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I hate to say "We told you so" but we did.   Now there is credible back up to our 2010 claims.

First, here's an acronym glossary for the three expert organization now in agreement that the GOP economic policies are a proven failure.  You can click on each to learn more about each.  Actually, any copy below that is either brown or orange will take to you the source documents:

IMF - International Monetary Fund
CRS - Congressional Research Service
CBPP - Center on Budget and Policy Priorities

I wrote this in July, 2010, the year Democrats didn't show up to vote in droves, heralding in the Tea Party takeover of the House which gerrymandering might keep in tact.

Deficit Hawks Lie, and Lie, and Lie, and Lie

It's not Political Rocket Science.

And when you hear either side mention ANY form of tax cuts to solve our economic woes, know you are being lied to, AGAIN.

Also, this just in, recommended reading Ruh Roh! CBPP Report "Big Dangers Ahead for the Economy, the Budget, and Low-Income People"

Tax cuts cause deficits.  Unfunded war spending causes deficits.  It's plain and simple.  It's not Accounting Rocket Science.  If you take in less than you spend, you have a deficit.  In the governments case, if they take in less taxes then they spend, we have a national deficit.

The Republicans caused the deficit.

Anyone who has read The Shock Doctrine by Naomi Klein knows that the IMF Austerity programs, foisted on countries around the world, created a world of hurt for the majority of their citizens and stellar investment opportunities for the world's multi-national corporations.  

The IMF recipe, in short, has been:  Debt, Privatization of Resources, higher costs for utilities, reduced social safety nets, increased poverty for the citizens, and chaos followed by government repression of the chaos.

Perhaps the IMF ran out of countries to anchor with economically suffocating debt, because they changed their mind recently, proving we have been right all along:  The IMF & GOP foundation principles are wrong.

I highly recommend reading this article that exposes how the Republican Senate squashed the release of the September, 2012 CRS report (see below) that obliterated the GOP position that lower taxes and austerity will solve the American economic woes:

The IMF Admits It Was Wrong About Keynesianism

But wait a minute.  Maybe not!  Maybe the title of the above article takes some liberties.

Right off the bat the authors of this report, Growth Forecast Errors and Fiscal Multipliers, include  this disclaimer:

This Working Paper should not be reported as representing the views of the IMF.
Within the paper the authors make a good case that austerity causes contraction, not expansion of the economy.

However, the article concludes (page 20):

Thus, our results should not be construed as arguing for any specific fiscal policy stance in any specific country. In particular, the results do not imply that fiscal consolidation is undesirable. Virtually all advanced economies face the challenge of fiscal adjustment in response to elevated government debt levels and future pressures on public finances from demographic change.
I am not qualified to discern the science presented in the above report and will leave that to the economists.

However, and more importantly, in September, 2012 (just before the election) the Congressional Research Service concluded its research on the effects of lower tax rates on the economy.

Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945

The CRS reported concluded with this important paragraph:

Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90%; today it is 35%. Additionally, the top capital gains tax rate was 25% in the 1950s and 1960s, 35% in the 1970s; today it is 15%. The real GDP growth rate averaged 4.2% and real per capita GDP increased annually by 2.4% in the 1950s. In the 2000s, the average real GDP growth rate was 1.7% and real per capita GDP increased annually by less than 1%.

There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth.

Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth.

However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution.

The share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession. The evidence does not suggest necessarily a relationship between tax policy with regard to the top tax rates and the size of the economic pie, but there may be a relationship to how the economic pie is sliced.

You will find some great charts in the CRS paper; however, I wish this CRS report had included this chart that shows how the Income Inequality prior to the Depression was almost identical to the Income Inequality prior to the Great Recession.

This Center on Budget and Policy Priorities, dated September 9, 2009, adds fuel to the fact that only the 1% has gained any benefit from the Lower-Taxes-help-the-economy falacy:

TOP 1 PERCENT OF AMERICANS REAPED TWO-THIRDS OF INCOME GAINS IN LAST ECONOMIC EXPANSION
Income Inequality Pre-Depression & Pre-Recession the Same

Just in case the above chart isn't quite stark enough for you, here's another

Income Distribution Inequality, USA 1946 - 2007

The closing statement of this CBPP report concludes:

Whether the highest income households will once more capture a highly disproportionate share of income gains as the economy begins to recover is uncertain, but Saez, along with Harvard economist Lawrence Katz, points to previous recessions and notes that only major policy shifts like the New Deal have prevented income concentration from “bouncing back” after a decline. In the absence of significant policy changes, income concentration levels could well return to their previous highs after the current recession ends and resume their 30-year climb.
Again "only major policy shifts like the New Deal have prevented income concentration from “bouncing back” after a decline."

History has proven time and time again that when the masses are impoverished in order to increase wealth for the few, all hell breaks loose.  Mass unemployment, unjust policies, and reductions in social services are a recipe for chaos as proven by riots in many countries today.

That said, we know what is needed.  The economists that aren't drinking the GOP cool aid know what is needed.  History has proven what has worked.  

Will the Obama Administration apply the real medicine needed to put Americans back to work and return the shared prosperity enjoyed in the decades prior to the laissez-faire takeover of US policies in the 1980s?

What did FDR do?  You can read all about that at Wikipedia New Deal

Well, that was interesting.  I had to edit Wikipedia! which had said that "the first Democratic president after FDR, Dwight D Eisenhower".  I changed that to REPUBLICAN.

CONCLUSION:

America's infrastructure is crumbling, we need to

move to green energy,
bring back jobs,
improve and expand education
honor and improve our social safety nets
undo the chains of special interest
regulate pollution
regulate banks

In short, we need to do the polar opposite of what the Tea Party GOP is pushing for.

FDR, Eisenhower, Nixon, Kennedy, and Johnson agreed on policies that produced the greatest results for most Americans for decades.  The 1950s - 1980 were truly the Golden Years for most white Americans.  We improved opportunities for African Americans.  It wasn't perfect, but shared prosperity was a whole lot better than today.

What will it take to convince the Obama Administration that the majority of Americans believe we can share some sacrifice in order to get this country back into a semblence of balanced economic opportunity?

They are coming for our Social Security and other social safety nets.  It's been a neo-liberal dream for years and they are using the deficit as an excuse to get this heartless desire manifest.  

I call it Manifest Poverty.

IF you have a minute, check out these 10 CHARTS that further demonstrate the disgusting income inequality in the United States in 2013.  SHAMEFUL:

10 Charts Show HOW Trickle-Down Fails and WHY You feel pinched

Can public outcry, now supported by credible sources, force the administration's hand?

Didn't the President tell us WE have to make this happen, WE are the change?

Or perhaps the share holdings by Congress members has locked their alliegence away from us.

Here's is opensecrets.org list of Congressional investments.

And we wonder why policies don't shift! and why companies are gaining monopolies

1    General Electric    94    46    48
2    Procter & Gamble    74    33    41
3    Cisco Systems    72    33    39
4    Microsoft Corp    70    28    42
5    Pfizer Inc    61    27    34
5    Bank of America    61    23    38
7    AT&T Inc    57    20    37
8    Intel Corp    54    24    30
8    Johnson & Johnson    54    18    35
8    Verizon Communications    54    22    32
11    Exxon Mobil    53    14    39
12    Apple Inc    51    21    30
13    Coca-Cola Co    49    22    27
13    JPMorgan Chase & Co    49    19    30
15    PepsiCo Inc    47    22    25
16    IBM Corp    46    16    29
16    Wells Fargo    46    19    26
18    Berkshire Hathaway    43    18    25
19    Walt Disney Co    41    19    22
20    Home Depot    40    16    24
21    Hewlett-Packard    39    15    24
22    McDonald's Corp    38    17    21
23    Merck & Co    37    14    23
23    Citigroup Inc    37    15    22
25    Abbott Laboratories    35    11    24
26    Wal-Mart Stores    31    12    19
27    3M Co    30    16    14
27    Oracle Corp    30    13    17
29    Apache Corp    29    10    19
30    Qualcomm Inc    28    12    16
31    Google Inc    27    10    17
32    Goldman Sachs    26    9    17
32    Ford Motor Co    26    8    18
32    Conocophillips    26    7    19
32    Time Warner    26    14    12
36    United Technologies    25    9    16
36    Bristol-Myers Squibb    25    7    18
36    Chevron Corp    25    8    17
39    BP    24    2    22
39    Amgen Inc    24    9    15
39    Duke Energy    24    10    14
39    Emerson    24    8    16
39    Kraft Foods    24    10    14
39    Teva Pharmaceutical Industries    24    12    12
45    Schlumberger Ltd    23    7    16
45    Comcast Corp    23    12    11
45    EMC Corp    23    13    10
45    Altria Group    23    6    17
49    CVS/Caremark Corp    22    7    15
50    Devon Energy    21    6    15

You can go tothis link to see who the wealthiest Congress members are, how much yours are worth, and what they are invested in.

TAKE NOTE of the interactive search feature in the upper right hand corner.  Search and learn about your Congress members.

Originally posted to War on Error on Tue Jan 08, 2013 at 10:40 AM PST.

Also republished by Community Spotlight.

Poll

With the burgeoning evidence, can the Obama Administration return to the fiscal policies that worked from 1950-1980?

46%58 votes
53%68 votes

| 126 votes | Vote | Results

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Comment Preferences

  •  Excellent analysis. You were, and are, right. We (22+ / 0-)

    are en the middle of a massive looting, and a systematic tear down of democratic government.

    •  Thanks. (5+ / 0-)

      And thank the dkos team for the rescue, recommend.  Very kind.  Hope the info helps.

      It's difficult to be happy knowing so many suffer. We must unite.

      by War on Error on Tue Jan 08, 2013 at 03:32:02 PM PST

      [ Parent ]

    •  I've been looking at the chart links (4+ / 0-)
      Recommended by:
      marina, War on Error, J M F, vahana

      and you can see where the folks in Washington have an "Interest" in the outcome of things.

      Just look where they invest.  Look who invests in them (i.e. lobbyists and the companies they represent).

      We are on the brink of a 2-class society and it is ALL related to the trickle down idea that trickled up (those of us with an accounting mind saw that coming years ago and thought it was WRONG then and it is WRONG now).

      Starve the children but feed the upper classes with caviar.

      There is a sense of Entitlement among these rich folks.

      And remember, Social Security, Medicare and Unemployment Insurance are all that, INSURANCE - not entitlements.  Please, change the language we use to reflect more reality..

      -6.13 -4.4 Where are you? Take the Test!!!

      by MarciaJ720 on Wed Jan 09, 2013 at 06:59:12 AM PST

      [ Parent ]

  •  All of this is great, however (14+ / 0-)

    The president's economic policies are firmly rooted in the republican camp.

    There will be no changes.

    •  Not exactly (2+ / 0-)
      Recommended by:
      War on Error, vahana

      Both parties policies are firmly rooted in the current paradigm, which arose in the 1970's.  

      In the linked article I suggested 2004 as a possible critical election which was almost immediately inavlidated in 2006 & 2008.  2008 was the next candidate and it was potentially invalidated by 2010.  Democrats had to win in 2012 and 2016 to support the 2008 date.  With Obama's victory the "window" for crit elections is closed and Dems MUST win in 2016 if the model is valid, so it is testable.

      Anyways the current paradigms favors the Right on economics and the Left on social issues.  This is one reason why Obama and Clinton come across as Republican-lite.  Another is continued  Republican political stength demonstrated as recently as 2010.

      The range of policies is limited by what their advisors think they know about the way the world works, which since they are successful must necessarily comport with the reigning paradigm.

      •  I think the economic policies ARE social (0+ / 0-)

        policies. As long as we follow supply side economics, the 99% will be sucked dry by the 1%, with little health care, retirement or living wages.

        "The object of persecution is persecution. The object of torture is torture. The object of power is power. Now do you begin to understand me?" ~Orwell, "1984"

        by Lily O Lady on Wed Jan 09, 2013 at 03:37:33 PM PST

        [ Parent ]

  •  WoE, it was swing voters, independents (5+ / 0-)

    and the young who didn't show up to vote in droves. Please stop pushing this ConservaDem point that disgruntled left-wingers sat out the 2010 election in droves.

    if necessary for years; if necessary, alone

    by SouthernLiberalinMD on Tue Jan 08, 2013 at 11:16:20 AM PST

    •  I didn't use the word disgruntled. (5+ / 0-)

      But I did cancel cable when Ed Shultz told voters to not vote.

      I'll defer to Nate Silver to respond

      ‘Enthusiasm Gap’ Was Largest in Presidential Swing States By NATE SILVER

      For example, exit polls suggested that an equal number people identifying as Democrats and Republicans turned out on Tuesday night. By contrast, Democrats led by 7 points on this measure in 2008.

      It's difficult to be happy knowing so many suffer. We must unite.

      by War on Error on Tue Jan 08, 2013 at 11:30:53 AM PST

      [ Parent ]

      •  OK, I guess I'll have to (2+ / 0-)
        Recommended by:
        War on Error, divineorder

        go dig up the diary on this subject...be right back.

        if necessary for years; if necessary, alone

        by SouthernLiberalinMD on Tue Jan 08, 2013 at 11:49:58 AM PST

        [ Parent ]

        •  Sorry. I hope we GOTV like our lives depend (11+ / 0-)

          on it in 2014.

          It's difficult to be happy knowing so many suffer. We must unite.

          by War on Error on Tue Jan 08, 2013 at 11:54:51 AM PST

          [ Parent ]

          •  OK, here it is: (11+ / 0-)

            did liberals cause the 2010 shellacking?

            Take a look.

            And here's the reason I keep trying to shut down this zombie lie:

            The problem with breaking this narrative (35+ / 0-)
            is that this sort of narrative "x stayed home, screwing the rest of us" only has political value if it can be used for Hippy Punching.  

            You can statistically disprove it.
            You can rhetorically disprove it.
            You can anecdotally disprove it.

            It doesn't matter, because the people who use the narrative are simply not using it in good faith. It is a blackjack to be used on those who question the status quo assumptions of the inside the beltway Democratic Party.

            X always has to be a Hippy, always, or the narrative is useless.

            If we lose because of how the Democratic Party operates, it means fundamentally changing everything about how the party operates from top to bottom.

            Easier, cheaper, and less painful to blame a group you see as a fundamentally powerless as well as fundamentally trapped constituency.

            You can't "Centrist Punch" or "Independent Punch" because they are, by definition, the most hypothetically politially mobile voters, and your electoral model is based on the idea of wooing them at all costs.
            You only punch a constituency you believe has to take it. We have built an entire model of politics around the idea that it's good to malign the most loyal and ardent of your voter pool because they have no place to go, and your tearing them down lets you sell yourself to people who you assume wouldn't want to vote for you otherwise.  

            It's no accident that the most ardent and passionately Democratic voters are cast as the most disloyal and treacherous. You can't have anyone questioning their place in the narrative, or it falls apart.

            It's a political model of taking people for granted based on the idea that they have no place else to go, and, constantly reminding them that they are the most vile creatures in the world if they question this narrative, or if the Democratic Party loses.

            Every other Democratic constituency has a 'walk away' card when it comes to blame for a very important reason, as long as everything that goes wrong with the Democratic Party can be blamed on the least powerful and least politically mobile voting constituency inside the party, the party doesn't have to change the way it does business.

            The Democratic Party has had a dominant narrative for my entire adult life, we lose because Democratic policy is unpopular, and we must distance ourselves from what made our party great, because otherwise we can't win. In accordance with this view, we must chase the mythical Independent voter, this wild card of a creature who is truly independent and has no natural political inclination, and is always a political free agent ready to be wooed away from the other guy.

            There is no massive middle of unbiased and politically unaligned voters. there are "Independents" who are straight ticket Democratic voters, and there are "Independents" who are more Movement Conservative than any Heritage Foundationite.

            by LeftHandedMan on Fri Aug 05, 2011 at 11:21:16 PM PDT

            if necessary for years; if necessary, alone

            by SouthernLiberalinMD on Tue Jan 08, 2013 at 12:06:01 PM PST

            [ Parent ]

            •  Thank you, thank you Southernliberal (0+ / 0-)

              For saying this, and saying it so well.  I'm so fed to the teeth for being shat upon by members of my own party simply for doing my best to get us all to stand for the ideals and agenda we all share.  I do my best for Democratic candidates that I believe will advance the Democratic agenda, but I fail to understand how it can possibly be my fault if a Republican candidate that I do not support and did not vote for wins.
              There are many Democrats who have expressed a willingness to settle for whatever we are given by our politicians, and that's fine.  What I don't understand is why it's not ok for other Democrats to ask for, and work for more.

          •  WoE, it all depends (3+ / 0-)
            Recommended by:
            War on Error, divineorder, Lujane

            or almost all of it depends--on whether or not the Democrats cut earned benefits. If they cut Medicare or Social Security--or even Medicaid--the Republicans are going to triangulate on those issues. They already did some of that in 2012. And those of us who regularly go to the doors are not going to have any way to repudiate those claims, unless we're willing to not only lie, but to tell a dumb, easily disprovable lie. Oh, I'm sure there will be some sort of fancy-dancing "it's not really a cut" kind of talking point put out by the Dems if this comes to pass. But that will cut no mustard with the voters.

            I, for one, am feeling more disinclined to volunteer for the Dems right now than I ever have been in my life. And my reaction is cake compared to what you'll get from a lot of Democratic loyalists if they cut Medicare and Social Security.

            if necessary for years; if necessary, alone

            by SouthernLiberalinMD on Tue Jan 08, 2013 at 12:09:28 PM PST

            [ Parent ]

          •  We need to get out our message, the truth since (2+ / 0-)
            Recommended by:
            War on Error, Creosote

            narrative in Red states like mine is all GOP/Tea Party all the time. Voters need to be better informed than they are now. We have two years to show seniors Republicans are not interested in their welfare, to show our neighbors how much ACA is going to help them and on and on. We need to go after independent and disaffected Republicans, we need to grow our base.

            The work goes on, the cause endures, the hope still lives and the dreams shall never die. ~ Edward M. (Ted) Kennedy

            by cherie clark on Tue Jan 08, 2013 at 02:30:32 PM PST

            [ Parent ]

  •  that was the CRS report (2+ / 0-)
    Recommended by:
    War on Error, divineorder

    that got taken down

    if necessary for years; if necessary, alone

    by SouthernLiberalinMD on Tue Jan 08, 2013 at 11:20:16 AM PST

  •  Sure, they can (1+ / 0-)
    Recommended by:
    War on Error

    but they won't.

    they will keep their richest stakeholders happy

    and that is that.

    if necessary for years; if necessary, alone

    by SouthernLiberalinMD on Tue Jan 08, 2013 at 11:26:38 AM PST

  •  IMF, CRS, CPBB (5+ / 0-)

    Initials like these need to be spelled out when you first use them:
    IMF - International Monetary Fund
    CRS - Congressional Research Service
    CPBB - Center on Budget and Policy Priorities??

    The spirit of liberty is the spirit which is not too sure that it is right. -- Judge Learned Hand, May 21, 1944

    by ybruti on Tue Jan 08, 2013 at 11:48:46 AM PST

  •  The IMF, as an organization, needs (1+ / 0-)
    Recommended by:
    Fieldswithoutfences

    To be burned to the ground.  I don't know where they physically are, but whatever host country is currently suffering from that parasite should mobilize its citizens to tar and feather the IMF officials and officers and executives, and run them out of town on a fucking rail.

    They are not decent people, and have no business amongst decent people.

  •  Fundamentally wrong assumption (2+ / 0-)
    Recommended by:
    War on Error, NoMoreLies

    Can it change?  The assumption is that people actually want to fix the debt situation.  They don't.

    Tea Partiers only want less taxes.  They say they are focused on debt, but then reveal their lack of seriousness on that issue by calling for tax cuts which prevents progress on debt reduction.

    More sane but also more greedy Republicans also only want tax cuts.  They don't see social services cuts as affecting them.  Who cares if some poor bum goes hungry?  It's his own fault for being lazy.  I want to live in my McMansion and buy another car with my tax cut.  Oh, and make it happen, or else I'll give money to the other guy running for office.

    Democrats at least are on the right track, but whether through fortunate coincidence that their preference (more spending in a recession) is a good idea or just because they are always for more spending...well, that remains to be seen.

  •  Can Obama return to New Deal policies? (5+ / 0-)

    Yes.
      Will he? No.

      As for austerity, they know it hasn't worked for a very long time.
      The problem is that the fact of it not working doesn't matter!

      Competence and fixing things is not a priority in politics, especially when the politics involves protecting the status quo.

    ¡Cállate o despertarás la izquierda! - protest sign in Spain

    by gjohnsit on Tue Jan 08, 2013 at 02:17:04 PM PST

    •  The New Deal was NOT responsible for the postwar b (3+ / 0-)
      Recommended by:
      gjohnsit, War on Error, J M F

      This is a common misperception (I think deliberately cultivated by the Right).

      The 1930's New Deal did not affect inequality and unemployment and growth was still very bad and the end of the 1930's.

      What created the postwar era was the 1940's New Deal, what I call the Real New Deal that was put into place by executive fiat during WW II.  The key feature was truy massive stimulus paid for partly by super-high taxes (91% top rate), borrowing, and direct monetization of the national debt by the Federal Reserve (i.e. printing money to fund the government).  The stimulus meant very low unemployment (1-2%) which created labor shortages and the potential for rapidly rising wages, which is inflationary.  Inflation was kept at bay by wage and price controls.  

      A key feature of the wage controls was that businesses could raise wages at the low end without having to get permission, whereas to raise wages at the high end they had to get permission from the Washington office who almost always said no.  In the middle they went went to the local office who was more likley to say yes if they had a good case.  

      The net effect of this adminstrative policy was to rapidly raise wages on the bottom end of the scale while the top level remained unchanged.  That is, it explicitly flattened the income structure, which stuck for decades after the policies were ended.  

      This is part of the reasons why CEO's only made ~40 times what their workers earned in the 1970's compared to ~300X today (super-high taxes helped).  Both the pre-existing flat income structure emerging from WW II and continued super-high taxes supported a business culture in which executives asking their boards for excessive compensation (i.e. a bigger increase than the the rank and file businessmen from which the executives came got) was unseemly.  CEOs made a lot more than 40X before WW II too when the business culture was more supportive.

      All of this was done by FDR using his power as commander in chief, it was not done Leglislatively.

  •  This makes little sense: (1+ / 0-)
    Recommended by:
    War on Error
    And we wonder why policies don't shift! and why companies are gaining monopolies

    1    General Electric    94    46    48
    2    Procter & Gamble    74    33    41
    3    Cisco Systems    72    33    39
    4    Microsoft Corp    70    28    42
    5    Pfizer Inc    61    27    34
    5    Bank of America    61    23    38
    [snip]

    Without this part:
    Rank   
    Organization     
    Total Investors   
    Democrat Investors   
    Republican Investors
    It is also not really necessarily to quote the information in your link as the diary is quite long already, and well sourced.

    A conservative is a man with two perfectly good legs who, however, has never learned how to walk forward. Franklin D. Roosevelt

    by notrouble on Tue Jan 08, 2013 at 04:50:30 PM PST

  •  Good work war on error (1+ / 0-)
    Recommended by:
    War on Error

    Very thorough.  You make great points.  Sadly, I don't have a lot of faith that major policy shifts are possible right now.  Not until we rid the country of the tea party mentality.

    "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

    by noofsh on Tue Jan 08, 2013 at 06:33:18 PM PST

  •  Another blow against FOD economics (1+ / 0-)
    Recommended by:
    War on Error

    Here is another blow against what I call the Field of Dreams (FOD) school of economics :

    If you build it (invest), they (growth and jobs) will come

    which posits that reducing taxes/regulations etc to incent investors will spur job-creating investment.  It worked in the movie, but it doesn't work in real life.

    I wrote an article looking into this issue in 2008 which concluded that tax cuts do not stimulate growth and may in fact do the opposite.  

    One of the key observations in that article, which is something I noted in 1997 (and used to my profit) was that asset bubbles ending in spectacular crashes follow capital gains rate cuts.  In 1997 I had noted that the two times rates were lower to 20% or ower levels there had been stock bubble ending in crashes (1929 & 1987).  In Dec 1996 Greenspan had given his irrational exuberance speech and many believed a bea rmarket was imminent.  After Congress passed the Stock Market Bubble and Crash Act of 1997 (what I called the rate cut the day it passed) I predicted that Congress had authorized a bubble and the market had room to go up a lot more, so I stayed invested for 2 more years before exitting.

    Then Congress passed the Real Estate Bubble and Crash Act of 2003, and we are still living with the consequences of that. :(

    So that's 4 successful experiments and since rates are still low expect another bubble and crash as soon as the economic conditions minimally warrant one.

    Recently I looked at the rate of capital accumulation versus growth on a decade-by-decade basis since 1871 and found no correlation.  It seems pretty clear that FOD economics is just that, a dream.

    •  Thank you for your great contribution, Mike (0+ / 0-)

      I'm running my own little social research project.  I interview the "little people" at convenience stores, fast food places, retail, etc.  I have found them to be disheartened, receiving very little health care, paying student loans for school they couldn't afford to finish, and barely surviving hand to mouth.  Most live in multi-generational homes now.

      American exceptionalism is a euphorism used by those who can't see the forest through their privatized, elitely constructed, myopic-making trees.

      It's difficult to be happy knowing so many suffer. We must unite.

      by War on Error on Wed Jan 09, 2013 at 08:26:29 AM PST

      [ Parent ]

  •  Great article... (0+ / 0-)

    ....good summation of the recent studies from key organizations that admit that:

    1) Spending cuts HURT in the current economic environment (output gap large)

    2) Tax increases on the wealthy DON'T HURT at the current levels of taxation and the current financial incentives in Zero-interest Rate Policy environment.

    Too bad that I've been beating the drum on this issue for a long time now with no luck. People are just convinced that we need spending cuts and that there's a debt crisis that is going to kill us if we don't reduce the debt.

    It's about emotions, financial ignorance, and general stupidity.

    We can't fight it.

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