The Myth of Job Creators:

The truth is this: "Without a successful consumer class, nobody will be a job creator."

Commentary: There is a economic theory that has taken hold in the America that has fundamentally changed the course of American ascendancy and that is responsible for the precipitous decline of the middle class and the stagnation of this Nation's economy.

I have said time and again that there aren't enough "job creators" to fuel the engine of the most powerful "consumer economy" in the world—in addition the wealthy don't "create jobs" they create personal wealth. The concentration of wealth at the top is the worst possible off shoot of the Republican—Ayn Randian "neo-libertarian economic "*doublethink".

Nick Hanauer is part of the 1% and he categorically renounces the neo-libertarian Republican theology of "no taxes" and rejects the self aggrandizing title of "job creator" as a deification of the wealthy.

Here is a six minute video about which one commentor said: "Nick Hanauer—has accurately described the economy cycle, debunked republican's ideology, bitch slap bush's tax cuts for the rich, and prove Obama's plan to tax the rich works ALL this in under 6 minutes".

denisrenelara

THE FOLLOWING IS THE WRITTEN TRANSCRIPT FROM THE VIDEO:

Raise Taxes on Rich to Reward True Job Creators: By Nick Hanauer

Bloomberg—December 07, 2011, 10:22 AM EST

It is a tenet of American economic beliefs, and an article of faith for Republicans that is seldom contested by Democrats: If taxes are raised on the rich, job creation will stop.

Trouble is, sometimes the things that we know to be true are dead wrong. For the larger part of human history, for example, people were sure that the sun circles the Earth and that we are at the center of the universe. It doesn’t, and we aren’t. The conventional wisdom that the rich and businesses are our nation’s “job creators” is every bit as false.

I’m a very rich person. As an entrepreneur and venture capitalist, I’ve started or helped get off the ground dozens of companies in industries including manufacturing, retail, medical services, the Internet and software. I founded the Internet media company aQuantive Inc., which was acquired by Microsoft Corp. in 2007 for $6.4 billion. I was also the first non-family investor in Amazon.com Inc.

Even so, I’ve never been a “job creator.” I can start a business based on a great idea, and initially hire dozens or hundreds of people. But if no one can afford to buy what I have to sell, my business will soon fail and all those jobs will evaporate.

That’s why I can say with confidence that rich people don’t create jobs, nor do businesses, large or small. What does lead to more employment is the feedback loop between customers and businesses. And only consumers can set in motion a virtuous cycle that allows companies to survive and thrive and business owners to hire. An ordinary middle-class consumer is far more of a job creator than I ever have been or ever will be.

Theory of Evolution

When businesspeople take credit for creating jobs, it is like squirrels taking credit for creating evolution. In fact, it’s the other way around.

It is unquestionably true that without entrepreneurs and investors, you can’t have a dynamic and growing capitalist economy. But it’s equally true that without consumers, you can’t have entrepreneurs and investors. And the more we have happy customers with lots of disposable income, the better our businesses will do.

That’s why our current policies are so upside down. When the American middle class defends a tax system in which the lion’s share of benefits accrues to the richest, all in the name of job creation, all that happens is that the rich get richer.

And that’s what has been happening in the U.S. for the last 30 years.

Since 1980, the share of the nation’s income for fat cats like me in the top 0.1 percent has increased a shocking 400 percent, while the share for the bottom 50 percent of Americans has declined 33 percent. At the same time, effective tax rates on the superwealthy fell to 16.6 percent in 2007, from 42 percent at the peak of U.S. productivity in the early 1960s, and about 30 percent during the expansion of the 1990s. In my case, that means that this year, I paid an 11 percent rate on an eight-figure income.

One reason this policy is so wrong-headed is that there can never be enough superrich Americans to power a great economy. The annual earnings of people like me are hundreds, if not thousands, of times greater than those of the average American, but we don’t buy hundreds or thousands of times more stuff. My family owns three cars, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. Like everyone else, I go out to eat with friends and family only occasionally.

It’s true that we do spend a lot more than the average family. Yet the one truly expensive line item in our budget is our airplane (which, by the way, was manufactured in France by Dassault Aviation SA), and those annual costs are mostly for fuel (from the Middle East). It’s just crazy to believe that any of this is more beneficial to our economy than hiring more teachers or police officers or investing in our infrastructure.

More Shoppers Needed

I can’t buy enough of anything to make up for the fact that millions of unemployed and underemployed Americans can’t buy any new clothes or enjoy any meals out. Or to make up for the decreasing consumption of the tens of millions of middle-class families that are barely squeaking by, buried by spiraling costs and trapped by stagnant or declining wages.

If the average American family still got the same share of income they earned in 1980, they would have an astounding $13,000 more in their pockets a year. It’s worth pausing to consider what our economy would be like today if middle-class consumers had that additional income to spend.

It is mathematically impossible to invest enough in our economy and our country to sustain the middle class (our customers) without taxing the top 1 percent at reasonable levels again. Shifting the burden from the 99 percent to the 1 percent is the surest and best way to get our consumer-based economy rolling again.

Significant tax increases on the about $1.5 trillion in collective income of those of us in the top 1 percent could create hundreds of billions of dollars to invest in our economy, rather than letting it pile up in a few bank accounts like a huge clot in our nation’s economic circulatory system.

Consider, for example, that a puny 3 percent surtax on incomes above $1 million would be enough to maintain and expand the current payroll tax cut beyond December, preventing a $1,000 increase on the average worker’s taxes at the worst possible time for the economy. With a few more pennies on the dollar, we could invest in rebuilding schools and infrastructure. And even if we imposed a millionaires’ surtax and rolled back the Bush- era tax cuts for those at the top, the taxes on the richest Americans would still be historically low, and their incomes would still be astronomically high.

We’ve had it backward for the last 30 years. Rich businesspeople like me don’t create jobs. Middle-class consumers do, and when they thrive, U.S. businesses grow and profit. That’s why taxing the rich to pay for investments that benefit all is a great deal for both the middle class and the rich.

So let’s give a break to the true job creators. Let’s tax the rich like we once did and use that money to spur growth by putting purchasing power back in the hands of the middle class. And let’s remember that capitalists without customers are out of business.

(Nick Hanauer is a founder of Second Avenue Partners, a venture capital company in Seattle specializing in early state startups and emerging technology. He has helped launch more than 20 companies, including aQuantive Inc. and Amazon.com, and is the co-author of two books, “The True Patriot” and “The Gardens of Democracy.” The opinions expressed are his own.)

--Editors: Max Berley, Stacey Shick.

To contact the writer of this article: Nick Hanauer at Nick@secondave.com.

To contact the editor responsible for this article: Max Berley at mberley@bloomberg.net.

* Doublethink made famous by Orwell is a concept that simply stated is: "the power of holding two contradictory beliefs in one's mind simultaneously, and accepting both of them as true".

The prevailing mental condition is controlled insanity.

The rules of the Inner Party are held together by adherence to a common doctrine. In a Party member not even the smallest deviation of opinion on the most unimportant subject can be tolerated. But it is also necessary to remember that events happened in the desired manner. And if it is necessary to rearrange one's memories or to tamper with written records, then it is necessary to forget that one has done so. The trick of doing this can be learned like any other mental technique. It is learned by the majority of Party members, and certainly by all who are intelligent as well as orthodox. In Oldspeak it is called, quite frankly, "reality control." In Newspeak, it is called doublethink, though doublethink comprises much else as well.

from the website: http://www.orwelltoday.com/dblspkthennow.shtml

PART 9d " Dear Mike: A Series of Letters from the Left to the Right

Commentary: On December 2, 2011 I was excoriated by a young "conservative" named Mike, who wanted to give me a hiding for my communist views on "unregulated" capitalism. He called me or more precisely my views "ridiculous" I'll let you decide who is ridiculous. His tirade was quite lengthy so I am publishing my response in 9 parts as "A series of letters from Left to Right: Dear Mike Since his attack was full of vitriol I have taken off the gloves as I see no point of entertaining his bombastic rhetoric. Parts 5-9 are in-response to the object of his real distain—my post called "Adam Smith Re-examined." Note: Due to length Part 9 is broken into 9a,9b,9c and 9d.

I have color coded my blog post that he critiqued in red—his critique in blue—and my response to his critique in black.

Part 9d

The Conclusion and a Commentary

And in conclusion, it is just plain stupid to argue for bigger, more expensive government, and to hope that they can ever tax enough to pay for how much they’ll spend. Every country that’s tried that has crashed and burned. Every single time. Greece is doing it right now.

ON GOVERNMENT SPENDING WHEN PRIVATE CAPITAL WON'T: The way out of every depression is to grow the economy. History proves that. It is not making draconian cuts that negatively impact the financial engine that drives the economy—"consumerism." Every dime we give to millionaires is one less dime that circulates through the economy.

Rich people don't spend at a level that will maintain the American economy[period] They are at most one percent of the total population. AND They don't create more American jobs—that's a lie—that in turn stimulates the American economy—they ship them overseas. Again current history proves that claim.

WE ARE NOT GREECE NOT EVEN REMOTELY CLOSE: Another false premise. In fact every time the Republicans run us into a ditch—Hoover in 29—it takes a democrat to get us out with the dreaded S word "stimulus" It happened in the twenties when Republicans drove us into the proverbial ditch and FDR got us out—it happened again when series of Republicans Reagan Bush one and Bush two finally two drove us off the financial cliff by spending the surplus he had to the tune of 6 trillion dollars which ironically is the exact amount of the current deficit, "stupid is as stupid does".

Let’s not repeat that, OK?

I agree—let's not repeat the moronic policies of the past thirty years—that got us in trouble in the first place—ill thought out unwarranted tax cuts for the richest among us, massive deregulation, and massive tax expenditures—welfare for corporations, and two unfunded unpaid for wars.

COMMENTARY: ON THE SIZE GOVERNMENT: As my friend Albert use to say—Mike—it's all relative. The country has grown from the time of Adam Smith and the founding fathers—from several million people to 313 million people—and the government, IS AS LARGE AS IT NEEDS TO BE—based on the idea of proportional representation and having a voice in congress—to fulfill its legitimate functions: including collecting revenue and "regulating factions"—aka. "special interests"—as my friend James Madison put it.

OR IS IT TOO SMALL? The consensus of the original mathematics used to determine fair Representation was one representative for every 30,000 people is enshrined in the Constitution.

"After the first enumeration, required by the first article of the Constitution, there shall be one Representative for every thirty thousand, until the number shall amount to one hundred, to which number one representative shall be added for every subsequent increase of forty thousand, until representatives shall amount to two hundred, to which one representative shall be added for every subsequent increase of sixty thousand." Source: Article the First - Wikipedia, the free encyclopedia

Let's see 313,000,000 — by 30,000 = 8,943 members to adequately represent the current population, which leaves us under represented by 8,508 seats. Even if you were to reduce representation to 1 representative for every 313,000 people which would equal 1,000 representatives that would still leave us short by 565 representatives. So much for the government being "too small."

WOW no wonder it feels like nobody is listening to me and that I don't count. The beauty of large numbers as Madison explained is that the more people in government the better because it makes it harder to "game the system."

Of course that was forestalled when the Republican congress was afraid of losing their individual power and limited the size of government to the current 435 members in 1929.

Now they can whore themselves to the highest bidders like the Koch Brothers. And, the call for an even smaller government increases the danger of killing our democracy altogether, which is exactly what the Conservatives want—when the say—"they, want a government so small that it can be drowned in a bath tub."

The problem is—"the lie"—that the government is "too big and it is the problem,"—has taken hold in the American vernacular without having been given much thought or opposition. People really are mentally lazy.

The Constitution was written to give all men their chance to be represented by the people they elect from among themselves. What's to hate about that? When the government fulfills one of its other legitimate function—of regulating special interests that prey on minorities and majorities—groups and factions—the founders referred—as "rule by the tyranny of the majority."

Without a strong a Federal Government we might still have slavery or maybe still have separate but equal as the law of the land." I remember the Civil Rights Act and the absolute hatred it engendered.

COMMENTARY: THE SCOPE OF GOVERNMENT: My BIG BEAUTIFUL Government—or my BBG as I call it—eventually freed blacks from slavery, prodded by shame of seeing children murdered and dogs attacking blacks in the south, it felt the pangs of conscience and the moral outrage in the White House and Halls of Congress and—after a tortured journey of one hundred years—through Brown v. The Board of Education—my government freed blacks from a sub standard education prolonged by the Jim Crowe laws of the south—under the so called guise of "states rights" Which claimed that each state was responsible for educating its young and is —ironically being used by the current Republican regime to argue for the dismantling of the Department of Education and a re-imposition of states rights to educate their young—because that worked so well prior the the nineteen sixties.

Finally the Constitution enforced by an energized Federal Courts System ended that shameful period in our history .

"There has been a steady growth in our government which is naturally reflected in the growth of the population of the nation. There has also been a slow steady corruption leading to crony capitalism that threatens to strangle the government of, by, and for the people with massive amounts of money.

The world is a much more complex place than it was back when the country was founded and requires the government to adapt to those changes, by continually leading us to a bigger vision than any one man can achieve on his own.

Adam Smith wrote his thesis in a day when commerce was mainly a local affair. Where neighbors lived and worked in smaller villages and everyone knew each other and were intermarried and interdependent. He could never have envisioned the complex economic systems or the size of global economy as it exists today. If history has taught us anything its that man's greed euphemistically referred to as "enlightened self interest" threatens to destroy the entire country—regulation is not only prudent its absolutely necessary.

The Original Articles of Confederation were replaced when taxes were voluntary and it became apparent that the government couldn't sustain itself by voluntary donations like a charity.

It became apparent that in order to secure—a more perfect union that a fair apportionment in representation and taxation was needed to maintain the country against the dangers they "collectively" faced. At first they tried import duties which still failed then they tried taxation on liquor which fomented a "Whiskey Rebellion" which was put down by George Washington.

Which belies your supposition that the government is "stealing" from you and that we need a "smaller government" that can be bought and sold to the highest bidders.

COMMENTARY: THE ROLE OF GOVERNMENT: Capitalist say that—government should operate like a business. GOVERNMENT IT IS NOT IN BUSINESS TO MAKE A PROFIT AND NO BUSINESS OPERATES AS A DEMOCRACY—MAKING THAT NOSTRUM PREPOSTEROUS ON ITS FACE. THE GOVERNMENT WAS NEVER INTENDED TO OPERATE LIKE A BUSINESS— ITS ENTIRE raison d'etre IS TO PROTECT THE INTEREST OF THE INDIVIDUAL FROM THE TYRANNY OF THE MAJORITY. That's why its purposes are at odds with Capitalism in the final analysis for reasons I have already stated. That is why—for all of their blustering about patriotism—capitalists real mission—is to buy or destroy this Democratic Republic. And thereby render individual rights a thing of the past.

THE ABSOLUTE UNEQUIVOCAL NEED FOR REGULATIONS AND THEIR RIGID ENFORCEMENT Dear Mike, Your adamantine dislike of regulation fly in the face of American History and the strenuous arguments of the founding fathers—which apparently you have never read—to the contrary. And the nature of human beings to trample the rights of others when left unregulated. Plus your false premise that tax cuts are revenue neutral are blatantly false. Human nature is such that any argument for "less" regulation is naive beyond belief.

United as a people this country has become the envy of the world by way of its enlightened vision towards a better life for everyone, not for the few but everyone. Individual's contributed greatly to this Nation but no individual built this Nation on their own—it was a collaborative effort and it was that collaborate effort in the face of extraordinary odds that made us what we are today.

Order in a civil society begs for regulations and laws that govern the behavior of those who would break faith with other Americans and calls for: 1. getting money out of politics. 2. tax reform 3. monetary reform 4. rigorous enforcement of current regulations. 5. prosecuting corruption in high offices.

Martin Luther King said: ..."while it may be true that morality cannot be legislated, behavior can be regulated. It may be true that the law cannot change the heart but it can restrain the heartless."

We have tried the nostrums of "trickle downism" and disastrous implementation of anti-American trade agreements—that we were told would create American jobs—they have not—they have had the opposite effect—they have savaged the American working class—and made the gap in wealth rise—only to benefit the top one percent—as in in the Gilded Age, when robber barons employed children and ran sweat shops that preyed on the poor.

The call from the Right to keep applying these failed policies in the face of the damning evidence of their complete and utter failure is the definition of insanity. And to return to them after three short years when the economy is just starting to show signs of recovery—in spite of their stubborn obstructionism—is moronic if not treasonous.

Consider that if an outside political force had done this much damage to our country—we declare them enemies and would hunt them down. They have betrayed their country and they need to be called out for those actions.

The Republicans say the government is broken—they know this because they are the ones that broke it and they are not complaining—they are bragging about it. It has been their stated intent from Grover Norquist to Rush Limbaugh who wants to "starve the beast and drowned it in a bath tub." and "hoping Obama fails" to bring back jobs and revive economy they ruined."

Clear evidence of this is the Republican "obstructionism at any cost mentality". Even bringing the Nation to the precipice of default and getting a downgrade in credit for the first time in America's history—which added billions to America's deficits.

Obama has time after time presented ideas that would create jobs only to be rebuffed and countered with "the pressing deficit problem and unreasonable paid for's" knowing full well that nobody will be talking about "the deficits" in November when they will hammer him without mercy, on only one point, and one point only— "where are the jobs?"

In conclusion its just plain stupid to argue when you don't have the facts or understand our common history to support your BS.

PART 9c " Dear Mike: A Series of Letters from the Left to the Right

Commentary: On December 2, 2011 I was excoriated by a young "conservative" named Mike, who wanted to give me a hiding for my communist views on "unregulated" capitalism. He called me or more precisely my views "ridiculous" I'll let you decide who is ridiculous. His tirade was quite lengthy so I am publishing my response in 9 parts as "A series of letters from Left to Right: Dear Mike Since his attack was full of vitriol I have taken off the gloves as I see no point of entertaining his bombastic rhetoric. Parts 5-9 are in-response to the object of his real distain—my post called "Adam Smith Re-examined." Note: Due to length Part 9 is broken into 9a,9b,9c and 9d.

I have color coded my blog post that he critiqued in red—his critique in blue—and my response to his critique in black.

Part 9c

On The Causation of Debt

And the “debt ceiling” is caused by government spending – public works, inventing the Internet, supporting the abandoned old and sick relatives of socialists; stuff like that. Claiming that the “debt ceiling” is caused entirely by tax cuts for job creators is either utterly dishonest or unbelievably ignorant.

Based on what study? Based on what evidence? I have sited many sources that are fact based. You, on the the other hand, have offered nothing but opinion based on conjecture and false premises. I know you won't bother to look because you are afraid you'll find out you are wrong, and all the things you believe are really lies that you have been fed. Have you heard the saying: "Stupidity is the deliberate cultivation of ignorance."

Your dismissal out of hand of Bush's unpaid for wars in Afghanistan and Iraq, 1 trillion and counting, an unpaid for Part B Medicare Program—that was another corporate welfare giveaway to large drug companies, 2 trillion and counting—on top of the tax cuts, three trillion and counting. Are what dug the hole—to say otherwise is naive and utter bullshit.

That doesn't even address the billions every year in tax subsides to corporations that the ordinary taxpayer like me never benefit from—Bush came into office with a projected surplus of 6 trillion dollars engineered by a Democratic President—he left this country on the brink of financial collapse. And 12.3 trillion in debt.

Current American History 101. Failed

"These tax breaks, combined with the cost of fighting wars in Iraq and Afghanistan, will account for nearly half the public debt in 2019, measured as a percentage of economic output, the CBPP's analysis shows. Source: a CBPP

"Even the cost of the economic downturn, combined with the cost of the legislation passed to stem the damage, won't be as burdensome as the weight of the Bush-era tax cuts." Source: a CBPP analysis from report by the Congressional Budget Office

Economics 101 Failed

Government debt is created when politicians dole out more in handouts than they can steal? ("there you go again") in taxes. Period. The deficit is paid for via loans (ITS PAID FOR BY SELLING BONDS TO US CITIZENS AND OTHER INVESTORS) from the private banking cartel of the Federal Reserve, (THE TREASURY ACTUALLY ISSUES BONDS THAT'S WHY THEY CALL THEM US TREASURY BONDS) who get to create money out of thin air (ITS ACTUALLY MADE OUT OF PAPER AND IS "PRINTED" BY THE TREASURY DEPARTMENT) and loan(ed) it to the government. (THAT'S THE PART I HATE, WHY SHOULD THE GOVERNMENT BORROW MONEY THAT TECHNICALLY IS THEIRS IN THE FIRST PLACE? THEY PRINT IT. THEY BACK. HOW DO BANKS GET TO HORN IN AND CHARGE INTEREST? I THINK WE NEED MONETARY REFORM. HOW ABOUT YOU?) This creates inflation, (ACTUALLY ITS THE INTEREST THAT BANKS CHARGE YOU AND I THAT CREATES INFLATION WHICH IS HOW BANKS MAKE THEIR PROFIT—DON"T YOU JUST LOVE CAPITALISM) which is an indirect tax on all of us which we pay for via the ensuing higher prices for everything.(THAT LAST PART IS ACTUALLY TRUE)

It's interesting that you—a capitalist—are railing at the banks because—they are, capital C,—CAPITALISTS—who are doing what you say is—as America as apple pie—and the sole agenda of capitalists—making a profit.

Maybe, hope for you yet—there is—young Skywalker.

In fact though—you are talking in circles.

1. The deficits are not paid for by loans to the government from bankers they are financed by selling US Bonds to investors like you and I.

2. You already agreed the government has a right to tax. If they have the right to tax—its not stealing.

3. Besides if the government (Treasury A) prints the money which—they give to a group of private bankers who have "privatized" the monetary system for their own benefit (the FED B)—what claim do you (D) have on the money or any right to complain? It's printed by the US Treasury. And it's after all back by the full faith and credit of government, of the people—which you despise.

Its a transaction between A and B not (D)

Remember your own example: A sells to B and D has no right to horn in.

So if you are (D) what right do you have to any of that money in the first place? OMG—a leech in our midst!

See Continued Part 9d

PART 9b " Dear Mike: A Series of Letters from the Left to the Right

Commentary: On December 2, 2011 I was excoriated by a young "conservative" named Mike, who wanted to give me a hiding for my communist views on "unregulated" capitalism. He called me or more precisely my views "ridiculous" I'll let you decide who is ridiculous. His tirade was quite lengthy so I am publishing my response in 9 parts as "A series of letters from Left to Right: Dear Mike Since his attack was full of vitriol I have taken off the gloves as I see no point of entertaining his bombastic rhetoric. Parts 5-9 are in-response to the object of his real distain—my post called "Adam Smith Re-examined." Note: Due to length Part 9 is broken into 9a,9b,9c and 9d.

I have color coded my blog post that he critiqued in red—his critique in blue—and my response to his critique in black.

Part: 9b

On Taxation and Tax Fairness

Make no mistake every dime of tax cuts for the “job creators” comes from you and I and adds to the “debt ceiling.” Every dime they receive is coming out of your pocket.

Again, Weber demonstrates his lack of understanding of how a tax cut works. Here’s an example: Job Creator X has $100. Instead of taxing X at 30% and taking $30 from X and leaving them with $70, the government taxes X 25% and takes $25 dollars, leaving X $75.

And your lack of understanding of how tax cuts—really work—is only exceeded by your pomposity and condescension.

Your premise is inaccurate and therefore false—here a more accurate premise: A, B and C go out for a night on the town at fancy club at the invitation of A. B and C work for A—a "job creator." They run up a bill for three hundred dollars. (A) says: "Damn I forgot my wallet guys you're going to have to pay the bill and cover me. B and C get stuck for their hundred plus another 50 dollars each to cover the "job creator's" bill.

Simple right? B and C get screwed by A who makes a fifty million a year while B and C only make 50,000 thousand a year each.

Did I mention A never pays them back—in fact A lays them off the next day—and ships their jobs over seas to China—and is subsidized to do so by legislation his, personally bought and paid for, Representative pushed through a corrupt Congress the week before. Oh—and before he goes— A raids B and C's pension fund which is then "covered by the hated government."

Make no mistake—money is extracted from you and I by these unfair and egregious tax cuts for "job creators." Anyone who claims otherwise is naive.

For your edification my young friend here's a little reading for you:

On September 28, 2006, Stanford economist Edward Lazear, chairman of the CEA in Bush’s second term, testified before the Senate Budget Committee and asked: “Will the tax cuts pay for themselves? He said: "As a general rule, we do not think tax cuts pay for themselves. Certainly, the data…does not support this claim. Tax revenues in 2006 appear to have recovered to the level seen at this point in previous business cycles, but this does not make up for the lost revenue during 2003, 2004, and 2005.” Source: Senate Budget Committee

As director of the Office of Management and Budget under Ronald Reagan, David Stockman knows a thing or two about trying to balance the national budget. And he's convinced that Reagan would never support extending the Bush tax cuts of today. Stockman, who still considers himself a staunch conservative and a staunch Republican, told Guy Raz he thinks: "extending those tax cuts would be akin to a bankruptcy filing by Congress and the White House." Stockman went on to say "we're spending $3.8 trillion in defense, non-defense, entitlements, everything else, and we're taking in only 2.2 trillion. So we got a massive gap. You have to pay your bills; you can't keep borrowing from the rest of the world at that magnitude, year after year after year. So in light of all of those facts, I say we can't afford the Bush tax cuts."

Further on in the interview Raz asked: "You seem to suggest that many of our economic troubles are the result of Republican economic policies over the past few decades. You are a Republican. You are a conservative. Why do you think Republicans are largely to blame?

Mr. Stockman said: "Because the Republicans abandoned their old-time fiscal religion in favor of two theories, which I think are now proving to be both wrong and highly counterproductive and damaging."

"One was monetarism, which said let the dollar float on the international markets. Let 12 men and women at the Fed decide whether to raise or lower interest rates, and use the Fed to try to run this massive economy. What they've done instead is run the printing press; they've flooded the world with dollars. The whole monetarist policy has been a mistake."

"The second thing was the perversion of supply side. Yes, there was a good idea that in certain circumstances, lower tax rates will encourage economic activity and savings. But when you make it a religion, when you make it a catechism and you say you cut taxes no matter what the circumstance, what the season, what the condition, then I think the whole idea has been perverted." Source: Interview by Guy Raz on NPR's "All things Considered"

Bruce Bartlett another conservative economist in a interview with Bill Moyers added his voice to Stockman's when asked by Moyers: You write the Bush tax cuts have added at least $3 trillion to the debt. When Bush took office, budget projections showed a $6 trillion surplus, enough to pay off the pending $6 trillion national debt.

Instead, by the time Bush left office, the national debt had ballooned to over ten trillion, and the Republicans are refusing to take responsibility for having driven the borrowing binge that put the nation in the hole it is in now.

BRUCE BARTLETT: That's exactly correct. One of the things that Bush argued during the campaign, not so much after he took office, is that budget surpluses are a bad thing. Because they might get spent.

It really sounds silly (I prefer stupid) when you say it. But he did say this over and over again.

And so, the idea of cutting taxes was a part of a policy that I call "starving the beast." He went on to say: ..."conservatives believe that there's only so much freedom out there. And the more the government, the more power government has, there's less freedom for the people."

And they have a tendency to look at this in terms of spending as a share of GDP. So it can be measured very precisely. So if the federal government takes 25 percent of GDP, then essentially, we have only 75 percent freedom. We're not 100 percent free. You know, if we could cut government spending down to 20 percent of GDP, then we would gain five percent freedom. We'll go from being 75 percent free to being 80 percent.

I'm serious. This is the way they think. And this drives a lot of these policies that on the surface don't make any sense.

They're just about taking away the government's resources to force it to shrink to -- if you cut the budgets of the regulatory agencies, then they can't regulate. This is a good thing.

They really believe that there's absolutely nothing good that comes out of government, unless it comes out of the Pentagon.

And the "starve the beast theory" is really extraordinarily pernicious, because one of the things that it is related to is the so-called tax pledge, which my friend Grover Norquist came up with. And which has become a ban on raising taxes at any time for any reason.

But at the same time, all tax cuts are okay. So you just have this constant ratchet down. Every time you can cut taxes, you've lowered the threshold that you can never then go up against. So it's like you're coming down a series of stairs. And this is all very conscious, because Grover believes that if you take away the government's ability to tax, it will necessarily be forced to spend less. Government will shrink. Freedom will increase. It's that simple." Source: Interview of David Stockman by Bill Moyers

The truth is that no serious Republican economist has ever said that a tax rate reduction would recoup more than about a third of the static revenue loss. Not even Reagan's own economists ever claimed that tax cuts would pay for themselves. Some like Stockman and Bartlett even think that the entire Conservative movement has swept up by this theory to the point of moronic fanaticism, and an absolutely rigid ideology that is indefensible. These are the guys that authored the "temporary" tax cuts in the first place.

They are definitely costing taxpayers plenty!

Accounting 101 Fail

Simple, right? No money was taken from you or I — Job Creator merely kept more of the money it already had. They received no dimes from our pockets, unless you had previously given it to them in exchange for a good or service.

You're too clever by half. Try an follow me. To wit—the Republicans are insisting on a "paid for" to extend the middle class payroll tax holiday. If they are revenue neutral—as you so simply put it—why do they need a "paid for" to cover them. Opps!

POINT: Tax cuts—increase the deficit—which requires more US bonds be sold (to China or other creditors or US citizens who own the majority of them) which is a "debt obligation" that is THE DEBT THEY ARE TALKING ABOUT—US BONDS—that have been issued for centuries to finance American debt—its how we paid for WWII—I know my parents bought me some when I was a kid—that adds to the deficits. Tax cuts are NOT revenue neutral. That is outright bullshit to say otherwise.

We incurred most of that debt during the Bush administration—with two unfunded wars, 3 trillion in tax cuts over ten years, a Drug subsidy program called Part D that was a "crony capitalist" giveaway. Economist have said that without those items that the debt would be declining when the tax cuts expire, and the wars end. If they continue the deficit will continue for the foreseeable future. Obama has ended one war and is phasing out of the second. The tax cuts without an extension will end in 2013. But the revenue is lost and will never be fully recouped. Instead of listening to Rush and FAUX News try some independent research its all out there. LOOK IT UP!

Economics 101 Fail

See Continued Part 9c

PART 9a " Dear Mike: A Series of Letters from the Left to the Right

Commentary: On December 2, 2011 I was excoriated by a young "conservative" named Mike, who wanted to give me a hiding for my communist views on "unregulated" capitalism. He called me or more precisely my views "ridiculous" I'll let you decide who is ridiculous. His tirade was quite lengthy so I am publishing my response in 9 parts as "A series of letters from Left to Right: Dear Mike Since his attack was full of vitriol I have taken off the gloves as I see no point of entertaining his bombastic rhetoric. Parts 5-9 are in-response to the object of his real distain—my post called "Adam Smith Re-examined." Note: Due to length Part 9 is broken into 9a,9b,9c and 9d.

I have color coded my blog post that he critiqued in red—his critique in blue—and my response to his critique in black.

PART 9a " Dear Mike: A Series of Letters from the Left to the Right

On the Proper Role of Government and Taxation

Its quit clear that CONservs cherry pick their belief systems and ignore long established codes of societal conduct and common human decency.

Poor Weber does not understand the proper role of government,

Not true—its to regulate factions, maintain order, print and distribute money, collect taxes for the maintenance of societal infrastructure, postal roads, provide for the common defense, provide for the general welfare. But just to make sure I don't leave anything out here's amore complete list of mandates:

The Congress shall have power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common defence[note 1] and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

To borrow Money on the credit of the United States;

To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;

To establish a uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

To provide for the Punishment of counterfeiting the Securities and current coin of the United States;

To establish Post Offices and post Roads;

To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;

To constitute Tribunals inferior to the supreme Court;

To define and punish Piracies and Felonies committed on the high Seas, and Offenses against the Law of Nations;

To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;

To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;

To provide and maintain a Navy;

To make Rules for the Government and Regulation of the land and naval Forces;

To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;

To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;

To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;—And

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof. Source Wikipedia

nor what a real conservative is, what a capitalist is,

Not true—a real, rabid reactionary, conservative/capitalist—clings—with the mindless, religious ideological fervor, of a zealot—in spite of facts—to the past, and brandish their stated intent of "starving the beast and drowning government in a bath tub"—which I find treasonous at their utterance—and when confronted by the evidence of their eight years of utter failure—point with unflinching temerity at Obama and blame him—and in the next breath call for more of the same failed policies convinced they will work if only they can get one more shot at it.

nor what common human decency is.

I'm kind to my web footed friends does that count?

It is decent of me to give of my excess to my needy neighbor.

Alleluiah! He has seen the light. And the truth shall set him free!

It is theft if I take property from my neighbor against their consent, even if I think they have more than they need.

Alas, according to you—all need, is want, disguised as greed.

That seem so obvious, so why do the bleeding hearts completely miss it? It is still theft if I hire someone else to steal on my behalf. And it is still theft if I give my hired thief a blue uniform and call it a tax. It goes against long established codes of societal conduct. It goes against common human decency.

I repent. Not really Just kidding. Who's stealing again? I thought we agreed taxation is not stealing, remember? [quote] Which is fine, and our federal government was originally designed with a very fair and progressive taxation system. [unquote] Again I must ask, are you oblivious to American History? The father of the Nation George Washington put down the Whiskey Tax Rebellion by leading an army to quell the insurrection. The Articles of Confederation of a Perpetual Union were rewritten so that taxes could be levied to support the federal government. "In order to form a more perfect Union" was in large part about raising taxes and establishing a "bigger" FEDERAL GOVERNMENT.

1. The founders were NOT against taxation. They were against taxation WITHOUT REPRESENTATION. The government issues the currency—its their currency they can't steal their own currency.

2. The founders were NOT against Regulation of factions and most of their duties in the Constitution gives Congress the ability to regulate Interstate Commerce.

Please seriously, you are giving me a head ache. Are you a Manchurian candidate on auto pilot? By the way—I seem to remember an icon of Jesus that showed him with a "bleeding heart" as in:WWJD? Are you anti-christian?

Thou shalt not covet. Thou shalt not steal. Codes of conduct thousands of years old, and still we struggle to live by them.

Alleluiah! Amen! Preach it brotherman! The summary of a great mind. But wait there's more!

Continued Part 9b