Wankiw Of The Day

January 3rd, 2011at 08:15am Posted by Eli

Dubya’s former economics adviser, Greg Mankiw, offers up some 100% bullshit right-wing talking points in the guise of “advice” for Obama on how to go along to get along with Republicans even better than he is already:

FOCUS ON THE LONG RUN Charles L. Schultze, chief economist for former President Jimmy Carter, once proposed a simple test for telling a conservative economist from a liberal one. Ask each to fill in the blanks in this sentence with the words “long” and “short”: “Take care of the ____ run and the ____ run will take care of itself.”

Mankiw then goes on to argue for Austerity Now!, and to explain that it’s the liberal economists who are shortsighted, not the conservative economists who had no problem with deficits when his boss was running them up, and who completely failed to predict the housing bubble and financial crisis.

THINK AT THE MARGIN Republicans worry about the adverse incentive effects of high marginal tax rates. A marginal tax rate is the additional tax that a person pays on an extra dollar of income.

From this perspective, many of the tax cuts you have championed look more like tax increases. For example, the so-called Making Work Pay Tax Credit is phased out for individuals making more than $75,000 a year. That is, because many Americans lose some of the credit as they earn more, the credit reduces their incentive to work. In effect, it is an increase in their marginal tax rate.

From the standpoint of incentives, a tax cut is worthy of its name only if it increases the reward for earning additional income.

Wow.  I think he just argued that the tax structure needs to be turned completely upside down, with marginal rates getting lower for the higher income levels, because people just won’t have any incentive to make more money if the government might take some of it.

Which makes perfect sense when you remember how the economy completely ground to a halt during the Eisenhower era of 91% marginal tax rates for the highest income brackets.  Yep, the rich just threw up their hands and stopped working, and everything just fell apart from there.

STOP TRYING TO SPREAD THE WEALTH Ever since your famous exchange with Joe the Plumber, it has been clear that you believe that the redistribution of income is a crucial function of government. A long philosophical tradition supports your view. It includes John Rawls’s treatise “A Theory of Justice,” which concludes that the main goal of public policy should be to transfer resources to those at the bottom of the economic ladder.

The goal is not to spread the wealth, the goal is to provide a safety net for the millions of people who are left out of your Ayn Randian free-market bonanza.  You callous soulless bastard.

SPREAD OPPORTUNITY INSTEAD Despite their rejection of spreading the wealth, Republicans recognize that times are hard for the less fortunate. Their solution is not to adjust the slices of the economic pie, as if they had been doled out by careless cutting, but to expand the pie by providing greater opportunity for all.

Since the mid-1970s, the gap between rich and poor has grown considerably. One of best analyses of this long-term trend is by the Harvard economics professors Claudia Goldin and Lawrence Katz in their book, “The Race Between Education and Technology.” The authors conclude that widening inequality is largely a symptom of the educational system’s failure to provide enough skilled workers to keep up with the ever increasing demand.

Educational reform, therefore, should be a high priority. To be sure, this is easier said than done. But research suggests that one key is getting rid of bad teachers. In a recent study, the economist Eric Hanushek says that “replacing the bottom 5 to 8 percent of teachers with average teachers could move the U.S. near the top of international math and science rankings.”

So instead of a safety net, all we have to do is make it easier to fire teachers, and maybe have some nice school vouchers too.  Yes, I’m sure that will totally fix the problem of their being five unemployed people for every job opening, because if those unemployed people are more educated that will just magically create more job openings.

Believe me, I’m all in favor of education and education reform, but I would rather see it done through a less localized funding base for public schools so that low-income areas aren’t permanently trapped in poverty because they don’t have enough of a revenue base to fund decent schools.  I would also like to see everyone get the opportunity to go to college without having to bury themselves in debt for the rest of their lives.

DON’T MAKE THE OPPOSITION YOUR ENEMY Last month, when you struck your tax deal with Republican leaders, you said you were negotiating with “hostage takers.” In the future, please choose your metaphors more carefully.

Republicans are not terrorists. They are not the enemy. Like you, they love their country, and they want what is best for the American people. They just have a different judgment about what that is.

No, they have a different judgment about who “the American people” are, i.e., corporations and the superrich.  They truly do not give one damn about the rest of us, and they’ve proved it again and again.

The only thing more painful than reading this dreck is picturing Obama reading it and thoughtfully nodding his head in agreement.

Entry Filed under: Bush,Economy,Politics,Republicans,Wankers

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