"Let's Try This Again," Take 6

Happy Anniversary, of sorts, to the economic philosophy known as Trickle-Down Economics. Ten years ago today, Pres. George Bush signed major tax cuts, promising sustained economic growth once government got out of the way. Today, unemployment is around 9% still, nearly three years after the economic policies of de-regulation and "Supply-side" growth nearly destroyed the economy of the United States, and with it most of the globe. Well done, TDE! Take a bow! You've now proven to be a completely fucked-up, idiotic economic philosophy FOUR TIMES.

Who could have foreseen. . .

Apparently my self-indulgent narcissism has to be more clandestine. Other social media got me fired from my non-real job! (Still, GFY William.) So since nobody reads this, I can comment here with much greater impunity.

Anyway. Of course, nobody could have seen this coming. Seriously, how many times does supply side or faux-austerity measurements have to be lied about? They don't work. Counter-cyclical spending does. Fine, I'll concede reasonable limits on said spending. But come on.

And, seriously, it's so depressing to be in the exact same spot as a year ago. *sigh*

But little rabbit Foo-Foo didn't listen...

I don't quite know enough about economics to understand this thoroughly, but I do know enough about history to point out the obvious - trickle-down economics or supply-side economics, which has genuinely been tried three times in the recent American past, is an abject failure. Here is a link to a HuffPo piece that contains a document by a UC-Berkeley professor that lays out the current, and past, ratios of the distribution of wealth in the US. The above graph I grabbed from HPo's site. Now, historically, to look at the graph, one would note two things: tax policy can be effective at ameliorating the more grotesque maldistribution of wealth. (And note - this is the top .o1%!!) So the passage of the first income tax bill by Woodrow Wilson (using the newly-passed 16th Amendment), along with war-time taxation, significantly reduced the share of wealth held by that top .01% of the population. Similarly, the programs of the Great Society and War on Poverty also had the effect of diminishing income inequality, which was the point of the program (well, one of them), for LBJ. The second thing worth noting is the periods at which income inequality spikes, and the historical events that follow: notice that GIANT spike in 1928 and 2003? Obviously, the historical events that follow those are two dramatic economic collapses - the Great Depression and the Great Recession. Now, I have to admit, I've not yet read J.K. Galbraith's The Great Crash, though it's on "the list." But I have read enough of the Depression to feel pretty confident in classifying three causes of the Great Depression: overproduction/underconsumption, the collapse of the international economy, and a huge maldistribution of wealth. Consult the 1929 Brookings Institution report for a good description of the concentration of wealth in the hands of a few. Notice any connection? I don't want to paint a mono-causal picture, but historically, it seems that a dramatic maldisribution of wealth can have calamitious economic impacts. Does this sway in any way the thoughts of the super-rich? No, of course not. They don't care. But the next time a Republican administration tries to sell you "supply-side" economic dung as rosebuds and lilacs, be skeptical. It don't work.

On economics

I really don't understand economics in a functional way. I am terrible with my OWN money - to say nothing of student loans. But there have been a lot of historical parallels generally in the US right now - in terms of the election (some particularly nasty ones in the 1840s and 1860 of course), and now economics too. I'm reading for my classes a really great book in the Oxford History of the United States series (can't recommend all five volumes enough) called Freedom from Fear by David Kennedy. And Kennedy makes the important separation of the Crash from the Depression. But the amount of failures in banking and finance now taking place present some really worrying parallels. A lot of the crisis after the Crash, Kennedy notes, was from runs on banks, and in essence, a total loss of confidence. Now the Market dropping 500 points today doesn't have an immediate impact on me. And I'm not suggesting that the economy is on the verge of utter collapse, as it did in 1929. But to view the Great Depression as a process does offer some troubling potential paths of our economy now.
Anyway, my brain hurts from 3 lectures today, and now I have another one to write on the settlement of the American South in the 17th century. So pardon the incoherence.