I Thought Tax Cuts Were the Elixir that Heals all…

Many in the GOP do not like the idea of extending payroll tax cuts.

I noted the following quote from Michele Bachmann in one of Doug Mataconis’ posts:

“Let me say first of all I voted against the bill that the president put forward last December that took $111 billion of revenues away from the Social Security Trust Fund this year. That’s the lowering of the payroll tax,” Bachmann said.

(Source)

What I find interesting about this is pretty obvious:  Republicans have spend a lot of time arguing that tax cuts are the end-all of government policy.  But now they have met a tax cut that they do not like.  As an LAT piece notes, Bachmann is not alone within the GOP as being skeptical about the payroll tax cut, and are therefore opposed to the proposed extension and deepening  of said cuts:

“I’m more dubious today than I was,” [Senator Jeff] Sessions [R-AL] said, citing the cost to the Treasury of the tax cut. “The debt is much larger now.”

Rep. Pete Sessions of Texas, who heads the House Republican campaign committee, called Obama’s plan “a horrible idea.”

[…]

“This is robbing Peter to pay Paul,” said Rep. Tom Price (R-Ga.), a leading House conservative. “It’s a gimmick.”

I will say that, I, too, wonder about the efficacy of the policy, so don’t mind the debate (see Brad Plumer for some discussion on the question).  Still, the GOP opposition raises some questions.

First, opposing cuts to payroll taxes undercuts several key Republican claims in regards to fiscal policy, including the notion that it’s “the people’s money, not the governments” and therefore any time you can let the people keep their money it is an unvarnished good.

Second, this then raises the potential that we can actually have a rational dialog* about taxes and spending, because if (as per Bachmann, Sessions and Price above) the payroll tax cut might not be worth the cost, then perhaps other tax proposals might should be evaluated in that fashion.

Third, I must confess, the GOP response to this particular tax cut does raise the issue of why they are in favor universally for tax cuts that help upper income earners, but lose their zeal for a tax cut that predominantly help lower income earners.  Now, this may well be that the basis of the GOP economic theory, i.e., that only upper income earners can stimulate the economy.  However, politically it will raise questions and opposition to the payroll tax cut will provide a line of attack for the Democrats.

One last thought:  this entire debate should be a reminder to everyone that, yes, everyone pays taxes, even low income earners (contra those who like to cite only income taxes as taxes, such as in the infamous formulation:  47% of the population doesn’t pay taxes!).

*Yes, I know.

FILED UNDER: Deficit and Debt, US Politics
Steven L. Taylor
About Steven L. Taylor
Steven L. Taylor is a Professor of Political Science and a College of Arts and Sciences Dean. His main areas of expertise include parties, elections, and the institutional design of democracies. His most recent book is the co-authored A Different Democracy: American Government in a 31-Country Perspective. He earned his Ph.D. from the University of Texas and his BA from the University of California, Irvine. He has been blogging since 2003 (originally at the now defunct Poliblog). Follow Steven on Twitter

Comments

  1. michael reynolds says:

    You’ve pointed to the truth: it’s not about tax cuts it’s about tax cuts for rich people.

    The particularly creepy thing about this is the servility of middle class and poor Republicans who are just desperate to make sure I get a tax cut. Is bootlicking some sort of genetic predisposition, or is it credulity combined with brainwashing?

  2. MarkedMan says:

    Wow, I gotta admit I’m surprised by just how blatant the republicans are being about this.

  3. Polaris says:

    There is a perfectly valid reason why many in the GOP want to cut taxes on the wealthy and less so for everyone else, and no, it’s not because the GOP is a bunch of meanies that hates the working Joe. You may disagree with their logic but it’s there and it goes as follows:

    If you want to cut taxes, then you presumably want the person benefiting to spend that extra money on things better for the economy (and country) in general than having it sit in federal coffers. When you cut the tax of a wealthy person who creates jobs, funds industry, etc, then that money that is saved by them is being used to promote economic activity that will “trickle down” (yeah I know many of you hate this but most in the GOP believe it) and actually have a multiplicative effect.

    On the other hand, if you cut the tax of a mere wage earner, you also lose a certain amount of federal revenue, so what does that person do with it? The typical person less than upper-middle class is going to spend almost all of that money ultimately. Now, that’s not bad for the economy (indeed it’s good for the economy), but that money only helps once.

    So if you only have enough political juice for a certain amount of tax cuts, who do you favor? The wealthy.

    Again, you may disagree with the trickle down premise, but if you accept it as ‘true’ (and most in the GOP do), then their stance is actually quite logical.

    -Polaris

  4. lunaticllama says:

    It’s been pretty obvious for a long time that Republicans are mostly concerned with trying to redistribute wealth from the lower and middle classes to corporate and economic elites. That rationale pretty much explains their behavior the majority of the time. Not sure why people have such trouble accepting it.

  5. michael reynolds says:

    @Polaris:
    So the poor person who gets a tax cut spends it on goods and services, while the rich person buys stock in an overseas corporation, and that’s why middle class and poor Republicans support tax cuts only for the rich?

    Yeah, it’s not meanness: it’s servility. It’s instinctive submission to authority. Bootlicking.

  6. john personna says:

    @Polaris:

    If you want to cut taxes, then you presumably want the person benefiting to spend that extra money on things better for the economy (and country) in general than having it sit in federal coffers. When you cut the tax of a wealthy person who creates jobs, funds industry, etc, then that money that is saved by them is being used to promote economic activity that will “trickle down” (yeah I know many of you hate this but most in the GOP believe it) and actually have a multiplicative effect.

    You know, I don’t think Republicans really believe that. It’s just a fig leaf they’ll still try to put on their behavior.

    It’s not like their argument is data-driven, right? And it’s certainly not like tax cuts for the rich produced a roaring trickle-down economy.

    [Go ahead, make the best case for that actually working.]

  7. Fiona says:

    “Trickle down” is proof of the human capacity for rationalization. Since Reagan, the GOP has adopted it as the economic policy with little to no evidence that it actually works. Yet, it’s become gospel because it fits in with their view of the world and protects their wealthy benefactors.

    The Republicans don’t care about the middle or lower classes; otherwise, they could read the same graphs the rest of us do and realize that the gap between the wealthiest and everyone else has been growing since the 1980s and that income inequality levels are where they were in the 1920s. Trickle down and tax cuts that favor the wealthiest (who’ve been holding onto their money or not creating jobs) have helped to create this gap. Yet, a tax cut that helps primarily the lower and middle classes is a budget buster by GOP logic, whereas one aimed at the wealthy is not.

  8. superdestroyer says:

    Notice how the issue is defined in how the Republicans are hypocrites instead of how the Democrats have done a 180 on policy. The Democrats were begging for tax increases juse a few months ago. Now the Democrats are proposing tax cuts. In addition, after the Democrats have savaged the Republicans many times for “messing with social security.” Yet, when the Democrats start “messing with social security” not only is the term “social security” not used but no one even mentions the rank hypocrisy.

    The Republicans should accept the tax cuts as long as spending cuts are made in the same year to make the program revenue neutral. Since the Democrats will never vote for real spending cuts, it will make it look like the Democrats are putting public sector unions ahead of the middle class.

    The long term plan should be that Social security should only tax what it needs to spend. If social security runs a surplus, it should rebate everyone the surplus.

  9. superdestroyer says:

    @Fiona:

    What is different between Reagan’s trickle down and the Democrats idea of trickle-down government spending. Isn'[t the economic argue of hiring more government employees and creating more make work jobs nothing more than hoping that government debt dollars trickle down to others?

    The wealth gap was predicted in the 1970’s when it was pointed out that the fertility rate of the wealthy was shrinking while the poor were having just as many children. High Fertility of the poor along with almost unlimited immigration from the third world has actually succeeded in creating more poor people at the same time that globalization killed many middle class jobs.

  10. john personna says:

    @superdestroyer:

    Notice how the issue is defined in how the Republicans are hypocrites instead of how the Democrats have done a 180 on policy.

    Geez Louise, I (and others) have been talking for a year about how there aren’t any real liberals anymore, and how all the economic prescriptions are right of (old) center.

    And I’ve been noting that this leads us to austerity and contraction.

    The Republicans should accept the tax cuts as long as spending cuts are made in the same year to make the program revenue neutral. Since the Democrats will never vote for real spending cuts, it will make it look like the Democrats are putting public sector unions ahead of the middle class.

    Looking back, the Grand Bargain was a pretty good deal, missed. Wasn’t it?

    You had a right of (old) center chance to greatly reduce spending, with only minor tax increases.

  11. john personna says:

    (Apparently now that the government is running on fumes, it’s important to lock down this disaster with “revenue neutral” solutions. Nothing better to make darn sure we run out of gas.)

  12. mattb says:

    @Polaris:

    When you cut the tax of a wealthy person who creates jobs, funds industry, etc, then that money that is saved by them is being used to promote economic activity that will “trickle down” (yeah I know many of you hate this but most in the GOP believe it) and actually have a multiplicative effect.

    Following the logic that you set up in the “drug tests for unemployment insurance recipients” thread, it seems to me that if one truly buys into this philosophy, it would make sense to structure tax cuts in such a way that it create incentives for job creation or capital business investment/expansion within the US (buying new equipment, buildings, etc). Otherwise, how would we know that those rich people are actually using that money in a way that promotes economic activity within the US?

  13. Gerry W. says:

    *The payroll tax cut makes no sense as it means less money to Social Security.
    *The Bush tax cuts has been on borrowed money, essentially creating a fake economy.
    *The Bush tax cuts being borrowed and the wars on borrowed money created a “guns and butter” economics.
    *The tax cuts ignored problems and does not solve problems.
    *Tax cuts is not going to trickle down if globalization is taking away jobs.
    *Tax cuts used as an ideology runs out of steam at some point.
    *More tax cuts is less stimulative today as it has been overused.
    *Spending (tax cut money) into the economy may have less of an effect today as many products on the shelves are foreign made.
    *We had tax cuts, but many lost jobs. What good are tax cuts if you lose your job?
    *There should be an equilibrium of where tax cuts should be (for example, the rate under Clinton) and use tax cuts to stimulate the economy for two or three years. With that, spending needs to be cut. And other problems need to be fixed.

  14. jan says:

    Much of the debate here is reflected through the prism of class warfare — the poor and the rich — rather than what would most positively effect more job creation.

    Most events in life don’t have one magic elixir. Healing, whether of the body, mind or of society, is usually a result of a plethora of remedies, applied in a balanced and thoughtful way.

    The application of “tax cuts” is no different.

    The payroll tax cut will deliver a positive jolt to the economy…temporarily. But, it is short term, and consequently superficial. And, in the long view, it is taking away from an entitlement program, SS, which continues on, full steam, with no reform on the table in addressing certain problems inherent within it’s own funding viability.

    So, what is really being gained here?

    The obvious answer is that Obama’s payroll cut is more an empathetic gesture or financial symbolism, that the president is doing ‘something,’ an immediate poultice to soothe, but not really rectify our complicated and ailing economy.

    Even the NYT is adding to the skeptism being offered by an array of people towards Obama Job’s Act, and how effective it will be.

    Companies are focused on jittery consumer confidence, an unstable stock market, perceived obstacles to business expansion like government regulation and, above all, swings in demand for their products.

    For others, the math just does not add up. Roger Tung, the chief executive of Concert Pharmaceuticals, said the company, a privately held biotechnology firm with 45 employees, would save $150,000 a year from the proposed corporate payroll tax deductions.

    But that is still not enough to cover the cost of hiring even one additional employee at the Lexington, Mass., company, Mr. Tung said, once benefits and other expenses besides salary are included. He can hire, he said, only when investors become confident again and the company can raise more money.

  15. superdestroyer says:

    @john personna:

    The government has been running on debt for decades and no long-term good has come from all of that debt. The government spends $100’s of billions a year just on interest. Adding more debt just means more taxes later.

    The U.S. just needs to take its medicine and get over the idea of pushing off problems into the future and solve its problems now. Tomorrow has finally arrived and it is not pleasant and will not be pleasant for a very long time. Trying to avoid the pain now just means more pain later.

  16. Console says:

    where the hell did we ever get this idea that rich people are job creators? Ideas create jobs. Bill Gates wasn’t rich. The Facebook guy wasn’t rich, neither was the google guys, or steve jobs, etc. etc.

    That’s simply not the way the world works.

  17. john personna says:

    @superdestroyer:

    And the Grand Bargain was the biggest move in decades to reduce that debt. Too bad the GOP didn’t push for it. This really ties into the hypocrisy at the center of this thread.

    The U.S. just needs to take its medicine and get over the idea of pushing off problems into the future and solve its problems now. Tomorrow has finally arrived and it is not pleasant and will not be pleasant for a very long time. Trying to avoid the pain now just means more pain later.

    And yet both Republicans and Democrats pushed this off to yet another committee, right?

  18. john personna says:

    @jan:

    The payroll tax cut will deliver a positive jolt to the economy…temporarily. But, it is short term, and consequently superficial.

    The same is true of all tax cuts. A cut to capital gains leads to a short term increase in gains claimed.

  19. john personna says:

    In 2001, as the economy slowed, Republicans endorsed temporary payroll tax cuts in order to boost demand. And again in 2008, when the economy slowed, they endorsed payroll tax cuts to boost demand. [link]

    But you know, that ignores the big issue. Is Obama for it? Ok, we change our mind.

  20. superdestroyer says:

    @john personna:

    The idea of using a committee to push off budget cuts into the future is a clear demonstration that on one in government is serious about the problems facing the U.S.

  21. john personna says:

    @superdestroyer:

    We agree.

  22. michael reynolds says:

    @jan:
    And yet the same tax cuts for rich people would be magic and unicorns and fairy dust!

    Cut the bull about class warfare. Let me tell you something: I’m in the top 1% of income earners and my “class” is winning. My class is obliterating the middle class.

    Give me a tax cut and you know what I’ll do with it? Overseas travel. I will take the money and spend it in Shanghai and London. 100% guaranteed.

    So stop groveling hoping that a crumb might fall from my table. My crumbs will fall into the hands of a Parisian restaurateur.

  23. Hey Norm says:

    superdestroyerbonehead sez:

    “…The wealth gap was predicted in the 1970′s when it was pointed out that the fertility rate of the wealthy was shrinking while the poor were having just as many children…”

    How does that work exactly? Does cash kill sperm cells? Are Muni’s really Uni’s? Can’t the Koch Brothers get it up?

    @ Jan…

    “…would save $150,000 a year from the proposed corporate payroll tax deductions.
    But that is still not enough to cover the cost of hiring even one additional employee…”

    But for as long as I can remember you have been claiming tax cuts lead to increased hiring. So if these payroll tax breaks, on top of already historically low effective tax rates, aren’t enough to prompt hiring…how low do taxes have to get before we see your economic theories bear fruit?
    Also…

    “…and, above all, swings in demand for their products…”

    But you have repeatedly claimed that the economic crisis is about taxes and regulations and NOT DEMAND.
    Please explain this contradiction to us.

  24. Hey Norm says:

    @ MR…
    Drop me an e-mail…I know some nice places in Paris.

  25. jan says:

    @john personna:

    The same is true of all tax cuts. A cut to capital gains leads to a short term increase in gains claimed.

    It depends on how long these financial ‘jolts’ are in place. If they are too short term, then people react that way in their business investments —> short term.

    What we need, IMO, is something more substantial, more long term in duration giving business a chance to reconfigure their investment ideas and project their profitabilty margins out a decent amount of time.

    We also need financial incentives that will not only keep current business in place, but also attract business back into this country, hence bringing jobs to this country, rather than chasing them away by high taxation or over-regulation.

  26. superdestroyer says:

    @Hey Norm:

    If the poorest people are having the most kids and the richest people are having the fewest children, you can expect the percentage of the population that is poor to grow. You can also expect a country to lose its ability to compete in the world marketplace if the number of people who are capable of doing world-class work shrinks.

    Look at what the U.S. has now: 50% of the workers do not make enough money to warrant paying income taxes. The percentage of men between 25 and 55 years of age who are participating in the workforce is the lowest since the depression. Also, look at the severe competition for jobs in Manhattan, or the spots in the top undergraduate university or profressional schools.

    The wealthy have gained because the underclass is so large and the underclass and pulled the middle class down with it.

  27. ponce says:

    If you ask a Christian true believer why gawd let’s 50,000 children a day die in horrible agony, they usually start babbling some childish mysticism and then try to change the subject.

    Republicans are starting to rely on similar dodges when asked to explain the nonsensical behavior of their leaders.

    The Republicans have become a faith-based party totally devoid of rational thought…and the press treats their stupid beliefs with the same respect they give to religious beliefs.

  28. john personna says:

    @jan:

    As in life, the first thing you do is pay the bills. What we’ve got now is a situation where (to be general) congress has said we don’t have to pay the bills. They’ve said we can cut taxes now and … mumble, mumble.

    This thread is about why the GOP doesn’t like that formula anymore. In a sense it is an improvement, but only apparently to “revenue neutral … mumble, mumble.”

    The spending cuts are in the mail, right?

    We also need financial incentives that will not only keep current business in place, but also attract business back into this country, hence bringing jobs to this country, rather than chasing them away by high taxation or over-regulation.

    As I’ve said before, the labor wage in China is $1.50/hr.

    The minimum wage in the US is around $8.00/hr. Let’d double that for benefits and etc., and call it $16.00/hr.

    Sure, we can see why labor would move toward $1.50/hr rather than $16.00/hr.

    But let’s say you wanted to “fix” that on the US side. How low would you actually go?

    Are you really proposing $1.49/hr in the US?

    Or are you making some vague implication that say $10.00/hr, or $8.00/hr, or even $6.00/hr beats China … because we’re Americans and we’re worth 4 or 5 or 6 times as much?

  29. john personna says:

    (It is supreme irony that “the business party” cannot make the “chasing them away by high taxation or over-regulation” argument in dollars and cents. It is all emotion. Rationalization.)

  30. jan says:

    @Hey Norm:

    The quote from the NYT article posted is one businessman calculating his own cost to hire a worker. By his math, the payroll tax would not cover his cost of a new hire. Would you hire a worker that would essentially cost you money to hire, Norm? Why don’t you try walking in the shoes of the people who are supposed to supply employment, and then construct your answers around what you find out.

    But you have repeatedly claimed that the economic crisis is about taxes and regulations and NOT DEMAND. Please explain this contradiction to us.

    I’ve already answered that in my post above:

    Healing, whether of the body, mind or of society, is usually a result of a plethora of remedies, applied in a balanced and thoughtful way.

    So, using your format, “our economic crisis is about taxes, regulations and demand.” I have emphasized the former remedies, of taxes and regulation, more than demand, because they are the ones progressives dismiss, while concentrating almost solely on demand.

  31. john personna says:

    @jan:

    By his math, the payroll tax would not cover his cost of a new hire. Would you hire a worker that would essentially cost you money to hire, Norm?

    What the heck? You want free employees for everyone?

    How many do I get? I’m behind on housework.

  32. jan says:

    @michael reynolds:

    Give me a tax cut and you know what I’ll do with it? Overseas travel. I will take the money and spend it in Shanghai and London. 100% guaranteed.

    All I can say is, that is pretty selfish, Michael.

    They say that ‘character’ is doing something when no one else is looking. I would go on to say that, by extension, it is also doing something of good or service when it is not government mandated either, but volunteered selflessly.

    We give our employees sizable bonuses, in cash, not tax deductible because they are good people and in our opinions have earned it. I’ve never been to Europe, as we have always been too busy working.

  33. Hey Norm says:

    @ Jan…

    So after all your ranting about socialism you now want the Government to completely – 100% – subsidize private sector employees? Really? Do you even understand the definition of socialism?

    Perhaps taxes and regulations are discounted because it has been proven repeatedly that taxes and regulations have little to do with it. Certainly a decade of historically low taxes has not helped employment levels one bit. Think about it for a bit. Maybe take some of your meds.

  34. Underverse says:

    @michael reynolds: You should just take your entire loaf and move to Paris. I’m sure they’d be positively thrilled to tax the hell out of your top 1% and then the rest of us wouldn’t have to put up with your elitist inhumane attitude.

  35. Hey Norm says:

    “…I have emphasized the former remedies, of taxes and regulation, more than demand, because they are the ones progressives dismiss…”

    So essentially you are only interested in anything progressives are not. If progressives said the sky was blue you would say fuscia. If progressives said water was wet you would say dry.
    I’m just trying to understand your logic.

  36. PD Shaw says:

    I’m not a Republican and can’t speak for Bachman, but I supported payroll tax cuts (on the employer’s side) in comments at OTB and elsewhere in early 2009. That ship has sailed, the employment that was lost was lost, and now we need policies that promote whatever growth is possible and ameliorate the suffering of high unemployment.

    We’re having slow, anemic recovery IMHO because of over-leveraging. Fortunately or unfortunately, the poor are not over-leveraged, but to the extent that have low job skills they are bear the brunt of the problem, though they are not a part of the cure. Meanwhile people in the top quintile struggle with debt. Policies aimed at deleveraging the upper-middle class will be politically difficult and pose risks of encouraging future over-leveraging.

  37. john personna says:

    @PD Shaw:

    I’m not a Republican and can’t speak for Bachman, but I supported payroll tax cuts (on the employer’s side) in comments at OTB and elsewhere in early 2009. That ship has sailed, the employment that was lost was lost, and now we need policies that promote whatever growth is possible and ameliorate the suffering of high unemployment.

    While I am somewhat sympathetic to that position, what I see missing in these threads is the recognition that demand is set at the margin.

    This cannot reasonably be a claim that it will generate zero jobs, or infinite jobs. It’s about how much hiring is teetering at current price levels, and how many jobs would tip, with such and such payroll tax reduction.

    And perhaps the thinking is that if you really can target new hires with the tax break, you are specifically buying those “tipped” jobs.

    (As I understand it the proposed law is a tax break on increases of dollars of payroll, because that is less cumbersome for business to track than actual hires. That leads to the question of whether more raises, at the margin, is useful stimulus as well.)

  38. john personna says:

    @jan:

    I’ve never been to Europe, as we have always been too busy working.

    Interestingly, “has traveled internationally” is a strong indicator of future voting patterns.

  39. Andy says:

    Predictably, this thread has degenerated in partisan and ideological name-calling.

    I don’t think any of us really knows (to include me) what policy would boost employment in the near term, short of the government just hiring people and paying them to dig ditches. Everyone’s got their pet theories but pet theories aren’t solutions.

  40. Hey Norm says:

    @ JP…
    So are tea bags dangling from your tricorn.

  41. john personna says:

    And perhaps the thinking is that if you really can target new hires with the tax break, you are specifically buying those “tipped” jobs.

    Casual readers might think this is a tax break on all jobs, rather than new jobs.

  42. Polaris says:

    @Andy:

    Predictably, this thread has degenerated in partisan and ideological name-calling.

    I don’t think any of us really knows (to include me) what policy would boost employment in the near term, short of the government just hiring people and paying them to dig ditches. Everyone’s got their pet theories but pet theories aren’t solutions.

    Indeed. My only purpose of my original comment was to highlight what I thought the GOP logic was behind this particular position and to point out that if you accepted certain premises, it was a logical position arrived at by logical means. Of course if you don’t accept the premises, then you obviously won’t agree with the concluded policy position. That’s all.

    -Polaris

  43. Hey Norm says:

    @ Superdestroyer…

    “…The wealthy have gained because the underclass is so large and the underclass and pulled the middle class down with it…”

    That is such an extreme leap of logic that it boggles the mind.
    Someone on this thread once attributed the gap to shipping containers…that makes more sense that what you are claiming. Actually space aliens makes more sense than what you are claiming.

  44. john personna says:

    @Andy:

    We know enough that throwing up our hands and saying “we know nothing” is wrong too.

    @Hey Norm:

    Mein Hut, der hat drei Ecken … aber kein tee

  45. jan says:

    @john personna:

    What the heck? You want free employees for everyone?

    How many do I get? I’m behind on housework.

    Now, you’re just being silly. Any business is run with an eye on some kind of profitability, being that their longevity in the business is based on a viable profit margin. And, you hire according to that bottom line. If you don’t then you go bankrupt. Maybe that’s part of the problem with Solyndra. Oh, but of course they had governmental loan guarantees — in other words, it wasn’t their money they were ineptly managing.

    And, as you well know, one’s own household domestic help is a form of personal discretionary spending, and is not relevant to the conversation we’re having here.

  46. john personna says:

    @Hey Norm:

    shipping containers

    That was me! The effect of reduced transportation costs on globalization is underrated.

    The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger, available at Amazon.

  47. john personna says:

    @jan:

    As others have noted, you set a strange bar when you said “Would you hire a worker that would essentially cost you money to hire, Norm?”

    Of course you hire workers that cost you money to hire.

    See also my comment to PD, on demand at the margin. You are the one I had in mind as not getting that.

  48. john personna says:

    Norm, there is a good sample chapter here, with:

    As wage earners, on the other hand, workers have every reason to be ambivalent. In the decades after World War II, wartime devastation created vast demand while low levels of international trade kept competitive forces under control. In this exceptional environment, workers and trade unions in North America, Western Europe, and Japan were able to negotiate nearly continuous improvements in wages and benefits, while government programs provided ever stronger safety nets. The workweek grew shorter, disability pay was made more generous, and retirement at sixty or sixty-two became the norm. The container helped bring an end to that unprecedented advance. Low shipping costs helped make capital even more mobile, increasing the bargaining power of employers against their far less mobile workers. In this highly integrated world economy, the pay of workers in Shenzhen sets limits on wages in South Carolina, and when the French government ordered a shorter workweek with no cut in pay, it discovered that nearly frictionless, nearly costless shipping made it easy for manufacturers to avoid the higher cost by moving abroad.

  49. michael reynolds says:

    @Underverse: @jan:

    All I can say is, that is pretty selfish, Michael.

    Oh My God.

    Jan, you’re arguing against tax cuts for the very people — your beloved employees — you claim to care so much about. You want a tax cut so that you can pass part of it through your hands to theirs. And you berate me for pointing out that many of us who make a nice living just pretty much piss the money away on good living? Is that really a surprise to you? Hello? Are you awake?

    And your fellow rocket scientist thinks I should take my tax cuts and move out of the country? Wake up. What the hell do you think people are doing? We’re already moving jobs out of country — how do you think those jobs get there from here? And your solution is to give us still more money?

    Listen carefully: give me more money in tax breaks and I will not create a single job outside of the hospitality industry and generally in other countries. Now, if that’s what you insist on doing, if you are determined that I do the restaurant tour of London, Barcelona, Shanghai and Tokyo okay then, I’ll crank up the Amex card. Thanks!

    Why in God’s name you would think that helps you, I can’t say.

  50. Hey Norm says:

    Jan just completely walked away from her previous statement. How do you have a discussion with someone who is incapable of even understanding what it is they are saying?

    “…the payroll tax would not cover his cost of a new hire. Would you hire a worker that would essentially cost you money to hire, Norm?”

    Businesses spend money to hire all the time. In my business, which is very technical and very creative, it costs a fortune to hire someone and give them specialized training. Then it takes years – yes years – to fully integrate them into our way of working. Will a tax break ever cover our costs? No – not ever. But it may tip the scales…if there is sufficient

    DEMAND!!!

    As Dan Ackroyd said to his Weekend Update co-host: “Jan you…”

  51. Hey Norm says:

    @ JP…
    Yes – I know plenty of artists who have their work made overseas and shipped. You argument makes sense. Impotent rich people…not so much.

  52. PD Shaw says:

    @Polaris: I don’t think this is about “trickle-down,” the payroll tax cut appears to be “trickle-up.” As I see it, the cuts would effect three groups differently.

    The bottom 50% of wage earners who don’t pay income taxes will receive, dollar for dollar full value of the cuts.

    Those paying income taxes, but with less than $106,800 in wages will receive their benefits after income taxes. So, every dollar you receive, you will pay (for example) twenty-five cents in income tax if your marginal rate is 25%. This group does not receive full dollar for dollar value of the cuts.

    Those with wages more than $106,800, traditionally pay a decreasing perecentage of their income as they go beyond $106,800. Correspondlying the benefit from a cut in the payroll tax diministhes as a percentage of income from this point on.

    * * *

    Generally, speaking the tax benefits look like what I would call a regressive tax, if the money was taken not received. There are more complicated situations, such as employers, the unemployed and retirees, but it looks like trickle-up.

  53. john personna says:

    @Hey Norm:

    Yeah, I just like reminding because it was an innovation that largely invisibly changed the landscape.

  54. john personna says:

    (eBooks are michael’s shipping containers!)

  55. jan says:

    @john personna:

    Or are you making some vague implication that say $10.00/hr, or $8.00/hr, or even $6.00/hr beats China … because we’ re Americans and we’ re worth 4 or 5 or 6 times as much?

    Where did I even vaguely reference wages? The problem with many of your arguments is that you tend to fill in the blanks of other people’s posts with your own extreme specific interpretation of their general statements.

    My comment:

    We also need financial incentives that will not only keep current business in place, but also attract business back into this country, hence bringing jobs to this country, rather than chasing them away by high taxation or over-regulation.

    If I were to fill in the blanks with any specifics, they would be dealing with lowering the corporate tax rate (that has long been discussed in business circles as being too high), and ending AGW remedies (unending environmental regulations) that adversely effect our economy, until, if and when, there is more conclusive evidence that something can realistically effect the climate changes that are occurring — a remedy all countries, including China and India, would embrace. If we have global economies, then we should also expect global cooperation and compliance in dealing with global climate conditions. And, I’m not implying that we should do away with all our anti-pollution regulations either, for any of you that might want to bring up a zing of “keeping up with China.”

    I would also add that labor unions need to come to grips with how their power is contentiously effecting business, motivating it to go elsewhere rather than be involved in the unrestrained demands and unrest that oftentimes go hand in hand with union shops. Look at the recent Longshoreman problems in Washington State. Gibson Guitar is another excellent current example of that, along with Boeing’s attempt to relocate some of it’s manufacturing to SC (a more business-friendly RTW state).

    Somehow, inculcated in the progressive’s mind is the idea that “might makes right;” that force is the way to get business in line, coughing up more money to arbitrarily redistribute it’s profit through higher taxes, essentially guilting and demeaning producers as being “rich and greedy.” That’s where class warfare is played over and over again, just as FDR unfortunately did in the 30’s, achieving only an elongation of the depression — something we are following suit in today’s recessionary times, via Obama’s progressive policy prescriptions.

  56. steve says:

    ” hence bringing jobs to this country, rather than chasing them away by high taxation or over-regulation.”

    This might make sense if corporations here did not already pay very low effective corporate rates, and regulations were now growing faster than in the past. It is also pretty hard to sort out if there is any effect from making rich people richer. It clearly did not do much in the last round of cuts. The Reagan years are offered as an example, but those years were also accompanied by very large deficit spending and very favorable monetary policy.

    Steve

  57. john personna says:

    @jan:

    Where did I even vaguely reference wages? The problem with many of your arguments is that you tend to fill in the blanks of other people’s posts with your own extreme specific interpretation of their general statements.

    Exactly. I’m trying to get you down to brass tacks, and dollars and cents.

    None of your follow-on text is more than rationalization that lower “stuff” would somehow mean “jobs.”

    My point is that none of that “stuff” can beat the $1.50 wage advantage. Not in real life.

  58. Gerry W. says:

    @Polaris:

    Indeed. My only purpose of my original comment was to highlight what I thought the GOP logic was behind this particular position and to point out that if you accepted certain premises, it was a logical position arrived at by logical means. Of course if you don’t accept the premises, then you obviously won’t agree with the concluded policy position. That’s all.

    And this is the problem with the GOP. The tax cuts has become an ideology and they are not looking at the problems. Globalization trumps everything, just sitting on tax cuts ignores the loss jobs. Been watching this since 2004 as Bush “stayed the course.”

    In a world of our own, tax cuts would make more sense, but it is now 2 billion cheap laborers who want our jobs. And if trade is not reciprocal, then there is not enough jobs to go around.

  59. john personna says:

    @steve:

    This might make sense if corporations here did not already pay very low effective corporate rates, and regulations were now growing faster than in the past.

    That may be true, but it’s all about the relative price of production. We can be high or low relative to ourselves in the past, or relative to other high cost producers. None of that matters.

    What matters is our bottom line cost relative to the low cost producer.

  60. anjin-san says:

    All I can say is, that is pretty selfish, Michael.

    Spending the money you earned the way you want to spend it? Bastard. Well, so much for personal freedom, personal choice, and all those other right wing bromides.

    I’ve never been to Europe

    Your provincial, one–dimensional outlook makes more sense now…

  61. john personna says:

    Do it in dollars and cents, Jan. What taxes or regulation can we cut to bring iPhone production back from Foxconn to California?

  62. jan says:

    @Hey Norm:

    Businesses spend money to hire all the time. In my business, which is very technical and very creative, it costs a fortune to hire someone and give them specialized training. Then it takes years – yes years – to fully integrate them into our way of working. Will a tax break ever cover our costs? No – not ever. But it may tip the scales…if there is sufficient (demand)

    Norm, go argue with the guy interviewed in the NYT’s article.

    Everyone has their bottom line as to what works and what doesn’t in their business. In areas that require R & D, of course there is more “investment” in an employee to train him/her. But, in other less highly skilled jobs, the business has different standards and expectations in their business model.

    One size does not fit all, Norm. You sound pretty dictatorial in expecting anything that doesn’t fit your model to be bunk.

    Also, there will be pautry demand if business determines there is no reason to expand and invest.

  63. steve says:

    6.9% of private sector workers belong to a union.

    http://www.bls.gov/news.release/union2.nr0.htm

    Steve

  64. jan says:

    @john personna:

    John, you can go into a paper bag and punch out hypothetical dollar and cents figures all day long if you want.

  65. superdestroyer says:

    @Hey Norm:

    Look at Detroit. The upper class have small families, get their kids into the Ivy league or to Univ. of Michigan as a safety school, and survive. The poor had large families, pushed out the middle class and now Detroit is a basket case that cannot attract the middle class and the STate of Michigan has become a basket case.

    Ben Wattenberg argued that one of the issues with the U.S. is that the adults most capable of having children have few if any children but that the adults least capable of caring for children have the most. In that demographic situation, you get ghettos and thus, the middle class has to spend more money trying to avoid the poor.

  66. Hey Norm says:

    Fine Jan…that is not what you said before. Make up your mind. Do you want the Government to pay the entire cost of hiring or not?

  67. Hey Norm says:

    @ Superdestroyer…
    Ben Wattenberg is one of the kooks at the AEI and thinks neo-conservatives get a bum rap.
    Sorry – sources matter.

  68. john personna says:

    @jan:

    John, you can go into a paper bag and punch out hypothetical dollar and cents figures all day long if you want

    But I’m not the one making the claim. You are making the claim that:

    We also need financial incentives that will not only keep current business in place, but also attract business back into this country, hence bringing jobs to this country, rather than chasing them away by high taxation or over-regulation.

    Did you go into a paper bag for that? (We know you did.)

  69. Gerry W. says:
  70. john personna says:

    @Gerry W.:

    Yeah. That too.

    Years ago … thirty? … I read a little story with someone’s projection of the future. In it robots and computers did most jobs, and there was a lottery to win the few remaining. Everyone else, in a robot-socialist state, went on vacation.

    I suppose that could make sense in a far future, when robots and computers are really good, and can grow all the food, do all the medicine.

    But the transition is a bitch, isn’t it? If we only slowly eliminate jobs, and of the poor first, while diminishing the middle class, and too slowly creating surplus wealth … what do you do?

  71. jan says:

    @michael reynolds:

    Michael, I didn’t berate you. I said, “that is pretty selfish,” as to taking your ‘extra’ money and running out of the country. Being selfish, though, is a normal human trait —> basically, thinking primarily of yourself.

    However, everyone is not like you. There are those who, having had a profitable year, and looking into a future that bodes well for having another similar one, would sink more of that profit back into their business.

    We have some friends in Sonoma County who own a building supply company. They’ve only had it for a few years. But, by both husband and wife working around the clock and being well accepted in the community, had a very profitable year in 2010. They took most of that profit and put it right back into the business, expanding it into other products, including a bigger nursery section, more lumber etc. They now are looking into buying the property they run the business out of, rather than just renting. Their’s is a business progression, which also includes hiring some extra employees, rather than just having family members, nieces and nephews, pitching in.

    I think my life is much less cosmopolitan than your’s, Michael. Most, not all, of my work experience has been around laypeople who have started from scratch, and have been hands-on in their labors for most of their lives. There is simply no time or left-over money for European lifestyles and travels.

    Jan, you’re arguing against tax cuts for the very people — your beloved employees — you claim to care so much about. You want a tax cut so that you can pass part of it through your hands to theirs.

    Tax cuts are not against anyone, except probably in a progressive’s POV. The more money I have on hand, that doesn’t go to the government, the more is given to people who work for us. It’s called cultivating your own employer/employee relationships without the government acting as the all superior middle man. We have a flex time orientation — where people work at their own pace and time to get what needs to be done, done. The people who work for us are more in charge of their lives than most employees find in more regimented work places. Because of our good relationship they do their best for us, as we try to do for them. It’s very much an example of synergism at work. For instance, my husband went into a supply house yesterday, and was talking to a clerk there. When she realized that the men coming in and buying certain materials from her worked for us, her comment was, “No wonder they always look so relaxed and happy. They work for you.”

    That’s an unsolicited compliment any employer likes to hear. And, it is also a symptom that a business paradigm is working for everyone’s highest and best interest.

  72. george says:

    Its almost impossible to see the GOP opposition to this as anything but an indication that they only care about tax cuts to the wealthy. Seriously, I read polaris’s argument (which I realize he put out just to give a possible rational), but it doesn’t work – the GOP position has always been that tax money belongs to the people (as true for people this would affect as any other tax), that taxes are a disincentive to work (again just as true for wealthy as your average person on the payroll), and that taxes pay for a bloated gov’t (again this would be just as true for this as any other tax).

    Basically, their position seems to be that taxes are good if they come from your average Joe, lousy if they come from the rich. They’ve certainly been accused of only caring about the rich in the past, but its a bit startling to see them admit to it here so readily.

    We really, really need a third party.

  73. michael reynolds says:

    @john personna:

    (eBooks are michael’s shipping containers!)

    Exactly. And I hate to admit it but I’m not plotting ways to add jobs, I’m plotting ways to cut out the middle men and cost jobs. Why? So I can keep more for myself.

    I swear to God these people repeat “job creators” like they’re reciting holy writ. Like it must be true. Entrepreneurs, start-ups, those are job creators (although many are net job-killers,) and since credit right now is basically free I don’t really see what more we need to do to help those guys.

  74. superdestroyer says:

    @Hey Norm:

    Have you looked at fertility in the 1950;s versus the 1990’s. Look at the percentage of the U.S. that was white in 1960 versus 2010. If you want to know where the middle class went, it was that they were replaced by third world immigrants.

    Also, I love how progressives believe that saying someone is a kook means that everything the person says is pointless. Does that mean that since Paul Krugman does not understand basic statistics, that I get to call him a kook and dismiss everything he says? I hope you have never cited anyone from a left of center think tank because they must also all be kooks.

  75. anjin-san says:

    There is simply no time or left-over money for European lifestyles and travels.

    Interesting concept. This first time I went to Europe, I was making about 40k a year, while living in one of the most expensive areas in the world. I was also working my ass off. Yet I somehow found the time and money for a little travel. I guess I am just an amazing person.

  76. jan says:

    @john personna:

    But I’m not the one making the claim. You are making the claim that:

    You turned my statement into a claim, demanding some kind of hypothetical figures to validate such a statement. And, even if I spent enormous time doing this (which would really prove nothing), in order to placate your rapacious requests, you most probably would then ask me to count grains of sand on the beach, or tabulate how much tea there is being produced in China. Your ask more so you can find some fragment which can be glommed onto to and instantly repudiated, even if the error is spelling or a miniscule straying from a definition of terms.

  77. jan says:

    @anjin-san:

    I have traveled in the US and Canada — camping. My time, from college on, though, has been spent working, mainly as a self-employed couple. And, because it was mostly for ourselves, and in a sector we enjoyed, it has been fun. When you find work you love to do, there is less need for other distractions. Frank Gehry made that same connection about his work in architecture.

    Many of my friends, though, have traveled abroad extensively, and lived there as well. It has made their stories colorful and wonderful to hear, and they know the world first hand better than I do. But, I can’t say that it has enlarged their personal dimensions to as great of a measure as to mean that those who don’t go abroad are provincial and saddled with only a one–dimensional outlook.

  78. anjin-san says:

    When you find work you love to do, there is less need for other distractions.

    Really? I love what I do, yet I am constantly looking for new & different things in life. It’s OK, lack of imagination and curiosity are a hallmark of conservatives – no shock here.

    But, I can’t say that it has enlarged their personal dimensions to as great of a measure

    Well, that tells us something about your friends that is not particularly flattering.

  79. samwide says:

    @PD Shaw:

    @Polaris: I don’t think this is about “trickle-down,” the payroll tax cut appears to be “trickle-up.

    Soshulism!!!!!

  80. samwide says:

    @michael reynolds:

    since credit right now is basically free I don’t really see what more we need to do to help those guys

    Bingfvckinggo!

  81. samwide says:

    @jan:

    I think my life is much less cosmopolitan than your’s, Michael. Most, not all, of my work experience has been around laypeople who have started from scratch, and have been hands-on in their labors for most of their lives. There is simply no time or left-over money for European lifestyles and travels.

    Ah, the ol’ city mouse/country mouse thing, huh? You apparently don’t know that before his success as an author, Michael lived under a bridge and, no doubt, raided the dumpsters behind Micky D’s. How’s that for starting from scratch? I’m pretty sure they didn’t speak French under there, either.

  82. Ben Wolf says:

    @jan: Michael is a self-made man. He’s exactly who you’re talking about.

  83. Gerry W. says:

    @jan:

    If you live in or around Sonoma county, I can see that there is some disconnect to what I see. I can see where tax cuts, may rub you the right way in your part of the world. In the Midwest, the tax cuts did not mean anything as the factories closed due to globalization. And in other parts of the country it was a housing bubble. I wonder if your friends are effected by Home Depot, Menards, and Lowes. Competition is fierce where I live and what is left with the various industries. There are no new industries or a business catalyst to go to as we gave a lot of it away.

    As far as Europe or international travel, I enjoy it so much more. I have walked (Europe is for walking) around many major cities in Europe without bumping into a slum (like the U.S.). Also, I have gotten temporarily lost, while it creates a sense of anxiety, it gives me a high to be in areas that I could be in places that I dreamed about as a kid.

  84. Ben Wolf says:

    @Jan

    Much of the debate here is reflected through the prism of class warfare

    Then perhaps the wealthy should stop waging it.

  85. jan says:

    @Gerry W.:

    Gary, you seem like such a nice guy, from your posts.

    Yes, Sonoma is a world apart, economically, from the Midwest. And, the European experiences you’ve talked about seem like an important aspect of your life.

    Each of us gets our ‘high,’ as well as our personal growth, from different venues and choices. It’s the same thing about the work one does. The difficult part is to discover and implement that which serves to individuate ourselves and our existence, making one’s lifetime a meaningful, worthwhile ‘adventure.’

  86. jan says:

    @Ben Wolf:

    Michael is a self-made man. He’s exactly who you’re talking about.

    Michael and I know virtually nothing about each other. I am merely responding to his words and ideas, as he is doing to mine. (although, it appears he makes more money than we do!)

  87. anjin-san says:

    If you live in or around Sonoma county, I can see that there is some disconnect to what I see.

    I live a few miles down the road from Sonoma, and spend a lot of time there. I urge you not to judge us using Jan as a standard…

  88. jan says:

    @anjin-san:

    I live a few miles down the road from Sonoma, and spend a lot of time there. I urge you not to judge us using Jan as a standard…

    There you go again, using us again, impersonating some kind of plurality faction, as if you, anjin, can’t manage to stand on your own two feet by making a “solo” comment. I bet you’re from SF……..

  89. anjin-san says:

    can’t manage to stand on your own two feet by making a “solo” comment.

    This is coming from someone who claims to be a Democrat, yet spends an hour or two a day copy and pasting from far right websites. It really hurts to be taken to task by someone with your credibility.

    I grew up in Marin. I have lived in the Bay Area for 52+ years. I can stand on my own two feet just fine, but I do feel I have a certain liscence speak for the region as a whole, certainly to extent where I feel I am on solid ground pointing out the your radical far right views are not representative of this area.

    I will be in SF tonight, attending a meeting of our cell of the Obammunard. Pasta will be involved, and possibly Chanti as well.

    Say Jan, you never got back to us regarding your claim that as a younger man Obama had “fantasies of unlimited success.” You know, his fantasy about becoming President…

  90. MarkedMan says:

    Michael, if you come to Shanghai, I’ll buy you a drink. I’m living here now and know some good places. Shanghai is an extremely international city.

  91. jan says:

    @anjin-san:

    Nice area, Marin….Have a good time at your Obammunard meeting. The last community pasta dinner I attended was a few weeks back, a fundraiser, supporting the local volunteer fire department. As they say, different strokes for different folks.

  92. sonmi451 says:

    @jan:

    I’m sure you and your husband are wonderful employers who care about you employees and would pass any profit you make to them. But here’s the problem: not everyone is like you. Not every rich people, or business owner is the soul of generosity like you and your husband. Yes, some people are selfish and would like to use their money only for their own benefit, that’s a fact of life and I don’t really see anything wromng with it. That’s the whole reason we need taxation and government policy – we can’t rely or every rich people or business owner being as wonderful and all-around AWESOME like you and your husband.

    I don’t know why this is so hard to understand. You seem like a smart woman, but you keep banging on about all the great things you and your husband do. That’ besides the point, since NOT EVERYONE behaves like you and your husband. Some people like to spend the money from their tax cut on expensive holidays abroad, or even gold statues of themselves for all we know. Relying on moral disapproval (“oh, you’re being sooo selfish, you should be more like me and my husband with our generosity”) won’t work, that’s why we need policy. Not everyone can be guilted into doing things, and not everyone is as virtuos and great as you and your husband. If they are, I’m sure we can hold off on any taxation at all and just depend on private generosity or charity or whatever. Sadly, most of us lacks your (and your husband’s) general awesomeness, so I’m afraid we still have to rely on tax policy.

  93. sonmi451 says:

    @michael reynolds:

    I think your effort to explain things more clearly by personalizing it to yourself but actually making a general point about the predilection of rich people is lost on jan. She’s taking it as evidence of your personal selfishness and moral depravity, as if you are the only rich person she ever met that thinks or behaves like this.

  94. sonmi451 says:

    And jan, please don’t go into that faux-naive, faux-humility routine so many people like to pull out when it’s pointed out that their personal behavior is besides the point in the argument we’re having – oh, I don’t see why other people can’t behave like me, it’s not so hard, just hard work and caring about other people and bla bla bla. It’s so annoying.

  95. jan says:

    @sonmi451:

    While you bring up poignant points, I think the distrust of business you express is not necessarily helpful to the problems of trying to bring business and greater employment together. If you continue to treat businessmen/women as criminals, people that have to be over-regulated in order to behave in a conscientious manner, I think business will respond in a defensive and non-cooperative manner — just like over-disciplined children tend to behave — they rebel!

    Government simply does not create jobs. It totally depends on revenue brought in by others — the “others” primarily being the private sector. So, a country needs the good graces of business to thrive.

    Again, FDR, ginned up so much resentment towards business, in his Great Depression rhetoric, in concert with his continuous assault, of one bill after the other, to squeeze monies out of the so-called “rich,” which did little to end the depression. It wasn’t until WWII came along, and men were thrown into the war, women into assembly lines, and the war machine stimulated the economy and shrank the UE rate that the US economy finally stabilized. Many of FDR’s regulations were repealed or pulled back, and the post war economy was able to prosper on it’s own free-market principles, sans these job-killing progressive interventions.

    Now, we are back at square one, with Obama attempting to duplicate the remedies of what many believe were the failed policies of FDR.

    When I give anecdotal stories of how my husband and I do business, it is not an exception to the rule, in my own personal experience. I know lots of people, small business men/women, who operate under the same kind of guidelines. People owning restaurants, building supply houses, lumber companies, all with satisfied employees, good benefits and a relationship of understanding where the owners and employees are in the business together trying to make it a success. My father-in-law was a small oil distributor who created a very innovative employee profit-sharing plan. In fact, I have been surrounded by ethical business people all my life.

    So, I tend to look at the “tax-the-rich” slogans as being nothing but politicizing a current fragile economic environment with negativity and non-growth emotionalism.

    She’s taking it as evidence of your personal selfishness and moral depravity, as if you are the only rich person she ever met that thinks or behaves like this.

    When you’re attempting to make a counter point, do it with legitimate claims and not faux ones. I made a statement, which has been blown out of proportion in order to meet your threshold allowing justification of your criticism. Michael made a glib remark about what he would do with money gleaned by tax cuts. I responded by saying that it was “selfish.” But, I don’t think Michael’s POV or money-spending traits represents all business objectives or entrepreneurial efforts. End of story.

  96. ponce says:

    It totally depends on revenue brought in by others — the “others” primarily being the private sector.

    Offhand, I can’t think of a single industry in America that doesn’t depend on government funding in some way.

  97. michael reynolds says:

    @sonmi451:
    I want to clarify that I make a healthy income but am not rich by any stretch. I should be. Any sensible person in the position I’v been in for the last, say, 15 years would be. But as I have confessed before: I have a certain genius for getting rid of money.

    Yeah, Jan doesn’t have a lot of room in her brain. Very narrow confines.

  98. anjin-san says:

    , supporting the local volunteer fire department

    You might want to do a little reading on what Perry has done to volunteer fire departments in Texas, and give some thought to how it has affected the people in his state, which is now being devastated. I have a lot of relatives down there, and it is bad. At least some of the damage could have been mitigated, but for Perry’s cuts.

    different strokes for different folks

    Not sure what is different here. Tonight I was having dinner with a friend. When I am being charitable, I support an organization that provides free sports leagues for kids in California’s worst neighborhoods.

  99. matt says:

    @jan: I have many family members who are also volunteer firefighters.. Does that give me some sort of moral superiority in this discussion? They do have some awesome chilli supper fundraisers. Not a big fan of the firemen’s ball fundraisers though 🙁

    @anjin-san: Yeah the cuts are rolling in hard and it’s aimed at the things this state needs the most education fire protection etc…

  100. john personna says:

    @jan:

    If this is not a claim, what is it?

    We also need financial incentives that will not only keep current business in place, but also attract business back into this country, hence bringing jobs to this country, rather than chasing them away by high taxation or over-regulation.

    Do you just say “bringing jobs back to this country, rather than chasing them away by high taxation or over-regulation” because it feels good. (We know you do.)

    Seriously, if that isn’t just some statement of political identity, in the feel-good claim that “high taxation or over-regulation” makes everything bad in the world, then you have to show how it works. With dollars and cents.

    Show us this isn’t the same old GOP three-step:

    – give us what we want
    – magic
    – jobs

  101. john personna says:

    @PD Shaw:

    Here’s a bit that argues PD’s proposition that we’re all screwed anyway:

    Stanley Aronowitz and William DiFazio wrote a pretty gloomy book in 1994 with the striking title, The Jobless Future. Here is a Harvard Educational Review discussion of the book (link). What is most discomforting in reading the book today is the degree to which the factors they identify seem to be today’s headlines. What does jobless mean here? In a word, it means that the US and other OECD countries will never recover the number and quality of jobs they need in order to regain the middle class affluence they had in the 1950s and 1960s. The future will involve work — but not enough jobs to ensure a low unemployment rate.

    Actually it supports PD and Gerry, in a sad convergence.

  102. alanmt says:

    This may be oversimplification, but with respect to the taxation issue, it seems the federal government can legislatively fix itself, or can instead attempt to fix or stabilize the economy.

    The first option requires balancing the budget, and making tough choices about increasing revenues and decreasing expenditures. It seems no one has the stomach to do what is necessary. The second option plays with the methods of taxation with speculative results as to the long-term effects, but a reasonably predictable understanding of very short term effects. My position is that the government should fix itself, and stop trying to run an economy through tax code manipulation.

    My measure of disappointment with the GOP is so high on this issue. The party of realism and tough choices has become the party of witch-doctor economics and political cowardice. It is appalling. I would like to hope that what we are seeing isn’t hypocrisy, but a waking up to seriousness. I expect that hope is doomed to disillusionment as well.

  103. john personna says:

    @alanmt:

    This may be oversimplification, but with respect to the taxation issue, it seems the federal government can legislatively fix itself, or can instead attempt to fix or stabilize the economy.

    I think that’s fair, but the sadness is that “government fixing itself” pretty much requires the austerity road, which makes the other part a bit more painful.

    I see that The Economist has a special issue: “The Quest For Jobs: America, Europe and a lost Generation.”:

    I kind of worry that we are collectively living on wealth until and if that sorts itself out.

  104. Fiona says:

    Call me cynical but I personally think “Jan” is a work of fiction worthy of Ayn Rand–the ideal employer who shovels all her money back into her business and into the pockets of her happy employees, who no doubt whistle while they work.

    She never addressed John Personna’s point about the exportation of jobs to low wage countries. These are no longer just factory jobs, but jobs with a higher skill level (e.g. computer programming) where well-educated workers can be had for a fraction of the cost of American workers. You can cut taxes and loosen regulations all you want, but the likelihood of any of these jobs returning to our shores are pretty limited. These are the costs of globalization and I don’t see any quick fix to creating enough jobs to lower the unemployment rate anytime soon.

  105. anjin-san says:

    Government simply does not create jobs

    Funny, I was talking to a couple of cops at the game the other night. I am almost certain they actually do have jobs, and that the government created them.

    People owning restaurants, building supply houses, lumber companies, all with satisfied employees, good benefits

    Himm. I worked in restaurants and clubs for 20 years. All high end places in the bay area. I had heath insurance exactly twice. It was when I was younger, and I have always been pretty healthy, so it was not a big issue. At my age now? Kind of a problem.

    If you continue to treat businessmen/women as criminals

    Huh?

    @matt

    let’s not forget that 26% of Texans have no health insurance. Perry has built a real model for Americas future down there…

  106. Eric Florack says:

    Notice how the issue is defined in how the Republicans are hypocrites instead of how the Democrats have done a 180 on policy. The Democrats were begging for tax increases juse a few months ago. Now the Democrats are proposing tax cuts. In addition, after the Democrats have savaged the Republicans many times for “messing with social security.” Yet, when the Democrats start “messing with social security” not only is the term “social security” not used but no one even mentions the rank hypocrisy.

    Complete agreement.

  107. Gerry W. says:

    @Eric Florack:

    You have to wonder where the democrats are. Obama supports free trade and that means the loss of jobs. Granted, free trade is here and it cannot be ignored, but they seem to think that it is a win win situation but the middle class loses. Add to that the employee tax holiday and that is less money for social security. And then tax cuts, well, the problem is if you raise taxes then you many throw the economy back into recession.

    It all adds up that the world is against the little guy. I have always had the thinking like Tom Friedman or Fareed Zakaria in which you invest in your country and you make it work. I see why we also have unions, although they can only go so far.

    Growing up, I never realized that republicans could be so ideological and throw people out in the street. It is tax cuts and nothing else. As Obama spoke the other night, when he mentioned the infrastructure, the republicans just sat there with their arms folded. Sure, they will claim white elephants, but the biggest white elephant was spending a trillion dollars on tax cuts and getting nothing for it or for a war of choice.

    Somebody has to step up to the plate and say this is what we are going to do to create good middle class jobs and protect social security and other programs. And I see very little out there.

  108. anjin-san says:

    when he mentioned the infrastructure, the republicans just sat there with their arms folded.

    Republicans love infrastructure. But it has to be in Iraq. They seem quite content to watch ours drift towards third world stature…

  109. Gerry W. says:

    @anjin-san:

    Yes, they would rather see other countries progress while we don’t. And to them, it is a state thing and not a federal thing. But as the world watches and does their thing, we fight with each other and nothing gets done.

  110. anjin-san says:

    nothing gets done.

    Meanwhile, businessmen from China and South Korea fly into JFK for the first time and think “Is this a joke?”

  111. Ben Wolf says:

    Somebody has to step up to the plate and say this is what we are going to do to create good middle class jobs and protect social security and other programs. And I see very little out there.

    A sea-change is underway in economic circles: there’s hope for the future but it will be a major battle to put the orthodox schools which got us into this mess to bed, and they’ll continue doing damage all the way to the end.

  112. sonmi451 says:

    @jan:

    But, I don’t think Michael’s POV or money-spending traits represents all business objectives or entrepreneurial efforts. End of story.

    But your POV, or your experience with all the saintly business people you hang out with does not represent all business obejectives or enterpreneurial efforts too. Why can’t you grasp that? There must be some businesspeople you’ve never met who don’t behave in as saintly and self-sacrificing way as you and the good folks you hang out with. What to do about them if we leave it all to people’s good conscience? You’d rather these people who are less saintly than you freeloads and sepnd their money on expensive overseas vacation while you supposedly sacrifice so much for your employees, all because TAX = EVIL?

    Just don’t understand this mindset at all. Really, really baffling.

  113. Rob in CT says:

    I’m somewhat skeptical about the economic bonus we’d get in exchange for an extension/expansion of payroll tax cuts. However, it seems clear to me that if you’re going to do a tax-cut stimulus, you should target the folks who will spend the money (and spend it here) and that means the poor/middle class. Of course, a payroll tax cut would be a tax cut for everyone, not just the poor/middle class. It would keep federal revenues low, which is a problem, but the hope would be that it’s worth it. I dunno, but I find the GOP position on this to be laughable.

    Re: cutting the taxes of relatively well-off folks instead of poor folks… all I’d do is save the money – maybe I’d buy some more stocks or maybe I’d increase my mortgage payments (we’re already overpaying every month, but hey, why not some more?). What I would not do is run out and buy a bunch of goods. My consumption would be unchanged (relative to what I’d do w/o another tax cut). Eventually – down the road a ways, I might purchase some more real estate (vacation home/rental property). In the short-term, however, the stimulative impact from my household would be zero.

    Everyone is different, of course, but generally speaking the well-off are not particularly consumption-constrained. Cut their taxes and you’re not going to see a bunch of us in Walmart buying new appliances.

    Ergo, if you want economic stimulus via tax cuts (something I’m not sold on, particularly given how much tax cutting has been done in the recent past), you want to cut the taxes of people who *are* consumption-constrained.

    As for the drum Gerry is beating (2 billion cheap workers, robots)… well, yeah, that’s scary. And I haven’t a clue what the answer is. I once mentioned that to Greg Mankiw (a conservative economist who doesn’t seem to have gone full wingnut) over at the American Scene and he confessed it worries him greatly too.

    If the long-term future really is robots doing most of the work, then I fear either we have to go for some serious socialistic re-distribution of wealth or we’re staring down a society of plutocrats and a massive underclass, which is bad for a bunch of obvious reasons. If there is a third choice, and I’d like to think there is, I hope we figure it out.

  114. Gerry W. says:

    @Rob in CT:

    Where to begin. I have seen my job go to Mexico, I was fortunate to retire. Before that they tried robots, some worked and others did not work. They also tried lean principles in which they changed the classification of jobs and made them more universal in the factory and they had you do the job of two or three people. They cut the janitors job to the point that they did not care about the dirt on the floor, just keep the lines running. So clearly, the companies want to do without more employees and they have ways of doing that. And if they can’t do it in this country, they can go elsewhere. My town has seen four major plants close and there is one major one left and that is family owned. If it was an international company, that plant would not be here. In the Midwest, as well as the Carolinas and other places, this is what is going on. We were told that we would be an information society or a service society and the economists were either wrong or they were right on the service, but it is Wal Mart and McDonalds jobs. Another mistake is not realizing what winning the cold war meant. It meant adding 2 billion cheap laborers to the free market system. So, what we did was give away millions of jobs. Then at the same time, the housing industry has its problems which would normally hire millions of people.

    In the past, I have said that we need to invest in our country; infrastructure, high speed internet, new air traffic control system, and energy independence. Invest in the people; Mandatory vocational training. Invest in the future; Federal research grants to universities so that new technologies can be made and come out in the private sector.

    However, the world has changed. Anything can be made anywhere and any information can be derived from anywhere. Even to buy into the economy, with tax cuts, you have to ask if the products bought are foreign or domestic.

    I support what Tom Friedman said:

    Cut spending
    raise revenue
    educate the population
    Best infrastructure
    attract the best immigration and talent
    best rules for capital spending
    and government funded research

    And there are others who want to change the tax code. Wilber Ross was on CNBC this morning and talked of a VAT tax and cutting the income tax. Others say a flat tax.

    But in the end, we have a globalized world and I have no idea what new widgets can be made or what service. Of course, none of us know. But the problem is, what ever it is, it will take years, a decade or two, to get back to normal. If that is possible. And this does not account for future crisis, wars, and recessions.

    Just cutting taxes does not solve any long term issues, no more than the democrats looking for spending on short term issues. The employee tax holiday also takes away revenue for social security. So taking money from one place and putting it in another place to solve an issue does not make any sense.

    And today, after years of tax cuts, we lost the punch of that stimulus. Likewise, the fed printing of money just makes things worse if we don’t attack the long term problems. And the biggest problem we face, to me, is globalization.

  115. john personna says:

    There will be a contraction of the American Dream.

    But .. we can’t talk about that yet. For a while yet we’ll pretend that “retraining” trumps $1.50/hr in China.

  116. Gerry W. says:

    @john personna:

    Well, there will be some jobs left, but they will require skills. And people will be displaced and how to get them from where they live to another job will be a problem. The new jobs will also require less people. For example, a solar farm only requires two or three people for maintenance. A factory had hundreds of people. The big three are reinvesting in the Toledo area, but this is after years of losing jobs and jobs that require more skills. They will demand more from the parts suppliers, which means the suppliers go to cheap labor.

  117. Rob in CT says:

    Cut spending
    raise revenue
    educate the population
    Best infrastructure
    attract the best immigration and talent
    best rules for capital spending
    and government funded research

    Cut spending: short term or long-term?

    Raise revenue: ditto, plus how?

    Educate the population: how, exactly? We current attempt this with our (much maligned) public education system. Are you talking about increased spending on higher education? If so, how does this jibe with “cut spending?”

    Best infrastructure: I take this to mean increased spending on infrastructure. How does this jibe with “cut spending?”

    Attract talented immigrants: I suppose you mean making immigration easier for highly-skilled applicants? If so, no objection. I’m with you there.

    Best rules for capital spending: help, I don’t know what you mean.

    Government funded research: over and above what we already do, you mean, right? If so, how does this jibe with “cut spending?”

    I’m not trying to rip you. Really. But so much of the above seems in conflict.

  118. john personna says:

    @Gerry W.:

    Well, there will be some jobs left, but they will require skills.

    Sure, but when everything trends towards a “world wage” that’s better for the people start low, rather than the people who start high.

  119. john personna says:

    (A Chinese Tiger Mom would make her kid become a petroleum engineer. We only think that’s wrong because we think we are “safe” enough to follow our “dreams.”

    Anyway, best strategies for a mom/kid are not always enough to make a high median wage.)

  120. Gerry W. says:

    @Rob in CT:

    Just got my internet back up.

    Cut spending: Numbers can be worked on for the long term. LIke raising age limits, whatever else they do.

    raise revenue: A vat tax for start. Although if you start something like this, it is hard to get rid of. I would gradually get the tax rate to the rate that was under Clinton. In any case, cutting spending on social programs and the military and raising taxes will cut the deficit.

    Educate the population: Well, if they have money for tax cuts and war, then there is money to get the country educated with vocational training. Without getting people back to work, you will have more government spending in forms of welfare and the deficits will be higher with people out of work.

    Best infrastructure: Improvements add to productivity. Or we can just watch everything fall apart. Make the airports better, have a huge project. It is a matter of getting the country involved and be proud of the country.

    Best rules for capital spending: Well, I don’t know what Tom Friedman is saying either. I suspect, that we should find out what our tax structure should be and to put it to good use. Put it in the areas that we benefit most. Make tax laws work to employ people and to make business invest.

    Well, the conflict is that we did not do these things before. We spent 1 trillion dollars for tax cuts, trillions on social programs, and war. The only way out is to change everything and look where we are in a globalized world. We cannot go on, with short term wasted spending, more tax cuts to trickle down, and more printing of money. That is all we are doing and we still keep sending jobs overseas. I don’t have the answers, just floating ideas. There is not much else to go on. There is not much Obama is doing except shifting money around.

    I guess, I am looking for someone to look up to, and have him say. ‘This is what we are going to do. We are going to create jobs, we need the revenue to spend in areas that will get people educated and back to work, cut spending so that our social programs do not fail, try to get out of war.’ I suppose an FDR moment. In any case, we wasted so many years and it is going to get harder to get out of this hole. But you have to give people hope and something to hang on to. No one is inspiring our nation.

  121. Gerry W. says:

    @john personna:

    In that respect, things don’t look good.

  122. Gerry W. says:

    @Rob in CT:

    Government funded research: over and above what we already do, you mean, right? If so, how does this jibe with “cut spending?”

    Yes, if it means spending a half a trillion dollars on research. You may get lucky on something. Doing nothing is what you get-nothing. And sure, there will be waste in spending and I cringe at the thought. But only government can do the preliminary research as companies only go so far with research. We should take a look what other countries are doing. South Korea has the best battery tecnology-why?, China building airports-Why? How? Singapore thrives on high tech and embryonic stem cell research. What do they do? Other countries with various energies.

    Or find a way of just giving money to incubator companies (no political influence). Expect to see wasted and lost money. Again, doing nothing brings nothing. And ideology is just more of the same.

  123. Rob in CT says:

    Ok, Gerry. So what you’re saying is a variation on “cut spending in the long term, but invest [spend more] now.” I happen to agree with that approach, but I wanted to make sure I wasn’t misunderstanding you.

  124. Gerry W. says:

    @Rob in CT:

    Well, it is obvious that we need to cut spending in the problematic areas, and at the same time to invest in our country. Also listening to a guy (private equity) on CNBC, the Dodd-Frank bill is bad and needs to done away with, at least from the position this guy was talking about. Costing him a million dollars for paper work that has nothing to do with him.

  125. Rob in CT says:

    @Gerry W.:

    I’ve heard complaints about D-F as well (from my mother, who is an administrative assistant working at UBS, so she’s repeating complaints she hears from her bosses). Basically that the law is unclear and the government has been bad about explaining it.

    I’m generally skeptical of the banking industry’s claims that regulation is horrible, but I’m totally open to the idea that a particular law may be bad. D-F may be. I really don’t know.

  126. Sisyphus says:

    @Polaris: @Polaris: Just because an argument is logical does not mean it is sound or true. The Premises of the argument must ALL be true for an argument to be sound, you can make any argument logical and valid, but that does not make it true. It is very easy to hide behind the ruse of calling something logical when it’s truly heinous and ASSUMPTIONS are stated as fact, when they are the opposite of facts.
    Hitlers argument for blaming the Jews was logical and valid, ASSUMING the horrible things he said about them was true, which they obviously werent, therefore rendering the argument unsound. But that doesn’t mean people won’t believe specious arguments because they sound true and “logical”. People misrepresent something that is logical as always being true, which I’ve shown above to not be the case. @Polaris: