Spoken like a true lefty. Tax cuts for the rich are useless. Tax cuts for the poor stimulate the economy. Yada, yada, etc, etc. I actually want to cut the Harvard professor a break. He’s the economist, I’m not. But to simply dismiss cutting taxes for one group has more economic benefit is absurd on its face. The stark reality is that tax cuts for both are critical to reviving the economy. Read more
On This Week liberal stateist economist Robert Reich contends the reason we need health care (or is it health insurance?) reform is because the American people just don’t understand health insurance. That’s enough to set the normally calm George Will off. Read more
Friday’s Wall Street Journal published an article about Obamanomics written by Robert Reich, a former Secretary of Labor under Clinton. Although not intended to, the piece provides perhaps the clearest description of why Obamanomics is doomed to failure. The article is only available in the print or on-line edition, so, unless you subscribe to either, you’ll have to trust me on the quote.
According to Reich, and, basic Keynesian economics, the first thing one needs to look at is,
… the extent of government spending needed to offset the continued reluctance of consumers and businesses to spend.
And in that little sentence… the first step of the government’s solution… lies the problem. Consumer spending can never be offset by government spending unless the government purchases the very things that consumers do. Consumers buy televisions, and the money they spend doing so is used to manufacture more televisions to be sold to more consumers, and so on. Government “buys” roads. The money spent building the road stops there. You can’t sell the road, and, the road doesn’t produce more roads.
This is no doubt why, when writing about the Great Depression in 1937, Henry Morgenthau, FDR’s Secretary of the Treasury, penned in his journal (and I am paraphrasing), we have been throwing money at the economy for four years, and, it has done nothing.
It did nothing, Mr. Morgenthau, and it never will. Government spending does not, and cannot replicate private spending.
So, let’s turn back the hands of time. It is once again February, 2009. Congress passes the $800 billion Stimulus Bill. The money goes to the people. Do you think they would spend it building roads, bridges and high speed rails, or buying televisions? And which do you think would have been better for our economy?
Yes and so much more. Allow me to set it all up.And its all about this week’s “Democrat Talking Point”
Reich begins to push the Democrat talking point of the day (more on that in a bit). He claims Republicans don’t want to be a part of the bill because when the economy doesn’t get better they will campaign on the issue. Gingrich will have none of that, and says Democrats have blocked Republicans every step of the way, they are trying to save the Dems from themselves
which sets up bite #2 and the Democrat talking point of the day. That is “Republicans refuse to be a part of the bill so they can campaign in 2010 against it. Here’s Senator Kent Conrad.
Which begs the question … if this is such a sure fired spectacular stimulus plan, and recessions generally run just 18 months … why are the Democrats so sure the economy won’t get better. Why does it seem the Republicans have more faith in their plan than the Democrats in theirs? The answer is easy. Listen up my liberal readers … WE HAVE FAITH IN THE AMERICAN PEOPLE TO SPEND THEIR MONEY BETTER THAN BARNEY FRANK CAN. We in fact really do believe in America.
When “Chat Room Jim” first brought this to my attention this morning I could not believe my ears. I have said repeatedly politicians care little about those who don’t fit one of their special interest groups. I can assure you they don’t. Thanks to HotAir
Wasn’t this supposed the era of post-racialism? Robert Reich apparently didn’t get that message. In his appearance before Congress on structuring the stimulus plan on January 7th, Reich suggested that the package discriminate against white male workers:
Just one little warning here. Don’t let this harden you heart. There is nothing the inside the beltway crowd would love to see more than the “angry, white, gun toten, bible thumpin, beer swilling, redneck” stereotype raise its ugly head. They are dividers and love playing both class and race against each other. Don’t let it happen. If this happens, your brothers did not deprive you of a job. The DC elite, who know more than all of us did.