The Bush Economy
Tempest
By Justin Hill
http://www.democraticunderground.com/articles/03/04/29_economy.html
Americans have finally stood up against President George W. Bush's
failed revival of trickle-down economics. Last week, the Senate denied
Bush his plutocrat-tilted tax plan for a scaled down version aimed at
immediate economic stimulus.
Chairman of the Federal Reserve Board Alan Greenspan, in speaking out
against the dividend tax cut, could have delivered the prophetic kiss of
death in early February when he doubted the stimulative effects of
Bush's dividend tax elimination, according to CNNMoney. Americans and
some courageous congressmen on both sides of the aisle have joined
Greenspan in declaring that a time of war, nation building and
ballooning deficits is not the time to push a large, questionable and
heavily slanted tax cut on the United States.
Bush came into office with a stalled economy and claimed to hold the key
to its revival with his $1.8 trillion tax cut. Granted, Bush inherited
the tail end of a slightly inflated economic boom, but the current state
of the economy is inexcusable.
According to the Bureau of Labor Statistics, since Bush took office,
unemployment has risen 43 percent, 2.7 million people have become
unemployed with 2.4 million coming from the private sector and the
Clinton legacy 4.2 percent unemployment rate has gone up to 5.8 percent.
Bush is actually the only president to post an average monthly job loss
since the Bureau began keeping statistics in 1939. No longer can he pin
the blame on Clinton. His tax cuts have been in place for more than two
years, and America is still in an economic recession.
Since jobs do not wholly represent the health of the economy, one might
look at the stock market since more than half of the United States is
now invested. The Wall Street Journal reported that investors have lost
$2.8 trillion since Bush's inauguration and the Dow, S&P 500 and Nasdaq
have all fallen more than 15 percentage points. Along with jobs and the
stock market in the toilet, America's federal deficit is in the red for
the first time since 1997 while the Bush administration condescendingly
refers to Rubinomics as baseless and ineffective.
Bush has proven many things since taking office. He has proven that he
is not as inept as many believed. He proved he could console and lead
the country after a tragedy. He has shown great political skill and has
easily installed many aspects of his agenda for the United States, all
with a closely divided Congress. Currently, he is proving that he can
proceed down a road of foreign policy that is divisive and exploratory
at best. He has also proven he cannot responsibly steer the economy into
growth and progress.
Former President George Bush earned a superior resume and a longer list
of accomplishments than his son throughout his career but found out
quickly that a failing economy is the albatross on the neck of a
floundering president. Bush used his pseudo-mandate of election in 2000
to push his massive tax cuts, which were overwhelmingly tilted to the
hyper-rich to avoid a one-term presidency. Those tax cuts have put
Americans deeper in debt and economic stimulation is still unseen.
The current White House has proven its incompetence in maintaining a
healthy economy and has chosen to pursue an agenda to help its donors
and corporate bedpartners. The talk of short-term stimulus has obviously
not been the practical aim of the administration. The reduction of the
burden on the working class has been overlooked. It has chosen to focus
tax adjustments on the upper brackets of the U.S. progressive tax system
while overlooking the most regressive tax in the United States, the
payroll tax.
The Bush economic plan centers on corporate welfare, tax rebates to the
richest 1 percent of Americans and corporate investor incentives in a
blurred quest for economic stimulation. Bush is still advocating what
his father referred to as "voodoo economics." One could argue that it
succeeded under Reagan, although the wealth distribution under Reagan
was so skewed it resembled the early 1900s wealth stratification.
Furthermore, Bush is reigning in a new era of corporate excesses by
allowing corporate and industry executives to completely govern
themselves. Corporations are given discretion over their polluting and
pollution controls, labor unions have stricter financial disclosure
rules than corporations such as Enron, and America's energy plan now
includes controlling the oil resources of other countries in "trust."
U.S. priorities have faded and America's direction is sketchy. No matter
what ideology one claims, the United States is in dire need of an
economic jump-start that confronts corporate crime, workers rights and
the environment. So far this administration has succeeded in cloaking
the issues most Americans hold paramount in war and a constant state of
fear. It might be time for the administration to swallow its pride and
start tackling the burgeoning deficit and disappearing middle class
because its tax cuts have proven they are not the paths to economic
prosperity.
--
"To announce that there must be no criticism of the president, or that
we are to stand by the president right or wrong, is not only unpatriotic
and servile, but is morally treasonable to the American public."
Teddy Roosevelt
Rober...@yahoogroups.com
> From: Tempest <tem...@hotmail.com>
Before I reply, let me issue this caveat: I found this article via a
keyword search on Google. I don't think Bush has done so bad overall
that he should be impeached, as might be mistakenly implied by my
posting to this newsgroup. It's just that I'm in much agreement with
this individual article and wish to offer my comments about it.
{{Americans have finally stood up against President George W. Bush's
failed revival of trickle-down economics.}}
That's one small bit of good news, but Bush was pushing the trickle
down plan again today in his speech in Santa Clara, sigh. I think the
right thing to do is the trickle-up plan started by FDR with the WPA,
which Grorge McGovern tried to revive in a new format in 1972, and
which I proposed reviving in an even newer format the past several
years. The basic idea is that our government should make sure that
*every* citizen and resident alien with work permit gets a job that
pays a living wage, and then all these people would be able to buy
products and services that make business boom. Business success should
be based on providing products and services to more people, not on
making more profit from fewer customers while the rest of the people
don't have enough money to make ends meet.
{{Since jobs do not wholly represent the health of the economy, one
might look at the stock market}}
If you mean watch the price of stocks rise and fall, I don't think
that's a good measure of the economy, because much of the price is
based on speculation and hype, and as Bush said today "pie in sky
projections", rather than on actual productivity and profit. If you
look *only* at dividends from stock, that would be a better measure
than market price. How about looking at dividends per unit price of
stock, which actually measures counter to inflated stock prices?
(Divide the total amount of all dividends on all stock during a
quarter, by the total price of all the stock shares at the start of
that quarter, to compute the average quarterly rate of return per unit
investment.)
{{investors have lost $2.8 trillion since Bush's inauguration and the
Dow, S&P 500 and Nasdaq have all fallen more than 15 percentage
points.}}
That's bad logic. If you buy stock for more than it's really worth, and
then the stock price drops and you can't get back your original
investment much less sell at a profit, you *already* lost your money
when you bought it at too-high a price, you don't lose money when you
finally realize your mistake and try to sell it and must accept the
lower price. People lost money when they purchased stock in the late
1990's based on inflated "pie in sky" projections, when the price of
that stock had already been run up by such speculations, and they were
hoping to find some even stupider sucker to sell at an even higher
price later. If they had found such a sucker to buy them out before the
price collapsed, they would have made a profit, but not on a good
economy, merely on a P. T. Barnum type of scam. The fact they didn't
find a new sucker to buy them out, didn't cause them to finally lose
money, but caused them to finally realize the loss they had already
made years before when they purchased the price-inflated stock. When
you place a gamble, when you buy a lottery ticket or stick a quarter in
a slot machine, you lose your money at that moment, not later when you
don't win. The same applies when you buy price-inflated stock, hoping
it'll turn out good, when really you had no such expectation.
So those investors really lost their money during the .COM boom when
they indiscriminately bought anything high-tech without considering its
individual merits, and especially when they bought a stock just because
they saw its price rising already! They only *thought* they were
getting richer as the speculative price of their stock kept rising
further, and then only *thought* they suddenly lost that money when the
price went back down. They never had that profit in the first place,
and they already lost their ininitial investment the day they purchased
the price-inflated stock.
{{Bush has proven many things since taking office. He has proven that
he is not as inept as many believed. He proved he could console and
lead the country after a tragedy.}}
Indeed! Also he impressed me very much when he went out of his way on
many occasions to emphasize that we aren't against people of a
particular religion (Islam), nor people of a particular ethnic or
raciol group or who live in particular nations (Arabic,
middle-Eastern). We're against only those very few people, some of
other ethnic and religious groups, who engage in or support terrorism.
{{He has also proven he cannot responsibly steer the economy into
growth and progress.}}
Yes, that's his bad side. i wish he'd switch from trickle-down
Reagonomics to trickle-up FDR/McGovern/Maas economics. (My plan is to
make great use of the InterNet to coordinate/organize/supervise the
21st century version of the WPA, and to allow much
information-processing work to be performed over the InterNet. The
"paperless society" would allow virtually all former paperwork such as
accounting to be done over the InterNet. A combination of neighborhood
work centers (with live supervisors) for people who can't be trusted to
work from home, and with live tutors for some trainees who need such
face to face tutoring, and keystroke monitoring and productivity
monitoring for those more trustworthy to work from home, would assure
that nobody is just sitting like Homer Simpson pretending to work and
getting paid for not really working. The McGovern/Maas InterNet-WPA
would reduce the desperation that leads to crime, and reduce the need
to commute long distances to work, saving money on both prisons and
imported petroleum.)
{{"To announce that there must be no criticism of the president, or
that we are to stand by the president right or wrong, is not only
unpatriotic and servile, but is morally treasonable to the American
public." Teddy Roosevelt}}
Did he say that while he was President, which would have been quite
honorable, or did he say that before he became President, when he was
trying to replace the incombant, which would have been self-serving.
Now for the event which prompted me to go online and search Google for
an appropriate place to post: I caught the last part of Bush's speech
in Santa Clara this morning. He proposed something I agreed with,
reducing the double tax on dividends, but his argument for it was
totally bogus, namely because "it's unfair". Well, that's a f***ing
matter of personal opinion what tax is fair and what tax isn't. Such an
argument has no value, in my opinion. Rich people think a tax on rich
people is unfair. Poor people think a tax on poor people is unfair.
Unemployed people think that unemployment itself is a hidden tax which
is unfair on them. Who's to say which opinin is better?? He completely
missed the point that dividends favor actual profit whereas re-selling
stock to another sucker at a higher price favors speculation based on
hype and P. T. Barnum huxterism.
Then the next minute he surprised me!! He mentionned how the .COM boom
was based on speculation based on "pie in sky" projections, not on
actual profit. He mentionned how you can say anything you want in a
projection, and it doesn't have to be based on actual profit, but you
can't pay stock dividends unless you have actual cashflow to fund it.
So he really does understand that, apparently! Wow! IS'S ABOUT TIME!!
So here's my tax proposal: We decrease tax on dividends, to encourage
distribution of actual profits, and increase capital gains tax, in fact
we treat them as totally-taxable unearned income, no deductions
whatsoever allowed on such income, and taxed at the highest rate. These
two changes in tax revenue would cancel to result in no change in total
tax revenue, to avoid going deeper into deficit, but as policy changes
they would add to push investors away from speculation and pull toward
getting income from actual profit instead.