Originally Posted by Rohirrim
Thirty years ago, this country bought into the Reagan crapfest of supply-side economics and started rewriting our progressive taxation laws and regulations on Wall Street, banksters, and corporations in order to create (what Oliver Wendell Holmes Jr. called a hundred years ago) a "Horse and Sparrow" economy. Yes, it's all been done before. And we shockingly discovered that the same thing happened as the last time we tried it: All the money flowed to the top, labor was wiped out, and the criminal investment community turned our markets into a casino, robbed us blind, stole all our money, and stashed it offshore. Big surprise. Only this time they were smart enough to buy up Washington to keep themselves out of jail (and keep the money) and we wake up to the worst income disparity in our nation's history and all the equity sucked out of our homes.
Holmes called it the "Horse and Sparrow" economy because the theory was that if you overfed the horse with oats, there would be plenty left over in the horse poop on the road for the sparrows to pick out. Unfortunately, what we discovered was that our horses didn't leave one grain behind. Impeccable digestion, these beasts have. And now we argue that a livable wage for the bottom tier of Americans is unacceptable because it might create a hardship for billionaires. Don't worry. The vaults in the Cayman Islands are holding fast. They'll be okay. Amazing what changing a few laws and regulations can do, isn't it?
Here's the funny part: The Right Wingers aren't satisfied. They want zero capital gains taxes, zero corporate taxes and zero estate taxes. Welcome to Wonderland.
Most of this is pretty much wrong, or at least the wrong emphasis. The major thing that happened is Asia started getting it's **** together, and we kept playing it like we were the only game in town.
Free trade has it's advantages, but you have to play that game with an eye towards competitiveness.
If you don't want to compete, you'd better keep those trade barriers up. Although that approach can only work for so long. Highest taxes in the world combined with MFN was a recipe for industrial collapse. Now we are where we are.