Friday, October 31, 2008

Supply Side Economics

Okay, quick economics lesson:

Demand-Side Economics, you raise wages, that increases the spending and saving ability of the middle class- heck it even grow the middle class. That demand, drives a need for greater supply. It works like a perpetual motion machine, the demand drives the supply, the supply feeds demand. That sustains the economy (although, admittedly, it may not grow the economy beyond what is reasonable).

Worked pretty dang good from 1932-1980, it even provided tax revenue to provide for things like the providing for the common defense, securing domestic security, promoting the general welfare, and especially securing the blessings of liberty for ourselves and our posterity (the "American Dream," where each generation had it a teensy bit better than the last one.

Supply-Side Economics (aka Reaganomics, aka Bushonomics) on the other hand is SUPPOSED to work so that if you drastically cut the taxes of the wealthy and corporations, they'll (theoretically) reinvest in research, production, and infrastructure (see the cartoon above on the current bail-out) which (in theory) would provide more jobs to the middle and lower classes and make up the revenue short-fall with payroll taxes. The idea was that "a rising tide lifts all boats."

IN PRACTICE, human nature being what it is, greed plays a roll. CEOs pay themselves 400x as much in salary as their employees make, executives put their own interests ahead of both their share holders and the common good- and certainly their share holders still come before the common good of the community, state, or nation. Investors use their tax cuts (and looser regulations) to gamble on bigger and bigger and quicker and quicker returns.

Was it Aesop or the Grimm brothers who told us about the goose that laid the golden eggs? Feeding, caring for, and nurturing the goose gets you years of golden eggs. Butchering the goose to get what eggs are in it's belly only gets you that one or two eggs. Greed vs. sustainability. Bubbles of rapid growth, or perpetual but gradual climb? Which is better for America in the long run?

As someone with a college degree in History, I'm here to tell you friends that 1980-2008 looks a lot like 1909-1929. A "gilded age" of conspicuous consumption , unregulated corruption, and unbridled ambition. PLEASE think about this when you vote on Tuesday. PLEASE.

This is not the difference between "Socialism" and "Pro-American," this is the difference between moral (good steward, civic-responsible) capitalism and amoral (malignant, cancerous) capitalism. PLEASE put America back on the right track.

"Nature still offers her bounty and human efforts have multiplied it. Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply. Primarily this is because the rulers of the exchange of mankind's goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.

True they have tried, but their efforts have been cast in the pattern of an outworn tradition. Faced by failure of credit they have proposed only the lending of more money. Stripped of the lure of profit by which to induce our people to follow their false leadership, they have resorted to exhortations, pleading tearfully for restored confidence. They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision the people perish.

The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of the restoration lies in the extent to which we apply social values more noble than mere monetary profit.

Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. The joy and moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. These dark days will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves and to our fellow men." ~ From FDR's first inaugural address, 1932

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