-Mart? McDonald's? Walgreen's? Applebee's? Wells Fargo? The middle-class market has been as thoroughly cartelized as it can be. Small business is being squeezed into oblivion. One might be able to start a business, but such is possible only if one finds clients (typically destitute or nearly so) that the trusts don't want as customers.

Well, at least you have some limited understanding of the intended result. There may be hope for you yet. I might add that, when the economy is booming, jobs are plentiful, making labor a much more valued commodity (due of course to the law of supply and demand). In those conditions, the bargaining power of the poor and the middle class may actually increase. So, labor may actually end up with a larger slice of a larger pie.

So far as I can tell, in view of the narcissistic and even sociopathic personalities who now have dominion over the economy. the objective seems to be to reduce living standards to something as close to bare, animal existence as is possible among working people. Fascist regimes show how low labor-management relationships can go -- people are compelled to toil, but employers are obliged only to feed and shelter them. In the pre-Civil War South that was called slavery.

You're forgetting the entire 19th century, when laissez faire economics were the rule. The average annual GDP growth for that entire century was 7%, which far exceeds the average growth for the 20th.

Growth from typically almost nothing -- from the agrarian era to the beginning of industry. Economic growth was gigantic in the California gold fields for a couple of years, which is an apolitical explanation. Note well that working people were treated horribly. Do you remember the ugliness of working-class life? 70-hour workweeks and 40-year lifespans were the norm for steel-mill workers.. if those workers didn't get killed in industrial accidents. Karl Marx' depiction of capitalism (if little else in his turgid prose) got it right. I have met people (obviously no longer living) who described those times. I heard tales of bosses deliberately grinding lighted cigarettes into the arms of subordinates. No, those were not mobsters; I have never had the questionable experience of meeting any of those slime.

By the way -- do you think that a sullen proletariat that feels cheated out of life in a culture that adulates the indulgence of the super-rich (Imperial Russia was a prime example) is good for long-term social peace?

And, BTW, isn't it a little disingenuous to quote growth figures for the post war boom as if they were solely due to political ideology? It's a well documented fact that the rapid growth during that period was due to pent up demand. Folks who had not been able to buy things during the war because they simply weren't available or because life in the military had caused them to defer putting down roots were suddenly able to buy them.

Sure -- but I figure that those veterans who survived the war often got specialized training applicable to civilian life for higher pay and better opportunities. Pent-up demand was a reality, to be sure... but competence at every level of skill led to unusually-high productivity as well as a sense of entitlement (well justified) for a share in the Good Life.

Isn't it also true that the majority of our potential competition from overseas had been smashed during the war and wasn't able to effectively compete with us until at least the 1970s? (Japan, in fact, chose not to export until it considered itself ready to compete.) Isn't it also disingenuous to imply that the enormous benefit American industry gained from that situation was due to political ideology?

We hire you -- you do a good job -- you buy what the system produces. The circle is unbroken.

Isn't it a bit inconvenient for your theory that the post war period you quote also includes the 70s, a disaster for the American economy, often referred to as "stagflation?" Isn't it therefore true that once America faced real competition from abroad, your demand-side theories FAILED MISERABLY? Isn't it in fact true that in the period from 1969 to 1981, America suffered from THREE recessions, each one worse than the previous one? Isn't it true that unemployment hit 10.2% in that last recession? Isn't it true that that the prime lending rate peaked at a ludicrous 21.5% in 1980? Isn't it true that the poverty rate started increasing in 1978, eventually climbing by an astounding 33%, from 11.4% to 15.2%? Isn't it true that real median family income began to fall in 1978 (two years before your supply side period began) and then snowballed into an overall decline of about 10% by 1982? Isn't it also true that from 1968 to 1982, the Dow Jones industrial average lost 70% of its real value, reflecting an overall collapse of stocks?

Boomers weren't good industrial workers, scientists, or engineers. That says much in itself.

It is in fact VERY convenient for a supply side argument that the second supply side era you quote begins more or less with Reagan, the quintessential supply sider. You're attempting to hide Reagan's success by burying him amongst Democrats and a couple of Republicans who paid a lot of lip service to Reagan, but were at best half hearted supply siders. (Bush 41 in fact re-regulated almost everything Reagan deregulated.) Lets pull out those facts you're trying to hide.

Economic policies appropriate for 1981 are inappropriate in 2001 as they would have been inappropriate for 1931 or 1946. That's the generational cycle at work.

• The Reagan recovery started in 1982. It went 92 months straight without a recession, setting a record as the largest peacetime expansion in US history and beating the previous record (of 58 months) handily.
• During this seven year period, the economy grew by nearly a third, adding the equivalent of West Germany (then the third largest economy in the world)
• In 1984 alone, real economic growth boomed by 6.8%, the highest in 50 years (and that includes your entire glorified demand side period).
• Unemployment fell to 5.3% by 1989.
• Inflation from 1980 was reduced by more than half by 1982, to 6.2%. It was cut in half again for 1983, to 3.2%. Moreover, it stayed low until very recently.
• Real per-capita disposable income increased by 18% from 1982 to 1989, meaning the American standard of living increased by almost 20% in just seven years.
• The poverty rate declined every year from 1984 to 1989
• The stock market more than tripled in value from 1980 to 1990, a larger increase than in any previous decade.

To quote Reagan economist Arthur Laffer:

"We call this period, 1982-2007, the twenty-five year boom–the greatest period of wealth creation in the history of the planet. In 1980, the net worth–assets minus liabilities–of all U.S. households and business … was $25 trillion in today’s dollars. By 2007, … net worth was just shy of $57 trillion. Adjusting for inflation, more wealth was created in America in the twenty-five year boom than in the previous two hundred years."

And, I might add, that Reagan accomplished all this in the midst of the worst onslaught of foreign competition (the rise of Japan) American had seen in at least a century.

It has now failed -- badly. Any suggestion on how to make it work?

Originally Posted by stilltim

By focusing on the few who have abused the system to become obscenely wealthy, you have deliberately ignored the fact that thousands and thousands of American businesses are in fact genuinely hurting. You sweep under the carpet the fact that hundreds of them are closing their doors forever because they cannot even begin to pay their bills. Have you ever stopped to consider - even for a moment - that perhaps keeping the taxes low for these businesses is the least we can do to protect them in these troubled times?

Have you stopped to consider that people making over $250K a year are not running struggling small businesses? That's the income level we should be raising taxes on. Not the mom-and-pop store owner that nets ~$100K a year, not the surgeon or lawyer making $100K+, nor the one-person consulting businesses that make similar amounts. No, we're talking about the owners and executives of large companies, the owners of vast amounts of real estate, the stockbrokers on Wall Street, etc.

A better question is why do you think that helping the productive well-off folks in the ~$100K range necessarily involves coddling the ultra-rich? That's the trick you've fallen for. You think that small business owners have the same interests as the ultra-rich. They do not.

Originally Posted by stilltim

Or, like many liberals, are you too obsessed with the idea that anyone who runs a business is just E-V-I-L to even consider such a fact?

Who's engaging in caricature now? At this point you should be quite aware that the left is distinguishing between the very wealthiest people in our society and everyone else. This is not business vs. worker; the issue is that a narrow slice of our population has tremendous wealth and power and your willingness to carry their water because it might save the corner liquor store is incredibly foolish.

This article by Andrew Hacker, who is never afraid to speak his mind, is about the coming election and contains an interesting analysis of the last two elections. In general he makes a strong case that Obama is very likely to be re-elected, although in the end he seems to agree with me that when you start breaking it down to states it looks a little shaky. He is much less confident about the fate of the Congress next time.

Name from the past - Tommy Thompson has decided to run for the vacating Herb Kohl's US Senate seat in Wisconsin.
James50

well well; yet another trickle-downer. Uh, I've never heard all this before

Originally Posted by stilltim

Since you're essentially mischaracterizing conservative policy in the same way that the "trickle down" moniker does, I'm not surprised you find it an accurate description. I suppose I should be shocked that liberals always fall back on the same lazy platitudes rather than looking at the real facts.

Trickle-down is an accurate description of conservative belief today. The same idea is heard over and over again. Not only is it not a platitude, it is practically the entire conservative program. Laissez faire is the traditional term. Don't tax the "job creaters," we invariably hear. That means, allow the rich business owners to keep more of their money, and don't regulate them much, and they will create jobs, and so workers will get the benefits. That is the definition of "trickle-down." Don't expect the rich to contribute their fair share in taxes, let them keep their money, and the people can expect to benefit from this "rising tide that lifts all boats." In the old days, conservatives like Hoover even embraced this term. I see that you defend Reagan too. Quite predictable, and obvious nonsense.

It does end up being a trickle, however, not enough for real benefit to the people. We can't depend on the wealthy to create jobs for us, or treat us fairly. They don't. They pocket the dough. And the taxes being asked for, do not hurt them at all. But they are so greedy they use the job-creater slogan and other free market nostrums to deceive the people into voting for their representatives in the Republican Party. The result of your conservative ideology is, what we've got. Most people poor or in a shrinking middle class; 1% of the people owning 90% of the wealth. Some trickle-down! More like tinkle-down. That's the Reagan legacy.

What do the job creaters do with their tax savings? Invest it in stocks and bonds. Buy out other companies. Buy expensive homes. Convert to computers and fire workers. Buy lobbyists to get Republicans and Democrats to protect their wealth and get subsidies and favors.

Again. Leftist caricature. This is not the premise of conservative thought. Once again, conservative economists merely wish to set the conditions for the most rapid growth. The idea that we consider widening income gaps to be a prerequisite to growth is patently false. In fact, I would argue that the widening of income gaps you cite is the result of the loss of bargaining power of the working class rather than the result of conservative policies. The loss of bargaining power that labor is experiencing now is more due to the high availability of low cost foreign labor than it is to political ideology. I submit that the same effect would have occurred even if your demand siders remained in control. Conversely, in a strong economy with an absence of foreign competition, one would expect that labor can demand higher salaries - also regardless of political ideology.

Both sides of the debate "wish to set the conditions for the most rapid growth." Labor declined mostly due to pressure from Reagan and other conservatives. Labor laws have been made more difficult. It is harder to organize. Shipping jobs overseas is absolutely a big reason, but a big reason for that is that conservative tax policies encourage it. And, especially, free trade policies encourage it. Free trade is just another expression of trickle-down conservative policy, pursued especially by Reagan. Don't regulate, go laissez faire, is the philosophy. Result: poverty.

We do, however, think that growth will not occur if the federal government pursues policies that absolutely crush the life out of the nation's businesses - as the current administration is doing. The entire wealth of the nation depends on the health of that nation's industry. Everything that a nation can possibly do for its people is dependent on the wealth generated by its business. This is basic economic theory, going all the way back to Adam Smith. I'd like to think you're not ignorant of this.

The idea that the tepid, conservative Obama administration "pursues policies that absolutely crush the life out of the nation's businesses", is about the most stupid thing I have heard. Be specific. What about the huge tax cuts, light regulatory rein, bail outs, etc. is crushing the life out of businesses? And we need more up to date policies than Adam Smith and 18th century free-market economics. Business is absolutely dependent on public infrastructure and regulation. Otherwise all you have is robber baron aristocracy and feudalism. Business per se has little to do with generating wealth. Craftsmen, farmers, professionals, workers, inventors working in their own garages: these are the source of wealth, not venture vulture capitalists and financial gamblers. Bankers and capitalists today in America are mostly parasites.

By focusing on the few who have abused the system to become obscenely wealthy, you have deliberately ignored the fact that thousands and thousands of American businesses are in fact genuinely hurting. You sweep under the carpet the fact that hundreds of them are closing their doors forever because they cannot even begin to pay their bills. Have you ever stopped to consider - even for a moment - that perhaps keeping the taxes low for these businesses is the least we can do to protect them in these troubled times? Or, like many liberals, are you too obsessed with the idea that anyone who runs a business is just E-V-I-L to even consider such a fact?

I am just so moved by the pleas of those making over $250,000 a year in personal income, that taxing them 3% more is "genuinely hurting" them. Assuming that such a tax ever happens.
I would like some of that hurt. Why don't you be more concerned with the family making $40,000 a year on two incomes that never seem to make ends meet, get thrown out of their homes, is on the edge of being laid off, can't afford to send their kids to college, paying $4 a gallon for gas? And that includes many who "run businesses." Why not make things more fair for THEM? How about the fact the ethnic minorities have 1/20th of the wealth of whites? Why are you not concerned for them, instead of calling them welfare queens who are living high on the hog of the government, as you guys never tire of claiming?

You're forgetting the entire 19th century, when laissez faire economics were the rule. The average annual GDP growth for that entire century was 7%, which far exceeds the average growth for the 20th.

Your Reagan era has emulated the 19th century. GDP growth was enjoyed by a tiny portion of the population. Most people lived in ever-worsening, grinding poverty and injustice. An obviously deceptive stat; how can you be so stupid to cite it?

And, BTW, isn't it a little disingenuous to quote growth figures for the post war boom as if they were solely due to political ideology? It's a well documented fact that the rapid growth during that period was due to pent up demand. Folks who had not been able to buy things during the war because they simply weren't available or because life in the military had caused them to defer putting down roots were suddenly able to buy them.

Isn't it also true that the majority of our potential competition from overseas had been smashed during the war and wasn't able to effectively compete with us until at least the 1970s? (Japan, in fact, chose not to export until it considered itself ready to compete.) Isn't it also disingenuous to imply that the enormous benefit American industry gained from that situation was due to political ideology?

It is certainly true that the post war era was an American decade because other economies were ruined, and since then they have recovered. That is one of your few good points. The New Deal can't claim all the credit for that. But it is also true that it was not just ideology, but actual policies, that allowed the middle class to advance, including better labor laws and workplace regulations, New Deal regulations that protected the economy from financial gambling, the GI bill, free education, higher taxes, rising minimum wages, infrastructure development, greater security for the unemployed, corporate and state pension systems, and the stimulus of war industries, and more. And after all, FDR's leadership helped win the war.

Isn't it a bit inconvenient for your theory that the post war period you quote also includes the 70s, a disaster for the American economy, often referred to as "stagflation?" Isn't it therefore true that once America faced real competition from abroad, your demand-side theories FAILED MISERABLY? Isn't it in fact true that in the period from 1969 to 1981, America suffered from THREE recessions, each one worse than the previous one? Isn't it true that unemployment hit 10.2% in that last recession? Isn't it true that that the prime lending rate peaked at a ludicrous 21.5% in 1980? Isn't it true that the poverty rate started increasing in 1978, eventually climbing by an astounding 33%, from 11.4% to 15.2%? Isn't it true that real median family income began to fall in 1978 (two years before your supply side period began) and then snowballed into an overall decline of about 10% by 1982? Isn't it also true that from 1968 to 1982, the Dow Jones industrial average lost 70% of its real value, reflecting an overall collapse of stocks?

Stocks are for the wealthy. Its real value has not budged in a long time, under your trickle-down policies. The oil shortage was the main reason for stagflation, along with the war spending without tax increases during the 1960s, which caused inflation. It's true that labor unrest was a factor. You can cite 1978 as the start of the Reagan-era; the fact remains that Reagan's policies vastly accelerated whatever trends may have started in 1978 due to the oil crisis. Yes, real median family income BEGAN to fall during the 1978-1982 recession, and it CONTINUED to fall until today. And free trade and the advancement of other economies had already started by 1978.

[LIST][*]The Reagan recovery started in 1982. It went 92 months straight without a recession, setting a record as the largest peacetime expansion in US history and beating the previous record (of 58 months) handily.[*]During this seven year period, the economy grew by nearly a third, adding the equivalent of West Germany (then the third largest economy in the world)
etc.

Most of this growth went to upper income groups. The minimum wage stayed flat. More families started working longer and holding two jobs. In the "greed is good" 80s, junk bonds and corporate raiders ruined the economy, making it into a system of wealth through buy outs, mergers, and outsourcing. People began losing millions in unprotected savings because unscrupulous practices were allowed. Stats show this, that under Republican presidents, the average person loses and the wealthy few gain, while under Democrats the reverse is true. The stats I saw said poverty increased under Reagan. The war on poverty ended. Homelessness became a scandal.

To quote Reagan economist Arthur Laffer:

"We call this period, 1982-2007, the twenty-five year boom–the greatest period of wealth creation in the history of the planet. In 1980, the net worth–assets minus liabilities–of all U.S. households and business … was $25 trillion in today’s dollars. By 2007, … net worth was just shy of $57 trillion. Adjusting for inflation, more wealth was created in America in the twenty-five year boom than in the previous two hundred years."

And, I might add, that Reagan accomplished all this in the midst of the worst onslaught of foreign competition (the rise of Japan) American had seen in at least a century.

The best era of that time was the 1990s. In the 2000s we've had less job growth than in any comparable period in recent history at least. The Laffer curve is laughable. You could get away with trickle-down economics for a while. You will keep touting the 80s throughout this 4T Great American red/blue divide. It's results after 30 years are obvious. All the boom you laud has trickled up to the tiny upper class. Reagan was among the very worst of our presidents.

The author of this article has been thinking similarly to myself and expressed himself very eloquently. I am about to dig up his email address and supply him with the missing link in his argument, that is, generational theory. It's interesting that he's a psychologist: historians who could write this article are very rare. He lives just down the road from James, maybe James should take him out for a drink!

Originally Posted by KaiserD2

The author of this article has been thinking similarly to myself and expressed himself very eloquently. I am about to dig up his email address and supply him with the missing link in his argument, that is, generational theory. It's interesting that he's a psychologist: historians who could write this article are very rare. He lives just down the road from James, maybe James should take him out for a drink!

(sniff-sniff)

Political "Troll-bait"!


Prince

This Iowa Republican poll is rather depressing: the rather sane Republicans (Romney and Hutnsman) account for less than 25% of the vote. If the crazies could unite behind one of their many choices, that person would probably win.

Originally Posted by KaiserD2

The author of this article has been thinking similarly to myself and expressed himself very eloquently. I am about to dig up his email address and supply him with the missing link in his argument, that is, generational theory. It's interesting that he's a psychologist: historians who could write this article are very rare. He lives just down the road from James, maybe James should take him out for a drink!

Good find.
Obama was elected in a time that called for an FDR but his background and psycology leads him to emulate Eisenhower. The America he want where red and blue reach a concensus, that is to say the Eisenhower model, can not be reached until the crises solving FDR model has completed enough of its work to create a system that will be sustainable for 70-90 years. And we're not going to get there under a president Obama. Nor does it seem likely if the GOP wins in 2012. It's likely to be 2016 before we get another chance at a 2008 like reset election.

Originally Posted by KaiserD2

This Iowa Republican poll is rather depressing: the rather sane Republicans (Romney and Hutnsman) account for less than 25% of the vote. If the crazies could unite behind one of their many choices, that person would probably win.

Here's another example of why the cultures are not dead yet.
Evangelical Christians do not consider Mormons to be Christians and will not vote for a Mormon, at least not for a the top job in the whole system. If the two so called moderates also happen to both be Mormons then that means the the evangelicals are going to look only amongst the hard liners for a champion.

Originally Posted by herbal tee

Good find.
Obama was elected in a time that called for an FDR but his background and psycology leads him to emulate Eisenhower. The America he want where red and blue reach a concensus, that is to say the Eisenhower model, can not be reached until the crises solving FDR model has completed enough of its work to create a system that will be sustainable for 70-90 years. And we're not going to get there under a president Obama. Nor does it seem likely if the GOP wins in 2012. It's likely to be 2016 before we get another chance at a 2008 like reset election.

I fully agree, but it almost seems like Obama had no choice but to play into the Eisenhower model because the country was tired of Bush who already attempted to play into the FDR model.

Originally Posted by millennialX

I fully agree, but it almost seems like Obama had no choice but to play into the Eisenhower model because the country was tired of Bush who already attempted to play into the FDR model.

I disagree. In January 2009 the potters clay of American politics, if you will, was as wet as I've ever seen it in my lifetime. Wetter even than it was in January 1981 when Reagan assured a troubled nation that "government is the problem" and set the stage, pun not intended, for the path that we have been on since.
Considering that every one of Obama's choices for his cabinet such as Geithner, Clinton and Sumner et. al. were people tied to the the failed operating procedures of the recent past indicates to me that the FDR words were just that to him-words. Words can be pretty but they don't get policy enacted without something tangible to back them up. Yes, I do understand the need to have some experienced people from past administrations in a new, but he could have nominated someone like Howard Dean as HHS Secertary if he was serious about passing a health care reform that wasn't mostly just a pay off to the insurance lobby. But he didn't.

He won't fight anyone with any power to oppose him on anything. It's sad. It's pathetic. And it's why as of now I plan to vote for the Green Party candidate for president next year.
For the sake of America and us all I'd like to see him do something to change my mind before next November. But I don't think that he will be able to.

Originally Posted by herbal tee

I disagree. In January 2009 the potters clay of American politics, if you will, was as wet as I've ever seen it in my lifetime. Wetter even than it was in January 1981 when Reagan assured a troubled nation that "government is the problem" and set the stage, pun not intended, for the path that we have been on since.
Considering that every one of Obama's choices for his cabinet such as Geithner, Clinton and Sumner et. al. were people tied to the the failed operating procedures of the recent past indicates to me that the FDR words were just that to him-words. Words can be pretty but they don't get policy enacted without something tangible to back them up. Yes, I do understand the need to have some experienced people from past administrations in a new, but he could have nominated someone like Howard Dean as HHS Secertary if he was serious about passing a health care reform that wasn't mostly just a pay off to the insurance lobby. But he didn't.

He won't fight anyone with any power to oppose him on anything. It's sad. It's pathetic. And it's why as of now I plan to vote for the Green Party candidate for president next year.
For the sake of America and us all I'd like to see him do something to change my mind before next November. But I don't think that he will be able to.

See I agree with what you are saying should happen. I'll clarify my previous post by saying that Obama is playing the "let's get ride of partisanship" role because the country was/is tired of the division that heightened during the Bush administration. Bush created the end of the world/ 4T atmosphere of "either you are with me or not" and Obama's "change" was going against that way of thinking.

He's trying to bring everyone together now but he can't because now it really is the 4T/ end of the world that requires folks to take a stand. The tea party folks are taking their stand and unfortunately Obama has not, yet. He's playing ball with folks who KNOW we are in a 4T and I think that in an attempt to compromise, Obama is helping to maintain status quo.

I agree with you...that Ike politics should be saved for later.

Originally Posted by millennialX

See I agree with what you are saying should happen. I'll clarify my previous post by saying that Obama is playing the "let's get ride of partisanship" role because the country was/is tired of the division that heightened during the Bush administration. Bush created the end of the world/ 4T atmosphere of "either you are with me or not" and Obama's "change" was going against that way of thinking.

He's trying to bring everyone together now but he can't because now it really is the 4T/ end of the world that requires folks to take a stand. The tea party folks are taking their stand and unfortunately Obama has not, yet. In an attempt to compromise, Obama is helping to maintain status quo.

I agree with you...that Ike politics should be saved for later.

I see.
He has or had so much potential. If the theory is proven over time he is likely to be a case study in what happens when a 4T era president is elected who as a joneser/Xer is tragically preseasonal.
S and H often praise preseasonal behavior while condemning postseasonal behavior in TFT.
But this appears to be one case in which being preseasonal is a bad thing.