Tuesday, September 27, 2016

Classic economics asserting itself in the face of Keynesian lunacy.

Aka "Supply Side" economics.

I watched the debate.  I watched it highly biased in favor of Trump, who I truly believe will ACTUALLY implement the policies he has advocated, if he can get in the White House. He talked like a working class joe, which he more or less is, even if his work is at a much higher level, and in contrast to Hillary sounded both much less erudite and much less smug.

As he more or less noted, most of our problems have been created by allegedly erudite, smug assholes with degrees from prestigious universities and ZERO experience solving actual problems in the real world.  That is something Trump has done his whole life.  He figures the situation out, develops a plan, executes it, and reaps a profit.  When his plan doesn't work, he recognizes it, develops an exit strategy, and executes that.

A meme circulating among the left is that if Trump had just invested the money he inherited, he would be much richer.  This may be true, but he would also be vastly less experienced as a human being.  His business experience is infinitely larger than that of Hillary, who has been in politics her whole life.  She doesn't get "little people".  They are an abstraction to her she practices appealing to rhetorically, but for which she has no practical use, and no interest in, outside the election season.

To my main point: somebody needs to do the fucking job of defending traditional economics.  Supply side is already propaganda.  Historically, the policy of government was to just let economic fires burn themselves out.  And it WORKED.  You know the Great Depression of the early 1920's?  Neither do I.  It didn't happen.

Not until you get to aggressive government activism--to Keynesian policy--which was started by Hoover, and put on steroids by FDR, do you get massive, long term failures.

It is worth recollecting that Keynes was a fascist.  Mussolini called his policies "pure fascism", and he speaks at the end of his "General Theory" about using his methods for the government to get de facto if not pure control of all the means of production.  He had room in his world for compliant massive global corporations, as indeed do all Democrats, but not for a forest of thriving independent small businesses.

The core idea behind tax cuts is that it frees up money for investment.  You cut personal and corporate taxes, you lose money for a year or two, then because the overall economy has expanded, you get more money at lower tax rates.  Win/win: the people get jobs and better paying jobs, and the government can stay the same size without borrowing money.  In a yet better world, the government would shrink, which would allow even fewer taxes to be needed, and more economic prosperity.

This fact is hidden by the clever and completely cynical ploy of tying government spending to overall GDP.  Why?  Do we need more government the bigger we are?  No, of course not.  What this trick actually does is convince ignorant and stupid people that the destiny of government is to grow forever.

None of these things are controversial among non-lunatics.

There is an excellent chart somewhere on the internet which shows that in both the case of Reagan and Bush overall revenues went up after the tax cuts, but I can't find it.  That is the sort of thing the left wing pukes at Google like to hide.  Why, I don't know. It shows their ideas about tax policy are wrong, and why they want to be wrong, I don't know.  Vanity and habit I suppose, the twin goblins that hover continually around all mediocrity.

http://www.heritage.org/research/reports/2014/12/federal-spending-by-the-numbers-2014

This covers the Bush years.  The cuts really took effect about 2003 or so.  The government took in 2.2 billion or so that year.  Next year, slightly more.  2005 we took in 2.5, 2006 2.7, 2007 2.8, and 2008 2.7 again, but recall a recession hit that year, one brought on by the collapse of the housing bubble that was largely the work of Fannie Mae and Freddie Mac.  Had the bubble not had the de facto underwriting of the government, sane loans would have needed to be made, and the bubble never would have emerged. The high risk lending never would have happened.  Government--specifically, BAD government--created that crash..

But as far as lower taxes creating more tax revenue as a result of economic growth: THIS IS WHAT THE THEORY PREDICTS AND IT IS WHAT HAPPENED.  Again, you can do the same experiment with Reagan.

"Supply side" economics is simply economics.  It works.  And I watch people like Hillary repeat these childlike mantras about the supposed failures of these policies, and I am forced to recall most people are fucking idiots when it comes to economics, and have been brainwashed into believing things that are completely batshit insane.


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