J. Brad Hicks (bradhicks) wrote,
J. Brad Hicks
bradhicks

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Job Killing High Taxes? Or Job Killing Low Demand?

Tonight, and in every speech I've heard him give in the last couple of months, Senator Barack Obama called Tuesday's election a referendum on 8 years of failed policies. I think that it's been more than 8 years. I think that next Tuesday's election is a stark choice, the clearest choice we as American people have been asked to make, not in 8 years, but in 28 years. Twenty eight years ago, the second weakest, second stupidest American president of my entire lifetime, someone whose legacy of failure in every way rivals George W. Bush's, Jimmy Carter, was left to be the one to make the case for one of two competing ideas. In the hands of one of the most gifted orators of my time was the other competing idea. And in troubled times, in the aftermath of four years of horrific incompetence that themselves followed over a decade of general incompetence at the hands of Presidents Johnson and Nixon and the do-nothing caretaker presidency of Gerald Ford, the American people chose, not entirely irrationally, to turn their back on the economic policies and social policies that had once saved the United States from the Great Depression and saved the world from fascism. They concluded that however good or necessary those ideas may have been for their times, they were costing us too much, they were leading to their own problems that had the potential to cripple the United States. They voted to turn America to a new course.

Much of what passed for "new" was, of course, no such thing. We call the economics of low to no taxation, of little or no government regulation of work or business, of little or no protection for the poor and the powerless after its French name, laissez-faire, because it got its first serious hearing as a proposed governmental policy after a meeting between French businessmen and the French monarchy in 1680, and had its first wide-scale trial when it was adopted by the French monarchy in 1750. In less than thirty years, the original laissez-faire resulted in mass starvation, lead to the rise of the largest-scale anarchist and communist movements in western European history, and eventually brought about the rioting, terrorism, and wholesale brutal revolutionary slaughter of the French Revolution followed by Napoleonic military dictatorship. Nevertheless, less than a hundred years later, we chose to try it again in the United States, believing that the "new economy" productivity innovations of steam technology and the assembly line, global instantaneous communications via telegraph, and a nation-wide open market through the deployment of the railroads, combined with our Puritan cultural ancestry, would lead to a different outcome. It didn't, and perhaps only the assassin's bullet that took out Huey Long saved the country from anarcho-communist revolution long enough for President Franklin Roosevelt to save us all, to save freedom, to save democracy, and yes, to save the capitalist free market. But that's hindsight talking. 1979 and 1980 were very dark days in America; people wanted change. And they got it. Vox populi, vox Dei, or as H.L. Mencken famously put it, "the common people know what they want and deserve to get it, good and hard."

In 1980 "change" went by a name, and that name was Supply-Side Economics. The argument for supply-side economics goes something like this: salaries come from jobs, and jobs come from companies, and therefore no job or salary can be secure, or prosperous, unless we have secure and prosperous companies. And there is nothing in the democratic process, nothing about getting elected or appointed to political office, that demonstrates that you understand what it takes to make a prosperous company; the only people in America who've demonstrated that they know what the needs of prosperous companies are are, obviously, the people who run currently-prosperous companies. And those leaders of prosperous businesses told us, and told the government, that they needed three things. They said they needed total repeal of all taxes on big, successful businesses, or as close to zero as could be achieved. They said they needed total repeal of all taxes on high salaries, and especially on the profits from stock market investments, while taxing everything else, so there would be huge tax incentives for people who had any money to make that money available, via the stock market, to successful businesses in order to invest that money in growing their operations and hiring more and better people. And finally, they also said that they needed an end to all government interference in business operations: no more worker safety or product safety or environmental safety regulation, no more anti-fraud consumer protection laws, no minimum wage or collective bargaining protection laws, nothing. They said that if we gave them those three things, American businesses would naturally, automatically, as a result of inescapable economic and natural law, be better able to hire more Americans and pay them better wages, and naturally inclined to do so.

And they, and the people they persuaded of these things, and especially the few people who profited handsomely from these changes, still believe this, and you can hear the proof on every radio station and on every TV station in America these last two weeks. Almost every single local or statewide Republican campaign has warned that electing even one single Democrat to even the lowest-level local or statewide office means one thing: "job-killing taxes." "Job-killing taxes." "Job-killing taxes" over and over again is almost their only mantra, the only case they have to offer to explain why we should continue to support right-wing Democrats in our Democratic Party primaries, and even if we do that we should then go on to vote for the further-right Republican Party candidate anyway, to protect us from "job-killing taxes." But where are all the jobs that were killed by taxes? Which jobs are those? Yes, American jobs have gone overseas. But we've lost almost as many jobs to countries that charge much, much higher taxes to their corporations and to their wealthy than Americans would ever tolerate, software jobs to Ireland and India, electronics jobs to Finland and Germany, aerospace jobs to England and France. The fact of the matter is that jobs go overseas for lots of reasons. Sometimes it's to be closer to raw materials. Sometimes it's because other nation's governments are far, far more corrupt than ours, allowing companies to use slave labor, adulterate products, and poison the countryside for hundreds of miles in every direction. Not infrequently, it's the money from the huge tax breaks we gave those corporations that paid the moving expenses of those jobs; giving companies "more money to invest" gave us no guarantee whatsoever they would invest that money here at home. And quite frequently, companies moved overseas in order to be nearer to customers; if the Chinese need, numerically, a lot more refrigerators and automobiles than we do, then it makes a certain amount of economic sense for refrigerator makers and auto makers to be building factories in China. On the other hand, not since the Beatles left England has anybody shown me even one single job that left America or any other country just to get lower tax rates.

But the economic collapse of a few weeks ago wasn't sparked by any rise in taxes. Nor was it solely, or even largely, caused by spiking prices of raw materials or energy; the huge spike in oil and fuel prices preceded the widespread failures of our economic system by months. We cannot tax-cut our way out of this. We cannot oil-drill our way out of this. So what was it that happened all at once, about a month ago, that threatens us with the possibility of cascading bank failures wiping out our checking accounts and our savings accounts, that threatens us with businesses having to close their doors and mass unemployment, that threatens us with runaway inflation if the government has to run the printing presses cranking out worthless pseudo-dollars to try to fix these things in a terrifying hurry? The American consumers closed their wallets. Mostly it was because the foreclosure crisis, when Americans stuck with "teaser-rate" loans found that they'd been lied to when they were promised they could refinance out of them when the rate reset, got so bad that even Americans who hadn't been personally affected by it began to panic. We also had a brief spike in the price of gasoline, and that scared even more Americans into closing their wallets. Why was it a crisis when, for as brief a time period as a month and a half or two months, American people became suddenly thrifty? I'll tell you why.

It doesn't matter how much investment money is available. It doesn't matter how low you make the taxes on businesses or on wealthy investors. It doesn't even matter how many overt government subsidies you give to big businesses. It doesn't make any sense for any business, anywhere in the world, to pay someone to make products unless there's someone out there who can afford to buy them. And over the twenty eight years since the election of Ronald Reagan, American businesses have cut wages, relative to inflation, in good times and in bad times, almost every single year. And with every increase in productivity due to better technology, they've laid off more of the workers who might have bought their products, instead of using that productivity to make more affordable products and more products and hiring more future customers with the profits. Americans tried to do their "patriotic duty" to the world economy, they succumbed to the lie (that they should never have been allowed to be told) that it was safe and smart to draw down their home equity to increase the debt limit on their credit cards, by paying them down with home equity and then maxing them out again "because house prices can only go up." Been in a restaurant lately, or a clothing store, or on a car lot? Now there's no one left to buy anything. So who will hire them to make it? Not just here in America, either; since that tap of easy (but, truly, unaffordable and unsustainable and fraudulent) credit has dried up, there've been mass layoffs in all the places those jobs went to, too, including China.

And so, next Tuesday, the choice really is clear. One candidate, whatever his other disagreements with his own Republican Party, had made it unambiguously clear for months now that whatever else he does or doesn't believe, he, John McCain, still believes in supply-side economics. In a world where even Alan Greenspan is having a crisis of conscience, questioning the wisdom he learned at his famous cult leader's knee back when he was one of Ayn Rand's personal hand-picked inner-circle disciples, after imposing her cult of Objectivism on us as a world-wide economic dogma, John McCain is one of a dying breed for still drinking the supply-side Flavor-Aid, and that's why he's almost certainly going to lose. But if you still agree with him that what the American economy needs, and the economy of the whole world needs, is more deregulation, less worker protection, less environmental protection, less anti-fraud and product safety regulation, and above all more tax cuts for big businesses and wealthy investors? If you still believe those things, then you absolutely need to go out next Tuesday, if you haven't done so already via early voting, and vote for John McCain. Even if you live in a state that John McCain can't possibly win, run up the losing vote as much as you can, because both parties will be looking at those vote tallies when they pick candidates in later election cycles. They want to know what you really believe, they're judging by the final election numbers county by county, and if you still believe in supply-side economics in a world where it sure looks like your belief is going out of style, this is the only way for you and the people who still agree with you to prove that you're still out there.

If, on the other hand, you're willing to consider some "demand-side economics"? Not even a whole-hog remake of the US economic system but at least a few measures aimed at improving the ability of the American worker, of the American college student, of the American retiree, to afford the necessities of life? If you're at least questioning the claim that was made to us, back in the 1970s and ever since, that paying American workers enough money to actually pay their bills on time without maxing out their credit cards "must" result in lost jobs and runaway inflation, if you're willing to consider trying some experiments to find out if it's possible to save the American Dream, possible to pay people enough that they can save up some money for their retirement and for their kids' education without destroying the economy? If you're coming around to the possibility that maybe the way to protect those people's wages from runaway inflation is for the government to raise some of those wildly cut taxes on the wealthy back up to where they were so that the government doesn't have to borrow so much, since we didn't get any benefit out of those tax cuts anyway? Then you need to go out next Tuesday, even if you live in a state that Barack Obama can not possible carry, and vote for the man who is willing to consider both supply-side and demand-side measures, the man with the deepest commitment in an entire generation to looking at evidence to see what works, so that even if in your home state you lose, the whole world sees how many Americans are no longer blindly and dogmatically bound to the ideas of laissez-faire and supply-side tax-cut economics. And if they try to stop you from voting or trick you into taking a likely-to-be-thrown-away provisional ballot, you need to keep trying to actually vote, go down to the election board office and fight for your right to vote even if it takes you all day, because the stakes in this argument really are that high.

Either way, if you are an American citizen and legally allowed to vote, vote next Tuesday, and do so knowing, as no American has known since 28 years ago, that there is a clear and important difference between the two candidates, that you are being asked which of two competing ideas of what is right for America you prefer, and that if you clearly prefer one of those two ideas to the other, you absolutely can know which candidate you prefer.
Tags: economy, election 2008, politics
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