7 months ago Citizen#7 0
Duped Again, and Again, and now Again!
President-Elect Trump tells us that regulations and corporate tax rates are killing the entrepreneurial spirit and stifling the ability of businesses to grow. His fix is to lower corporate tax rates and interest for the top 1% of earners (those that earn 3.7 million annually). He says this will create jobs and increase wages for the average working person.
An analysis by the non-partisan Tax Policy Center has a different view, the Trump plan would reduce federal revenues by 9.5 trillion dollars over the next ten years. Think Corporate welfare for those that need it least. It also means that the government has got to either raise the debt ceiling, something Congress is loathe to do or to cut spending elsewhere (think Social Security, Medicare, Medicaid, etc.)
If this sounds familiar it is the same policy promoted by George W. Bush and Ronald Regan, Trickle Down Economics or Supply Side Economics. Under Regan we added $1.86 trillion to the deficit, under Bush took a Clinton budget surplus of $127.3 billion and turned it into a $1.4 trillion deficit and what President Trump has proposed will do far more to keep the middle class down.
By almost every economic metric Trickle Down Economics is a failed policy because all the elements needed for it to work aren’t put into play. This is the view of David Stockman the man Regan put in charge of implementing Trickle Down. He has saidThe cuts are given to corporations and those at the top keep the profits, that’s where the ball stops and where it will stop again if we allow Trump’s plan to be implemented.
We really don’t need David Stockman to tell us the economy has been terrible. We just have to look at wages and salaries. Since 1979 wages have stagnated. For most of the past generation (except for a brief period in the late 1990s), pay for the vast majority lagged further and further behind overall productivity. From 1973 to 2013, hourly compensation of a typical (production/non-supervisory) worker rose just 9 percent while productivity increased 74 percent. This means that workers have been producing far more than they receive in their paychecks and benefit packages from their employers.
In 2009 Financial Corporations were bailed out by first a Republican President (Bush). On Friday, October 3rd 2008, Congress gave Wall Street a financial lifeline that was immediately signed it into law. The House of Representatives reversed course and approved a $700 billion bailout package in the wake of markets roiled by the failure of storied investment firms and major banks. The House passed the measure 263-171, following the Senate’s lead in passing a reformulated bill that added tax breaks, an increase in the federal deposit insurance limit and other “sweeteners” designed to increase support among Republicans.
The amazing thing about that was Republicans led us to the brink of financial disaster and then needed “sweeteners” to save the institutions that they serve.
Bush then doubled down and authorized the Toxic Asset Relief Program (TARP) before leaving office. Most believe this was an Obama program but that is incorrect this was a Bush initiated program Obama carried out when he took office.
TARP was a Wall Street bailout that marked the end of “Free” market capitalism. Essentially they take risks and reap the rewards and if things go bad we pay the tab to clean up the mess if things don’t work out.
President Obama and Candidate Clinton and others claim that Dodd-Frank protects us from future failures of this magnitude. It was supposedly to protect us from the too big to fail scenario of 2008-9. News Flash- It doesn’t work.
The six largest banks in the nation now have 67% of all the assets in the U.S. financial system, according to bank research firm SNL Financial. That amounts to $9.6 trillion, up 37% from five years ago. And the big banks seem to be getting better at acquiring assets all the time. The overall growth of assets in the system in the same time is up just 8%.
Glass-Steagull or Banking Act, became law in 1933 and was a mere 37 pages long. It protected us until July of 2010 when Dodd- Frank written largely by the very financial institutions it was to protect became law. Dodd-Frank is 2,300 pages long. Do you really think that a complicated document written by the financial charlatans that caused the problem would write legislation that wasn’t full of loopholes, also get out of jail free cards?
What President Trump has proposed is the same thing Regan, and Bush before him proposed the difference now is we have a lot of data that clearly shows it didn’t work before and it is far from likely to work now.
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