The self-described socialist senator from Vermont, Bernard Sanders, is prematurely declaring the teachings of Milton Friedman dead in the fringe publication, In These Times. Many dim bulbs on Capitol Hill think the same way as Sanders does, so if only for that reason it's worthwhile to see what he's thinking.
The senator's beliefs are not merely misguided but evil and profoundly un-American. He and his fellow travellers on the Hill and in the media routinely lie and distort the history and function of markets in this country. Never does it occur to them that government, because it set the rules of the road and provided incentives for perverse behavior, is a primary cause of the current temporary economic downturn. Instead they are adherents of an imported ideology that tolerates no dissent and crushes all freedom. Take this Sanders statement:
My colleagues in the Senate and I are now picking up the pieces of a banking system brought to the edge of collapse by this theory of deregulation and by the insatiable greed of a small number of wealthy financiers playing in the market and engaging in incredibly risky-if not illegal-behavior.
Which deregulation would he, as Congress enslaves future generations by running up debts in the trillions of dollars, be referring to? Sarbanes-Oxley? The Community Reinvestment Act? Ask these people for specifics and you consistently get stammering evasions. Sanders and those like him are just trotting out the same lies that one of America's worst presidents ever, Franklin Delano Roosevelt, used in the 1930s to vilify the market after government intervention helped to push it over the edge.
The Truth about taxes
Stimulus: President Obama, a smart man, says that tax cuts for the wealthy are the main reason we're now in such economic trouble. Someone needs to tell him how utterly - and dangerously - wrong that is.
"We have tried that strategy time and time again," the president said Monday of "tax cuts for the wealthiest few Americans," and "it's only helped lead us to the crisis we face right now."
Well, he's half-right: We have tried it again and again. But rather than create crises, economic growth has been restored. The evidence is pretty much beyond dispute. Since World War I - the start of the modern financial era - we've suffered four major downturns. In three of them, the government cut tax rates. And each time an economic boom ensued. In only one did the government respond by raising taxes, erecting trade barriers and enacting massive new spending programs to get out of the slump. Today, we call that time the Great Depression.
As noted in a recent study by UCLA economists Harold Cole and Lee Ohanian, President Roosevelt's efforts at government direction of the economy likely extended the Depression by seven years. As history shows, lower taxes, not more government, work best:
The 1920s: When the income tax was established in 1913, the rate was 7%. But it quickly soared, especially for the rich, and by 1918 the top rate was 77%. Unfortunately, coming out of the war the economy was a mess, with prices falling, unemployment soaring and nominal GDP dropping by more than 15% in just one year. From 1921 to 1925, under Presidents Harding and Coolidge, tax rates were slashed to 25%, and GDP rose at an annual rate of 3.4% in the four years after the tax cuts vs. 2% before. All told, GDP swelled more than 50% during the 1920s.
All this was undone, however, on a bipartisan basis - first by President Hoover, a Republican, then by the Democrat FDR. Hoover boosted the top income tax rate to 63%. Then, FDR took it to 79%, while also doubling the corporate tax to 24%, imposing a Social Security tax of 2% and raising taxes on stocks and dividends, estates, and "excess" profits. Is it any wonder the economy went nowhere in the 1930s?
The 1960s: President Kennedy, a Democrat, believed strongly that lower taxes meant higher growth, and he was soon proven right. Before he was assassinated, JFK proposed cutting top tax rates from a punitive 91% to 70%. In 1965, his cuts were enacted under President Johnson by a Democratic Congress. Once again, growth took off, along with private investment. Real GNP, which averaged just 2.4% from 1952 to 1960, expanded at 4.5% during the '60s. The expansion that began in 1961 and ended in 1970 was, at the time, the longest ever.
The 1980s: President Reagan took over an economy with a 21% prime interest rate, double-digit unemployment and inflation, slowing productivity and flagging economic growth. But he too was a big tax cutter. His 25% across-the-board rate cuts snapped the economy out of its funk, creating the longest peacetime expansion ever at the time. During Reagan's two terms real GDP growth averaged 3.2% compared with 2.8% in the preceding eight years. After stagnating through most of the 1970s, real median family income grew $4,000 under Reagan. Investment boomed, as did the stock market, business creation and innovation. Some 20 million new jobs were created, due to the increased incentives to work, save and invest resulting from lower tax rates.
We all want our new president to succeed. But to do so, he needs to drop the class-warfare rhetoric on taxes and cut them instead. Like Coolidge. Like Kennedy. Like Reagan.
The Mysterious Disappearing Tax Cuts in Stimulus Bill : "We have all heard about the debate regarding the percentage of the Obama Stimulus Bill that is tax cuts as opposed to expenditures. Originally, there was discussion that it should be up to 40% of the total of the bill. There were arguments because it had slipped to 33%. In the final package, I don't see much at all in the way of real cuts -- certainly not tax cuts that will stimulate the economy in the near future... For individuals, a large portion of the tax savings is a one-year correction to the tax code to limit tax hitting about 70 million Americans with the Alternative Minimum Tax (AMT). Allowing for the fact that only one person in a back office on the fifth floor of a very large building in Washington actually understands the AMT, how are these 70 million Americans going to know that they saved taxes from a tax they never knew existed? How are they going to quantify how much they are saving? Even if they could figure out what they are saving are they now going to go out and spend this mystery savings? Even if they knew about these savings, they would not happen until March or April 2010. So much for this "tax cut" being a stimulus.
The Left as a Mafia: "Members of the Mafia have to take a vow of silence, and if they break it, they face the very real possibility of winding up dead. Liberals have their own version of the vow. However, instead of having to keep quiet about murder, drug deals and extortion, they must promise not to ridicule their own kind. The price of breaking the code isn't death, it's something far more serious; namely, exile from their social circle. Dare to make fun of Joe Biden's statement that in 1929, President Roosevelt went on TV to reassure his fellow Americans about the Depression, and don't expect to be invited to write for the Huffington Post. Dare to laugh at Nancy Pelosi's contention that 500 million Americans are losing their jobs every month, and you can forget about being invited to brunch at Streisand's or to pitch a movie idea to Tom Hanks or Steven Spielberg. Believe me, for some people, that's a far worse fate than swimming with the fishes. When you remember what a big deal the press and the late night jokesters made out of Dan Quayle's merely misspelling "potato," you get some idea of what partisan hypocrites these people are."
Helping people to see Muslims in a better light: "Orchard Park police are investigating a particularly gruesome killing, the beheading of a woman, after her husband - an influential member of the local Muslim community - reported her death to police Thursday. Police identified the victim as Aasiya Z. Hassan, 37. Detectives have charged her husband, Muzzammil Hassan, 44, with second-degree murder. "He came to the police station at 6:20 p.m. [Thursday] and told us that she was dead," Orchard Park Police Chief Andrew Benz said late this morning. Muzzammil Hassan told police that his wife was at his business, Bridges TV, on Thorn Avenue in the village. Officers went to that location and discovered her body. Muzzammil Hassan is the founder and chief executive officer of Bridges TV, which he launched in 2004, amid hopes that it would help portray Muslims in a more positive light.
Israel: No truce unless soldier freed : "Israel said yesterday that it would not agree to a long-term truce with the Hamas rulers of the Gaza Strip unless an Israeli soldier held by the Islamists was freed. Full opening of the Gaza border crossings has been a Hamas condition for a truce. Israel linked that demand with the release of Gilad Shalit, held captive in Gaza since 2006, when he was kidnapped in a cross-border raid. `The prime minister's position is that Israel will not reach understandings on a truce before the release of Gilad Shalit,' Prime Minister Ehud Olmert's office said in a statement. Palestinian officials had reported significant headway in the indirect talks mediated by Egypt."
For more postings from me, see TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH, POLITICAL CORRECTNESS WATCH, GUN WATCH, SOCIALIZED MEDICINE, FOOD & HEALTH SKEPTIC, AUSTRALIAN POLITICS, IMMIGRATION WATCH INTERNATIONAL, EYE ON BRITAIN and Paralipomena
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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)