Monday, July 28, 2008

Bottom up economics

Robert Reich explains the differences between McCain and Obama on the economy.

McCain (and the Republicans and the Tories) believes in 'top down economics'. Top down economics holds that you should give generous tax breaks to the rich, so that they will work harder and invest more, leading to more growth and more jobs. You should also give tax breaks to large corporations, reduce their payroll costs, and impose fewer regulations on them, so they can compete more successfully in global commerce and create more jobs. The best way to reduce energy costs for ordinary people is to lower taxes on oil companies and give them more land to drill on. And fourthly, the best way to deal with the crisis in credit markets is to insure large Wall Street investment banks against losses.

But in a global economy, very few of the benefits of helping people at the top pass down to ordinary consumers.

Obama prefers bottom-up economics. This says that the growth of the economy depends largely on the productivity of its workers. They are rooted here, while global capital and large American-based global corporations are not. Workers' productivity depends mainly on their education, their health, and the infrastructure that connects them together. Good jobs will be created not because taxes or wages or regulatory costs are low (there will always be many places around the world where taxes, wages, and regulatory costs are lower) but because the productivity of workers is high. The answer to higher energy costs is found in creativity and inventiveness in generating non-oil and non-carbon fuels and new means of energy conservation. Finally, in order to avoid a recession or worse, it's necessary to improve the financial security of ordinary people.

3 Comments:

At 8:25 am , Anonymous Anonymous said...

Agree in general that Obama is better than McCain on most of these issues but, in the interests of fairness - the Dems have been far more supportive of bailing out Wall Street than the GOP.

Also Wall Street is giving far more to Obama than McCain. Jum Bunning has been especially outraged.

http://www.bloomberg.com/apps/news?pid=20601039&refer=columnist_baum&sid=aS_TCiK9ghaU

Duncan

 
At 10:40 am , Anonymous John W said...

Hello as a Tory and an economist I can inform you that in your characterisation I would support 'bottom up' economics. I am a fan of Barack Obama, partly for this difference with John McCain (and for a host of other reasons).

I think you are mistaken about Conservatives generally supporting tax cuts for big companies and indeed thou ought to look to the mote in thine own eye. Labour've been being had by the Management Consultants, Private Equity Groups, Hedge Fund Managers and Investment Bankers for a good 11 years at least

If you want to look to some of the deeper reasons why thing are in such a mess now you might like to think about this.

 
At 3:33 am , Anonymous Anonymous said...

You want to get the economy moving again? perhaps getting the government the hell out of the economy will suffice the best. I mean, wasnt it the Keynesian style of "pro-government involvement in economic affairs" which got us into the great depression because of the then credit crisis?

And where in history has it been proven that when the federal government gets involved in anything, it's gotten better and more efficient than it was before they got involved...it doesn't, and if you do your research you will find this to be the case 9.9 times out of 10.

So if you want to fix the economy, try taking some lessons from Henry Hazlitt, Ludwig Von Mises and Fredrick Hayek. Give the people right to keep the money they earn reguardless of their income level, allow us complete control of the economy and return the buying power of all economic sectors by eliminating the income tax.

And let consider this for just a moment, where is all the money coming from to fund the next big Obama Bailout Package? Chances are, if we dont borrow it from China or some other country, it is going to come from the tax payers. So we are going to take money out of the hands of the people, and give it back in a much smaller quantity [I want it all back] in hopes that people will spend it on bullshit we dont really need. So they take our money and give us a small protion of it back? all the while raising our budget deficit to a total that will likely reach 2 trillion dollars? How the hell do you think the money is going to be repaid? They are going to tax the living hell out of us to make up the difference. And dont give me that bullshit that they are only going to over tax the rich 1% pay more in taxes than the rest of the population combined.

Of course you more socialist out there will probably ask the question, How are we going to fund the government?". Well here's a little tidbit of information for all of you, our precious income tax that the federal government steals from us on a weekly or bi-weekly basis, only funds the interest occured by the Federal Reserve and their insistants to print more money with no real sound monitary backing. Check the facts, our dollar has been decreasing in value steadily and has lost about 95% of it's ACTUAL value ever since December of 1913.

I think the worst part of where this country is heading is the fact that people no longer care about their individuality, rather they are more concerned about a collectivist state, a state where everyone is forced to work for everyone else in the name of the "greater good" aka the federal government. You have allowed yourselves to vote away your right, your properties and your money away from yourselves under the illusion of helping others with your tax money and calling it charity. Let me clue you in on a little fact, charity is no longer charitable when it is forced out of you.

Thank you for all of you ass holes that have taken our REPUBLIC and destroyed it. You have fallen for the great lie that Democracy is a good thing for all and have swollowed all the lies government has spewed at you about it. Democracy has given you the ability to allow the majority to take away the rights of the minority. Consider the reasoning for the reason why the word Democracy does NOT appear in the Constitution, it's because it is the worst form of government you can have because the people are ultimatley responsable of the fall of a free society by simply voting it away.

Great job on ruining our country and our Republic. Of all places, you have to fuck up this one. Just keep in mind, once our Liberty and freedom is gone, you will not get it back without fighting and dying for it against your own government.

 

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