More Lies From Wonderboy About Modern Economics

It is mystifying to me how the major media in this country have let the First Rookie get away with so many baldfaced, clear cut lies about economics.

For example, Wonderboy asserted recently that Republicans are only offering 'tax cuts for the rich,' which have 'been discredited as a failed solution.'

This is false. First, marginal tax rate cuts have worked, and those include rate cuts for those earning higher incomes, regardless of their net worth. That is, income does not equal wealth.

Only yesterday, Robert Barro, a Harvard economist, was quoted in the Wall Street Journal observing that the Kennedy/Johnson tax rate cuts of 1963-64, the Reagan cuts of 1981 & '83, and the Bush tax rate cuts of 2003 all stimulated economic growth very quickly.

Another outright lie by Wonderboy is that FDR's New Deal actually alleviated poverty, created lasting employment, lowered the unemployment rate, thus 'succeeding' in pulling America out of the Great Depression. He further opined, to paraphrase him,

'I thought the debate was over on whether the New Deal worked.'

As I wrote in this post, Amy Schlaes and Lee Ohanian have both written extensively, with empirical evidence, on the failure of FDR's New Deal to do any of those things. It went even further, promoting cartels, restricting economic output, competition, and scaring away private capital from equity markets and investments for nearly a decade, not the least because of the taking of substantial elements of the power generation industry from private owners, and subsidized competition with the remainder by the TVA.

Then the First Rookie claimed that 'only government remains with the resources to solve our economic problems.'

Wrong. Wrong. Wrong. Completely wrong.

Government's resources come directly from the citizens. Especially in this era of global flow of capital and linked, floating exchange rates, the ability, as in FDR's era, to print money with impunity, has vanished.

Instead, as Hayek noted, and Dick Armey observed recently in a Wall Street Journal editorial, Keynes' government spending idea never explained how government makes its choices. Unlike individuals who, each to his own ability, behave rationally, seeking efficiency of result from spending or investment, government behaves politically, not economically.

If government has resources, it has them because of us, the citizens. Why not take the same spending amounts in the stimulus bill and, instead, simply reduce/eliminate taxes on corporations and persons for an amount of time necessary to return that much money to citizens?

Then people will choose, economically, individually, how to invest or spend the huge sums now being printed and allocated by.....politicians.

So much of the President's statements on economics is wrong that one wonders if it is deliberate. As my business partner noted, if Wonderboy utters economic falsehoods long enough, the less-well-educated, lower-income segments of our society will simply believe these lies.

Maybe that's what he wants. What would you expect when you elect a lawyer with no practical world experience whatsoever?