It's Our Turn Now
Candidate John McCain gave a truly innovative speech last week that suffered from one fatal flaw. The innovation: cast your speech as a fantasy, looking back from the end of your first term so you can tout all your great accomplishments without the distraction of pesky fact-checkers. The fatal flaw: recent history has shown that his policy agenda is antithetical to his goals. His vision of the future is divorced from his roadmap to get there.
To the contrary, anyone interested in a future that looks quite different from the present, and most Americans are leaning in precisely that direction, needs to remember but one mantra. It's one of the most important arguments progressives can make between now and November, and it's simple, compelling, and unarguably true: we've tried it their way, and it hasn't worked.
Whether it's the economy, the environment, foreign policy, fiscal policy, government competency, judicial fairness... you name it... we've tried it their way, and it hasn't worked.
For this post, let's focus on the economy. We're aided by the fact that we are likely at the end of the economic expansion that began in late 2001, so we can now compare the results from this cycle to previous ones. We're additionally aided by the fact that the work has already been completed by my EPI colleagues Josh Bivens and John Irons. They've done the math, comparing growth rates of all the key variables over this and past cycles.
We'll get to those results in a minute, but consider them in this light: they are the outcome of a natural experiment, one wherein we turned every branch of Federal government, including the judiciary, over to conservatives with a unified vision of the economy. I describe the vision as YOYO (you're on your own) economics, though you're free to amend it to "you're on your own unless you've got friends in high places... in that case, you can plunder the treasure." For the rest, it's "here's a tax cut, a private program, some deregulation, and a nudge into the market place to sink or swim."
Note, for example, that McCain's speech revives privatizing Social Security ("personal retirement accounts) as a policy goal. He reforms health care though the injection of more "market forces," as we're all incentivized to go out and shop for health care in the open market, a plan that has the potential to be both expensive and ineffective. And as I pointed out last week in this space, McCain's tax cuts are Bush's on steroids. He begins with extending the Bush cuts (10-year cost: $1.7 trillion), but that's less than a third of the cuts that he's planning. And remember, in the midst of all these cuts, he's got to pay for a lot more war.
So, what are the economic outcomes of this great, neocon experiment? From Bivens and Irons:
- Of the 10 expansions since 1949, as measured from the end of the recession (trough) to the end of the expansion (peak), the expansion from 2001 through last year ranks last in average growth of GDP, investment, employment growth, and employee compensation.
- Despite [supply-side] tax changes that were promoted as incentives to increase investment, average growth in total investment over the latest expansion was less than half of the post-WWII average, and ranked last in this group. For the full cycle (from the 2001 peak to the last quarter of 2007), investment growth was also less than half the average and worse than all cycles in the last 50 years.
- Corporate profits were the only area of strength in the latest cycle, ranking 2nd strongest among the last the prior 10 cycles.
- The rankings for all 10 full business cycles since WWII show that the 2000s rank eighth in GDP, ninth in consumption spending and employment growth, and last in labor compensation and the ratio of the population employed.
Regarding the variables that matter most to working families, the neocon experiment was a particularly dramatic failure. Employment grew one third as fast as the average over the 2000s business cycle and the unemployment rate, though low on average, was higher at the end of the cycle than at the beginning. Perhaps the most damning indictment is this: for the first time on record, going back to the mid-1940s, the income of the typical, middle-income family was slightly lower last year than at the prior peak in 2000 (see their figure A).
The reason, of course, is that the benefits of the economy's growth flowed largely to those at the top of the scale, an outcome long associated with YOYO'ism. In the history of income inequality data going back to 1913, income is now more concentrated among the top 1% of households than in any other year, bar one: 1928.
So there you have it: the great, neo-con economic experiment is over and the results are in. Outside of the top 1%, there's less income growth than in any past business cycle. The key macro-indicators, such as employment, GDP growth, and investment have also faired uniquely poorly. The anti-government, deregulatory agenda has led to fatal incompetence, a massive housing bubble, ailing global credit markets, and near-recessionary growth for the US. The "ownership society" is a cruel joke: homeownership rates are falling for the first time in decades.
The defenders of the status quo will howl in protest: the Democrats blocked us, the terrorist attacks and the war changed everything, we must stay the course to victory! But such rhetoric should be dismissed as what it is: the last, desperate gasps of a dying movement.
They've had their turn and they've failed. It is our turn now.
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Fear and Reason
It must be obvious by now that to win the Presidency, John McCain is committed to politics of fear. His speech to the National Restaurant Association May 18 is a replay of George W. Bush. McCain said that staying 100 years in Iraq “…would be fine with me as long as Americans are not being injured or harmed or wounded or killed.” How could a serious candidate make such a reckless statement? There will not be a bridge standing in the United States, nor a laboratory in operation, nor a child in school after 100 years of making enemies in the Middle East. McCain also ties himself to Bush with steel cable by promising to continue a policy of borrow and spend, which means that taxes first must pay lenders, and transfer citizens’ wealth into the hands of large investors in Federal notes, including China. And who makes money from war? Fear is the enemy of reason, and truth is still a main casualty of war.
Today Kentucky and Oregon have a choice: War and fear or negotiation and work for a better future. As President, Barack Obama will end the thriftless spending on a war he never supported, prepare and negotiate with enemies whose interests can be aligned with ours, and focus our spending on new manufacturing and education. I choose hope. Please strengthen our nominee.
When I want an explanation of what a Conservative is trying to say, I always go to HuffPo for the correct interpertation. Just like when I want a clarification of the Bible, I go to an Atheist and when I want a correct interpetation of American history, I go to Howard Zinn the marxist who supports Obama. Makes sense doesn't it? What confuses me is that Huffers never seem to take my interpetation of Obama's weaknesses as gospel. Go figure.
Another insightful ananlysis by the chimp. What I missed was any attempt to point out errors in the post. You know, like did you perceive factual misstatements, defects in logic, perhaps even distortions? Assuming that you would recognize such flaws if you saw them, there must not have been any since you did not discuss a single one. When will you go away?
Howard Zinn is a Marxist? Please explain....
Whereas those of us who tend to post here more often come here, AND elsewhere so that we can get several DIFFERENT viewpoints so that we can expand our minds. And then we read YOUR comments.........
The post below written by me (realtalk) is a response to NEAGUY's post.
neauy --- HERE ARE THE REST OF THE FACTS:
-Obama believes that teachers should NOT be teaching to the standardized test which is what has been happening. Teachers should not be forced to spend the academic year preparing students to fill in bubbles on standardized tests. Obama will reform NO CHILD LEFT BEHIND, and he will improve the assessments used to track student progress to measure readiness for college and the workplace and improve student learning in a timely, individualized manner. Obama will also improve NO CHILD LEFT BEHINDs accountability system so that we are supporting schools that need improvement, rather than punishing them.
- Obama will immediately begin to remove our troops from Iraq. He will remove one to two combat brigades each month, and have all of our combat brigades out of Iraq within 16 months.
- Obama believe that Afghanistan is where we should be fighting a battle because it is in that country is where the Taliban, and where AlQueada are still getting stronger. Bush ignored Afghanistan resulting in AlQueada and the Taliban become stronger in Afghanistan.
- McCain has NO plans to deal with Iran, he does not want to talk to them, and he does not want to bomb them, so he has ZERO plan of dealing with Iran, and that is stupid, and dangerous!
According to an evaluation of data from the U.S. Department of Treasury, the cost of goods and services remained relatively consistent between 1635 and 1913, around a level of roughly 25 times the buying power of the U.S. dollar in 2006.
And what happened in 1913, on Dec 23rd? Or is that post hoc reasoning ...
You've left out the most important part of that historical analysis, Novista. In those years between 1635 and 1913, most people had very little money with which to buy anything because wealth was concentrated in the hands of a very few -- much like what is happening again today.
Do you really want to see a return to the conditions of the 1830, for instance? Children working underground 13 hours a day for pennies? No minimum wage? No safety regulations for workers? "Iron Law of Wages?"
Better read up on what life was like for the "average" American before income tax became the means of redistribution of wealth. Unless you are filthy rich, I'm sure it will be an eye-opener for you.
If we adopt the neo-liberal model for economics, rest assured children won't be working underground 13 hours per day, because nobody will work. Well, except those for whom Our Great Leader, Barack will decide are worthy of work.
I, for one, cannot wait to get laid off (in about a month here). Then it's nothin' but free livin' and free money for the next 6 months! And right in time for summer too. Thank you, American Taxpayers!
Ah. Sarcasm. The last bastion of those who have nothing whatsoever to say or add to a discussion.
I find it odd that while it's true there are lazy Americans who believe in entitlement they are in both extremes of our economy. From the entitled rich to entitled poor, those extremes seem to think they should be handed tax breaks, leisure living and few responsibilities. Then there are the ever growing working poor and the ever shrinking, struggling middle class. They love to define themselves through their work and sacrifice. They are the backbone, the real one, of this country, the one's who defined our national work ethic that, at one time, was the highest in the industrialized world.
It is they who have been betrayed by glib sarcasm of folks like you, redeyes, and the greedy profiteers who have all but destroyed their ability to make an honest life for themselves. My hope is that once you come crawling back a job that you have to struggle the way those more hopeful and more honest about their situation have had to.
I'd say good luck but then you've proven you don't deserve the sentiment.
Just two questions -
1. What was the purpose of the "temporary" tax cuts in 2001/3 passed for TEN years?
2. This meant that when the "temporary" expired, the cuts became permanent?
Only politicians of all stripes would rely on such gimmickry to fool all of the people all of the time!
1) The purpose of making the cuts temporary is that they recognized that making them permanent would cost too much money (using the then current situation) and that they were hoping that the cuts would have paid for themselves by then, so that we could make them permanent. They have NOT paid for themselves, as anyone with a brainstem KNEW at the time, but......
2) No, technically the cuts are supposed to expire 10 years after they were created, and that means that the rates would go up at that time. McBush is trying to make them permanent, and Obama and Hillary are trying to get rid of them BEFORE the 10 year mark!
From your lips to American's voters ears. Too bad the media won't tell them this, and it will be spun so that it was the Democrats failure, etc.
Chimpy is astonishing as a Demolitions expert working over our economy; hope we have equally good experts to rebuild everything, literally everything that Mr. W has destroyed. How did he pull his stunt? - a complacent and foolish Congress. As usual, the NeoCons will be free with their criticism and advice, but not their help. The Tip of the Iceberg: the economy, with a lot of things under water. What I hope to see in the next decade: the NeoCons eagerly, no desparately, looking for another FDR.
For being 'destroyed' we, as americans, live in the weathest country in the world. We have the highest standard of living, and the best health care, food, etc. It may be getting more expensive, but we are certainly not in DIRE straights.
We still are at positive growth rate (small).
Now tell me what YOU are doing for yourself economically, that will help yourself, and will also help others?
You want government to have all the answers, but it really starts for you!
http://www.prospect.org/csnc/blogs/ezraklein_archive?month=01&year=2008&base_name=the_best_health_care_in_the_wo
Turns out our health care is so hot after all. We rank 19th of 19 in preventable deaths in this country. We also have the 2nd worst mortality rate for newborns in the developed world.
And we are not the most weathly per captia:
Richest Countries in the World
Rank Country GDP - per capita
1 Luxembourg $ 68,800
2 Equatorial Guinea $ 50,200
3 United Arab Emirates $ 49,700
4 Norway $ 47,800
5 Ireland $ 43,600
6 United States $ 43,500
7 Andorra $ 38,800
8 Iceland $ 38,100
9 Denmark $ 37,000
10 Austria $ 35,500
Source: CIA World Factbook
And as for the best food in the world, maybe so, but the safety of that food is questionable: http://www.rwjf.org/newsroom/newsreleasesdetail.jsp?productid=28851
And the highest standard of living does not go to the U.S. - We, in fact, ranked 8th in 2006
http://www.dalgety.sk/en/australia/
Australia was in 2006 ranked number three by the United Nations Human Development Index, as one of the best countries in the world to live in. The United Nations HDI is a standard means of measuring well-being.
Norway
Iceland
Australia
Ireland
Sweden
Canada
Japan
United States of America
Switzerland
Netherlands
Government does not have all the answers, but when you're asking people who have been laid off when their jobs were shipped overseas, what kind of "personal responsibility" do you expect of them? Government's role should be to help those who need help get a hand up so they can become responsible citizens (meaning they can pay taxes). Would you prefer to see them on the streets (as they are now) begging for a handout? There are families who can no longer afford to pay their bills with the high cost of gas that they must purchase in order to get to work. Credit card companies are charging usary fees because government has not regulated them. Are you one of John McCain's middle class who make $200K per year? Hate to burst Johnny's bubble, but as you can see above $ 43,500 is the per capita income. Try to feed a family (or even yourself), pay for housing, heathcare insurance, a car payment (or repairs to an old beater that's paid for), the car insurance, the electric bill, the water bill, the sewer bill, the trash bill, and the gas bill on that amount of money per year. I'm guessing you won't have much left to invest in your future.
First, while I will admit that we are still the wealthiest country with the highest standard of living, this is an average, and is still the holdover from the progressive policies of the 50s and 60s. We are running out of steam, however, and are soon to fall from those twin peaks.
As regards your statement that we have the best healthcare in the world, obviously you've never had to go to a hospital with no money to pay for it!
As far as what I'm doing, I am not driving except to go to and from work (and I would take public transit, but it's more expensive) and I'm cutting mack on the rest of my spending to make sure that I can survive the storm, hopefully!
I'd go out on a limb and say the scandinavian states probably have the best healthcare in the world. I pretty sure it's not us Brits.
From all reports there are more people in the US with no access to healthcare than the entire population of Wales. I guess you meant to qualify your statement by adding
"if you can afford it or have an employer that can",
but I know how easy it can be to forget little things like that when in a hurry to make a point.
I'm growing my own food now. Btw, can I have some of what you're smoking?
And to all those DINO's out there taking about voting for McCain instead of a Dem this November--You apparently like the direction we are going.
How sad for you.
What this guy doesn't really mention is what "THEY" are actually going to do.. according to Senator Obama, its raise every tax they can, to a point where higher income people are paying over 50% marginal rates.
He also conveniently ignores that 1980-92 were run by conservative economics, as were many of the presidencies prior to that (Eisenhow, Nixon).. heck, even Kennedy cut taxes quite a bit.
He might be conveniently ignoring the fact that government spending is the root of the problem, a problem that the Democrats have shown themselves particularly good at carrying forward (farm bill, anyone?)
Higher income people can well afford to pay 50% taxes, even 70% would not be out of line.
Source for this proposed tax policy please??
When the United States Government is $10 TRILLION in debt, coupled with having a $400 BILLION deficit this year ALONE, yeah, we need to raise taxes!
And just how is your example of 1980 to1992 being a conservative time a positive example???????
And you are right, Kennedy cut the higher levels tax rates, from around 90% for the richest Americans under EISENHOWER to around 70%, which is STILL more than Obama is talking about!!
If we let the Republicans continue with their policies we may pass a point where there is no way that the people will be able to recover the form of government envisoined by Lincoln. By the people and for the people may be gone. We cannot allow McCain to win. Republican must not be in control of government for generations.
For illiterates, such as yourself, President Bush embodies far more of the positive characteristics of Lincoln than Obama ever will. It's humurous to listen to Obamaniacs comparing Obama, who has never accomplish anything, to past great Americans and other World leaders. The closest that Obama comes is to Carter and Bill Clinton. Carter, for his appeasement of terrorists and enemies of the US and Clinton for his propensity to lie through his teeth.
Where does the US rank on education?
Among adults age 25 to 34, the U.S. is ninth among industrialized nations in the share of its population that has at least a high school degree. In the same age group, the United States ranks seventh, with Belgium, in the share of people who hold a college degree.
By both measures, the United States was first in the world as recently as 20 years ago, said Barry McGaw, director of education for the Paris-based Organization for Cooperation and Development. The 30-nation organization develops the yearly rankings as a way for countries to evaluate their education systems and determine whether to change their policies.
McGaw said that the United States remains atop the "knowledge economy," one that uses information to produce economic benefits. But, he said, "education's contribution to that economy is weakening, and you ought to be worrying."
The report bases its conclusions about achievement mainly on international test scores released last December. They show that compared with their peers in Europe, Asia and elsewhere, 15-year-olds in the United States are below average in applying math skills to real-life tasks.
Top performers included Finland, Korea, the Netherlands, Japan, Canada and Belgium.
Given what the United States spends on education, its relatively low student achievement through high school shows its school system is "clearly inefficient," McGaw said.
Yes, but, that top 1%, in the words of Ronald Reagan, is sure glad they got the government off their backs!
Right on, Brother!!!!
Obama wants higher federal income taxes, higher social security taxes, higher gas taxes and higher capital gains taxes ASAP. Yeah this will be great for the middle class and lower folks of the U.S.
Get real Obama will kill what is left of the economy and Middle class America!!
Federal income tax increases: don't affect the lower and middle classes NEARLY as much as the rich
Social Security tax increases: not even on the table, please stop lying
Higher gas taxes: these pay for minor details, like BRIDGES!!!
Capital Gains tax increases: please explain how this will even AFFECT the middle and lower classes, since they aren't the ones paying this tax?????????????
Just as neocons are a particularly dramatic people.
http://www.pubrecord.org/index.php?option=com_content&task=view&id=51&Itemid=8
McCain Defends 'Enron Loophole'
The Public Record
May 19, 2008
Sen. John McCain says he opposes the $307 billion farm bill because it would dole out wasteful subsidies, but his chief economic adviser Phil Gramm also wants to stop its proposed regulation of energy futures trading, a market that was famously abused when Enron Corp. manipulated California’s electricity prices in 2001.
Clearing the way for that California price gouging, Gramm, as a powerful Texas senator in 2000, slipped an Enron-backed provision into the Commodities Futures Modernization Act that exempted from regulation energy trading on electronic platforms.
Let's see isn't Gramm the Senator who predicted that there would be a ression after Clinton's tax package passed without one Repuk vote in 1993. And check your 401k's and Ira's after that bill passed also the price of gas a balanced budget and a surplus. So this is the guy McCain the Senile old man is relying on for econmic advice
Ah yes, the Gramm Leach Biley Act that repealed the Glass Stegal Act that was put in place to regulate the banking industry after the Crash of '29 to prevent them from getting creative again. I understand Gramm was well rewarded for that lovely bill. And, of course, we have been rewarded with the sub-prime crisis. And, of course, the deregulation of the utilities (Enron) and the telecoms (MCI)...all Republican legislation that Bill Clinton happily agreed with and signed into law (even Greenspan referred to Bill as a "Republican")
It's time to clean house and rid both parties of the people who sell us out for 30 pieces of silver.
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