The Tax Policy that Obama "Bought"

Here is a bit from a post by Robert Reich which nicely sums up the crazy right wing economics viewpoint that Obama has swallowed hook, line, and sinker:

More than thirty years ago, Ronald Reagan came to Washington intent on reducing taxes on the wealthy and shrinking every aspect of government except defense.

The new tax deal that’s embodies the essence of Reaganomics.

It will not stimulate the economy.

A disproportionate share of the $858 billion deal will go to people in the top 1 percent who spend only a fraction of what they earn and save the rest. Their savings are sent around the world to wherever they will earn the highest return.

The only practical effect of adding $858 billion to the deficit will be to put more pressure on Democrats to reduce non-defense spending of all sorts, including Social Security and Medicare, as well as education and infrastructure.

It is nothing short of Ronald Reagan’s (and David Stockman’s) notorious “starve the beast” strategy.

I find it crazy that Obama is that concerned with the rich or that he wants to side with the "starve the beast" crowd. But his "deal" with the Republicans does exactly that. All entitlement programs are now "on the table" an liable to be slashed and destroyed over the next few years. Obama himself gave the "go" signal!

Here's Reich's analysis which should be obvious to all but the brain dead. But I guess Obama is brain dead:

Since Ronald Reagan was president, median hourly wages have barely budged, and America’s vast working and middle classes have taken home a steadily smaller share of the nation’s income (adjusted for inflation). The typical male worker today is earning less than the typical male worker thirty years ago.

Yet the richest 1 percent of Americans is now taking home a larger percentage of the nation’s income than at any time since 1928. And we recall what happened in 1929.

Unless the vast majority of Americans has enough purchasing power to keep the economy going without going ever more deeply into debt, the economy will eventually go over a cliff.

That’s what happened. By the late 1990s the middle and working classes could keep spending — and thereby keep the economy moving — only by adding debt. This strategy ended when the housing bubble burst in 2007.

Without their spending, there can be no buoyant recovery.

Obama has "bought" the big lie that the Republicans have been pushing since the Reagan years, the lie of "trickle down" economics:

Will lower taxes on the rich spur them to create more jobs? Not a chance. Since 1980, Reagan’s supply-siders have said lower taxes on the rich will trickle down to everyone else. Nothing could be further from the truth.

Look at history.

During the almost three decade spanning 1951 to 1980, when the top rate was between 70 and 92 percent, the average annual growth in the American economy was 3.7 percent.

Between 1983 and the start of the Great Recession, when the top rate ranged between 35 percent and 39 percent, average growth was 3 percent.

And here is the tragedy of a Democratic Party lining up to vote in a Republican tax "deal" under Obama's "guidance"...

Supply siders are also fond of claming that Ronald Reagan’s 1981 tax cuts caused the 1980s economic boom. There is no evidence to support this claim. In fact, that boom followed Regan’s 1982 tax increase. The 1990s boom likewise was not the result of a tax cut; most of it followed Bill Clinton’s 1993 tax increase.

Nor did George W. Bush’s tax cuts trickle down. Between 2002 and 2007 the median wage actually dropped. And Bush’s record of job creation was pathetic relative to Bill Clinton’s, when taxes were higher. Under Clinton, America added 22 million net new jobs. Under Bush, barely 8 million.

So why are Democrats voting for Reaganomics?

It is simply too insane to believe. If somebody in the late 1970s had told me that this would be the world of 2010 I would have known the the person was crazy. That was impossible. Sadly, I've lived to see the impossible become fact.

So last night I watched in sorrow as they had a news story on TV about little kids who used to write to Santa asking for gleaming new toys, now writing in heartfelt earnestness assuring Santa that they believed in him and really, really wanted him to bring their family some food, some warm clothes, a place to live. They even had parents who are at their very limits writing to "Santa" begging him to bring some food and warm clothes to their family this Christmas. This is the wonderful world of the Republicans. The ones who have hoovered up all the wealth and are so rapacious that they can't stop grabbing every loose dollar, even having Congress hold the country at gun point to ensure that they got their "Bush tax cut"!

Reich offers his bottom line assessment:

They say they have no choice — either vote for this or watch taxes rise on everyone starting January 1.

That Democrats have allowed themselves to get into this fix is a testament to either their timidity, obtuseness, or dependence on the campaign contributions of those at the top.

I think it is pretty obvious. It is the third option. The rich have bought the politicians lock, stock, and barrel.