Category Archives: Robert Reich
When the video, from his Countdown appearance tonight,(alert, its at the bottom of this post) is available I will post it…until then, here is RR’s post from his blog today on the topic of Bush’s tax cuts for the rich and how full of shit the rightwing nutters are on this issue:
The economy is slouching backward because consumers can’t and won’t spend enough to revive it. Congress is about to recess for the summer without doing anything to fill the gap. And it looks like the only issue it will be debating when it returns is who, if anyone, should pay more taxes next year – just the very rich, everyone, or no one? The cuts enacted by George W. Bush will expire in January, and with midterm election pending in November we’re about to be treated to months of tax demagoguery.
Here’s a guide to the perplexed.
From a strictly economic standpoint – as if economics had anything to do with this – it makes sense to preserve the Bush tax cuts at least through 2011 for the middle class. There’s no way consumers – who comprise 70 percent of the economy – will start buying again if their federal income taxes rise while they’re still struggling to repay their debts, they can’t borrow more, can no longer use their homes as ATMs, and they’re worried about keeping their jobs.
But the same logic doesn’t apply to people at the top, earning over $250K, who represent roughly 2 percent of tax filers. Restoring their marginal tax rates to what they were during the Clinton administration (36 and 39 percent) won’t inhibit their spending. That’s because they already save a large portion of what they earn, and already spend what they want to spend. (During the Clinton years the economy created 22 million net new jobs and unemployment dropped to 4 percent.)
But restoring those top marginal tax rates will help bring down the long-term debt, pulling in almost a trillion dollars of revenues over next ten years. That’s not nearly enough to make a major dent in the nation’s projected deficits, but it’s not chicken feed either. It would at least signal to financial markets we’re serious about cutting that long-term deficit – and the rest of us will chip in when the economy strengthens.
So-called supply-side economists don’t like raising taxes on anyone, of course, and argue that raising them on the well-off will slow economic growth. They say people at the top will have less incentive to work hard, invest, and invent.
Unfortunately for supply-siders, history has proven them wrong again and again. During almost three decades spanning 1951 to 1980, when America’s top marginal tax rate was between 70 and 92 percent, the nation’s average annual growth was 3.7 percent. But between 1983 and start of the Great Recession, when the top rate was far lower – ranging between 35 and 39 percent – the economy grew an average of just 3 percent per year. Supply-siders are fond of claiming that Ronald Reagan’s 1981 cuts caused the 1980s economic boom. In fact, that boom followed Reagan’s 1982 tax increase. The 1990s boom likewise was not the result of a tax cut; it came in the wake of Bill Clinton’s 1993 tax increase.
A final reason for allowing the Bush tax cut to expire for people at the top is the most basic of all. Although Wall Street’s excesses were the proximate cause of the Great Recession, its fundamental cause lay in the nation’s widening inequality. For many years, most of the gains of economic growth in America have been going to the top – leaving the nation’s vast middle class with a shrinking portion of total income. (In the 1970s, the top 1 percent received 8 to 9 percent of total income, but thereafter income concentrated so rapidly that by 2007 the top received 23.5 percent of the total.) The only way most Americans could continue to buy most of what they produced was by borrowing. But now that the debt bubble has burst – as it inevitably would – the underlying problem has reemerged.
Why make it worse? George W. Bush’s 2001 tax cut was a huge windfall for the wealthy. About 40 percent of its benefits went to the tiny sliver of Americans earning over $500,000. So rather than debate whether to end the Bush tax cuts for the top and restore the top marginal tax rates to where they were under Bill Clinton, we should be debating whether to raise the highest marginal tax rate higher than it was under Bill Clinton and use the proceeds to give the middle class a permanent tax cut.
I’m not suggesting this, mind you, but just to get the debate started: How about restoring the top rate to where it was under John F. Kennedy (76 percent), or under Dwight Eisenhower (91 percent)?
I really never re-post someone else’s entire work. But Reich makes so much sense, I hope to hell he doesn’t get pissed at me. We have conversed, via email, in the past and he gave me permission to re-post his writings…so I am using that for this specific issue. I love that man, he breaks it down for yahoo’s like moi to understand.
Beloww is Ezra Klein’ pov on the same fuckery:
How dumb is the general voting population on this horseshit? Only time will tell…
I love this man, he makes so much sense…it’s almost scary!!!
The base of my post is filched from Robert Reich’s blog post up today. I never miss a post and I read them over and over again. I use his posts to strengthen my arguments when talking to folks that do not see things as I do, or sadly..buy into the rightwing nutjobs fearmongering.
Labor Day 2009. It’s a sad labor day if you go by ‘the numbers’ of those out of work and/or struggling to make ends meet because they are underemployed. From Mr. Reich’s blogpost on the subject:
The latest employment figures (released this morning) show job losses continuing to grow. According to the payroll survey, job losses are increasing more slowly than in previous months. According to the household survey, they’re accelerating — from 9.4 percent of the workforce in July to 9.7 percent in August. Bottom line: almost one out of six Americans who need a full-time job either can’t find one or is working part-time. Meanwhile, wage growth among people who have jobs has just about stopped. The Economic Policy Institute reports that between 2006 and 2008, wages grew at an annualized rate of 4.0%; by contrast, over the past three months annual wage growth has plummeted to just 0.7%. At the same time, furloughs — requiring workers to take unpaid vacations — are on the rise: recent surveys show 17% of companies imposing them. More than 20% of companies have suspended their contributions to 401(k)s and similar pension plans.
Mr. Reich questions why the ‘media’ isn’t jumping all over these newest numbers. I do too as they seem to only report the numbers and then move on to Micheal Jackson’s funeral. He has an explanation that will not make anyone feel warm and fuzzy who isn’t among the top one to ten percenter’s. It’s frankly very scary to me when he lays it out in plain english..no spin required:
So why isn’t the media screaming? Partly because these job and wage losses are not, for the most part, falling on the segment of our population most visible to the media. They’re falling overwhelmingly on the middle class and the poor. Unemployment among those who have been in the top 10 percent of earnings is closer to 5 percent, and their earnings continue to climb — although, to be sure, much more slowly than before the meltdown. It’s much the same with health-care and pension benefits. Among people under 65 who are in the bottom 20% of incomes, only 21.9% have employer-sponsored health insurance — if they have a job at all. Half of all people nearing retirement age have a 401(k) balance of less than $40,000.(emphasis mine of course)
I would venture to say that our elite MSM looks down their nose at the middle class and the poor. They don’t count because they are just the ‘working classes’. As Robert Reich points out in his blog post, a report states 42 percent of consumer spending before the meltdown came from the top-earning 10 percent of Americans. This information is from a report authored by Bank of America and Merrill Lynch, not Mr. Reich.
But the middle class and the working poor are the laborers in America. They are the people that work to earn their money for the love of pete! The top one-to-ten percenter’s don’t work, they sit back and let their portfolio’s or the businesses they own do the work and/or earning for them.
Perhaps the middle class and working poor do not spend as much as the top dogs on frivolous crap because their wages have stagnated for over a decade. The cost of keeping health care for their families has gone through the roof. Putting kids through college also takes it’s toll on working Americans.
It’s morally wrong and pure bullshit to say the middle and working poor do not contribute to the economy as much as the top one-to-ten percent does. Let me leave you with Robert Reich’s pov on this:
This logic is morally and economically indefensible. If we’ve learned anything from the Great Recession-Mini Depression of the last 18 months, it’s that the skewing of income and wealth to the top has made our economy far less stable. When the majority of middle-class and poor Americans are either losing their jobs or feel threatened by job loss, and when those who still have jobs are experiencing flat or declining wages, there’s simply no way to get the economy back on track. The track we were on — featuring stagnant median wages, widening inequality, and job insecurity — got us into this mess in the first place.
A-friggin-men to Robert Reich. As an economist and left of center human being, he speaks truth to the powerful. He has plenty of bonafides and frankly he isn’t just a talking head that spews the latest line of bullshit. He is currently Professor of Public Policy at the Goldman School of Public Policy at the University of California, Berkeley. His wikipedia bio is here and his personally penned bio can be read here on his other website.
Sadly, the powerful don’t always listen to him. But I do..and so should you, m’dear reader. He boils down the rhetoric so that we can all understand it and digest it and figure out who the bullshit artists are.
So have a good Labor Day Weekend you hard-working people. You have earned it, more than you know.
Good video from C&L, it’s the ABC news roundtable from Sunday’s This Week, with some interesting folks in attendance:
Krugman and Robert Reich are there. Warms the cockles of my little black heart to see both of them at the table with the nimrod George Will. The topic was of course…healthcare reform!
Krugman talks about the hypocrisy of the Rethugs and specifically Johnny McCain.
George Will asks the inane question, are drug prices too high? He actually says he doesn’t know..idiot on aisle two!
Reich has an OpEd up at Salon that answers his own question, Why in the blue hell does the Gang of Six get to decide the fate of healthcare reform:
It’s not even as if the gang represents America. The three Dems in the gang are from Montana, New Mexico and North Dakota – states that together account for just over 1 percent of Americans. The three Republicans are from Maine, Wyoming and Iowa, which together account for 1.6 percent of the American population.
No shit Mr. Reich..why in the blue hell do these fuckwits get to determine what is done? Tiny states with minimal populations will determine which road we go down, with respect to healthcare reform? Horseshit I say!
Still wading through the Torture Report, a chapter at a time. It’s hard to make sense of it when page after page is completely redacted.