No, Virginia, Tax Giveaways To The 1 % Don’t Work

Just a check in on the astonishing economy building super duper special magical powers of GOP TAX CUT POTION™.

Spoiler: it works just as well as the utter, don’t-let-the-pointy-heads-at-the-FDA-f**k-up-a-good-thing  quackery Orrin Hatch has spent so long protecting.

The latest by Dean Baker:

The ostensible rationale for the big cut in the corporate tax rate that was at the center of the tax cut is that it will lead to a flood of new investment.

Since the outlines of the tax cut had been known since September, businesses had plenty of time to plan how they would respond to lower tax rates. If lower rates really produce a flood of investment we should at least begin to see some sign in new orders once the tax cut was certain to pass.

The January report showed orders actually fell modestly for the second consecutive month. The drop occurs both including and excluding volatile aircraft orders. While this is far from conclusive, it is hard to reconcile with the view that lower taxes would lead to a flood of new investment.

Remarkably, these new data have gotten almost no attention from the media. Both the NYT and the Washington Post ran an AP story that just noted the drop in passing. Doesn’t anyone care if the tax cut works?

As everyone who wasn’t a Republican and or a CEO said, the tax bill was a sham, a way to transfer yet more wealth from labor to capital, from most of us to a very few, already hugely rich.

Image: Reginald Gray, The Banker, Smoking, 2002.

 

 



We Can Always Use Some Bitter, Cynical, Gallows Humor, So Here’s A Kudlow Post

Larry Kudlow is the pure distilled essence of a Trump appointment, the type specimen of the breed, and the perfect expression of the state of Republican “thinking” on not just economics, but any matter in which actual knowledge and a respect for empiricism might help.

Via Wikipedia, we find he is barely educated, at best, in the fields in which he now works:

Kudlow graduated from University of Rochester in Rochester, New York with a degree in history in 1969. Known as “Kuddles” to friends, he was a star on the tennis team and a member of the left-wing Students for a Democratic Society at Rochester.

In 1971, Kudlow attended Princeton University’s Woodrow Wilson School of Public and International Affairs, where he studied politics and economics. He left before completing his master’s degree.

I’ll admit that Kuddles is kinda cute, but an unfinished masters degree in a policy school is not one you’d usually associate with economics acumen.

He went on to a stellar business career, managing to get fired repeatedly for substance abuse on the job, including a claimed $10,000/month cocaine habit that got him canned from Bear Stearns in 1994. (It’s interesting to note that a frantic effort is underway today to diminish such inconvenient truths on Kudlow’s Wikipedia page.)

Fortunately for Kuddles, he cleans up well, dresses nicely, and can tok gud. So he was able to revive his career as a TV gasbag, with a series of appearances and then shows on CNBC, the network that figured out the markets could be covered like sports teams.

Unfortunately — for the rest of us, if not for the ever-failing-up Kudlow — he’s been wrong about almost every key economic call since Methuselah was in diapers.  He is a Laffer disciple, a supply-sider whose faith that there is no tax that is too low, no plutocrat whose needs must not be served, is impervious to any test of reality.

Consider this:

In 1993, when Bill Clinton proposed an increase in the top tax rate from 31 percent to 39.6 percent, Kudlow wrote, “There is no question that President Clinton’s across-the-board tax increases … will throw a wet blanket over the recovery and depress the economy’s long-run potential to grow.” This was wrong. Instead, a boom ensued. Rather than question his analysis, Kudlow switched to crediting the results to the great tax-cutter, Ronald Reagan. “The politician most responsible for laying the groundwork for this prosperous era is not Bill Clinton, but Ronald Reagan,” he argued in February, 2000.

And this:

Kudlow firmly denied that the United States would enter a recession in 2007, or that it was in the midst of a recession in early to mid-2008. In December 2007, he wrote: “The recession debate is over. It’s not gonna happen. Time to move on. At a bare minimum, we are looking at Goldilocks 2.0. (And that’s a minimum). The Bush boom is alive and well. It’s finishing up its sixth splendid year with many more years to come”. In May 2008 he wrote: “President George W. Bush may turn out to be the top economic forecaster in the country” in his “‘R’ is for ‘Right'”.

And this:

When Obama took office, Kudlow was detecting an “inflationary bubble.” That was wrong. He warned in 2009 that the administration “is waging war on investors. He’s waging war against businesses. He’s waging war against bondholders. These are very bad things.” That was also wrong, and when the recovery proceeded, by 2011, he credited the Bush tax cuts for the recovery. (Kudlow, April 2011: “March unemployment rate drop proof lower taxes work.”) By 2012, Kudlow found new grounds to test out his theories: Kansas, where he advisedRepublican governor Sam Brownback to implement a sweeping tax-cut plan that would produce faster growth. This was wrong. Alas, Brownback’s program has proven a comprehensive failure, falling short of all its promises and leaving the state in fiscal turmoil.

The reviews are coming in. Via the BBC:

David Stockman, Mr Kudlow’s former boss during the Reagan administration, told the Washington Post in 2016 that Mr Kudlow’s prediction that tax cuts would lead to growth was “dead wrong”. Instead, he said the cuts led to budget deficits.

More recently, he has warned that Mr Kudlow would not be able to rein in the president.

“As much as I love him … Larry’s voice is exactly the wrong voice that Donald Trump ought to be hearing as we go forward,” he told CNBC.

Liberal economist and New York Times columnist Paul Krugman has been sharply critical, noting that Mr Kudlow missed signs of the housing bubble and recession.

“At least he’s reliable — that is, he’s reliably wrong about everything,” Mr Krugman tweeted.

Indeed in December 2007 – just as the recession was beginning – Mr Kudlow wrote in the National Review: “There’s no recession coming. The pessimistas were wrong. It’s not going to happen.”

It is interesting that Kudlow himself doesn’t seem to disagree with his predecessor on the issue that got Cohn out. From a quick take bylined by him, Laffer and Stephen Moore (another stellar, always-wrong econ public intellectual) here he is on Trump’s tariff announcement:

Tariffs are really tax hikes. Since so many of the things American consumers buy today are made of steel or aluminum, a 25 percent tariff on these commodities may get passed on to consumers at the cash register. This is a regressive tax on low-income families.

I wonder how that squares with the new job. ETA: I know how it squares. It’s already been forgotten. We’ve always been at war with Eastasia.

But that’s just SOP in the circles in which Kudlow travels:  intellectual rigor doesn’t actually matter.  He’s under no obligation to be consistent in any of his pronouncements, and he certainly doesn’t have to be right about anything as long as he provides cover for the true Republican (n.b.: not just Trumpian) policy goal: the transfer of more and more of our society’s wealth to those who are already wealthy — and hence, in the GOP/Rand/Sociopath view of the world, those who are virtuous enough to deserve such riches.

For all of you who’ve wondered why the US can’t be more like Kansas — we may now we get to find out.

Image: Thomas Shields Clarke, A Fool’s Fool,  c. 1887.



Lucky Seven

Pharma Bro got seven years. If loving this tweet is wrong, I don’t know what right is anymore:

Update:Another good one, via LAO in the comments:



Facebook Is The Devil

Josh Marshall has a good piece on Facebook VP of Advertising Rob Goldman’s earlier disingenuous tweets about the way Russians played Facebook like a fiddle to elect Trump, so I won’t rehash that.

But the later tweets embedded above are such classic Silicon Valley bullshit – “my company fucked up our country, shame on the government for not fixing it”. Never mind that Finland is a fairly homogeneous country of fewer than 6 million people which has been facing a real existential threat from Russia ever since WWII. Never mind that Facebook’s walled garden had (and, basically, still has) almost no content standards, no way for the captive audience of that platform to separate truth from bullshit in their feeds. And never mind that the whole platform is designed to keep people trapped inside rather than branching out to more reliable news outlets. No, on Goldman’s account, government needs to clean up the turds his company left on the sidewalk.

Facebook is bad, but Uber is the poster child for this Silicon Valley attitude. On one hand, they shit all over the attempts of government to regulate their ride service, when it’s obvious to anyone whose head isn’t buried in Atlas Shrugged that random strangers giving rides is something that needs a hell of a lot of oversight. On the other hand, as soon as their semi-moron “self driving” cars aren’t able to navigate the roads, government needs to build up road infrastructure so Uber can get rid of their army of underpaid drivers.

It is very god damned telling that a Facebook VP took to Twitter to defend Facebook, because media people generally don’t engage on Facebook. I’m not saying Twitter is an information paradise, but it reaches the low bar of being better than Facebook, which has been losing engagement as they try to deal with the fact that their feeds are garbage.



Browser Outrage Dump

Time for another thread, I’d say, and I don’t have the functioning synapses to come up with anything new to say about the moral and intellectual crater that is both the Republican Party and the right’s public intellection bunch. (Did you know that Ron Johnson’s mug is being considered as the “After” portrait in the upcoming “Don’t Eat Tide Pods” campaign? Or that Rod Dreher’s thought leading crunchy conservative Christianity is racist to its root?)

So here I’m just going to lock and load some stuff I’ve kept open in my browser, waiting for the moment to foam in rage over here.  Think of this not so much as considered analysis (don’t think of it as all). Rather, it’s a very partial catalogue of how much damage decades of GOP anti-government, and worse, anti-society sabotage has done.  A goad, perhaps, though I hope no new one is needed, to crush these sorry f**ks come November, and forever after.

So here they come, in no particular order:

From Stat: “Drop in U.S. life expectancy is an indictment of the American health care system”

According to the CDC, the average life expectancy at birth in the U.S. fell by 0.1 years, to 78.6, in 2016, following a similar drop in 2015. This is the first time in 50 years that life expectancy has fallen for two years running. In 25 other developed countries, life expectancy in 2015 averaged 81.8 years.

The article acknowledges the impact of the opioid epidemic on those figures but notes that cross-country comparisons reveal systemic failures that make the disaster so much deeper here.  And then there’s the way we treat — or don’t — our elderly:

It is widely accepted that the accessibility and quality of medical services strongly affect life expectancy among the elderly and elderly Americans fall behind their counterparts overseas when it comes to being able to get and afford the health care they need.

This may seem surprising given that Americans over 65 enjoy universal health insurance coverage under Medicare. But as valuable as Medicare is, it provides far less protection against the cost of illness, and far less access to services, than do most other Western countries. In a recent cross-national survey, U.S. seniors were more likely to report having three or more chronic illnesses than their counterparts in 10 other high-income countries. At the same time, they were four times more likely than seniors in countries such as Norway and England to skip care because of costs. Medicare, it turns out, is not very good insurance compared to what’s available in most of the western world.

Next: that GOP assault on environmental regulation and protection?

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Open Thread: The 2017 Bitcoin Adventure

(Drew Sheneman via GoComics.com)
.

Bitcoin prices climbed back above the $15,000 mark Saturday following a steep decline Friday when the cryptocurrency shed about a third of its value.

Bitcoin, which is known to be extremely volatile, sank below $11,000 at one point Friday, according to data from CoinDesk.com.

Prices had approached $20,000 as recently as a week ago….

I’ll concede that Bitcoin is as “rational” as any other highly speculative investment, but dear trickster god the stories…

Problem is, even if cryptocurrency is the most rational method of storing value, it’s being developed / used by human beings, who (per all historical records) may not be…


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They’re Still Coming for Your Retirement

Mitch Ohnstad: “Why do you rob banks?”

Willie Sutton: “Because that’s where the money is.”

After the Republicans last night voted to gut the law allowing you to sue the banks and the credit card companies (yes, pedants you technically can still sue, but what individual can take on Wells Fargo without a class action suit?), I am absolutely convinced this will happen:

Republican tax writers on Capitol Hill are still considering changes to 401(k) retirement savings programs, downplaying President Donald Trump’s repeated pledges not to touch retirement accounts popular with middle-class Americans in the GOP tax overhaul.

At a breakfast with reporters this morning, House Ways and Means Committee Chairman Kevin Brady, R-Texas, said tweaks to the current system are possible in the tax plan, which Republicans are expected to release on as early as Nov. 1.

“We want more Americans to save more. We want them to save earlier in their lives,” Brady said, adding that congressional Republicans are “exploring a number of ideas” and share the same goal as Trump.

And why are they considering these changes? Because that’s where the fucking money is:

About 55 million Americans save in 401(k) plans, which hold more than $5 trillion in assets, according to the Investment Company Institute.

Americans are wedded to the idea of receiving tax deferrals when they save for retirement, with the ICI finding that 93 percent of workers with either a 401(k) or an IRA were against removing tax incentives. A majority also opposed reducing contribution limits.

In the meantime, the total amount Americans have saved to fund their retirement falls short of what they need by as much as $14 trillion, depending on how one runs the numbers. (By comparison, total U.S. GDP is roughly $18 trillion.) More than one-quarter of working Americans have no retirement savings or pension, according to a Federal Reserve study published earlier this year.

And they’ll get the changes they want. And then they’ll give it to the rich in the form of tax cuts. While their wall street buddies whittle away at that 5 trillion with fees and charges.And they’ll call it fiscally conservative. And praise deregulation. And limit your right to sue. And our press will let them because they are too busy chasing Clinton’s skirt.

They’ll get it all because our democracy has failed, our electorate is stupid, our politicians are evil, and our media is worthless.