The Resurrection of Voodoo Economics

M.W. Guzy is a retired police detective who teaches criminology at the
University of Missouri, St. Louis.
----------------------------------------------------------------------------------------------------------------------
The recent Republican triumph at the polls has left the GOP in control
of both Congress and the White House. Though alarming to liberals,
this development could actually boomerang in their favor: It finally
allows for an empirical test of so-called "supply-side" economics.

The supply-side theory is essentially a reformulation of the venerable
fiction that wealth at the top of the economic pyramid "trickles down"
to those below. By this reasoning, Brazil -- where an elite few own
virtually all of the wealth -- should be the most prosperous nation on
earth.

The concept's modern incarnation first entered the political arena
during the 1980 primaries when Ronald Reagan advanced the
counterintuitive notion that cutting tax rates would increase tax
revenue. At the time, critics howled. Chief among these was his rival
for the Republican nomination, George H. Bush, who labeled the
proposal "voodoo economics."

Talk of witchcraft soon vanished, however, when George [Bush] I --
ever the team player -- joined the Reagan ticket as its
vice-presidential nominee. The theorem that reduced taxes would
stimulate economic growth and thus enhance revenues subsequently
became a right-wing staple.

When Reagan actually implemented his plan, of course, nothing of the
sort transpired. In conjunction with a massive defense build-up, his
tax cuts plunged the budget into record deficits that would persist
until two tax increases, a "peace dividend" and the unparalleled
economic expansion of the '90s finally combined to stem the flow of
red ink.

Undeterred by disastrous outcomes, supply-siders blamed the profligate
Democrats who controlled Congress for the mess. It seems that their
appetite for domestic pork had undermined the experiment. The debate
thus remained a theoretical stalemate until the '02 elections gave W.
Bush the mandate he'd sought.

The ideological scion of Reagan rather than of his patrician and
relatively moderate father, the younger Bush would never renege on a
"read my lips" pledge simply to accommodate fiscal reality. Relieved
of the strictures imposed by a hostile legislature, he's now free to
test the theory that our economic doldrums are the result of rich
people not having enough money.

Of course, should welfare for the wealthy fail to stimulate middle
class consumer demand, supply-side enthusiasts will fabricate another
explanation for their creed's failure. Like all true believers,
they're amazingly resilient in the face of contradictory empirical
data. After all, they've argued for decades that any increase in the
minimum wage will result in job cuts even though this phenomenon has
never, in fact, occurred.

In theory, wage hikes should cost jobs because they inflate the cost
of labor. In reality, this doesn't happen because employers hire
workers to satisfy demand for their products, not because labor's
cheap. Layoffs take place when demand ebbs.

Understanding that simple fact suggests that the surest way to
stimulate economic growth is to give consumers more money to spend --
demand-side economics, if you will. Unfortunately, that humble notion
fails to justify huge windfalls for the country club set and will thus
attract few proponents in the current political climate.

Boxing is sometimes called the "sweet science" because it subjects all
conjecture to the test of the ring. Supply-siders are about to step
back between the ropes -- this time without a fall guy to blame for
their shortcomings. Let the match begin.

This is M.W. Guzy for TomPaine.com.


get the latest on what's new at TomPaine.com before everyone else! You
can unsubscribe at any time and we will never distribute your
information to any other entity.





Published: Nov 18 2002

Don't worry. When it doesn't work they'll just blame the liberal courts for
the failure.

"David" wrote in message
...
The Resurrection of Voodoo Economics

M.W. Guzy is a retired police detective who teaches criminology at the
University of Missouri, St. Louis.
----------------------------------------------------------------------------------------------------------------------
The recent Republican triumph at the polls has left the GOP in control
of both Congress and the White House. Though alarming to liberals,
this development could actually boomerang in their favor: It finally
allows for an empirical test of so-called "supply-side" economics.

The supply-side theory is essentially a reformulation of the venerable
fiction that wealth at the top of the economic pyramid "trickles down"
to those below. By this reasoning, Brazil -- where an elite few own
virtually all of the wealth -- should be the most prosperous nation on
earth.

The concept's modern incarnation first entered the political arena
during the 1980 primaries when Ronald Reagan advanced the
counterintuitive notion that cutting tax rates would increase tax
revenue. At the time, critics howled. Chief among these was his rival
for the Republican nomination, George H. Bush, who labeled the
proposal "voodoo economics."

Talk of witchcraft soon vanished, however, when George [Bush] I --
ever the team player -- joined the Reagan ticket as its
vice-presidential nominee. The theorem that reduced taxes would
stimulate economic growth and thus enhance revenues subsequently
became a right-wing staple.

When Reagan actually implemented his plan, of course, nothing of the
sort transpired. In conjunction with a massive defense build-up, his
tax cuts plunged the budget into record deficits that would persist
until two tax increases, a "peace dividend" and the unparalleled
economic expansion of the '90s finally combined to stem the flow of
red ink.

Undeterred by disastrous outcomes, supply-siders blamed the profligate
Democrats who controlled Congress for the mess. It seems that their
appetite for domestic pork had undermined the experiment. The debate
thus remained a theoretical stalemate until the '02 elections gave W.
Bush the mandate he'd sought.

The ideological scion of Reagan rather than of his patrician and
relatively moderate father, the younger Bush would never renege on a
"read my lips" pledge simply to accommodate fiscal reality. Relieved
of the strictures imposed by a hostile legislature, he's now free to
test the theory that our economic doldrums are the result of rich
people not having enough money.

Of course, should welfare for the wealthy fail to stimulate middle
class consumer demand, supply-side enthusiasts will fabricate another
explanation for their creed's failure. Like all true believers,
they're amazingly resilient in the face of contradictory empirical
data. After all, they've argued for decades that any increase in the
minimum wage will result in job cuts even though this phenomenon has
never, in fact, occurred.

In theory, wage hikes should cost jobs because they inflate the cost
of labor. In reality, this doesn't happen because employers hire
workers to satisfy demand for their products, not because labor's
cheap. Layoffs take place when demand ebbs.

Understanding that simple fact suggests that the surest way to
stimulate economic growth is to give consumers more money to spend --
demand-side economics, if you will. Unfortunately, that humble notion
fails to justify huge windfalls for the country club set and will thus
attract few proponents in the current political climate.

Boxing is sometimes called the "sweet science" because it subjects all
conjecture to the test of the ring. Supply-siders are about to step
back between the ropes -- this time without a fall guy to blame for
their shortcomings. Let the match begin.

This is M.W. Guzy for TomPaine.com.


get the latest on what's new at TomPaine.com before everyone else! You
can unsubscribe at any time and we will never distribute your
information to any other entity.





Published: Nov 18 2002

David wrote:

The Resurrection of Voodoo Economics

M.W. Guzy is a retired police detective who teaches criminology at the
University of Missouri, St. Louis.
----------------------------------------------------------------------
Understanding that simple fact suggests that the surest way to
stimulate economic growth is to give consumers more money to spend --
demand-side economics, if you will. Unfortunately, that humble notion
fails to justify huge windfalls for the country club set and will thus
attract few proponents in the current political climate.

Not at all. The problem is, how do you give money back to the
consumers without lowering taxes across the board - which, the last
time it happened, led to cries of "a new Lexus for the rich, and a new
muffler for your old car for the rest of us"? Pretty much by
definition, all "tax cuts" favor the wealthy.
(I'd like to say that the Democrats' plan for "saving social security"
is to wait until the well is pretty much dry and then tax the rich,
but I can't because the PPOR (Post Proof or Retract) types seem to run
Usenet now (along with the "The 9/11 Pentagon 'crash' was caused by
two people playing something called 'hat putato' at someplace called
'boiiiiiger king'" types) and I can't remember where I heard it.)

-- Don

"§ Dr. Artaud §" wrote in message
...
David wrote in
:

I'm a registered Republican, allow me to say that I believe that they
(Republicans) have already hung themselves and the Nation. Oddly enough
though, other than the issue of Judicial Appointments, the Democrats have
been surprisingly cooperative with the Republicans on much of the
spending and the Democrats have been far too willing to cooperate on the
"so called" Patriot Acts.

I genuinely believe that most of the Legislators have been compromised by
a loose life style, allowing anyone with intelligence gathering
capabilities to unduly influence the Legislators voting, lest their
skeletons become public.

I bought into the conservative vs. liberal arguments, and I perceived the
Republicans as being more conservative, having "down to earth" values.
The Terri Shiavo issue starkly demonstrated that they care less about the
common man, and I believe that they intentionally used this issue to
promote the now trendy initiative of allowing physicians to determine
when "end of life" has been reached. This will save money for Medicare,
help preserve the meager social security system by eliminating people
that are otherwise eligible to collect, and save the insurance industry
untold dollars.

Bankruptcy reform protecting the credit card companies, (but no usury
protection from these same companies), protection for American
pharmaceutical interests by eliminating cheaper Canadian drugs, done
under the guise of (what else) protection from terrorism, and their
ludicrous mantra of free trade, despite the fact that many other
countries readily block the importation of American goods, yet we must
always be open to "free trade" (i.e. dumping).

I hope I never see one party control all three houses again.

Oh, but it's still the Democrats fault when something goes wrong. Never the
ones that control the situation.


Regards,

Dr. Artaud

"§ Dr. Artaud §" wrote in message
...
"FDR" wrote in
:

I can see that you are firmly ensconced in liberalism, please don't
expect posts from me that will ever fit your needs.

Rather than read the post for what it was, you read it for what you
needed to further your agenda.

No, you came out with these things to support your argument and I addressed
them for the hooey they were.


My post was about my disillusion with the party that I have identified
with for years, though there is no chance of me voting for the Democrats.

Well good for you.


The Democrats wail about Republicans limiting a woman's rights to do with
her body what she wishes, then proceed to support euthanasia, where
eventually people are going to be forced to do with their bodies what
they may not wish. They support "Free Speech" when it comes to any form
of pornography, then squelch the right of a child to say "God" in school.

Huh? People should be allowed to do what they want with their body. Do you
like the government having say over you?

As for free speech, there is no such thing at schools.

If your kids were told they had to say a salute to Allah the conservatives
would be up in arms. Yet, God is ok. What God has to do with learning
arithmetic and English confuses me. Maybe you can elighten me. Will kids
understand algebra better if the give praise to the Lord?


My post was about the hypocrisy of both of the parties, yet you blathered
away at just one concept of my post.

This is hooey too. Let's look at it this way: Does America
need those extra 45 million people?

Certainly not! I agree with you here. Tell your Democratic Legislators to
support enforcement of the Mexican U.S. borders and to send back the
illegal immigrants that are already here.

But I thought Zell said we needed more workers? Does it matter if those
workers came from an unaborted fetus in Mexico or an unaborted fetus in the
US?

If you are suggesting that
killing infants is the best way to control the population, this is where
I suggest that you and others like you have lost your morals.

No, I said nothing about killing infants as a means of population control.
I instead countered the idiotic statemens of a out of touch sneator.


Late term (partial birth) abortions are not moral under any circumstance.
Please don't use the mother's life argument, it's hackneyed, and do a
little research on the issue on some web site other than Howard Stern's.

Sorry, I don't listen to Stern. Do you?

So what about those 45 million workers we need? Republicans should be
having more babies to make up for the shortfall.


Regards.

Dr. Artaud

"FDR" wrote in
:

Hi again, I didn't finish reading your reply as it was too predictable.
Nevertheless, that's what is great about living in a country with at least
a vestige of freedom of speech, we can all believe what we want to.

You probably are interested in knowing the Liberty Net frequency this
Saturday, it's 3955 KHz LSB so far.

Regards,

Dr Artaud

§ Dr. Artaud § wrote:

"FDR" wrote in
:

Hi again, I didn't finish reading your reply as it was too predictable.
Nevertheless, that's what is great about living in a country with at least
a vestige of freedom of speech, we can all believe what we want to.

You probably are interested in knowing the Liberty Net frequency this
Saturday, it's 3955 KHz LSB so far.

Until the jammers show up.

Regards,

Dr Artaud


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"David" wrote in message
...
The Resurrection of Voodoo Economics

M.W. Guzy is a retired police detective who teaches criminology at the
University of Missouri, St. Louis.

So how does this make him an expert in economics?

On Mon, 18 Apr 2005 12:45:15 -0500, "MnMikew"
wrote:


"David" wrote in message
.. .
The Resurrection of Voodoo Economics

M.W. Guzy is a retired police detective who teaches criminology at the
University of Missouri, St. Louis.

So how does this make him an expert in economics?


He's telling you what happened. He is a trained observer.

"David" wrote in message
...
On Mon, 18 Apr 2005 12:45:15 -0500, "MnMikew"
wrote:


"David" wrote in message
.. .
The Resurrection of Voodoo Economics

M.W. Guzy is a retired police detective who teaches criminology at the
University of Missouri, St. Louis.

So how does this make him an expert in economics?


He's telling you what happened. He is a trained observer.

Man, you'd believe anything. And no, he's telling what HE thinks happened.
Big difference.