Sunday, February 8, 2009

Cutting Taxes

In negotiations over the desirability of putting tax cuts into the Democratic Administration's so-called Economic Stimulus Bill, the Republican minority has resumed its party's traditional, familiar refrain of advocating tax cuts as the best method of creating economic incentives for the growth of employment, the freeing up of investment capital, and the general health of free enterprise.

The Stimulus Bill is in its specific parts, essentially a huge spending bill emphasizing public works and government programs, along with a large dose of tax cuts. During the Bush Administrations, the rich and the corporations benefited mightily from tax cuts, designed to stimulate investment and job growth. But those tax cuts did not have that effect.

Domestic investment and employment in this country have been steadily decreasing for the last two decades. American capital has turned its back on American workers, transferring hundreds of thousands of manufacturing and semi-technical positions overseas. These jobs were once the backbone of American prosperity.

Apologists for the Right argue that American workers, with their unreasonable demands for high wages, favorable conditions, health care and pension benefits, can't compete on the new "global market." They tell us that Americans need to "gear up" for the future technological era, when everyone will need to be skilled and flexible and "work smart."

Bullshit.

At any given time, there are relatively few professional and technical positions in the general economy. If you put all the skilled jobs from science, management, law, and technical fields together, even those imagined by the dreamers of tomorrow-land, they wouldn't employ more than 15% of the able workforce. Despite what people say about the technological revolution, our electronic gadgets and the computer age, unskilled or semi-skilled labor still is the basis for the great majority of employment in the world. Sending "everyone" to college, even if that were feasible, isn't going to "produce" jobs or maintain a strong middle class. The factory system and the mass employment it requires is the real engine of prosperity in the modern world.

China now dominates the manufacturing field. It has transformed itself from a primarily agrarian society, to a fully industrialized one in less than two generations. And it now out-earns and out produces the United States by a significant margin. It also maintains effective trade barriers (de facto tariff), and currency policies, to insure that that advantage continues.

This trend has led to the wholesale destruction of our American middle class. The social and political implications are staggering.

Until or unless we are willing to address this destructive paradigm in our economic policies and practices, our position in the world, and the welfare of our nation, will continue to decline.

15 comments:

Kirk Johnson said...

Which brings us back to Blake again? "That he who will not defend truth may be compelled to defend a lie." Not a bad alternative to all this so-called bipartisanship

Curtis Faville said...

Blake foresaw the growth of industrialization as an evil that would remove the soul from English society.

He was probably right.

But what industrialization brought--even considering all its flaws and bad accompanying effects--was the engine of wealth for 150 years.

China now occupies the position of industrial leader in the world. They've got the spoils.

What will become of us, now that we've lost our edge?

Will we become like a sad Scandanavian socialist state, 60% tax rate, 6 months mandatory "vacation" each year, and a lazy, easy-going life-style?

Might be.

eddie watkins said...

Perhaps the electronics/technology industry is the fairy tale golden goose in the myth of perpetual motion/growth that is free market capitalism, an opportunity for literally endless advancement - ever smaller faster more powerful.

Jobs and Gates (even with his philanthropism) are very irresponsible in perpetuating this, even as they claim a larger environmental/social consciousness. Where do all these almost immediately obsolescent devices/adult toys end up?

Curtis Faville said...

The point is that production is what produces wealth.

Automation is a problem, as machines keep replacing people.

But the idea that the whole society can be technocrats sitting at computer screens is nonsense. Huxley predicted in Brave New World that eventually "work" as then conceived would not be necessary.

How would a society based on leisure be run?

Obviously, machines can't do everything.

But it may be that China's prosperous adaptation of the factory system is the last hurrah for mass employment. If mankind manages to control its rabid expansion, and some kind of ecological stasis is achieved, what will a world in which there is little "work" look like?

If people can be fed, clothed, and efficiently transported (in all senses), with automation, where does our Puritan ethic lead us?

eddie watkins said...

It all sounds like Science Fiction to me, if not the Eloi and the Morlocks, then something worse. Personally I think there have to be Morlocks doing the dirty work somewhere.

I don't see how such a society could ever be possible. Part of what I meant by my earlier comment is that we seem to be ruled more and more by fantastical notions, about dreams of perfection, as if speculative fiction has actually infiltrated rational pragmatic society and thought.

But humans are so inherently flawed that a "perfect" society could never be possible. We are literally half wild and need a strong structure of work and such to keep us even somewhat tamed. There will alway be people who don't need this structure, and I don't just mean the whip-wielders, there are "enlightened"-type souls who could get on in a world of leisure, but the bulk of humanity will always need a provided structure, that is if we don't want to descend into brutal chaos.

Kirby Olson said...

Curtis, your posts generally begin with a description of a malady of some kind, and then you end by saying that someone needs to address the problem. Actually, you need to address the problem, and provide a prescription, or else you're not doing any real work. You're passing the buck.

This isn't right.

You argue here that we need a better work ethic, but you show that you yourself do not have same. Get to work, and provide answers.

You think Tasers are a bad idea, but you don't suggest an alternative.

You think it was wrong to shoot Tatiana, but then you don't say what the alternative should have been.

Now you don't want this spending bill, and you think China is sneaky.

What do you think should be done?

I think that an alternative might be for you to write the wonderful criticism of the poets you like. I actually bought the Donald Justice Reader, and am amazed at how good it is.

Should writers stick with what they know?

Curtis Faville said...

As Al Smith used to say, "Let's look at the record."

(Smith was the Democratic Candidate for President in 1928.)

My posts on Ronald Johnson and Donald Justice and John Updike are non-partisan. Not much to argue there except aesthetics, and the competing camps probably only wear white archivists gloves.

I've hardly begun my blog, but with respect to the potentially controversial subjects I've so far engaged, there are three: The Taser Controversy, the animal rights issue surrounding the incident involving Tatiana the Tiger at the San Francisco Zoo, and the tax cuts provision of the so-called Economic Stimulus Package legislation currently working its way through the U.S. Congress.

My position on Tasers is that they should be banned. That's a pretty clear position to take. The alternative is we go back to using batons and pepper spray and water hoses and guns. Actually, those have never been abandoned. Tasers are a product that was invented to sell to police, as well as the general public, to make money. They're bad for society, just like cigarettes and unregulated handguns. It's sort of like demanding a "solution" to cigarette addiction; the cure is the solution, just stop.

I'm against the unnecessary exploitation of animals. Killing animals for sport is bad. Locking them up in cramped zoo cages is bad. The Dhaliwal Brothers are clearly responsible for the death of their family friend. It wasn't the zoo's fault, or the fault of cage construction. It was THEIR fault. They should be charged with a crime. Tatiana didn't deserve to be locked up; she didn't deserve to be shot by four men armed with pistols and shotguns.

About tax cuts: Our country is seriously in debt, and going deeper. We need policies that address that problem; if we don't address it, eventually we won't be able to solve ANY problems, because we won't be able to afford to. Tax cuts don't stimulate the economy. But neither do big welfare and public construction projects. As far as is known, the pundits and experts in finance don't have a solution, so it's unreasonable to think an ordinary citizen like me would either. But I'm convinced that what we're doing now will make it worse. As an amateur, my suggestion is to balance the budget, and trim costs.

The primary function of the press (and the internet) in a democracy is to raise questions, and criticize power (question authority). Those are tired cliches, but they're true nonetheless.

Kirby Olson said...

Al Smith is still a big deal in New York State, where I live. You get all kinds of stuff named after him. I like your summaries of your positions.

They actually aren't that clear in your original posts.

I think you believe that you are allowed to simply imply things, and that we will catch your drift.

In my case, I have not caught your drift in a few cases. I wondered what you meant.

I feel that I am a bit of a tyrant and an oppressor.

You will now complain that the terms are redundant.

But we also need to form superlatives, and through redundancy, that can be easier.

Kirby Olson said...

Now your general positions are much tidier. A big improvement.

I would like to be your tyrant and oppressor, if you will allow it.

The terms of course are redundant, but like little and tiny, separately they are nothing. Taken together, they square one another and form a superlative that might otherwise require me to use a term like satrap, and hope you will get what I mean, when I'm not sure that you will.

I mean, if anyone would, it would be you, but maybe no one would.

Curtis Faville said...

To be obvious: "Little" and "tiny" are not redundant, they're different. If something is little, then to call it tiny at the same time is confusing. Tiny should be smaller than little, at least in context. A pea is little, whereas a pin-head is tiny. But context is everything.

But using "little, tiny" as a descriptive phrase is vague and contradictory, no matter what the context. The speaker is trying to "modify" the word little with the word tiny--which is using an adjective to modify (or amplify) an adjective. Can't do it.

Kirby Olson said...

One problem perhaps in speech is that there is a poor attention span now, so you have to say things twice, and draw them out. People are used to people talking at the speed of television, and so when you're a bit slow in understanding, your understanding might be improved by saying something twice. Tiny and little are different, now that you mention it, but most people would see them as synonyms. Still, I really am on the side of precision.

What do you propose as the penalty for infractions? Do you think it should be a federal crime to misuse a term? do you think people should do hard time for language mis-use?

Short of that, I don't think you will get many people to change.

Anyone caught using your list: would you want a 30-day prison sentence on first or second misuse?

Death sentence?

If it's just you that's annoyed, and you can't get the California legislature to act, I don't think you will get anywhere with this.

Curtis Faville said...

No, I'm not for laws against bad language.

I'm definitely a free speech guy. I think truly civilized people do manage to perpetuate good traditions without laws, thought the French do make laws about food and condiments, I understand. They have lots of tariffs and trade barriers to protect their precious stuff. It's considered unpatriotic, for instance, to drink wines from other countries.

Repetition in poetry can be very effective. I'm writing a blog on a villanelle by Justice, which uses repeated phrases. But that's music. I'm not sure people need to be nagged with repetition. I know it gets on my nerves if people do that.

eddie watkins said...

If Curtis offered solutions to the poblems he points out, he might be in danger of coming across as a crank, and people could stop listening. It's much better to lay out the problem, with maybe hints at solutions, and let others think on it and work it out in their own minds.

Kirby Olson said...

An economist named Robert Barro who teaches at Harvard U. is writing in the WSJ today and says, "There's a big difference between tax rate changes and things that look just like throwing money at people. Tax rate changes have actual incentive effects. And we have some experience with those actually working" (Op-Ed, A16).

Barro thinks Obama is just throwing money at people, and that he's stupid for it. WSJ is somewhat critical of Obama generally, though, so who knows.

If the Demos get this thing through, they will rise or fall by it in the next election everyone is saying, because the Repos refused to sign on, which will also be the way by which we know them.

Time will tell.

I wish they'd let the markets settle out a bit, and rise of their own accord. With all these monkeys monkeying about with the bananas, it's hard to know whether the tamale is spicy enough of its own accord.

We'll see what happens. I just hope someone fixes the economy. I don't care who it is.

That stupid peanut company closed its doors.

Curtis Faville said...

I'm afraid there are no easy fixes.

Anyone got 10 trillion they don't know what better to do with?

That's what they say the banks have on the debit side of their ledgers.

No one will ever be able to make that up. Not in a hundred years.

If that debt is allowed to stand, it will drag the entire finance industry down, and that will be the end of America's economy.

Boom.