Cheap Talk On The Economy

National Review Online: Democrats' Solutions Are Wrong, While GOP Is Timid And Vague

(National Review Online)  This column was written by the editors of National Review Online.

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Like the stock market, politicians have predicted nine of the last five recessions. Worse, they are proposing to do something to avert or soften the recession they currently predict. The leading idea, apparently embraced by the White House as well as the Democrats, is to send out checks to everyone. We’ll take the money, but the economic theory behind this idea - that people will take their “rebates” and the country will spend its way out of trouble - is doubly flawed. The rebates of 2001 were mostly saved, not spent, and consumer spending has been holding up pretty well.

Instead of trying to fine-tune the economy - to make temporary changes at just the right time to smooth its ups and downs - politicians should try to devise policies that promote its healthy long-term growth. Democrats, unfortunately, seem to have reached a party-wide consensus on economic policy that is well to the left of where they were in the 1990s. The chairman of the House tax-policy committee, Charles Rangel, wants to raise the top income-tax rate to 44.2 percent, which is well above its level of 39.6 percent under Bill Clinton. Those Democrats who want to fix Social Security, such as Sen. Barack Obama, would do so by adding more upper-income taxes. The leading Democrats also want higher taxes on dividends and capital gains. Meanwhile, the Democrats are running away from free trade. Even Hillary Clinton wants a time-out from trade deals.

The Republican presidential candidates say they would block tax increases, and most of them favor liberalized trade. (Rudolph Giuliani, based on his campaign statements, is probably the most aggressive free trader of the bunch.) Giuliani, John McCain, and Mitt Romney have all outlined health-care plans that could be expected to help the economy, both by reducing inflation in the health sector and by making it easier for people to switch jobs without fear of losing their insurance. Several of the candidates - McCain, Romney, and Fred Thompson, in order of increasing specificity - have faced up to the need to rein in entitlement spending.

It must be said, however, that the intra-Republican debate has often been pretty dismal. The low points have generally come from Mike Huckabee, who seems to think that it is a sin to lay anyone off. Sometimes it is a favor to everyone else, if it keeps a company in business. The recent back-and-forth between Romney and McCain, in which the candidates have debated who is the more optimistic, has not had much content.

In Michigan Monday, Romney said we should “be bold.” His first piece of boldness: a quintupling of “our national investment in energy research, fuel technology, materials science, and automotive technology.” Next time, try timidity. Romney is right, however, to resist federally mandated improvements in the fuel efficiency of cars. If we want the government to discourage the use of gas - a big if - we should just raise the tax on it; consumers will then buy more efficient cars without being forced.

McCain, meanwhile, has said that he does not know much about economics. It shows. He would impose an emissions cap on oil companies to fight global warming, but pretends that the companies would not pass on their costs to consumers. (His plan has been estimated to raise gas prices by 68 cents a gallon.) He is a moving target on taxes. He voted against Bush’s tax cuts, saying that they were tilted toward “the wealthiest.” After they passed, he said he would not vote to keep them. Now he says that they helped the economy and he would keep them, but he is still glad he voted against them.

We’re not sure what he thinks about the economy; we’re not sure whether he thinks about the economy. The Michigan primary, being held today, has become a three-way contest between Huckabee, Romney, and McCain. On economic issues, Romney is the best of the three.

[bootcut]

Our foriegn policy is so insane if you actually sit back and look at it for awhile (and it dosen''t take a long while). Our idiotic leader is in the middle east trying to broker peace between the Arabs and Isralies. Then turns around and wants to sell millions of dollars worth of J-Dam''s (a sattelite guided bomb) to the Arabs. Gives billions of dollars to the leader of Pakistan, who by the way is a dictator of a country with nukes and whose people hate him. We gave Osama weapons and stinger missles at one time. We gave weapons and money to Sadam and the gas he used on his own people when Iraq was fighting Iran. I wonder why Iran dosen''t like us HMMMM. Then we Invade Iraq Because king Bush said they had WMD''s, which turns out the only WMD''s they ever had was the gas we gave him. If this all was not so seiously insane it would be funny. And the real sad part about it, we let them do it. This country will colapse like every other nation that tried to expand its empire. It will be a unbelievable sad thing to see happen.

[knyghtwolf]

So while shrubbie is overseas selling our weapons to the Saudi''s, and chest pounding for war against Iran, I wonder how his peace mission is going so far? Every species can smell it''s own extinction, I hope whatever species replaces us will do much better. Somebody just needs to nail his shoe to the floor so all he can do is run in circles, all the while thinking he is going somewhere, the man has to go home and veg on the range and soon before he destroys the whole world for whatever insane reasoning he is using or NOT using.

[bootcut]

As I read all these comments and I can''t help but think how they all miss the point. Let me keep it plain and simple. Our goverment is basically broke. It spends more then it takes in. It sends billions upon billions of dollars overseas due to our foriegn policy. For wars, aid to other countries and keep all our military bases throught out the world running and such. Our goverment has to borrow more and more money from countries such as China and Japan to name a few because it spends more then it takes in, in taxes and such. The goverment also prints more money with nothing to back it. This in turn drives the value of our dollar down which is one of the key factors which cause inflation. You need to cut taxes, BUT and this is a big but, you have to cut goverment spending first. We need to greatly reduce or eliminate the money our goverment sends overseas. The money saved there would allow such cut in taxes. Also lowering the prime interest rate will only make matters worse. Easy low interest credit is a good part of the reason we are in this mess. Face it, Americans are addicted to credit. Low interest rates will only allow more people to get deeper in then they already are. Now i''m sure alot of folks will say its much more complicated then what i have stated. But no its not. We just have a habit of making things sound much harder then they really are. Lets keep our money in this country for our people.

[logicanada]

Politics is the art of getting votes from the poor and campaign funds from the rich while promising to protect each from the other.

[logicanada]

Money is a good servant, but a bad master.
Francis Bacon

A nickel isn''t worth a dime today.
Yogi Berra

[observantx]

Truth #1: Tax breaks for the wealthy (ala little Georgie) do not result in reinvestment in American business that create jobs.

They result in bigger and more luxurious houses, cars, vacations, and trust funds for junior and whatever high priced status symbol is the rage at the moment for Mr corporate Gotbucks. The jobs generated by these purchases are negligible and extremely low end with no benefits.

What $$ the corporate pirates have left over from pampering themselves is spent on building factories in low wage countries and not in the U.S. So, not only is little Georgie''s largesse not available to the rest of us directly, we don''t even get a chance to EARN any of it.

Let''s face it people, the deck is stacked, the dealer is crooked as a crankshaft and the IRS vultures are waiting outside the casino.

This used to be a country where a person could put in an honest day''s work and receiver an honest days wage. Kiss that goodbye.

Kiss America, land of the free and home of the brave goodbye too.

Coming to a theater near you: America: the new third world country

[idlepugilist]

Gotta love how the National Republican Organization puts it: Democrats=wrong, Republicans=vague. The implication is that Democrats know what they''re talking about, Republicans aren''t sure what they''re talking about, and the NRO knows better than all of them.

[downsteamjim]

To MCV: Learn how to knap flint, make a bow or atl atl, & live in a cave.

[mommalolo]

How about heavily taxing companies that outsource? Encourages them to hire Americans, add bucks to the tax base, etc.

[mcv57]

These points of financial advice is bascially what you would do for a depression. They left out changing your portfolio to a bear market environment. So, in a nutshell.

- Bear Market investments (include precious metals)
- GET OUT OF DEBT NOW (Sell it; if you cannot buyout)
- Shore-up of liquid assets
- Cut all luxuries (cable television, YMCA fees, etc.)
- Find cheaper options for all you necessarities:
(1) Food
(2) Shelder
(3) Power/electric and gas
(4) Entertainment (not a necessarty if you are unemployed).
(5) Buy local store (when possible - save gasoline). Disadvange of a small store is 10% higher prices and limited inventory selection.

[noloyalisti]

I would like to add:

Buy from small businesses wherever possible.
Buy organic and locally produced food and goods.
But the smallest vehicle that you can use.
Vote only for candidates that will repeal anti-worker "free-trade" agreements and will break up monopoly corporations like the media corporations.
Vote for pro-union candidates, we need them more that ever.
Don''t believe anything reported by the mainstream media and don''t support those corporations like GE who owns NBC and any corporation or advertises associated with Rupert Murdoch like the Wall Street Journal.
Don''t go to Walmart. EVER

[downsteamjim]

My problems with George Bush include spending like a democrat; socialized health care [drug policy]; education department [a la Ted Kennedy]; illegal immigration amnesty plan to name a few. In many ways George Bush has been one of the most LIBERAL presidents in history.

[logicanada]

The republican mantra follows Milton Friedman''s economic paradigm of trickle down economics, otherwise known as Reaganomics.
It supposes that tax concessions and input into big business will create jobs and that the wealth will trickle down into the economy and everyone will prosper.
Unfortunately todays corporate strategy of downsizing and shopping jobs overseas, combined with the unchecked immigration of cheap labor compounds corporate profit at no benefit to the domestic worker.
Uneducated small investors get burned by big business every time.
More tax breaks for business merely drains money from the middle class tax payer into the foreign labor markets of third-world countries who buy little from the US. Western civilizations are also bred to demand everything they desire ''right now''.
Take a lesson from Argentina and Venezuela who are injecting commodity profits back to the people who then spend it on foreign and domestic items.
They seem to have realized that people need to feel financially comfortable when purchasing products and will wait for their desired purchases in order to forgo interest rates by refusing to finance and by paying cash.
Refuse Credit!!!
Refuse to pay out on teaser rate credit terms!
Pay cash only!!

[noloyalisti]

Tylenol6 makes a very good point. No matter who we vote for we get fascism. It is time for the right and the left to get together to realize that instead of fighting each other, we need to fight the big government overspending on the military to keep us in fear while it is being run by corporate America.

We the consumers have to power to shut it down and have our elected "representative" represent the interest of the people (not themselves and their sponsors the greedy CEOs of America)

When are we going to get together, when we all go down. People unite to fight the current fascists.

[cfin5]

Posted by tylenol6 at 03:46 PM : Jan 16, 2008--------They''re doing all of these things on purpose. The powers that be are NOT stupid, like 9/11 they need a crisis to aggravate the peace so that folks will willingly give up their rights for a little back of the peace that they had.......It''s a continual 2 steps forward in "believing" there is peace, but always 3 steps backward from liberty. This standard applies to the big three aspects of life,....economic, religious, and national sovereignty. They are not called GLOBALISTS for nothing. In fact, the globalists political entity''s right arm is called Neoconism, the left arm is Neoliberalism, yet is controlled by ONE agenda,......its so sad.

[tylenol6]

Somebody please explain to me why americans KEEP voting for the politicicans and these presidential candidates who are the ones who have sent our jobs overseas??? Yes, I am talking about CLINTON, OBAMA, EDWARDS, MC CAIN, ROMNEY, HUCKABEE, THOMPSON and GUILIANI.All of these candidates I have mentioned also want to keep us in Iraq AND START A WAR WITH IRAN. Are you people out of your friggin mind??????? If you did
a research on these candidates you will find out who
the people are in their campaigns. That tells you alot. McCain,Guiliani, Romney and Huckabee are all aligned with the Bush Crime Administration. If you did
a search on Hitlery, you will find out she gets most
of her campaign donations from the military complex.
That means people, HILLARY PLANS TO KEEP THESE WARS
GOING!!!!!!!!!! She is LYING to the american people.
She voted to FUND THE WAR ALL THE TIME..... I use to
like Obama until I found out he is a CFR MEMBER globalist SCUM that is selling out the american people. My vote goes to RON PAUL...Why do you think
the media is censoring him???? The government KNOWS
RON PAUL IS TELLING THE TRUTH TO THE AMERICAN PEOPLE.
Just please do the research on these candidates and
you will find out for yourself.....

[tylenol6]

Somebody please explain to me why americans KEEP voting for the politicicans and these presidential candidates who are the ones who have sent our jobs overseas??? Yes, I am talking about CLINTON, OBAMA, EDWARDS, MC CAIN, ROMNEY, HUCKABEE, THOMPSON and GUILIANI.All of these candidates I have mentioned also want to keep us in Iraq AND START A WAR WITH IRAN. Are you people out of your friggin mind??????? If you did
a research on these candidates you will find out who
the people are in their campaigns. That tells you alot. McCain,Guiliani, Romney and Huckabee are all aligned with the Bush Crime Administration. If you did
a search on Hitlery, you will find out she gets most
of her campaign donations from the military complex.
That means people, HILLARY PLANS TO KEEP THESE WARS
GOING!!!!!!!!!! She is LYING to the american people.
She voted to FUND THE WAR ALL THE TIME..... I use to
like Obama until I found out he is a CFR MEMBER globalist SCUM that is selling out the american people. My vote goes to RON PAUL...Why do you think
the media is censoring him???? The government KNOWS
RON PAUL IS TELLING THE TRUTH TO THE AMERICAN PEOPLE.
Just please do the research on these candidates and
you will find out for yourself.....

[king77shaw]

PERSONAL ECONOMIC SOLUTIONS - don''t look to the do-nothing Republocrats for answers! ...

1) CANCEL YOUR CABLE TV: let the corporate media moguls (and their advertisers) know that you will no longer pay for their propaganda ..

2) STOP INVESTING YOUR MONEY ON WALL ("WAR") STREET: corporate America is selling out the middle class to the lowest global bidder and using our own money to do it; the financial markets will push for anything that increases profits - especially war .. best to invest your money in land, real estate or even better, gold and silver%u2026

3) SUPPORT LOCAL ECONOMIES !
- Buy from local manufacturers, local retailers, local craftspeople/artisans, etc.
- if possible, BURN WOOD for heat;
- support local growers or grow some of your own food;
- implement alternative energy sources (solar, hybrid autos etc ..)
- develop local means of commerce not based on the failing US dollar ..

4) STOP UNNECESSARY CONSUMPTION & STOP USING YOUR CREDIT CARD ! think twice about what you buy; is it absolutely necessary ? who does it ultimately support ?

5) DECENTRALIZE ! - the global economy is nothing more than a ploy to centralize power, control and wealth into the hands of an elite few - blinded by misinformation, the American people are buying right into it - the rich get richer and the middle class is quickly becoming the working poor ...

[omega39-2009]

Meanwhile, the Democrats are running away from free trade. Even Hillary Clinton wants a time-out from trade deals.

Anybody with an iota of sense would understand how these so called "free trade" deals are killing the American worker and consumer.

[davidlar2]

Where is the evidence from the United States or any other country that protectionism and heavy government interference/regulation/redistribution in the economy generates economic wealth? This is independent of any discussions surrounding those of us, even if not wealthy, who want to live in a free country where the government makes fewer economic decisions for us and doesn''t make wealth redistribution a major facet. I am not a fan of Bush, but fear the left wing labor union, protectionist, redistributionist economics to come that have never done anything for long term economic growth (or personal freedom) in any country.