On this week's Meet the Press, guest commentator Tavis Smiley made the following assertion:
Why couldn't somebody have said, why couldn't somebody have said very simply, to David's question, tax cuts for the rich and lucky are not the answer? That's what needed to be said, that's what was not said and that's why we're in this mess now.
This notion of tax cuts for the "wealthy" being a root cause, or even part of the problem we are currently facing is about as wrong headed as you'd expect from a someone with Tavis Smiley's financial creds. Problem is, he's not the only person who has made such an arbitrary connection. Here's a quote from President Obama's Budget Director, Peter Orzag:
We arrived at this point because of an era of profound irresponsibility. We threw fiscal caution to the wind and ran up trillions of dollars in debt by cutting taxes and ignoring "the deep, systemic problems" that are a drag on the economy.
Such indulgence in fantasy hasn't just been the domain of sycophantic journalists and members of Obama's cabinet. President Obama himself has made similar claims:
But as we've learned very clearly and conclusively over the last eight years, tax cuts alone can't solve all of our economic problems — especially tax cuts that are targeted to the wealthiest few Americans. We have tried that strategy, time and time again. And it's only helped lead us to the crisis we face right now.
While Bush was roundly blamed for tenuously connecting the 9/11 terror attacks to Saddam Hussein, Obama is making his own tenuous connections between the so-called Bush tax cuts, and the current economic crisis we are in. But Saddam Hussein had actually used his own WMDs previously and was known to fund terror. Bush's tenuous link between Saddam and Al Qaeda was considerably less of a stretch than Obama's linking tax cuts to the current crisis.
To be more specific, there is no link between cutting taxes, even those "targeted to the wealthiest few Americans" and the root cause of recessions. Or this recession. Yet, the media ignores such claims, neglects to challenge these incorrect assertions, and allows the President and his cabinet to continue with such statements without clarification. It's been repeated so often, that it's become conventional wisdom, or more accurately the lack thereof.
Article comments
1 - Arch Conservative
Gee OA, by using reason, logic and honesty you just took a four page dump all over the radical left's class warfare propaganda campign and for that you get a virtual high five from me.
Although we can't excuse the GOP and thier lacksadisical attitude torward our right to have the federal government stay the fuck out of our business.
The next time big brother sticks his hand deeper in our pocket or tries to dictate our lives for us we would all do well to take a page out of Charlton Heston's book.........
"From my cold dead hands!!!!!!"
Charlton Heston's been dead for a year now and that liver spotted commie fuck Noam Chosmky is still prattlingon to anyone who will listen.........maybe the moonbats are right..........there's just no justice in this world.
2 - handyguy
Cutting taxes during a very expensive war was the issue. It may not have caused the recession, but it did quickly turn a surplus into a deficit.
Returning the taxes to the Clinton-era rates doesn't seem like an 'extremist' or 'socialist' idea to me. The very wealthy did not suffer under Clinton's tax rates. They did get very much wealthier during the Bush administration.
David Leonhardt, the very perceptive economics columnist in the NY Times, put it this way:
The history of the United States economy over the last 70 years can be roughly divided into two periods: the decades immediately after World War II, when [income] inequality plummeted, and the past three decades, when global economic forces and government policies caused it to soar. Mr. Obama is setting out to begin a third period that looks more like the first than the second.
That agenda starts with taxes. Over the last three decades, the pretax incomes of the wealthiest households have risen far more than they have for other households, while the tax rates for top earners have fallen more than they have for others, according to the Congressional Budget Office.
As a result, the average post-tax income of the top 1 percent of households has jumped by roughly $1 million since 1979, adjusted for inflation, to $1.4 million. Pay for most families has risen only slightly faster than inflation.
Before becoming Mr. Obama’s top economic adviser, Lawrence H. Summers liked to tell a hypothetical story to distill the trend. The increase in inequality, Mr. Summers would say, meant that each family in the bottom 80 percent of the income distribution was effectively sending a $10,000 check, every year, to the top 1 percent of earners.
So, turnabout is fair play.
3 - Lumpy
Ah the self-serving liberal bullshit is deep here, dished out by the likes of handy. truth is that even after the tax cuts government revenue was up in subsequent years so blaming them is just silly propaganda for the suckerfish.
4 - bliffle
Bush cut taxes, depleted the surplus, created deficits, unleashed business pirates and started 2 expensive wars.
Then the country went broke.
It's all Jimmy Carters fault.
5 - Baronius
Excuse me, but didn't the Taliban start the War in Afghanistan by sponsoring the WTC attacks?
6 - bliffle
I've not heard it asserted that the Taliban 'sponsored' the WTC attacks. I remember that they refused to turn over OBL unless the USA made a convincing case. So we invaded knowing that nothing would be convincing enough, I assume.
7 - V.M.B
handyguy... How deluded you are. The government's goal should not be income equality. That would be a Marxist tenet. The goal of the government should be to provide a basic framework for business, and nothing more. Taxing the successful, and separating the classes is near criminal. Hitler did the same exact thing, except it was the Jews. Nazis and Fascists use race hatred and race conflict to keep order and control over the masses. Socialists and Marxists use class hatred and class conflict to achieve their goals. We should help fix education, and that should be the main avenue for social mobility, but we should not distribute income after it has been earned. We need to give everyone an equal chance for success, not adopt a Robin Hood scheme.
8 - roger nowosielski
VMB,
Agreed. But also protecting all citizens from all manner of abuses, whether at the hands of criminal corporations or individuals. And although not everyone can afford equal protection in terms of taxation (i.e., being able to pay for it), everyone's is entitled to it under the auspices of a just state. And in such a state, justice is a distributive quality.
9 - nahummer
Links, references, anything would be nice to back up your conservative rhetoric.
10 - NJ
Of course they caused the recession.
The assertions that these cuts were used to create jobs, or start new businesses does not pan out.
What the wealthiest two percent did with their trillion dollar of the tax cut was to start a round of speculative investment, largely in mortgage backed securities.
The reason that the Clinton tax INCREASES worked was because Clinton ALSO lowered other taxes. Like dropping capital gains from 28 percent to 20 percent, as well as cutting other "corporate" and "business"taxes.
This was carrot and stick. If you wanted to take money out of a business as personal income, you were taxed higher. If you used it for business purposes, your taxes dropped.
Even today, the Bush tax cuts are having their pernicious effect.
The first round of Bush tax cuts come to about 210 billion dollars a year.
Then in 2008 Bush's answer to forestall a recession that had already started, but which he did not admit started was...
ANOTHER TAX Cut. 143 billion in NEW tax cuts in fact.
Then in order to get three Republican votes for the Obama stimulus, these three votes insisted that at least 43 percent of the 789 billion dollar stimulus be tax cuts. They negotiated, and came down to 36 percent for an additional 288 billion in tax cuts.
So over the last two years, there have been a total of 851 billion dollars total in tax cuts *210 - 420 + 288 + 143 = 851) and the rest of the stimulus that was not tax cuts came to 501 billion.
If tax cuts were EVER going to stimulate an economy, the 425.5 billion given each year for 2009 and 2010, should have done so. This was in fact TWICE AS MUCH per year in tax cuts as was being given on between 2001 and 2008.
11 - John Wilson
The reason for tax cuts to big business and rich people is to inject more capital in the system in order to build businesses and thereby increase employment and GDP.
But if the capital channel is already overloaded with money then it just goes into savings, e.g., US Treasury bonds, which means the money never becomes capital. The money is dead, stagnant.
This is the situation we are in today: we have too much capital. Offices and factories are standing idle and empty. Machinery goes unused. It is the irony of supply-side economics.
What we need is more market activity and the most effective way to do that is to increase consumption by directing money to the people who spend it immediately and thoroughly: the poor, the unemployed, the lower classes.