I have spent many days listening to the American People blindly lining up behind their respective parties and repeating the Mantra spouted by their respective leaders. Unfortunately the leaders in both parties have got it all wrong.
Today I will look at the Republican Party. I have chosen to look at them because they have two distinct factions in the party which I call Dumb and Dumber. Now before all you right leaning independents get frustrated and call me a bleeding heart liberal let me state that I am only going to address fiscal policies here.
I openly admit to being left leaning on social policies, right leaning on less or at least more efficient government, and a total centrist on fiscal policy. Sometimes we just have to spend money people and there is no two ways about that. If I need to go to work and there is no mass transit I have to go borrow money and buy a car to get to the job to get the paycheck to pay for the car. Now after I buy the car from the dealership if I do not have enough money from the job to pay for the car I either have to get a second job, cut out spending money on luxuries like fancy restaurants, or use my credit cards to borrow from Peter to pay Paul until I can get a second job or a raise on the first job. What I cannot do, however, is default on the car loan or my credit rating drops and I lose the means by which to get to any of the jobs I might get. So now that you understand how I see things let’s look at why I call the Republican factions Dumb and Dumber.
Faction: DUMB
These are the hard core Reaganomics snake oil salesmen. They know they are selling snake oil but they also know that it sells so why not. Well, the why not is because the gig is up, guys. The day you knew would come is here. Well that is what we said to them in 2008, when the giant Ponzi scheme created by their trickle-down economics policies came back to bite us in the butt. Isn’t that what we said when we elected Barack Obama to the White House? Well it was what we were trying to say.
Why does the trickle-down theory really not work? One word GREED!
Ok, that might be a little on the harsh and simplistic side but I am a big fan of Judge Judy Sheindlin and her Don’t Pee On My Leg and Tell Me It’s Raining mentality of personal responsibility right along with the KISS Keep It Simple Stupid application of reasoning. This group does not get to stand around and blame the people who have tried to keep human beings from starving to death while waiting on their trickle-down theory, that they knew full well would not work, to work while they take no responsibility for the disaster they allowed to happen. So as Judge Judy would say, “Don’t pee on my leg and tell me it’s raining!”
Now I promise I will limit my references to the Democrats since our focus here is the Republicans but I do have to address this one little item. Of course, here in America we have lost Occam’s razor. We have no idea how to do anything in a simplistic or moderate manner so naturally the Democrats went overboard and they could have used a lesson from that nice gentleman Clarence Leonard "Kelly" Johnson at Lockheed Martin’s Advanced Development Programs also know as Skunk Works. It seems that Mr. Johnson told a bunch of engineers that the jets they were making had to be able to be fixed with some very basic tools under combat conditions by poorly trained mechanics. So the concept was to simplify the design or, Keep It Simple Stupid, KISS it. Needless to say the Democrats need a lesson in how to KISS their social programs or else they will be kissing them goodbye eventually when the country actually goes broke.
So why does trickle-down economics really not work? Well because it is DUMB! Alright, that is not a real answer either so let me explain why it is dumb. It is dumb because it is based in a level of flawed logic that stems from their application of religious theory to people who do not necessarily apply that theory the same way they do. Confused yet? Well so was I for a long time. This is how it really breaks down:
Dumb is thinking that I, as a wealthy person, am going to invest more money into my company if taxes on my income are low. Why would I reinvest in the company? Let me explain why it makes no sense to do that.
It is all about appetites. Let’s say I like big homes, fancy cars, and gourmet food. If my tax rates on my income and/or capital gains is high but my money reinvested in my company is tax free then I can satisfy my appetites through the use of credit and taking out small quantities at a time to reduce my tax debt at any given time. Reinvestment is tax free and makes a safe tax haven for my money. However, if my tax rates are low then I have no need to reinvest into my company or use credit and pay all that interest to feed my appetites because with a low tax rate I can take my money out of investments and just have it in plain old spending cash. For that matter I can even take it out of banks and keep it distributed between the safes in my numerous houses. I can buy new cars, new houses, boats, planes, box seats at theaters and sporting venues, or maybe even my own island like the Carnegie family did. I can be self indulgent with my money because the government is not going to hit me hard if I take it out of investments.
Now the Dumb theory of economics says that I am a good person and that I will put the interests of some poor fellow living in the projects in inner city Chicago, Detroit, or New York City over my own appetites. Well unless I am dumber than the guy in the projects then that is just a really dumb way to believe. Trust me on this if he had my money then I can assure you that he would be feeding his interests and not mine. Money Corrupts. Why does it do that? Money buys absolute power and absolute power corrupts absolutely. So it is absolutely stupid to believe that the wealthy will invest in creating jobs when they are taxed less. They will invest in making their lifestyles more comfortable regardless of which or how many people they crush in the process.
So much for the grand ideal of "trickle-down" economics saving the United States of America from whatever it was that we needed saving from that time. Now, to be fair I have to give the Dumb side credit for one thing with their economic plan. They do create some jobs because someone has to make the boats, cars, and stuff the rich buy. Someone has to build the homes they want and someone has to prepare and serve them their gourmet dinners. The problem with this is that they make up 1% of the population of the country and there is no way they can financially support the other 99% by spending lavishly on themselves even if they only bought American made products, which they do not. There is not as much prestige in owning a Ford Mustang or a Chevrolet Corvette as there is in owning a Lamborghini Gallardo Spyder Performante or a Ferrari 599 GTB. Neither Lamborghini nor Ferrari make cars in the USA so that is not going to create too many jobs except for the guy they hire to take care of the cars. The only jobs they create are service jobs that pander to their appetites and the insidious effect of this is to subjugate people by making them feel subservient to this elite class of people. This demoralizes the common people and creates a disparity between the classes that inevitably leads to class warfare.
Faction:Dumber
Out of the heartland of America comes the first set of victims of the giant Ponzi scheme that was perpetrated by the Dumb faction. However, since they are envious of the wealthy they side with the party that caters to the wealthy. They listen to the rhetoric of the snake oil salesmen and buy into it. When they lose everything they blame the Democrats and high taxes. How does this happen? Why do they not see that the snake oil salesmen created the environment that cost them their homes and investments? That is easy. It was the taxes they could not pay on those homes that got them repossessed. They do not stop to ask why they could not pay the taxes on their properties they simply look at the fact that the foreclosure on the property was a tax debt foreclosure.
Why did they stop being able to pay their taxes? Nice of you to ask. You didn't ask, I asked! Oh well, at least someone asked.
These Warren Buffett wannabes got involved with that little real estate mortgage thing that we had going on where any idiot that wanted to buy a house could no matter what their credit was like. They would go get foreclosures or distressed properties, fix them up, and arrange with the loan company that gave them the money to do all this with to sell them to a sub-prime borrower for far more than was owed on the home. You know this scheme is the thing the banks financed, the insurance companies insured, the ratings agencies thought was a better risk that current US T-Bills, and the thing that all of them bet against in order to line their personal pockets every time a mortgage failed. These people invested in things like that and made big bucks. They invested some of it in the stock market and they bought gold and lots of it.
Then one day back in 2008 this Ponzi scheme came crashing down around all of them rather unexpectedly for the average investor. Of course the S&P guys knew it was coming long before it happened. They knew this house of cards was precariously perched on an incline in front of a slowly oscillating fan and the first time the fan turned toward this poorly assembled house of cards that it was going to fall and make a huge mess in the process. They knew and did nothing. So now we have these average middle class Americans that have made a bundle buying, renovating, and selling, (a process known as flipping) houses and have invested that money into the stock market so they can be like Warren Buffett, rich.
Of course they are not really rich. They have lots of assets but they are property heavy, liquid capital weak, invested in gold, and heavily invested in a market that is basing a huge chunk of its stability on this giant nightmare called the sub-prime mortgage market. Most of their income is from interest on their investments which they use to pay their bills including their tax bills on their homes. Have you figured it out yet? The winds change as the fan slowly moves along its course, the sub-prime mortgage house of cards falls, the stock market crashes, the interest income dries up and they fail to make their tax bills. Their homes are repossessed for tax debt and it is all the democrats fault for making taxes too high. Never mind that they invested in cases of the snake oil that the Reaganomics snake oil salesmen were peddling. Never mind the fact that they could have liquidated their gold reserves to pay their taxes but decided the day was not yet rainy enough to warrant doing that. Of course they did none of that. They did not do that because the snake oil salesmen went right to work convincing them that the Democrats taxes caused this whole mess. While they were reeling over what had just happened to them the snake oil salesmen brought out their secret weapon, a hockey mom from Alaska who just so happened to be the Governor.
Enter Sarah Palin. This little gun totin' hockey mom who could "See Russia" was going to tell it like it wasn't and make you believe it all the way to the alter call or the bank depending on whether you were broke or made a mint off of insider trading information. Either way this was all the Democrats fault. She does not have to ever run for a single office again. She is the Queen Bee of the snake oil salesmen. The only problem they are having right now is that they seem to be experiencing a little difficulty "handling" her and she has moved into the extreme side of the party. Actually she is the cornerstone of the Taxed Enough Already TEA Party. She is their Golden Girl and if Michelle Bachman falls to one of the Dumb faction members of the Republican party you can look for Sarah Palin to come out in force to get her own name on the ballot in enough states with the TEA Party as a third party in the race with Michelle Bachman as her VP. If they don't do this in 2012 and the Dems win the white house and control of congress watch out for the split in the republican party with the TEA Party moving out under the leadership of Sarah "I can see Russia" Palin with Michelle "Pray the Gay Away" Bachman as her right hand man, uh I mean woman.
All of this, however, does not explain how their plan is Dumber than the Dumb faction of the Republican party. Well, that is a pretty simple thing to explain. If you take a Dumb plan and add more Dumb ideas with it to form a second plan of many Dumb ideas then your plan is going to be Dumber than the original Dumb plan. Alright, I will stop being vague, I promise.
Short recap here, the Dumb plan is trickle-down economics. the Dumber plan is the Dumb plan plus getting rid of the Fed, defaulting on our debts, and gutting the social programs that put money into the hands of the poor that they spend into our economy.
We have already covered why trickle down economics does not work. Getting rid of the Fed is a whole blog entry on its own so for now let me just say that it is not a good idea. Dumb Ideas #1 and #2
Defaulting on our debt I think is pretty self explanatory but if you need help let me enlighten you as to why that would not be smart in really simple terms. If you buy a house and a car on credit and sign an agreement to pay for them based on your good credit and then at some point in time you realize that you do not make enough money to pay those bills and buy food, pay your utilities, and whatever else you need to pay what do you do? Well, the simple answer to the question is that you pay your mortgage and your car payment then cut spending and pay your bills in order of the necessities first and the luxuries last. Hopefully you will have enough for your loans, your utilities, and your food. If not, then where do you go from there? At that point in time you dig out those credit cards and start using them to borrow from Peter to pay Paul while you figure out what to do about the problem. Ultimately you will have to do one of two things, default on your loans for the house and car which will leave you with no way to your job or no where to live or both OR you can increase your income enough to pay your bills. If you choose the default plan then your credit is ruined, you are homeless, and you have no way to work, so you are also unemployed. Would you choose that as your method of handling your expenses? Yes you could sell your house and downsize and spend less but what happens if you cannot downsize enough because of the size of your family. What if you cannot get a smaller or less expensive house or you cannot sell your house because no one has the money to buy it because of the economy? The last thing you want to do is default. You will do anything to avoid default because it will result in you being evicted and your credit rating being destroyed. So explain to me why in the name of heaven would a person think that pushing the USA into a position where it would default on its credit obligations is a good idea? Dumb Idea #3
Dumb Idea #4 is the conclusive evidence that I have that Dumb Idea #1 is based on flawed logic. Remember the flawed logic I spoke of earlier? Remember how it was dependent on a set of religious standards not interpreted the same from one person to the next? Well here is my conclusive evidence of that fact. The very same group that embraces trickle-down economics because rich people are going to invest out of the goodness of their hearts to create jobs for the jobless want to gut social programs because there are nothing but fat, greedy, lazy people on welfare and we ought to kick them to the curb and let them starve if they can't find a job.
Of course part of this actually makes sense in their messed up logic because if we gut the social programs then there will be plenty of desperate workers that will take below minimum wage (which they will have repealed) jobs and live in abject poverty. Meanwhile the Dumber faction's idols are busy living in mansions that they envy because they almost had one like that if those awful old democrats had not had such high taxes in order to support those fat lazy people on welfare.
Of course the reality of what will happen is nothing like that at all. If they cut the social programs the poor will not have money. They will not go shopping. The companies will have fewer customers and will need fewer workers. Fewer workers mean fewer people with money which leads to less spending which leads to needing fewer employees.... Do you see the cycle here yet? I hope so.
Now you see why the republican plans will not work to fix the economy. Removing cash, the green dollar bills that they print at the behest of the Federal Reserve(that entity that they want to get rid of), from circulation by gutting social programs, or refusing to spend money through stimulus spending when there is a recession WILL lead to a depression. Take time to read how we know this to be fact on my Are We Headed For Another Great Depression? post which will be coming out right after my Why the Democrat's Tax and Spend plan will not fix the economy. Remember I am not the only person that sees the problems here.
During these hard times in which we have found ourselves, we see a few of the folks that belong to the Dumb side of this economic struggle biting the bullet and attacking the Dumber side of the party because they actually knew all along that trickle-down economics was a hoax that they perpetrated so they could line the pockets of their rich buddies, who lined their pockets with campaign contributions, which kept them in their 6 figure salaries. They knew that it would not last forever and have lived waiting on the other shoe to drop and the people to rise up and vote them and their pandering politics right out of our government. We almost did it in 2008. They gained it back in 2010 because we lost sight of the problem. Lets not make that mistake in 2012.
No comments:
Post a Comment