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Post by unlawflcombatnt on Jan 21, 2006 14:24:29 GMT -6
Bush pseudo-supply-side economic policies are destroying our economy. His policies are actively worsening life for the lower 98% at present. And they will make 100% of us poorer in the future.
Tax cuts for the affluent, and other "supply-side" giveaways make no economic sense. Many people aren't aware of this, because it does take a little time to explain. But not very much. So I'm going to try here.
Our country became the world's most powerful economy under administrations that practiced "Demand-Side" economic policies. In general, demand-side economics centers on consumer spending and demand. Profits are made when goods are sold, not when produced. Industrial production is driven by DEMAND for goods made from that production. Consumer spending creates the demand for that production. Without demand, there is no production. That's because there's no benefit to that production. No profits can be made from unsold production.
Consumer demand is the ONLY factor that increases job and wage growth. Demand for goods also creates demand for labor to produce goods. Increased demand for anything increases the price. Thus, increased demand for labor increases the price of that labor. In other words, it increases wages. It also increases hiring. Demand increases the number of people working, as well as the wages of those people working.
If more workers are working and average wages are higher, it increases the aggregate (or total) demand for goods in our country. Aggregate Demand, when measured in dollars, is the ultimate limiting factor of industrial production. Aggregate Demand in dollars is total spendable dollars available to consumers. (NeoCons hate the concept of Aggregate Demand. It conflicts with their "alternate reality" economic theories.)
Again, aggregate demand for goods is the engine that drives our economy. It drives production, hiring, and wage increases. The demand cycle has a self-perpetuating effect. As labor/consumer income increases, so does the demand for goods. That's because consumers have more money to spend. This increased demand further increases labor demand. Which further increases wages and hiring.
Supply-side concepts have never been accepted by a large number of economists. What I mean here is that they are not even accepted as a valid economic theory. Many economists refuse to call supply-side policies a theory. Some refer to them as "voodoo economics." Supply-side policies are essentially economic mythology. They are a completely illogical set of ideas that were concocted to justify tax cuts for the rich. The major proponents were not even economists. Most were actually journalists, such as Robert Bartley, the late editor of the Wall Street Journal.
Let me try to show the error of some supply-side propaganda. A major point is about tax cuts for the rich. This is supposed to stimulate investment. That investment is supposed to go into building production facilities and increasing production (supply). There is an obvious problem here. What if consumer spending doesn't necessitate increased production? If consumer spending doesn't keep up with supply, that investment money is completely wasted. Profits are made by SELLING products, not producing them. Un-sold goods do not "grow" our economy. (Neither do increased CEO salaries.)
Another less important, but even more illogical assumption, is that if you tax people less, they will produce more. It may be true that high-end taxpayers would have more money to invest. However, that's where the truth ends, and the fantasy begins. Even acknowledging that smidgeon of truth, the benefit of that money is questionable. The extra investment money is supposed to lead to increased goods production(supply). Again, there is no benefit to producing more goods than consumers can pay for. This increased investment money is useless unless demand necessitates increased production.
There is also a definite negative to these supply-side fantasies. Increasing the deficit to fund these cuts increases inflation, as well as devaluing the dollar. That means consumer dollars are worth less. So consumers will buy less. And provide less demand for goods, causing less demand for labor. Which starts us on another self-perpetuating downward spiral.
The big picture is this. In order for production to increase, demand for production must increase. Consumers need to have enough spendable wealth to purchase increased production. Increasing production without increasing consumer spending is putting the cart ahead of the horse. The cart isn't going to "push" the horse forward. And manufacturers aren't going to "push" consumer spending forward. Only consumers can drive our economy. They provide the demand that "pulls" production forward. Remember the old adage: "Necessity is the mother of invention." So it is that "Demand is the mother of production." Demand for goods leads to increased production of those goods. However, supply of goods does not increase demand. Unsold goods are worth absolutely $0.
Demand-Side Economics were almost universally accepted until the mid-1970's. However, sometime in the 70's, supply-side mythology was born. (Under a rock, in a dark cave.)
Today we're seeing the fruits of supply-side mythology. Consumer income has decreased during Bush's "economic reign-of-terror." Tax cuts for the top 2% favor investment, not consumer spending. Though consumer income was obviously declining, Bush decided his rich friends needed more money to "grow" the economy. According to Bush, they would produce more goods and increase production capacity. Also, as Bush dishonestly claimed, they would hire more workers.
Does this make any sense? Will a company hire more workers just because they have more money? Do they hire more just because they can afford to? No, absolutely not. They only hire workers when they NEED them. No amount of corporate giveaways will increase hiring, unless demand for production increases, which increases demand for labor to provide that production.
Let me give an example. Let's say I'm a doctor who sees 6 patients per day. I need one nurse. What if my new friend, George Bush, gives me $1 million because he likes me. (for some unknown reason.) Will I hire more nurses? Of course not. I don't NEED more nurses. They won't increase my profits any, and they will cost me money. So I'm not going to hire them.
Let me change the example. Let's say I'm the same doctor, and my ex-friend, George Bush, takes back the $1 million. He then gives it to the potential patients who live around my office. Now more people can afford medical care. Now I have 30 patients per day. Am I going to hire more nurses? Yes, indeed. Because now I NEED more nurses. The DEMAND for nurses has increased. Hiring more nurses will increase my profits.
In the above example I hired more nurses only when I NEEDED them. I hired none when I didn't need them, even though I could afford them. Being able to afford hiring of nurses had no effect on hiring. Demand for their services did. This increased demand was due to increased consumer income. Increased consumer income ALWAYS increases aggregate demand. (It may effect demand for individual products differently. But is still increases the sum total of demand for goods and services produced.)
In the above example, nurses spendable income increased because of demand increase. In turn, their income increased aggregate consumer income. This increases demand for the goods they buy, and the labor that produces those goods. It helped the entire economy as a result.
Again, increased consumer income increases demand for production. But how does consumer spending increase, if consumer income decreases? It increases through credit and borrowing. Current consumer spending has been maintained through increased borrowing and credit card spending. To phrase this differently, it has been maintained by consumer "deficit" spending. And this is becoming an increasingly larger portion of consumer spending. A lot of this deficit spending has been financed by the artificially increased value of homes, and the resulting increase in home equity loans. Interest rates have almost a direct effect on the market value of homes. The higher the fraction of buyer's cost going to financing, the less the market value of the home. This is because the seller receives a smaller fraction of the total payment. If interest rates are low, the seller receives a higher fraction of the buyer's payment.
Let me give a brief illustration. Let's say I want to buy a home. Let's say I am a perfect example of all potential buyers in my area. I'm willing to pay $300,000 total for a home. This includes all finance charges, as well as principal payment. Let's say the total financing costs $150, 000. That means the seller will get the other $150,000. That means the market value of his home is $150,000, because that's what he actually gets.
Let's change the finance charges. I'm still only willing to pay $300,000 total for the home, including all finance charges. But the finance charges are only $50,000 now, because of a lower interest rate. The seller now gets $250,000, instead of $150,000. The market value of his home is now $250,000. The market value of his home has increased $100,000 because of a reduced interest rate. The reduced interest rate accounts for 100% of the increase in market value. This increases the equity, and increases the amount he can borrow off this equity.
Lowered interest rates have greatly increased home equity values. They have also greatly increased the amount of money that can be borrowed off this equity. This money has made a significant contribution to consumer spending during the last 4 years. Current estimates are that it contributes $200-300 billion per year to our $12 trillion GDP. This is 1.5 to 2.5% of our GDP. Borrowed money has prevented consumer spending from sinking. As interest rates rise, home equity values will decrease. Money borrowed from this reduced home equity will also decrease. The contribution to consumer spending from this money will also decrease.
From this, it becomes obvious that consumer demand cannot be maintained by this consumer deficit spending. We are nearing the limit now. We are going to reach this limit in the near future. The home-refinancing loan bubble, and its contribution to consumer spending, is about to burst. When it does, consumer spending and demand will drop. And they will continue to drop, because this is also a self-perpetuating cycle. As consumer demand for production decreases, so will the demand for labor to provide that production. As a result, hiring will decrease and layoffs will increase. This will further decrease consumer income, and the spending that comes from that income. We need to change our economic course. We can't let Republicans distract us from major issues. We can't let them waste our time with discussion right-wing planted distractions. Subjects such as steroids in baseball, the Robert Blake trial, Michael Jackson, and Terry Shiavo provide cover for what the Republicans are really up to. Corporatization of social security and extension of tax cuts for the rich affect all of us. Job loss to the cheap slave labor of foreign countries affects all of us. Let's not help provide cover for the Bush/Snow/Greenspan "economic axis-of-evil."
Clinton was right. It is "the economy stupid." Let's not let the Republicans convince us otherwise.
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Post by lc on Jan 28, 2006 21:07:32 GMT -6
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Post by unlawflcombatnt on Jan 29, 2006 17:28:36 GMT -6
LC,
Clearly many factors contributed to our prosperity and growth of our economy. My point regarding Demand-Side economics wasn't so much it was responsible for our prosperity, but more that the prosperity occurred while practicing Demand-Side economics. Demand-Side economics was more an enabler of that prosperity rather than a "cause" per se.
In contrast, supply-side theories have set us back.
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Post by lc on Jan 29, 2006 22:08:59 GMT -6
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Post by unlawflcombatnt on Jan 30, 2006 22:50:15 GMT -6
LC,
I haven't run into any evidence either of any successes from supply-side economics. I have heard quite a few fairy tales and revisions of history claiming its successes.
Supply-Side economics was really just an attempt to justify tax cuts for the most affluent, while making the knowingly false claim that it would actually raise tax revenues.
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Post by lc on Jan 31, 2006 0:05:29 GMT -6
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Post by unlawflcombatnt on Feb 2, 2006 15:11:53 GMT -6
I think it should be an impeachable offense. The Bush administration has made these fantasy predictions ever since the 1st round of tax cuts. And they were not only proven wrong, but proven very wrong. They repeatedly have predicted deficit reductions and even surpluses initially. Yet they were proven wrong every single time.
This is the same type of "alternate reality" economic statements that have been espoused since Bush's first stolen election. The best recent example of the wrongness of such statements is 4rd quarter GDP growth. The prediction by Bush and his hoodlum Corporate allies was a GDP growth of 3.0%. The 1st report from last Friday was only 1.1%. They overstated the growth by almost 200%. Though the initial estimates didn't come directly from der Fuehrer's mouth, they did come from the same economic fiction writers that supported his fraudulent re-election.
One reason I started doing my own economic research is due to repeated overstatements of the economy by the Bush administration. And no matter how many times they're proven wrong, they continue to lie. They appear to believe that repeating lies often enough makes them true.
Do you suppose any of these alleged financial "experts" give any consideration to the fact that all precious metal prices have skyrocketed over the last 6 months, and that we now have an interest rate inversion almost always at some point between the 3 month and 10 year rates? Or do they spend all their time concocting stories why these indicators are giving a false impression about the economy? Could it be that investors aren't believing all the propaganda about an economy that's "strong, and getting stronger"?
Could it be that the 1.1% 4th quarter GDP growth really is giving an accurate indication of our economy? Naah. Couldn't be that. Der Fuehrer has told us the ecomony is "strong, and getting stronger." And we know he doesn't lie about such things. Because he's told us told he doesn't lie.
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Post by lc on Feb 2, 2006 15:56:37 GMT -6
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Post by unlawflcombatnt on Feb 3, 2006 18:55:54 GMT -6
I completely agree with that. Though I believe it is possible appropriate government policy to help the economy, it seems impossible to get them to do so. That's one of the strongest arguments for shrinking the government size as much as possible, because they generally do nothing but harm.
However, those falsely claiming to champion small government actually favor significant government intervention that favors their own interests.
Tax cuts for the most affluent in the face of over-abundance of investment capital make no economic sense. Yet there are government and privately paid economic think tanks whose sole function is to concoct some confusing theory that justifies high-end tax cuts on the grounds that it will "grow" the economy.
John Maynard Keynes addressed these obfuscatory theories in his General Theory from 1936. He implied that many of economic theories of the time were designed to serve the interests of the rich, and create justification for policies that made no logical sense to the common man. His suggesting was that in fact such theories made no sense to the "common man" because they simply made no real logical sense to anyone.
Classical economic theory, which was the gold standard before Keynes, subscribed to the falsehood that "supply creates demand." An entire, exhaustive system of economic theories were based on this falsehood. Until the 1970's, these concoction of falsehoods had fallen out of favor. However, during the 70's, a new perversion of Classical Economics was born: Supply-Side Economics. And it was concocted exclusively to satisfy the wishful thinking desires of the affluent. It was invented to justify how making the rich even richer was good for the economy.
We're still left with the aftermath of these economic fantasies. The increased ability of Americans to borrow money to continue consuming has obscured the true lack of logic behind such theories. And adherence to these theories is extremely popular with Corporate America and the affluent. And they even fund their own Right-Wing Alternate Reality think tanks to perpetuate these theories. Those candidates critical of these reverse-Robin Hood policies have trouble getting campaign contributions from the big-money special interest groups who espouse these fantasies.
The only hope in breaking this vicious cycle is to write and post the truth wherever possible, and continue to try to re-educate the public. And contribute and assist candidates who appear to be on the same wavelength.
The next best thing to keeping politics out of economic issues is to remove big money from politics. As long as money can essentially buy voting machines, influence, and even elections, we'll continue to have politicians making economic policy based on the whims of their rich campaign contributors.
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Post by lc on Feb 4, 2006 12:54:39 GMT -6
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sandy
New Member
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Post by sandy on Apr 11, 2006 7:07:33 GMT -6
You are putting the blame on our out-of-control debt on the Republicans and I would like to explain that it is the current big-spender neocons who have driven America into a near bankruptcy.
I am a Fiscal Conservative who would like nothing better than to send Bush running for his life. The problem as I see it is that we voted for candidates who represented the Christian Churchs without a thought to be given to the Constitution.
In 1992, 7 million people left the GOP; I was one of them! I joined up with many of these irate Republicans to try and form a Party that preached Limited Government, Individual Choices and Personal Responsibilities.
We elected a party of members of the religious right and the Christian coalition. This party was not for me and when Bush 41 went on about the one world order, I ripped up my RNC card and stepped in behind Perot. I had a call last night from the NRA and I had to explain to her that Bush is killing Patriotism in America and we all should have the legal choice to collect guns. I chose to move to Arizona so I had the legal right to protect myself.
I've been fiscally involved in the American budget since Ike was president. We are at the point now in 2006 that we must determine how much authority we are willing to hand over to the government
It is a shame that Bush is forcing a decision between anarchy and a police state. Forcing higher taxes on us is not the answer to our debt problem. Cutting just the pork out of our spending would take care of what we owe.
We must determine whether we went to war legally in Iraq and act accordingly.
I realize our last three Presidents have done their best to weaken America. They seem to want full power over our American businesses. This is part of the neocon movement and it should be everyone's desire to clean up the corporations that you feel are so harmful to you. Asking the foxes to guard our chickens is ricidulous.
Every pay check I have received has come from a collaboration of many big corporations. We have seen our corporations moving off-shore due to the government intrusion into their policies and benefits, limits on their profits and a dozen other problems. We need leadership that will ask these corporations to return to America starting with a large open public meeting with the CEOs. Our government would rather issue mandates and force these manufacturing plants to move south. Could our unfair trade agreements be one of the reasons our corporations are gone? Our trade deficit is in the trillions thanks to our corrupt government and agreements like NAFTA and CAFTA.
For 200 years America has worked under Free Enterprise Capitalism It proved that the law of supply and demand actually works. The failed corporations simply failed and in many cases, opened up again with better management. I see our government going in this same direction.
20 years ago we would see that most of our products were made in America and our wages were competitive and good benefits issued from the corporations. Today we see our home products, garments, cars, televisions and even our American flags are made overseas.
You seem to want to put even more of our economics mess be solved by the Federal Government. This would not be necessary of we elected men of honor and leadership.
D.C. is being run like a revival meeting and our laws are focused on Christian protection. Our Congress has been sent to Christian bootcamp so they could bring this religious movement in to grow from within the government.
We have never seen such abuse as we have witnessed under President Bush 43. I would have expected the Democrats to come up with an agenda to free us all from this corrupt government. Hell, they can't find their butts with both hands. The Christian voters have scared the hell out of them.
Pandering to the illegal immigrants will hurt both parties! I would have expected the Democrats to not allow people who have broken the law to be allowed to stay here and bring down the wages. I see little action coming from the Democrats which means thast America will continue to down the sewer.
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Post by unlawflcombatnt on Apr 11, 2006 16:28:24 GMT -6
Sandy,
I agree with much of what you've said. And like myself, you rightfully blame much of this on our free trade policies. I couldn't agree more that government spending is out of control. And Corporate Welfare is one of the biggest expenses.
I completely disagree with you about the "cause" of businesses moving offshore. Businesses have moved offshore to utilize cheap foreign labor, not to avoid U.S. regulations and taxes. There is no amount of "onerous regulatory burden" that we could remove that could offset labor cost reductions achieved by paying foreign workers $2/day.
If we removed all regulatory burdens and all taxes from American industry it would make almost no difference. It still wouldn't make up for the reduction in wages resulting from the use of foreign semi-slave laborers.
The job loss from outsourcing is due almost entirely to global labor arbitrage.
I, too, am a fiscal conservative. However, I don't live in the fantasy world that espouses the "starve-the-beast" mythology. This was a known falsehood started by alleged fiscal conservatives that has never worked and never will work. What's worse, the originators of this myth knew it wouldn't work at the outset. It was just a falsehood espoused to justify tax cuts for the most affluent.
Under Reagan this falsehood was accepted, and its pitfalls were cleverly covered up. The revenue shortages it caused increased the deficit astronomically. But then, along came Alan Greedspan to the rescue. He conveniently claimed we needed to increase Social Security taxes to prevent future shortfalls. He succeeded in increasing the rate under Reagan. And then this increased Social Security revenue was used to reduce the massive deficits caused by Reagan's reverse Robin Hood tax policies. The deficits that would have occured were reduced by using the increased contributions from Social Security taxes. In essence, the increased Social Security taxes helped pay for Reagan's high-end tax cuts. This effectively shifted the tax burden from the most affluent on to the less affluent.
No one wants to "force higher taxes" on most Americans. But many of us do want to roll back the completely counterproductive tax cuts on the top 2%. The only proposed macroeconomic benefit high-end tax cuts is to increase investment capital. But investment capital is not only abundant at present, it is over-abundant. The Wall Street Journal states the markets are "glutted with capital." There is more than enough capital, and not enough investment opportunities.
Rolling back the tax cuts won't reduce capital investment any. In fact, it will increase capital investment because it will reduce inflation, increasing consumer buying power as a result, and increase the investment opportunities created by increased consumer buying power.
In theory I acknowledge your distinction between the NeoCon-Artist Republicans, and the rest of the Republicans. Unfortunately, the Republicans have generally voted in lock-step with the NeoCon-Artist faction. And they level criticisms at Democrats in unison, instead of as separate representatives of their party. There are certainly exceptions, such as Ron Paul of Texas. But in general, almost all Republicans are toeing the line drawn by the NeoCon-Artists.
For the record, I was also previously registered as a Republican. Two factors caused me to change. The 1st was George Bush. The 2nd was the realization that the Supply-Side economics stressed by Republicans was nothing but self-serving economic fantasy.
I'm not satisfied with the current policies of the Democrats. In particular, their apparent open-border advocacy, as well as their frequent desire to address every problem by spending more money. However, there is NOTHING about the Republicans that I agree with. Even their Immigration Bill is just a sham. Though purported to include employer prosecution as part of the plan, it doesn't enforce employer sanctions for 6 years.
In general I share your dislike of the big spenders in Congress, both Republicans and Democrats. At least some Democrats are talking about re-institution of "pay-as-you-go" rules. This is something today's Republicans appear completely opposed to.
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Post by lc on Apr 12, 2006 6:13:20 GMT -6
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Post by unlawflcombatnt on Apr 12, 2006 13:23:00 GMT -6
LC,
Let me get back to you on the specifics. This is laid out in economist Ravi Batra's book, Greenspan's Fraud, which I'll have to re-read. Also, Paul Krugman refers to it in at least one of his books, though I'm not sure how specific he is about it.
Every year, however, the Federal Government uses some of the money taken in from payroll taxes to reduce its reported budget deficit. It's apparently done by some type of borrowing from the fund's annual surplus. Again, I'll have to get back to you on the specifics.
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Post by graybeard on Apr 15, 2006 10:27:44 GMT -6
The Aviation Trust Fund, although much smaller, is also held hostage to the budget, where revenues are used to offset the deficit. That keeps the money from being spent for its intended purpose of aviation infracture and safety. It probably started with Reagan. GB
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Post by Joby on May 24, 2006 23:21:15 GMT -6
Unlawful, I agree with your assessment on supply-side economics. The only thing that worries me is that it will take another 1929 to force the economy back to demand-side.
The parallells between the 1920s and today are incredible. Huge amounts of consumer debt, a stock market that goes up while income goes down, and billions in taxes being shoved aside.
It's unfortunate that Keynsian Economics has no real proponets. The Republicans are, as you've already stated, a party simply caring for the affluent and the Dems are meanwhile caring about workers who undercut all american workers.
In response to the accusation of the Christians moving to the republican side, let it be noted that, in their defense (i'm not one), the Dems did embrace gays, abortion rights folk, and, now, illegal immigrants with open arms. I honestly believe that both parties do an excellent job shoving the liberal v conservative battle in our faces on the news every night.
Anyway, my point is, as long as the Dems embrace such groups and abandon the middle class, they have no chance getting a majority back. And knowing what they're fighting for, I wouldn't mind too much.
Any "good" parties out their someone knows about?
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Post by unlawflcombatnt on May 25, 2006 16:48:15 GMT -6
Joby, I couldn't agree with you more about the parallels between today's economy and that of the 1920's. Tremendous credit expansion and tremendous overvaluation of assets with grossly insufficient consumer income to purchase production is a recipe for disaster. Couple those things they have in common with the extreme downward pressure on wages (and consumer income) through outsourcing and uncontrolled labor force expansion through illegal immigration and it actually looks worse. Today's Senate vote to give amnesty to almost all illegal immigrants will make things much worse. Hopefully House Republicans will stand their ground and block passage. However, considering how they caved in on the Medicare-Pharmaceutical Welfare Bill (incorrectly referred to as the Medicare Prescription Drug Bill), I have serious doubts. I share your angst with the Democrats who've sold out the middle class and American workers. And I share your lack of enthusiasm for having the Democrats returning to power. They completely failed when it came to blocking anti-worker, anti-middle class measures such as CAFTA, NAFTA, the Bankruptcy Bill, Class Action Law Suit limitations, the Highway/Transportation Bill or extension of Bush's reverse Robin Hood tax cuts. They couldn't even stand behind a 2004 election challenge or stand behind a censure of King George for breaking the law. Regarding parties, you might want to investigate the Reform Party. The link to their discussion board is Reform Party Discussion Board. They oppose unrestricted immigration as well as outsourcing. They've also taken a position of neutrality when it comes to social issues. At present I think they're having some organizational problems. That's the impression I got after talking to Charles Foster, the president of the Reform Party. I suspect you'll find that their views are similar to yours. I know they're far closer to my views than the Republicans or Democrats are. Below is a link to my post on the Reform Party Platform unlawflcombatnt.proboards84.com/index.cgi?action=display&board=noneconomic&thread=1144106171&page=1
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Post by lasher on Nov 14, 2006 18:31:43 GMT -6
Very good thread going on here. I have taken particular note to the excellent label of 'demand side economics' which I had not previously seen. It has been incorporated into my vocabulary for times when I want to convey a message that must be brief and simple.
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Post by unlawflcombatnt on Nov 16, 2006 0:30:04 GMT -6
Demand-side economics was pushed to the forefront by John Maynard Keynes. It's difficult to say whether or not he invented it, or even the term. But Keynes did describe the importance of Aggregate Demand, which had never received much consideration until he wrote about it.
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Post by ThePoligarchy on Dec 19, 2006 23:42:47 GMT -6
Note: i pasted these posts here at the request of the moderator, but also to spark some thoughts to whoever might find it interesting. this was three posts put here as one message, but i think it should make sense. :
First of all, I guess we may as well chat about political strategies, but I want to be clear that my original point was not about political speak (which of course is sort of my point). I don’t think anyone is serious about laissez faire conservatism, and I am not a democrat or a republican and don’t claim to represent either party.
Starting with the facts, the democrats now control congress even with district gerrymandering, undercounts ect. What I think the voters were trying to get across was they are sick of this administration and the direction the country is headed in general. I don’t think you’re even going to get a real clear platform out of the democrats because the entire party is organized around refuting republican logic. They obviously don’t have a clear direction (or a Karl Rove), just that “they” want a “new” one. (It looks good on paper ya know)
The two big issues have been first, republican corruption which includes the Iraq occupation and all the war on terror-speak (read Orwell). The other issue is the economy. With so much surplus capital people think they’re entitled to a living wage, health care, ample shelter, ect… Now back to my earlier post, this train of thought was what inspired the discipline of economics that is in use today. Unfortunately, capital was distributed in the hands of a few from the day Jefferson signed the Declaration of Independence (on paper made from hemp fibers) and our current political modes of partisanship reflect that very clearly. You might remember Madison’s reflections on the system when he realized what was going to happen a few years later: he panicked and said the experiment should be stopped. This year, as soon as it was clear that the elections were going to turn out the way they did, corporate donors flooded the democrats with money for their campaigns and interests. This two-party system we have here is a complete joke, and as far as I’m concerned, I can’t tell much of a real difference between them on a federal level. Locally, somewhat, but you understand what I mean.
Look-at-me Pelosi has been around politics her entire life, so that leads me to believe her interests lie mostly in politics, not in interests that affect my life and my community. She’s made that clear already, first by saying that impeachment is off the table ( just a waste of resources that would enable the republicans to say she’s pro-terrorist or something like that, besides, Bush himself can’t explain his own policies, he’s as much of a puppet as Reagan was), so therefore she supports the occupation, which will continue to be funded until every poor family’s children are dead and the basis of our human resources are as depleted as Iraq’s. (Everyone there with half a brain was executed right at the beginning, and with current estimates saying one in every three or four Iraqis has a dead family member as a result, you can’t honestly say that we’re not supporting/fueling a new generation of terrorism). Remember, the “war” was illegal, not officially endorsed as a war, not ratified, not officially declared, and based on “faulty information” that later turned out to be fabricated on speculations. Illegal means criminal and punishable by law, but no body exists to actually enforce state crimes or international war crimes. You know, who watches the watchers and all that jazz. Rumsfield may be tried in Germany under the Nuremburg statutes, but it’s not likely.
If Pelosi were to do anything that resembled (wow you have a lot of posts ducttape, are those all your own work?) independent leadership two things would happen that are largely symbolic { kind of like Skilling and Lay’s convictions were, done as symbolic measures for media appeasement – the Rico statutes weren’t even mentioned by the popular press } :
1. Hold the Bush administration accountable for criminal acts. I.E. the Downing Street Memo, a violation of unenforceable international law, “extraordinary renditions,” which were kidnappings that can only be recouped in civil lawsuits, the record number of Presidential Signing statements, sexual predatory behavior that extends to conspiracy, losing records of weapons shipped overseas, distribution of illegal bombs to Israel, the list goes on forever. I won’t even bring up the Patriot Act and its similarity to the same act used in Germany after the Reichstag fire in 1933 that directly led to Hitler’s empowerment.
2. Create an independent ethics oversight committee that has real power, complete transparency, and access to every bit of paper or information they want, when they want it.
Well, neither of these are really looking good. The financial supporters of the new congress would also be held accountable, like AT&T for complying with illegal wiretaps and compromising the safety of journalists. So, back to issue number two: the domestic economy.
The key to reversing the direction of the economy is the redistribution of wealth. ---insert screams and run like hell =) -- As the Russians learned the hard way, people don’t adapt well to dramatic changes in their environment on a large scale. To begin that process and keep people secure, we could start with your corporate tax idea. Corporations, oddly enough, have more legal rights than citizens do. A structure built purely on the premise of making money ( 5% of stockowners own about 95% of all stocks here, and they don’t even work for the company – so I think they won’t be starving in the cold with wet socks ) has more entitlement in our society than a living, breathing person. No army of lawyers will ever help me understand that. This must stop. [read Martin Horrowitz’s series on the history of corporate law to for specific legal precedents, or Howard Zinn’s people’s history of the us for a more readable version ] Corporations were originally private charters drawn up to do public works, like if a bridge needed to be built, a group of people would draw up a corporate charter, build the bridge, and then disband after being paid by the local government. The point of corporations were for the public good; to serve the public trust and benefit the community. This sort of organizing has been around since the dawn of time, and it has only been since the 1850’s or so that they embarked down the path to becoming private tyrannies with more right to the earth’s resources than the people who actually live on the land. New corporate tax revenue? Yes, but a little more extreme than just a tax on pure revenues, which is what I believe you’re talking about ducttape. Liquidate shareholder capital and force corporations to make reparations to the people they’ve stolen from, the resources they’ve stripped from the earth, and obviously, clean up the pollution they’ve created and so on. Good idea ducttape. =)
[ As an aside, I think I should qualify that I’m not critiquing capitalism, I’m talking about fixing the economy with some added benefits. We can do that in another thread if you want; I’m game. Our economy has already been developed as far as I’m concerned and pure capitalism, oh, sorry]
When we’re done with the logistics of who owes who for what, and healing the wounded corporations that survived, we can turn to the R & D projects. Since the corporations get corporate welfare for most R & D anyways, I figure that’s a moot point and we can look at international trading, which you say is at an all-time high.
This is really an interesting thread to me, there's a lot of ideas being thrown around that I hadn't thought about in context, so thanks to all. ductape - have you seen the movie "thank you for smoking?" it's hilarious, brilliant, and it kind of in a nutshell parallels my view of republican economics. There's a lot of points brought up that I don't see as relevant to the way I understand the economy as functioning. This is probably because I'm younger than you and have grown to view politics at a time when the US has the most economic/political control over the rest of the world, dictates the way other cultures develop (such as frito lay trying to introduce snack food in holland, where they don't snack), yada yada yada, yet American voters display such laziness at the polls that when political campaigns are launched, they already know their target audiences. And the "strategies" are not developed in the public arena, they're done knowing full-well that the image someone can portray to the Washington Post and New York Times is going to determine public perception, so any honest discussion of the actual issues are dropped and the media focuses exactly where the planners intended them to. There’s no such thing as a political dialectic in America, and by that I mean politics is a separate being entirely than the public’s needs, that politics does not have to really engage in communication with the public, and can set the agenda. Have you ever seen how consolidated the media is today? There’s like 5 networks that distribute most of what we regard as information, but in reality it’s more like entertainment. The main one is Fox, and the other ones stay busy trying to mimic or respond to what they did in the last hour. That’s competition for advertising dollars and it has nothing to do with distributing information. More people get their “news” this way than I thought, but we didn’t have cable at my house and we got the newspaper everyday. So my understanding of what was happening in the world was based around the headlines on the Tampa Tribune. (not on 24-hours a day).
Then one morning when I was in my second year of college, I got up to go to work, walked in, and some airplanes had crashed into those cool big-ass towers in New York City. I was on top of one of those things and still have the little pressed penny that cost me 50 cents. Man, I thought, I don’t know what to make of all this, so we left work early to go to the bar and watch what was happening. The waitress even let me openly drink beer that day because there was something everyone was focusing on -- it was really important and was affecting people’s lives. Plus, we could see it on tv so it was even more real than just hearing about it.
Well, after that it was really difficult to believe things like that happen to Americans. We’re the land of the free, home of the brave, defenders of world justice… independent in every sense of the word. I had no reason to believe otherwise: I wasn’t beaten as a child, always had food and a nice house, ect… I had no reason to be skeptical about the system I was living in, so I didn’t question the things people told me. I mean, we have separation of church and state, we can say what we want, we bear arms so the gov’t stays out of our homes and respects our will, -- why would our authority figures (church, state, media, ect..) want anything but to provide an accurate reflection of the best interpretation of reality?
So, ductape, it wasn’t until after I spent a few years in reflection ( serious drinking and mind-altering drugs =) that I decided I should go back to college. It was all too much reality for me to handle at the time, but when I did go back, it wasn’t to learn a trade, it was to try and understand. So now, the area that is native to me is being taken over by people who are done working, but have amassed more capital than everyone else and can spend only a few months here at a time. The local economy reflects that, and partly because it costs so much to take care of their health, I can’t find a job that will allow me to go see a doctor once in a while even though I’m young and relatively healthy. If I wanted to go on my own, it would cost me more than I have, and the lady who owns my house and 6 others on my block wouldn’t get her check.
I didn’t mean to get so off track with all of that, but I want to share my belief of why there might be a real recession before the 2008 election, but I also want to be honest in the process. No hard feelings ok? Good, thanks.
Unlaw- thanks for those links, the pat’s one is pretty good. I only looked at them briefly, and I think I get the jest of why in numbers it looks like the housing market could collapse at any moment. I’m not sure if I understand where you’re talking about though. Are you in southern california year-round? I was just in san fran area visiting friends. 1st time there since I was like 15. I dig the mediterranean climate, and I also know now why california produces america’s #1 cash crop – everyone I met was high. =) I think you’re right about us headed for a recession. The housing market in my opinion is only one factor as I see it. The housing market is still bound to the law of the economy, which is productivity. If we build houses like we do, they’re fundamentally based on the premise that there are people that live in them, and those people serve a function in the local economy and put their capital where it can be accessed in the market based on proximity of available resources….
Let me check out some of your threads more in detail. You can post them yourself if you want, or I will, whatever you want. (where specifically?) I like from pat’s:
“4. Extreme use of leverage. Leverage means using debt to amplify gain. Most people forget that losses get amplified as well. If a buyer puts 10% down and the house goes down 10%, he has lost 100% of his money on paper. If he has to sell due to job loss or an interest rate hike, he's bankrupt in the real world.
It's worse than that. House prices do not even have to fall to cause big losses. The cost of selling a house is 6%. On a $600,000 house, that's $36,000 lost even if prices just stay flat. So a 4% decline in housing prices bankrupts all those with 10% equity or less.”
A lot of what this guy is saying is similar to the way I understand the stock works, which by the way, I wouldn’t be investing in either unless they were in “green” buildings and technology, or sustainability. I am really interested in what you think the result of the recession is going to be.
Ok, I’m tired, but on democracynow.org today howard zinn gave an hour-long lecture to a university about understanding history, so I’ll leave ya’ll with a quote from Mary Lease, speaking at a meeting in 1890 to the populist party:
“Wall street owns the country. It is no longer a gov’t of the people, by the people, and for the people, but a gov’t of wall street, by wall street, and for wall street… our laws are the output of a system which clothes rascals in robes and honesty in rags… the politicians said we suffered from overproduction. Overproduction, when 10,000 little children… starve to death every year in the u.s. and over 100,000 shop girls in new york are forced to sell their virtue for bread,, There are thirty men in the united states whose aggregate wealth is over one and one-half billion dollars. There are half a million looking for work… we want money, land, and transportation. We want the abolition of the national banks, and we want the power to make loans direct from the gov’t. we want the accursed foreclosure system wiped out… we will stand by our homes and stay by our firesides by force if necessary, and we will not pay our debts to the loan-shark companies until the Government pays its debts to us. The people are at bay, let the bloodhounds of money who have dogged us thus far beware.”
---from people’s history of the u.s. (robber barons & rebels).
The next point is international trading, and it’s impact on the American economy, and American interests in general.
Let’s look at the countries that are closest to the US, and what are relations in trade and foreign policy are actually achieving for the current US domestic economy. In terms of natural resources, Venezuela has the largest energy reserves, comprable to those in the middle east, Mexico after them. These two countries are both in radically-changing political climates, mostly because their respective populations are demanding change from wealth consolidation, much like the US is.
Venezuela’s gov’t is labeled as being a socialist democracy. They just held their elections, and Hugo Chavez received a reportedly 60% popular vote, with negligent US intervention. The other 40% or so (ie the conservatives) ran on a similar platform (although the opposition candidate was supported by the same group that witnessed the us-backed coup in 2001, which led to chavez’s evacuation to cuba and the beginning of their alliance – their conversation is actually published online somewhere, it’s really interesting). But where Chavez is building the productive infrastructure in a state capitalist fashion, Manuel Rosales was not critical of us policies, and favored a credit system that resembles pure welfare for the poor, and would have likely ended up using american credit card profit-models. International market analysts concluded the population would rather have jobs in the long term and the election results were known a long time in advance. South and Central America in general are still trying to recover from the us attempts at bringing them “democracy,” with brought with it the “reaganomics” that worked so well. And ultimately, led to discriminatory capital development: the same type of economic mode that created the current us domestic trends – resource monopolization, unequal wealth distribution, a democracy deficit (ie a criminal state in general, which contributes to crime at the local level). It’s pretty interesting that the Venezuelan elections had a smaller % of disputed ballots per population than say, sarasota county (with 17,500 voting machines randomly audited with a paper trail that displayed the votes, not just – yup, you voted alright, it’s official) and had a much higher voter turnout. The only complaint the “a new era” party representatives had was that venezuelan authorities forced some polling centers to remain open longer than scheduled and until everyone had voted. So, it’s then fair to say that the Venezuelan gov’t is legitimate and democratically supported by the majority of the population; venez is then a “functioning democracy” by american standards and as a whole could be said to have a smaller political deficit than america’s.
Venezuela is not well-liked by the bush administration. So much so that hugo chavez was blocked by congress from giving discounted propane gas in wintertime to americans through citgo, and offering discounted gasoline to low-income families. 7-11 even went so far as to stop using citgo gasoline as their distributor in us stores, driving citgo out of the popular market. They were praised in the media for doing so. This was seen as pure racism in venezuela and chavez stopped all state relations with the us before going to the united nations. Speaking right after bush, he walked to the podium and opened his address to the world assembly by saying he could still smell the sulfur from where the devil was just standing. Well, that’s what happens when you appoint john bolton as your executive representative, he’s not approved by the senate, and you allow it anyways. Mama said there’d be days like this. It’s also illegal, and why an ethics committee…
Evo Morales in Bolivia is the same situation, and he’s also focusing on us policy that caused the flourishing of the cocaine trade (thanks nixon, wasn’t your presidency illegal, so wouldn’t the policies you set up have to be illegitimate also?). The trade terrorized people throughout the continent of america and has even led to the privatization of water in bolivia. Yeah, I don’t get it either, but it happened. Morales was actually a cocoa farmer, like Jimmy Carter was a peanut farmer. They both have a realistic understanding of the local resources and their importance in the local market; when times are tough, the health of which will ultimately determine the political landscape. (have you read carter’s new book on the israel/us – palestinian war? It’s good).
Mexico is not really aligned with the south american movement yet. ( this includes cuba. They’re all unified because of their similar results from the “free market” and us intervention, not their common visions or plans. They share doctors and other resources between themselves. Cuba even offered to send doctors to new orleans when hurricane katrina hit, but they were refused entrance to the us. I would have assumed that jeb bush could have let them come to fl and integrate with the doctors we sent up there. Ah, mel martinez, what a guy. We should only be so proud of being american. : eyes roll :
Well, anyways, the mexico authority is in chaos. The country is officially deadlocked and will be controlled by drug traffickers and those focused around NAFTA trade until further notice. There was so much ballot tampering that statisticians agree felipe calderon’s narrow win ( under 1% I think) was illegitimate. The election was ratified anyways by the mexican gov’t, maintaining party control, and protesters camped in mexico city blocking city streets, banks, tollbooths, and is now establishing their own separatist gov’t; a populist party that could easily integrate with the alignment and cooperation in south america. Last week, south american leaders met to discuss the “south america committee of nations,” a study group looking at creating a unified continent, consolidated around strengthening SA much like the European Union. I don’t know if the United States will be invited to the party. Pelosi will have to determine that, I think. : smile:
The significance here is actually your point about us exports being at record highs. The actual goods that the stock market & manufacturing industry are centered around, which are luxury goods that serve the fading populations in these countries. These are the populations that took financial advantage of us intervention ( ie foreign policy) and actually caused the backlash we’re seeing. If you look at where south american industry is inclining, it’s very transparent that the lessons the u.s. is starting to learn the hard way were taken into consideration. I think that the us economy is in very big trouble in the very near future, maybe before nov. ’08
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Post by unlawflcombatnt on Dec 20, 2006 23:24:39 GMT -6
Poligarchy,
Thanks for posting here. I'll have to read your post again before commenting further.
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Post by phantom on Jul 3, 2007 3:21:56 GMT -6
You are putting the blame on our out-of-control debt on the Republicans and I would like to explain that it is the current big-spender neocons who have driven America into a near bankruptcy. I am a Fiscal Conservative who would like nothing better than to send Bush running for his life. The problem as I see it is that we voted for candidates who represented the Christian Churchs without a thought to be given to the Constitution. Bush is certainly NOT a Christian, no matter what is said in public, or in the media. For example: He has taken the oath to uphold the constitution, and defend it from all enemies domestic and foreign?. HE IS AN ENEMY of the CONSTITUTION! (Basically I'm saying he took the oath, and ignored it. Is that Christian like? Or even worse, becoming of the PRESIDENT of the U.S.? Anyways, to continue the topic as progressed. ThePoligarchy you raise interesting points, I certainly agree on the Government being controlled by an outside monetary source, and with your assessment of Mexico.
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Post by Tim on Aug 26, 2008 8:13:06 GMT -6
Also, what has accompanied this reckless supply side phenomenon is a very slick shitstorm of highly irrational advertising designed to make you consume, consume, consume - even if you don't have the money to do so. After all, what's worse than over production, with no demand?
In the supply side scenario, the crisis of over production is averted by reckless consumer spending, encouraged by the advertising blitz engineered by psychologists.
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Post by Tim on Aug 26, 2008 8:56:56 GMT -6
Also, what has accompanied this reckless supply side phenomenon is a very slick shitstorm of highly irrational advertising designed to make you consume, consume, consume - even if you don't have the money to do so. After all, what's worse than over production, with no demand? In the supply side scenario, the crisis of over production is averted by reckless consumer spending, encouraged by the advertising blitz engineered by psychologists. Oh, and another thing ... aside from advertising, another way to avoid over production are planned obsolescence and plain shoddy manufacturing. All these things force people to buy more and more, the same things over and over again.
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Post by fredorbob on Aug 11, 2009 8:40:09 GMT -6
Supply Side was sold as Trickle Down. Actually I believe in Trickle Down economics, except it doesn't work in a "global economy."
-If a rich American is employing foreigners, then taxing the American rich won't effect American jobs.
-If a rich German is employing Americans, then whenever the German government taxes the rich Germans, American jobs are negatively effected.
"Hey, tax them, it won't effect my job." The more globalization, the more you will hear this; to the point where every single government on the planet will be taxing the rich at greater and greater rates, because hey, it doesn't effect their constituency jobs.
The Republican Party truly has become the Dumb Party. The Democratic Party may be evil, but the Republican Party is dumb. With Democrats in charge, you get taxed to death, with Republicans in charge you lose your job and the middle class disappears to "globalization". Either way your screwed, oh and the Libertarian Party isn't an option either, they are the original globalists, more hardcore free traders then the Republicans. Damn, so can't take the first, second, or third choice.
. . .
Trickle Down was also sold with the "Laffer Curve"; an inverted exponential drawing on the X-Y axis. Again another Supply Side argument I believe in.
But were still under the "Laffer Curve".
About 50-75% tax rate is the theoretical top of the "Laffer Curve".
And since the rich would prefer to employ foreigners over Americans, then the rich can enjoy sitting at the top of the "Laffer Curve" for a while.
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Post by fredorbob on Aug 11, 2009 8:44:44 GMT -6
Demand-side economics was pushed to the forefront by John Maynard Keynes. It's difficult to say whether or not he invented it, or even the term. But Keynes did describe the importance of Aggregate Demand, which had never received much consideration until he wrote about it. I always figured supply and demand went together, like peas and carrots, and there was no need to separate them. Supply and Demand should get together, hold hands, and sing kumbaya.
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Post by doctorfungcool on Sept 19, 2009 18:11:35 GMT -6
LC, Clearly many factors contributed to our prosperity and growth of our economy. My point regarding Demand-Side economics wasn't so much it was responsible for our prosperity, but more that the prosperity occurred while practicing Demand-Side economics. Demand-Side economics was more an enabler of that prosperity rather than a "cause" per se. In contrast, supply-side theories have set us back.
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Post by fredorbob on Oct 16, 2009 7:11:12 GMT -6
These damn neocon bastards are proud that the, "$30 an hour manufacturing jobs are unsustainable." I think those bastard sons of bitches enjoy it.
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