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Voodoo economics & bad math
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Pelle Svanslös
Apr 29, 2017, 7:07:40 AM4/29/17
to
Mr. Trump sold himself to voters as unorthodox as well as effective. He
was going to be a different kind of president, a consummate deal-maker
who would transcend the usual ideological divide. His supporters should
therefore be dismayed, not just by his failure to actually close any
deals, but by the fact that he evidently has no new ideas to offer.
We saw that on Trumpcare, where the administration outsourced its policy
to Paul Ryan, who produced exactly the kind of plan you might have
expected: take insurance away from millions, make it worse for the rest,
and use the money to cut taxes on the wealthy.
And now we’re seeing it on taxes. Mr. Trump has promised to unveil a
“massive” tax cut plan next week. This announcement apparently came as a
surprise to his own Treasury officials, who obviously don’t have a plan
ready. Still, one thing is clear: Whatever the details, Trumptax will be
a big exercise in fantasy economics.
How do we know this? Last week Stephen Mnuchin, the Treasury secretary,
told a financial industry audience that “the plan will pay for itself
with growth.” And we all know what that means.
Back in 1980 George H. W. Bush famously described supply-side economics
— the claim that cutting taxes on rich people will conjure up an
economic miracle, so much so that revenues will actually rise — as
“voodoo economic policy.” Yet it soon became the official doctrine of
the Republican Party, and still is. That shows an impressive level of
commitment. But what makes this commitment even more impressive is that
it’s a doctrine that has been tested again and again — and has failed
every time.
Yes, the U.S. economy rebounded quickly from the slump of 1979-82. But
was that the result of the Reagan tax cuts, or was it, as most
economists think, the result of interest rate cuts by the Federal
Reserve? Bill Clinton provided a clear test, by raising taxes on the
rich. Republicans predicted disaster, but instead the economy boomed,
creating more jobs than under Reagan.
Then George W. Bush cut taxes again, with the usual suspects predicting
a “Bush boom”; what we actually got was lackluster growth followed by a
severe financial crisis. Barack Obama reversed many of the Bush tax cuts
and added new taxes to pay for Obamacare — and oversaw a far better jobs
record, at least in the private sector, than his predecessor.
History offers not a shred of support for faith in the pro-growth
effects of tax cuts.
Not to forget recent experiences at the state level. Sam Brownback,
governor of Kansas, slashed taxes in what he called a “real live
experiment” in conservative fiscal policy. But the growth he promised
never came, while a fiscal crisis did. At the same time, Jerry Brown’s
California raised taxes, leading to proclamations from the right that
the state was committing “economic suicide”; in fact, the state has
experienced impressive employment and economic growth.
In other words, supply-side economics is a classic example of a zombie
doctrine: a view that should have been killed by the evidence long ago,
but just keeps shambling along, eating politicians’ brains. Why, then,
does it persist? Because it offers a rationale for lower taxes on the
wealthy.
To be fair, it’s not clear whether Mr. Trump really believes in
right-wing economic orthodoxy. He may just be looking for something,
anything, he can call a win.
We might also note that a man who insists that he won the popular vote
he lost, who insists that crime is at a record high when it’s at a
record low, doesn’t need a fancy doctrine to claim that his budget adds
up when it doesn’t.
It’s just voodoo with extra bad math.
https://www.nytimes.com/2017/04/24/opinion/zombies-of-voodoo-economics.html
was going to be a different kind of president, a consummate deal-maker
who would transcend the usual ideological divide. His supporters should
therefore be dismayed, not just by his failure to actually close any
deals, but by the fact that he evidently has no new ideas to offer.
We saw that on Trumpcare, where the administration outsourced its policy
to Paul Ryan, who produced exactly the kind of plan you might have
expected: take insurance away from millions, make it worse for the rest,
and use the money to cut taxes on the wealthy.
And now we’re seeing it on taxes. Mr. Trump has promised to unveil a
“massive” tax cut plan next week. This announcement apparently came as a
surprise to his own Treasury officials, who obviously don’t have a plan
ready. Still, one thing is clear: Whatever the details, Trumptax will be
a big exercise in fantasy economics.
How do we know this? Last week Stephen Mnuchin, the Treasury secretary,
told a financial industry audience that “the plan will pay for itself
with growth.” And we all know what that means.
Back in 1980 George H. W. Bush famously described supply-side economics
— the claim that cutting taxes on rich people will conjure up an
economic miracle, so much so that revenues will actually rise — as
“voodoo economic policy.” Yet it soon became the official doctrine of
the Republican Party, and still is. That shows an impressive level of
commitment. But what makes this commitment even more impressive is that
it’s a doctrine that has been tested again and again — and has failed
every time.
Yes, the U.S. economy rebounded quickly from the slump of 1979-82. But
was that the result of the Reagan tax cuts, or was it, as most
economists think, the result of interest rate cuts by the Federal
Reserve? Bill Clinton provided a clear test, by raising taxes on the
rich. Republicans predicted disaster, but instead the economy boomed,
creating more jobs than under Reagan.
Then George W. Bush cut taxes again, with the usual suspects predicting
a “Bush boom”; what we actually got was lackluster growth followed by a
severe financial crisis. Barack Obama reversed many of the Bush tax cuts
and added new taxes to pay for Obamacare — and oversaw a far better jobs
record, at least in the private sector, than his predecessor.
History offers not a shred of support for faith in the pro-growth
effects of tax cuts.
Not to forget recent experiences at the state level. Sam Brownback,
governor of Kansas, slashed taxes in what he called a “real live
experiment” in conservative fiscal policy. But the growth he promised
never came, while a fiscal crisis did. At the same time, Jerry Brown’s
California raised taxes, leading to proclamations from the right that
the state was committing “economic suicide”; in fact, the state has
experienced impressive employment and economic growth.
In other words, supply-side economics is a classic example of a zombie
doctrine: a view that should have been killed by the evidence long ago,
but just keeps shambling along, eating politicians’ brains. Why, then,
does it persist? Because it offers a rationale for lower taxes on the
wealthy.
To be fair, it’s not clear whether Mr. Trump really believes in
right-wing economic orthodoxy. He may just be looking for something,
anything, he can call a win.
We might also note that a man who insists that he won the popular vote
he lost, who insists that crime is at a record high when it’s at a
record low, doesn’t need a fancy doctrine to claim that his budget adds
up when it doesn’t.
It’s just voodoo with extra bad math.
https://www.nytimes.com/2017/04/24/opinion/zombies-of-voodoo-economics.html
bob
Apr 29, 2017, 11:11:20 AM4/29/17
to
On Sat, 29 Apr 2017 14:07:35 +0300, Pelle Svanslös <pe...@svans.los>
wrote:
>Mr. Trump sold himself to voters as unorthodox as well as effective. He
>was going to be a different kind of president, a consummate deal-maker
>who would transcend the usual ideological divide. His supporters should
>therefore be dismayed, not just by his failure to actually close any
>deals, but by the fact that he evidently has no new ideas to offer.
>
>We saw that on Trumpcare,
you mean Ryancare? trump never wanted to rid the country of a health
plan, even a horrible one like obamacare.
bob
wrote:
>Mr. Trump sold himself to voters as unorthodox as well as effective. He
>was going to be a different kind of president, a consummate deal-maker
>who would transcend the usual ideological divide. His supporters should
>therefore be dismayed, not just by his failure to actually close any
>deals, but by the fact that he evidently has no new ideas to offer.
>
>We saw that on Trumpcare,
plan, even a horrible one like obamacare.
bob
Pelle Svanslös
Apr 29, 2017, 11:42:06 AM4/29/17
to
On 29.4.2017 18:11, bob wrote:
> On Sat, 29 Apr 2017 14:07:35 +0300, Pelle Svanslös<pe...@svans.los>
> wrote:
>
>> Mr. Trump sold himself to voters as unorthodox as well as effective. He
>> was going to be a different kind of president, a consummate deal-maker
>> who would transcend the usual ideological divide. His supporters should
>> therefore be dismayed, not just by his failure to actually close any
>> deals, but by the fact that he evidently has no new ideas to offer.
>>
>> We saw that on Trumpcare,
>
> you mean Ryancare?
It's probably what Krugman meant.
> On Sat, 29 Apr 2017 14:07:35 +0300, Pelle Svanslös<pe...@svans.los>
> wrote:
>
>> Mr. Trump sold himself to voters as unorthodox as well as effective. He
>> was going to be a different kind of president, a consummate deal-maker
>> who would transcend the usual ideological divide. His supporters should
>> therefore be dismayed, not just by his failure to actually close any
>> deals, but by the fact that he evidently has no new ideas to offer.
>>
>> We saw that on Trumpcare,
>
> you mean Ryancare?
> trump never wanted to rid the country of a health
> plan, even a horrible one like obamacare.
pulling the plug on the premium subsidies? That would rid millions of
health insurance.
Of course it's another one of Trump's brilliant dealmaking moves that
would pee on his own cheerios if it ever came down to that.
Please don't remind me how thoroughly stupid this man is.
bob
Apr 29, 2017, 5:55:29 PM4/29/17
to
On Sat, 29 Apr 2017 18:42:00 +0300, Pelle Svanslös <pe...@svans.los>
trump even in his campaign was for universal healthcare, left of
obamacare. he didn't even present a plan, ryan did. wise up pelle.
bob
obamacare. he didn't even present a plan, ryan did. wise up pelle.
bob
Pelle Svanslös
Apr 30, 2017, 5:58:46 AM4/30/17
to
So why didn't he keep them? He's the executive in charge now ...
> he didn't even present a plan, ryan did. wise up pelle.
coverage that bad, he could of presented that to the Congress instead of
the Ryan plan, no?
But seriously, none of that was ever in the cards. You didn't take that
stuff at face value, did you?
Brian W Lawrence
Apr 30, 2017, 6:28:44 AM4/30/17
to
On 29/04/2017 22:55, bob wrote:
> trump even in his campaign was for universal healthcare, left of
> obamacare. he didn't even present a plan, ryan did. wise up pelle.
He wasn't interested and delegated it to Ryan. He used to do that
> trump even in his campaign was for universal healthcare, left of
> obamacare. he didn't even present a plan, ryan did. wise up pelle.
in business and then bully people to close the deal. Congress doesn't
work like that.
Midterms are only just over 18 months away, House Republicans don't
have much time before they need to think about their re-elections,
and how long they can afford to support the president and ignore
their bases.
---
This email has been checked for viruses by AVG.
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bob
Apr 30, 2017, 11:53:43 AM4/30/17
to
On Sun, 30 Apr 2017 11:28:41 +0100, Brian W Lawrence
<brian_w_...@msn.com> wrote:
>On 29/04/2017 22:55, bob wrote:
>
>> trump even in his campaign was for universal healthcare, left of
>> obamacare. he didn't even present a plan, ryan did. wise up pelle.
>
>He wasn't interested and delegated it to Ryan.
exactly. "he wasn't interested." that's what i keep telling you.
<brian_w_...@msn.com> wrote:
>On 29/04/2017 22:55, bob wrote:
>
>> trump even in his campaign was for universal healthcare, left of
>> obamacare. he didn't even present a plan, ryan did. wise up pelle.
>
>He wasn't interested and delegated it to Ryan.
> He used to do that
>in business and then bully people to close the deal. Congress doesn't
>work like that.
>Midterms are only just over 18 months away, House Republicans don't
>have much time before they need to think about their re-elections,
>and how long they can afford to support the president and ignore
>their bases.
1/4.
bob
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