Post by unlawflcombatnt on May 23, 2007 15:38:39 GMT -6
Below is a great article by Robert Reich showing how Bush's pseudo-supply-side tax cuts have not fueled capital investment in the United States. In fact, they have fueled investment in foreign countries, actually REDUCING investment in American production facilities. The title of the Alternet.com article is American Corporations Getting Rich Abroad
5/18/07
"I'm spending my spare time these days debating supply-siders who are convinced that the record-breaking Dow proves the correctness of the Bush tax cuts.
Yes, the Dow did reach a record high last month. But the Commerce Department also reported that economic growth slowed to its weakest pace in four years. How can investors do so well while the real economy is doing so poorly? My supply-side friends don't have an answer, but I do.
It's because of two great decouplings that have occurred in recent years. First, the rest of the worlds' major economies have decoupled from the United States' economy. China, India, Japan and Europe are now such large markets, they can grow briskly even as America slows.
Second, America's largest corporations have decoupled from the United States. Their overseas subsidiaries are booming even as their American operations stagnate. General Electric expects more than half its revenue this year to come from outside the United States for the first time. More than half of Boeing's new orders are from overseas. Ford is struggling in America but doing well in Europe.
In other words, the president's supply-side tax cuts are great for America's global investors, who have been investing their extra money around the world -- either in foreign companies or in global American-based ones.
But little or nothing is trickling down to average working Americans. Half of U.S. households do own some shares of stock, usually through their IRAs or 401Ks. But the vast majority own less than $5,000 worth. Their equity is in their homes, whose values have slumped. They're paying far more for health insurance and fuel. And their wages haven't kept up.
Bottom line: The Bush tax cuts have delivered for Wall Street but done zilch for America's Main Streets.
This article is the property of the Independent Media Institute
The full article can be found at:
www.alternet.org/story/51399/
Bush's unjustified pseudo-supply side tax cuts have not helped the economy. In fact, they've hurt the economy by enabling American investors to invest in foreign production facilities which directly compete with American facilities. The result is less demand and sale of American produced goods, and more for cheap-labor produced foreign goods. American capital has chased (and found) the cheapest labor on the planet, and has been invested in those markets. The result is that these cheaper foreign-made goods, whose production facilities are owned by Americans, have replaced goods produced by Americans. The replacement of demand for American-made goods with foreign made goods has reduced demand for American labor, reducing both employment AND wages for American workers.
Bush's tax cuts have DIRECTLY contributed to the decline in American manufacturing. Investment has gone into foreign production facilities at the expense of American facilities. Worse still, those foreign facilities have put many American production facilities out of business. This has resulted in the replacement of American production workers with foreign production workers.
5/18/07
"I'm spending my spare time these days debating supply-siders who are convinced that the record-breaking Dow proves the correctness of the Bush tax cuts.
Yes, the Dow did reach a record high last month. But the Commerce Department also reported that economic growth slowed to its weakest pace in four years. How can investors do so well while the real economy is doing so poorly? My supply-side friends don't have an answer, but I do.
It's because of two great decouplings that have occurred in recent years. First, the rest of the worlds' major economies have decoupled from the United States' economy. China, India, Japan and Europe are now such large markets, they can grow briskly even as America slows.
Second, America's largest corporations have decoupled from the United States. Their overseas subsidiaries are booming even as their American operations stagnate. General Electric expects more than half its revenue this year to come from outside the United States for the first time. More than half of Boeing's new orders are from overseas. Ford is struggling in America but doing well in Europe.
In other words, the president's supply-side tax cuts are great for America's global investors, who have been investing their extra money around the world -- either in foreign companies or in global American-based ones.
But little or nothing is trickling down to average working Americans. Half of U.S. households do own some shares of stock, usually through their IRAs or 401Ks. But the vast majority own less than $5,000 worth. Their equity is in their homes, whose values have slumped. They're paying far more for health insurance and fuel. And their wages haven't kept up.
Bottom line: The Bush tax cuts have delivered for Wall Street but done zilch for America's Main Streets.
This article is the property of the Independent Media Institute
The full article can be found at:
www.alternet.org/story/51399/
Bush's unjustified pseudo-supply side tax cuts have not helped the economy. In fact, they've hurt the economy by enabling American investors to invest in foreign production facilities which directly compete with American facilities. The result is less demand and sale of American produced goods, and more for cheap-labor produced foreign goods. American capital has chased (and found) the cheapest labor on the planet, and has been invested in those markets. The result is that these cheaper foreign-made goods, whose production facilities are owned by Americans, have replaced goods produced by Americans. The replacement of demand for American-made goods with foreign made goods has reduced demand for American labor, reducing both employment AND wages for American workers.
Bush's tax cuts have DIRECTLY contributed to the decline in American manufacturing. Investment has gone into foreign production facilities at the expense of American facilities. Worse still, those foreign facilities have put many American production facilities out of business. This has resulted in the replacement of American production workers with foreign production workers.