“Supply-Side” Theory Manipulates Realities, Covers Greed
(BEND, Ore.) - What goes up, against the force of gravity, must always then come down, too --usually with a devastating impact if carelessly contrived as irresponsible action primarily for show.
That’s universally true for any myth-making political pretensions put together primarily for their persuasive powers; especially when promoted relentlessly, if ridiculously, via potent “noise machine” and dollar-power provided by corporate forces for their own purposes.
Just as the laws of physics control any contrived demonstration about gravity - so do the laws of economics force the inevitable conclusion.
Supply-side economic theory, originally designed to offer possible cover for greedy manipulation of the entire U.S. economy for political purposes, has proven once again that its key principle of “less is more” must also always follow the overriding realities of economic laws: “There is never any free lunch!”
Today we face economic consequences that are being felt worldwide, as the destructive impacts on the U.S. economy bring on similar destruction in markets around the world.
History will show that we have only ourselves to blame for these truly historic consequences, for our own neglect in allowing elected leadership to foist off on us this truly destructive economic theory.
From possibly helpful economic guidance, via broad crony capitalism, distortion and outright perversion to protect and rationalize plain old greed, the Laffer Curve has now become a curse-word rather than the sensible pattern it could have been.
Perhaps it may be helpful to seek out from our own history where “supply-side theory” came from and why it has been allowed to operate as the major U.S. economic principle for two closely-allied Presidential administrations.
The Curve was the start --and has long ago become the symbol--for this entire damaging era in American economic history.
Because of that reality, it has also forced still other Presidencies to take into full account its disturbing and damaging consequences, made entirely unavoidable since --by canny and contrived manipulation at many ongoing business and financial levels-- inbuilt consequences have been forced upon our U.S. economy ever since its initiation.
“Deregulation”, “privatization", and the resulting large stimulus for onrushing “globalization”, all came about and were installed deeply into our American economy as components of the U.S. domination of world markets and, for decades, of rapid technological and corporate management and remarkable worldwide growth and development.
“Supply-side economics” is the descriptive term first applied to the application of the Laffer Curve, purporting to prove that “Less can be more” by its portrayal of larger tax revenues flowing to government when a lower rate is set, making up in new volume for the obvious smaller-slice taken from each taxpayer’s funds.
This larger-production situation is possible only under special economic conditions and market-return situations, well reflected for decades prior to Dr. Arthur Laffer’s presentation to leaders in the Ford administration, at a 1974 luncheon attended by Donald Rumsfeld, President Ford’s chief of staff, Dick Cheney, his deputy; and others.
The image of the seductive Curve was laid out for this key group by Dr. Laffer’s now famous curve-sketched-on-napkin -- sometimes suggestively seen as “upside-down”.
BUT it proved a potent propagandizing tool for the following Reagan Presidency cabal, led by some of the same persons, seeking any and every way to attack the status quo resulting from an already-changing American political climate and worldwide economic trends then already highly evident.
The GOP immediately adopted as its major doctrine --already in place previously-- the assumption of “unfailing success for any and every tax-cut”, as further provenance for their entrenched other major component of a continuing militantly aggressive conservatism: “Smaller government is always better than an expanding one, no matter what the need.”
Grover Norquist, a highly-active/aggressive GOP leader, notoriously anointed the second component by declaring that the great need was to “drag government into the bathtub, where we can drown it.” He also declared that “Bankruptcy for any state will be an exemplary lesson for all the others.”
It was in that ineluctable political climate --with little room for rational and reasonable commonweal consideration for all Americans-- that the irrational and unreasonable demand for continuing tax-slash and program-funding decline at every level possible, began --fully exemplified in the “starve the beast” doctrine put into place then, continuing ever since.
Following the original Reagan administration, the Bush I regime continued the major impacts of “supply-side” further cementing its consequences on national funding policies across the board.
That approach to all things possible was later driven into full frenzy in the Bush II administration, continuing the great raid on federal funds for empire-building military expansions and the capture of oil reserves around the world --empowered by destructive attacks on our Constitutional rights and on the role and place of Congressional oversight and control at every possible level.
The “imperial Presidency”, already strongly under development in the Reagan and Bush I eras, was driven to new heights by the skills and determination of a Rove and a Cheney, aided and assisted by others in the ongoing political cabal.
The tax cuts somehow always protect and reward the already-rich, the large-contributing corporate entities indulging in crony capitalism, and the very small percentage of Americans living from capital gains in lieu of everyday demands at a job, contributing to our economy by personal/professional productivities.
The total tax cuts produced by Laffer Curve principles since the earliest ones now, without doubt, total into many billions and even trillions of revenues, irretrievably lost to the wasting actions directly attributable to the distortions and perversion set into place by some of the same perpetrators over these past decades.
In all truth, now it is finally, broadly, consequentially recognized that, indeed, “There ain’t any free lunch!” in U.S. economics.
Meanwhile we have seen the proliferation of economic bubbles -unwarranted and irresponsible speculation in asset accumulation in stocks, bonds and real estate-- now occurring in rapid sequence, where for 100 years these came only very intermittently, especially when rational regulation was still in place for protective purposes.
It is impossible to survey these overall developments within the larger picture without also viewing the damaging consequences of the Laffer Curve arrival early on in the sequence now firmly rooted in American history.
Despite these ongoing destructive consequences now highly evident from three decades of “supply-side” economic “management”, it is highly ironic to see the current rapid descent into recession --with strong threats of economic chaos even deeper into world damage-- being, first, slowed and then openly attacked for remediation by basic and obvious Keynesian principles.
Even President Nixon, caught in somewhat similar but nowhere nearly as drastic economic pressures, finally said it: “Now we are all Keynesians.”
Keynesian Theory is an economic theory based on the ideas of twentieth-century British economist John Maynard Keynes. Keynesian economics promotes a mixed economy where both the state and the private sector have important roles.
In Keynes' theory, macroeconomic trends can overwhelm the micro-level behavior of individuals. Instead of the economic process being based on continuous improvement in potential output, as most classical economists had believed from the late 1700s on, Keynes asserted the importance of aggregate demand for goods as the driving factor of the economy, especially in periods of downturn.
The most revealing and self-indicting of actions possible here is for Bush and his Laffer Curve buddies now to run rapidly for saving succor to the Keynesian Curve, embodied in the same Keynesian remedial actions undertaken so historically successfully by President Roosevelt and his New Deal.
Op Ed: WHY Less Is MoreSalem-News.com