On August 14, I had to turn off "Morning Joe" in anger as I watched Chris Matthews and Gene Robinson (among others) sit silently while Joe Scarborough ranted and raved typical Republican supply-side nonsense about the economy. Democrats are NOT going to win the economic debates (nor will the world economy recover) until the dominance of Ronald Reagan's "supply-side" fantasies is vanquished, once and for all.
Basically, Scarborough's rant attacked Democrats' presumably desired taxation of rich folks and union preferences and "Obama-care" as creating fear and uncertainty among the various "job-creators" out there who, BUT FOR the onerous future risks of higher taxes and employment costs, would magically start hiring all those folks either unemployed or doing part-time work to come back to full-time jobs that are just idling in some sort of economic "Purgatory," just waiting to be filled when said onerous future risks are demolished by Mitt Romney (buttressed by the laser-focused views of Paul Ryan) and thus resolved in favor of said "job-creators." This fear and uncertainty is, of course, magnified and emboldened by all those "lame-stream journalists" out there who are OBVIOUSLY liberal and OBVIOUSLY Democrats and who favor Obama's tax-and-spend philosophies.
I think that is a fair assessment of Scarborough's positions as he laid them out this morning, and I assume that many (if not most) Republicans embrace those views.
So, as someone else has already asked, if the "supply-side" approach of lower taxes on "job-creators" and other wealthier folks works, then what happened to all the jobs that should have magically appeared after income taxes (but not payroll taxes) were ridiculously cut in 2001 by pernicious Republicans and spineless Democrats? Before he died, Steve Jobs famously told Barack Obama that all those manufacturing jobs that had migrated to the Third World during the previous 20 years were simply NOT coming back, and to get over it! Jobs was right, and the simple facts are that the US economy is going to have to reinvent itself away from traditional manufacturing. When Chrysler and GM were bailed out to avoid bankruptcy, Democrats (including Obama) crowed that the assembly-line jobs were being saved. Perhaps so, in the short run, but what was REALLY saved in the long run were the aggregate investment of shareholders and bankers and the white-collar jobs of senior management. IF there were consumers who desired American-built cars and would buy them if available, then those assembly-line workers would have EVENTUALLY found employment elsewhere, to satisfy whatever DEMAND there was for such automobiles. The shareholders, lenders and managers of Chrysler and GM may have been devastated by a lack of government bail-out of those companies, but the workers would have found whatever work there was to satisfy whatever demand was to be had. I think the wrong interests were saved by those Democrat-approved bail-outs.
THERE IS NO SUCH THING AS A "SUPPLY-SIDE" MARKET! Why are we STILL debating this crap 24 years after Ronald Reagan left office? Even David Stockman, Reagan's OMB Director who invented the concept of "supply-side," now admits it was a fabricated bunch of hooey. All markets are demand-driven--that is, there is no market for sellers or manufacturers of goods or services unless there is a demand for whatever. And, unless ordinary people have spending money in their pockets, there won't be any DEMAND in the marketplace! Why is something so seemingly simple so hard for politicians to embrace? Giving the fewer upper-income folks more spending money than they already have is not going to recover ANY market! The largesse must be spread among a greater number of consumers. Ideally, they would have more spending money if they had more jobs, but the jobs simply are not there. Joe Scarborough is wrong. "Job-creators" don't have jobs to magically create unless and until somebody wants to buy their stuff. And, if the jobs are not (yet) available, then the spending money is going to HAVE to come from the government. It will patently not "trickle down" as chump-change from the overflowing pockets of the lower-taxed wealthy.
Why are we still debating these points? Why don't Democrats quit trying to embrace "supply-side" and look at markets as they really exist? Because, Democrats instinctively distrust market philosophy and simply don't bother to master it, when it can work in favor of Democrats' presumed objectives. Despite the compelling logic, they are simply too ignorant (or corrupt) to effectively defend their own positions.
Most Republicans just fabricate market "witchcraft" to suit their predispositions to cut income taxes on wealthier folks (who, unlike workers, do not pay much in payroll taxes). At least Republicans serve their wealthier constituency consistently and effectively. Democrats, the alleged "Party of the People," are mostly clueless. Like Barack Obama, they have bought into the line that cutting taxes (despite the military-driven deficits) will produce prosperity, so they advocate continued overseas imperialism and keeping taxes lower for those earning up to $250.000, while HALF of all American households gross less than $50,000 annually! To be sure, many in the lower half don't vote, so they have only themselves to blame, but those are facts. They can't be bothered to vote their own interests because NEITHER major political party is focused on those interests. Democrats are chasing big bucks like Republicans, and the ordinary folks can just go suck eggs!
The single greatest consumption engine the world has ever seen, the Baby Boomers, are aging, and our consumption is drying up. Most of us born before 1960 have bought our last piece of real estate and perhaps our last new vehicle, washing machine, refrigerator, whatever. Who is going to replace us? The world economy is in the toilet substantially because the Baby Boomers are cutting back. The much-lamented feeble savings rate will likely start to rise again as Boomers get older and more paranoid about the future, like their elders have done throughout the ages. Where has all that buying power gone? They can't sell enough disposable diapers to recover the world economy!
Politicians, economists, pundits, voters, all need to think about consumption and demand, not supply, especially in the US. As working-class buying power continues to shrink, so shall US wallets.
