Friday, January 16, 2009

Supply/Demand???....Don't you believe it!

Did you believe that the $147 a barrel price of oil last July was because of Supply and Demand?

Don't believe it.

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Friday, January 9, 2009

"Laffer-ing" all the way to ruin..or...how voodoo economics has lead this country to disaster

In 1980 George H. W. Bush, while running against Ronald Reagan in the presidential primaries, referred to supply side economics as "voodoo economics". (he changed his mind, of course once accepting the VP nod from Reagan)

He was right....and over 28 years, this kind of economics has led us to ruin as a nation.

But what most people fail to see is that the folks that thought this up, (Arthur Laffer, Jude Wanniski, Grover Norquist, David Stockman, ) didn't just want to cut taxes, they also wanted to gain votes for more political power and that meant that they also had to increase government spending.

Wait a minute....Republicans increasing spending???? I can hear Sarah Palin now, "Say it ain't so, Joe!" But it's true.

That's where we come to the 2 Santa Claus Theory. Traditional conservatives believed in less taxes and LESS spending, and balanced budgets. However, in the 70's, this was seen by some cons as the path to being in the minority party forever. These folks believed that it was government spending that rallied voter support for the dems, so, let's see....why not cut taxes AND increase spending!! Yeah, that will cause voters to like us AND we can still move towards Norquists goal of -

"I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub."

But, under Reagan, weren't we were told that by cutting taxes, tax revenues would GO UP??? Yeah, we were told a lie....click HERE to see that tax revenues did NOT go up, they went DOWN under Reagan. That's why he left office with a HUGE national debt. (Remember, Reagan said deficits don't matter) So, cut taxes and raise spending...that will cause massive deficits and therefore it will "starve the beast" (destroy the federal government). Which is exactly what folks like Norquist want to happen.

Well, here we are 28 years later, 12 trillion dollars in debt, negative personal savings, double digit unemployment/under employment, no manufacturing base, almost no unions, 47 million without health care, trillions spent in Iraq and Afghanistan.....WAKE UP AMERICANS!!!

Norquist is drooling.....

It's time to bring back what worked from 1935 to 1980....

  • strong unions (pass the Employee Free Choice Act)
  • a trade policy that protects (yes, i said protects) our manufacturing jobs...let's start making stuff again
  • do away with the Bush tax cuts on the wealthy, or better yet, roll back the Reagan tax cuts on the wealthy
  • update regulation to 21st century technology standards
  • have a single payer health insurance policy (how about everyone can buy into MEDICARE)
  • increase the minimum wage to a LIVING wage
  • FREE higher education for anyone that qualifies

It's time! Here's a nice article on why supply side economics didn't work!