Reality therapy can be harsh for those with repressed memory

I know I’m not supposed to do this.

Modern economic history is now said to begin on Jan. 20, 2009, the day that Barack Obama took the oath of office as president, and nothing that occurred prior to that date is supposed to be mentioned in polite company. In fact, anybody who dares to look back more than 18 months is deemed guilty of “dredging up the past,” which has become a thought crime of the highest order.

Well, to hell with that.

From The Washington Post, Jan. 2, 2010:

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“There has been zero net job creation since December 1999. No previous decade going back to the 1940s had job growth of less than 20 percent. Economic output rose at its slowest rate of any decade since the 1930s as well.

Middle-income households made less in 2008, when adjusted for inflation, than they did in 1999 — and the number is sure to have declined further during a difficult 2009. The Aughts were the first decade of falling median incomes since figures were first compiled in the 1960s.

And the net worth of American households — the value of their houses, retirement funds and other assets minus debts — has also declined when adjusted for inflation, compared with sharp gains in every previous decade since data were initially collected in the 1950s.”

I know that’s quite a shock to many of you. Bringing back such deeply repressed memories can be very, very traumatic. But I want you to gather yourself because we’re now at the important part. Try to remember: What was the primary economic strategy during that decade that we are now supposed to block from our memory banks and pretend never happened?

Two words, seven letters. The first word begins with T…

Who said “tax cuts?” Very good. I see it’s all coming back to you now.

And what is the GOP’s primary economic strategy for the next decade, their sole prescription for restoring lost jobs, income, hope and opportunity (all of which began disappearing Jan. 20, 2009)?

That’s right, more tax cuts. As John Boehner told us the other day, “We’ve seen over the last 30 years that lower marginal tax rates have led to a growing economy, more employment and more people paying taxes.”

Is that really what we’ve seen, class?

(h/t Barry Ritholz)

437 comments Add your comment

Once "Recent" Reader

July 28th, 2010
2:36 pm

Jeez Dave R . . .is it a transgression to dock your boat in another US State??? If you had an option to declare a dependent on your US Tax Form and could . . .would you decide not to do so to pay more taxes. They can dock their boat there . . . .that’s it. MA folks don’t have to vote for him if they don’t like that he saves money by docking his boat their. That is everyone’s prerogative . . .but I don’t see it as a transgression . . . . just smart docking! Lying and cheating in regards to taxes is a transgression. If it is proven Kerry lied or cheated . . .I’m right there with you !!

Get Real

July 28th, 2010
2:37 pm

Once “Recent” Reader

July 28th, 2010
2:31 pm
Get Real . . .what did the previous Admin do about Iran, Venezuela, N Korea, and the Mexican Border issue that was so great. Boy during GW’s Admin I never saw Fox News jump all over the Illegal Immigration issue nor the Republicans. This is not a new issue – but I’m glad everyone at least “expects” more from our current President.

The previous administeration didn’t trash and apologize for America and bend over bowing and kissing their a$$ for starters! And, illegal imigration has always been an issue with me no matter who was president but at least other presidents didn’t try to block another state from protecting their border from illegals from coming in.

Once "Recent" Reader

July 28th, 2010
2:44 pm

Get Real . . . .You know I always thought of myself as a Patriot and I love our Country. But I also always thought of myself as a practical and non-assuming person. This apologist thing that became a big uproar to mostly conservatives just reinforces why many folks look at us as arrogant. Do you truly believe that we the USA are perfect and can do no wrong?? Do you believe we did not make mistakes . . . including the Iraq War? In that case there might even be some trickery involved in getting the US Citizens (myself included) to believe that Iraq was a much bigger threat to our security. The President has only said what any truly sane and honest person would say . . .we ARE NOT perfect, we the USA can and have made mistakes !! His saying that does change my opinion . . . and his to I believe . . that we are still the Greatest Country to Live In!! If we cannot admit we make mistakes . . .like History . . .we are doomed to repeat them.

Once "Recent" Reader

July 28th, 2010
2:47 pm

Get Real . . ..and before you write it . . . .I know most folks who rant at Pres. Obama’s “apologies” DON”T care what other Countries think and if they think we are arrogant. That’s fine . . . . .but it not only reinforces the Arrogant American stereotype . . . .but also that of the “Ugly American”!

Fix-It

July 28th, 2010
2:49 pm

Obozo does not have a plan except to blame Bush, what a loser, all it does is show that he is lost in a real job, I remember when Bush inherited the Clinton tech bubble and Enron scam, but I don’t EVER remember Bush blaming Clinton or ANYBODY for these things. Makes you wonder what the meaning of man up means…. Certainly not Obozo or his tax cheats cabinet and loser terrorist buddies.

Georgia

July 28th, 2010
2:56 pm

Bud Wiser,

You are definately in the right Party, the Party of Ignorance.

First of all, President Obama is not a social experiment. He was elected to fix the country, that your Party of Ignorance destroyed for their own greed. They not only destroyed the U.S., but other countries around the world due to their deregulation and fraud in the banking industry.

So you will not forget, it was your party who was in office when the job losses began. It was your party who started the unpaid wars. It was your party who funded the huge unfunded Medicare Drug Plan that is being paid by the taxpayers. It is your party who gave the tax breaks to the rich hoping the money will funnel down to YOU.

Most of all, it is your Party of Ignorance, Party of No, the Republican Party who only will pass legislature to benefit the rich and big business, which You Are Not A Part.

So Bud Wiser, continue to hold on to your racism, you will no doubt continue to lose like the rest of the non rich and small businesses.

Saul Good

July 28th, 2010
2:56 pm

Can you spell Healthcare?

Yup…can you?

Now tell me the TAXES RAISED?

What tax was raised on any level so far?

Sad that a TRILLION dollars spent in Iraq from 2003-2008 matters not to you (you know to KILL people)… but a TRILLION dollars being spent “here” at home to “help” people gets you into a tizzy…

Yeah..that makes sense…

So go ahead and list the “taxes” you said that are no HIGHER because of the health care bill.

SH

July 28th, 2010
2:59 pm

Interesting chart. If job growth occurred in the 20%-38% range in each decade save the 1990s, and tax rates were both “high” and “low” at various times during this entire period, then one has to logically conclude that there is no correlation between tax rates and employment. It’s like arguing that wet sidewalks caused it to rain.

One can argue for relatively higher taxes, or relatively lower taxes (I’m on the lower side myself), but the issue of employment growth is completely separate.

HDB

July 28th, 2010
3:03 pm

mmm, mmm, mmm, Barack the Liar Obama – BEND OVER, Here comes the CHANGE!

July 28th, 2010
1:06 pm
HDB – on the count of three, click your heels and say you’re not in Kansas anymore. – If you can’t tell the difference bettween NObama and Bush (you are truly out of touch with reality)

Nope…not out of touch…weedeater stocks declined since there were no more Bushes to cut down!!
The question that Reagan asked: Are you better off now than you were four years ago?? IN my instance: YES!! Think about this from my vantage point: the Clinton years: upper-5-figures, able to pay debts……,the Bush years – unemployed for extended periods, defaults on loans..adversely affected by 9/11……

Am I better off now?? YES..back to work…mid-5-figures…coming out of the hole that the Bush administration dug for me……..

DawgDad July 28th, 2010
1:40 pm

“I would eliminate the corporate income tax for business revenue derived from domestic labor-based operations.” No disagreement here…and further incentivize hiring of veterans!!

“I would take a serious look at capital gains tax and employment tax policy in the same context; ” Definitely!! If capital gains are reinvested in the company, then taxes should be reduced….but if not, tax as INCOME!!

“Instead of spending $300,000 per added job derived from a trillion dollars in Federal stimulus money let’s cut the corporate employment tax rate substantially. Let’s provide tax credits to companies employing domestic school aged workers temporarily (after school and summer jobs). There is an endless list of things we COULD be doing to improve the jobs market and our economy.”

Those are ideas worth considering…and I could possibly go for!! The only thing is that when the private sector refuses to step up and HIRE, the government must lead the effort to spur the economy…and current government spending reflects this!! Once the private sector begins hiring…then can we address government spending, the reduction of same, rax increases and spending cuts!!! Note how much cash the private sector is sitting on….

Dave R.

July 28th, 2010
1:45 pm
Uh, no Bosch, they won a temporary injunction. They did not win the lawsuit.

THAT’S a good start!! When a law whose sole purpose is to discriminate against a group of people and mandates racial profiling as SB 1070 does, someone MUST take a stand!! At least, Round One goes to the government…and the people!!!

BenFranklin

July 28th, 2010
3:10 pm

Here’s a NEW SHOCKER!!! According to Jay’s pretty graph, there were NO NET JOBS LOST, EITHER!!
If government takes more money from its subjects, the subjects will have less to invest in new companies and in new jobs!!!!

Georgia

July 28th, 2010
3:11 pm

For all of you who talk about the high rate of unemployment, have you ever thought of the same rich people that are getting the Bush Tax Breaks are the ones who refuse to hire and are the ones laying off people. It is cheaper for them to lay off the older workers who are paid high salaries. The companies then have the cheaper workers to work harder to keep their jobs. It is not hurting the large companies to lay off workers, they are saving big money.

Your states like Georgia, Mississippi, Louisianna and others received stimulas money to create new jobs and retain the Police, Firefighters and Teachers, but since they are Red States and want President Obama to fail they refuse to use the money. So don’t blame the President, blame your Red State Governors. Don’t blame the President, blame your big companies who get big tax breaks along with the rich. Most of all, if you want to blame someone, blame yourself for allowing your Party of No, the Republican Party for blocking bills that benefit the working people.

I see why Georgia ranks near the bottom of the list in Education from reading the bloggers.

Saul Good

July 28th, 2010
3:15 pm

“I see why Georgia ranks near the bottom of the list in Education from reading the bloggers.”

you’ll get no argument from me…

But NEAR almost too kind….

Once "Recent" Reader

July 28th, 2010
3:20 pm

SH . . not the Blog Typo or Data police here, but I’ll assume that you meant no job growth in the 2000’s and not 1990’s as the chart shows. The Tax Cuts went into effect 2003 through . . .reconciliation . . .that thing which was demonized by Repubs during Health Reform. Estimates I just looked up on the impact to the deficit range from 1.2 – 2.5 trillion – directly attributed to tax cuts. There is varying analysis on the tax income that was or was not created due to the tax cuts from both non-partisan and partisan think tanks. As I mentioned earlier . .the one thing I did see take off like wild-fire in the 2000’s was international outsourcing of many, many IT jobs and Call Center jobs. Can’t speak for manufacturing . . .but we all can see the many abandoned factories throughout the USA. I don’t know if the 2003 tax cuts helped create jobs, the straight numbers say no. However, I do believe if there were tax cut incentives to keep or bring back jobs to the USA . . . .that should be a job creator. So I’m not for blanket tax cuts/hikes. But if we are gonna bash the Pres on deficit and say letting the tax cuts expire as planned – will result in loss of jobs. I say jobs have been lost with them . . . .millions. I keep hearing folks talk about tax cuts that have already been put in place by Obama Admin for those who hire more people . . …I have not looked that up . . .but that gets drowned out in the noise to protect the CUTs made for 2/3%. I don’t get it . . . .maybe many on this post are part of that 2/3%, just like millions were there when Hank Aaron broke the Babe’s record:) I’m not in that 2/3%!!! Darn it . . I wish I was . . .I’d pay a bit more in taxes, and happily!

Rob

July 28th, 2010
3:21 pm

Wait wait wait — you can’t say (well, I guess you CAN) in one post “there was no mini-recession after 9/11″ and in the following post say “Nyah! There were recessions in other years, too!” (paraphrase).

Just a few links, from 2008 and 2006 and 2003:

http://www.huffingtonpost.com/stephen-viscusi/work-is-not-a-democracy_b_142188.html

http://www.allbusiness.com/human-resources/4104517-1.html

http://www.nber.org/cycles/july2003.html

Now, granted, maybe it wasn’t the “agreed-upon definition of recession”–you know, kind of what the Democrats said in the months preceding the 2008 election, when in fact a true “recession” by definition had not yet occurred–but most agree that the country experienced an economic downturn in the months following 9-11.

And by more than a few accounts, choices made by that administration pulled the economy out of the recession in less than half the time this administration has been in office. (From third link: “The trough marks the end of the recession that began in March 2001 and the beginning of an expansion. The recession lasted 8 months, which is slightly less than average for recessions since World War II.”)

I think it’s entirely possible that the choices made by different parties (rampant spending, Fannie, Freddie, the mid-term elections–see: rampant spending, part II) helped bring about this recession we’re in, but hey: At least the previous administration got us out of the FIRST one. Not sure the same will be said for the current folks. Thinking that ridiculous, job-killing policies will work just because “I REALLY WANT them to, golly gee willikers!!” … well, yeah. Good luck with that.

Gordon

July 28th, 2010
3:30 pm

There were tax cuts by Kennedy in the 60’s and Reagan in the 80’s and there was job growth. Hmmmm. I wonder if other things outside of tax rates might have an effect on jobs. Something like 9/11 in the early part of the decade and a fiscal crisis in the latter part of the decade. I wonder what the job numbers would look like with higher taxes AND those things.

Can someone explain to me the theory about how private sector jobs are created with higher taxes? I’m not necessarily arguing against higher taxes, I would just like to know how they would NOT have a negative effect on the creation of private sector jobs.

NO DEAL!

July 28th, 2010
3:34 pm

Some interesting charts on the economy since the “Reagan Revolution” for those deniers out there.
“Reagan’s Revolution Home to Roost”

http://www.ourfuture.org/blog-entry/2010062415/reagan-revolution-home-roost-charts

Dave R.

July 28th, 2010
3:40 pm

Recent, there is some evidence that he actually had the boat in Mass. waters before the 6-month grace period was up. Not proven yet, but that case is still out.

It is simply a question of equality. Of course the voters can vote him out. Thanks for stating the obvious! I’m talking about equal treatment and equal responsibility. If this were a Republican, you and others would be all over him, as has been done for the slightest transgressions or misstatements from others.

But John Forbes Kerry gets a pass from you.

Aww, it’s legal, right? Everybody else does it, right? He’s just another rich guy trying to save money, right?

But he takes AIM at the rich for doing what he did.

And THAT’S what makes him wrong on this, and worthy of the attention he’s getting.

Once "Recent" Reader

July 28th, 2010
3:44 pm

Hey there Dave R! Hey – if there is wrongdoing . ..go at him. I have no problem with that at all. I don’t know how I would feel if this same thing happened to say . . . ..Mitch McConnel. I’m really being truthful here too. I am a Dem, but I don’t go jumping off at folks at every little item. I’m human . . .and I make human mistakes . . .or discretions:) I honestly do not sweat the small stuff. To me this was small stuff until something comes out that makes it illegal (tax wise), immoral and not just fiscally “prudent” (tax wise), or shows that Kerry is lying about the facts regarding Das Boot:)

Once "Recent" Reader

July 28th, 2010
3:45 pm

Dave R . . .but I get your point . . .I agree if this happened to a Repub, there would be many bloggers on the left drooling away. I’m just not one of those types. My posts are normally “counter-punching” and not sloppy right hooks.

williebkind

July 28th, 2010
4:17 pm

I have read your posts and I have not changed my mind. Liberals can not lead and do not know how to follow. They definately do interfere with the execution of a war–to its detriment on the American military and create huge costs. Some conservative and independents are willing to compromise but in the end that means you give up your beliefs and accept the progressive liberal agenda. For example the student at the university who was kicked out of the graduate program because of her Christain beliefs. Now if it were liberal who got get kicked out because of their beliefs, all the news media aclu, and special interestes groups would be rioting in the streets–violately.
Jay talkes about reality therapy being harsh for those with repressed memories. You know he could be right. I mean like Britain’s healthcare failing and death bed planning. Now we wait to see how the financial arena will fare. We will have Obamacare, bailouts, and financial reform as history. However maybe repressed memories would be good for the progressive liberal socialist movement. Can you imagine what would happen if the people really realized their agenda?

Timmy

July 28th, 2010
4:29 pm

Instead of additional taxes, why don’t the government cut spending instead. That’s what I did at my house when my income dropped, but I did think about making my kids work harder for less dinner … but at some point they will revolt and poop on the floor.

Swede Atlanta

July 28th, 2010
4:30 pm

Fix-It

Bush repeatedly reminded everyone that he inherited a recession and the end of the dot com bubble when the economy was struggling.

Uh, Jan 2007

July 28th, 2010
4:31 pm

Uh, Jay,
Did you forget when DEMOCRATS came to power? I believe that was 2006 along with the “great-one” Barrack Obama…. just saying. They didn’t do anything to change the course over the last 4 years. nevermind Obama’s brief presidency.

mmm, mmm, mmm, Barack the Liar Obama - BEND OVER, Here comes the CHANGE!

July 28th, 2010
4:36 pm

Bosch – Suck it xenophobes

xenophobes? Why because ILLEGALS are flooding the borders – Get it, ILLEGAS! douchebag!

Timmy

July 28th, 2010
4:55 pm

What about the 1 trillion dollars spent on interest on the debt every 3 years?
Maybe that has an effect on jobs

Politics to the right of Attila the Hun

July 28th, 2010
5:14 pm

We can debate all day long and come up with stats over taxes, who caused and inherited recessions, etc. The bottom line is that the less government interference, the lower the marginal tax rates, the closer a country is to capitalism as opposed to socialism the more prosperous the economy. This is not rocket science. Its an easily observable fact of life. Look around you. Look at the fastest growin, most prosperous economies in the world. They are all low tax, capitalist oriented economies such as the Asian tigers- South Korea, Singapore, Hong Kong, etc. Then look at the countries burdened by huge socialist governments like Greece, France, Spain, the western European economies in general. They are in decline- their economies are sluggish, unemployment is high( near 20% in both France and Spain), and worst of all they are all flat out broke. Even in 3rd world countries the countries geared towards free market capitalism are the ones advancing while the countries like Zimbabwe in Africa that embrace socialism are broke and in complete economic disarray. Even Cuba and China get it. They had to enact free market reforms to get their economies moving or go bankrupt. Only North Korea has not and we look at what’s happened there. Why is this so hard for Democrats to see?

ChewOnThis

July 28th, 2010
5:18 pm

Ok I spent part of today trying to digest the tax cuts for the wealthy argument so popular with those on the right. The basic premise of that argument is that if we cut taxes for the rich, supposedly small business owners, then they will take that money and buy things or hire people.

As I always tell those HR dudes, compensation dictates behavior. What really happens as we cut those tax rates is that the rich, be they business owners or not get to keep more money. They don’t really spend it they just keep it. Particularly now they sock it away in the bank or buy US Treasuries to keep it around just in case they need it.

So let’s try dictating their behavior by changing their compensation. Instead of cutting their taxes lets raise them to 100% of any income over say $500K. Shocked you didn’t I. But you know what would happen if we did that? All of those rich guys, supposedly small business owners, would get zero personal benefit out of every dollar of profit over $500K. So most likely instead of paying the money to Uncle Sam they would SPEND it on employees, capital goods, booze, meals, travel and the list goes on.

Guess what happens when they spend that money? Of course the economy gets better and the middle class grows.

Now I know that some of you don’t think this makes much sense, but if you think about it for a moment it sure seems more plausible than just giving the money away in tax cuts.

HDB

July 28th, 2010
5:29 pm

Politics to the right of Attila the Hun
July 28th, 2010
5:14 pm

…and ALL of those Asian countries have one thing that the US doesn’t: UNIVERSAL HEALTH CARE!!

Once "Recent" Reader

July 28th, 2010
5:40 pm

WilliBKind. … ..well I don’t know about you, but the way that Afghanistan “war thing” has been run from the beginning . …I think someone definitely needed to “interfere”. I do agree that Independents do compromise . . ..but after watching the past 18 months or so . . ..I’m not sure how you can say Conservatives compromise. That’s almost a funny statement. Hey, it’s not a bad thing sticking with your beliefs . .. . but that’s why we have elections, that’s why there “currently” is a Democratic Congress, Senate, and Executive branch. You would’nt think that was the case by the way the battles have been going . . .but most of the Wars have been won by the majority. Many may not like the outcome, and many may vote for Conservatives. We’ll see what happens when the folks digest the arguments from the Right and Left. I’m a Democrat, but boy I’ll admit the Republicans are very good at attacking. Much better than the Dems.

Atlanta 1

July 28th, 2010
6:13 pm

This is garbage for multiple reasons. Starting with there was plenty of job creation between 2000 and 2007 that starting falling in 08 and went to hell in 09. The economic fall out falls on many shoulders, starting with George W. Bush; but he has plenty of help, starting with Frank and Dodd.

I was of the opinion the who ever won this election would be a one term President, because there was just too much work to be done; was also of the opinion that the next party would lock in for 8 years and that there would be a huge swing away from the other party. That’s the way it is heading.

President of Obama has made little or no attempt to even pretend to work to the middle. That is why he is not a popular President right now. He promised that by taking the country further into debt and spending money that unemployment would be no higher than 8%. He promised that this summer we would see an economic turnaround – hasn’ happened. He drove these through claiming that most of the money would go to much needed Infrastructure improvments – isn’t happening.

He and the Democratic Party forced through a Health Care Program that we are still finding little suprises written into it. The Democratic Party will pay a heavy price for this in the fall and unless they learned to come back to the center, an even heavier price two years later.

Do not be surprised to see a Republican President, House and Senate with a mandate to CUT and cut in a big way.

Personally, like a President and the House under one Party, with the Senate able to ‘check’ and force compromise. However, the Democrats are performing so poorly, they’ll likely lose it all in two short years.

Pathetic performance by both parties over the last 10 years…

dave

July 28th, 2010
6:44 pm

TaxPayer – Trillions of dollars in new debt (in a year and a hafl) with no end in sight, now that’s something we haven’t seen before.

dave

July 28th, 2010
6:49 pm

ChewOnThis – your “strawman” has no arms or legs and his head is up his butt. You really don’t know much about small business owners. They are not your enemy, they are the people who create jobs, but that would never happen under your concept. glad you don’t have anything to do with the rules, you’d be even worse than what we have now and that’s saying something.

marko

July 28th, 2010
7:26 pm

Taxed enough already? No taxation without representation? Sorry folks, we elected these idiots not King George. If you’ve never voted you have a right to complain. Maybe you you think that only the guy’s you vote for know how to spend other peoples money. For the record no president before W ever started wars without raising taxes to pay for them. Hows that democracy in the middle east working out for Ya /

ChewOnThis

July 28th, 2010
8:59 pm

@Dave, what you need is an economics lesson.

Fact is 35% or 39% most likely won’t change a single business decision, and if it did the tendency would be to spend more $’s. The higher the tax rate the lower the effective cost of hiring or capex.

Lil' Barry Bailout

July 29th, 2010
12:38 am

Guess what Jay–unemployment was lower under our President Bush than it is under the Idiot Messiah. I suppose that means that fewer jobs were DESTROYED by Bush, while the Messiah has destroyed more than he’s created.

Unemployment is now hovering around 10% and the Idiot Messiah is doing all the wrong things for future growth (except in the size of the government workforce, natch).

Lil' Barry Bailout

July 29th, 2010
12:42 am

ChewOnThis: The higher the tax rate the lower the effective cost of hiring.
——————

You need an arithmetic lesson.

You must be one of those idiots who thinks you’re getting ahead by paying interest on a mortgage since you get to deduct the interest from your income when doing taxes. That’s like saying you’re saving 25 cents by spending a dollar.

If you disagree, look back at your own argument. How many additional folks would be hired if the tax rate were 100%. Why, then the employees cost you nothing!

Idiot.

ChewOnThis

July 29th, 2010
7:52 am

@Lil’ Barry Bailout, you got it Larry! At 100% the employees would cost you nothing. You would have the choice to spend the money on employees or give it to the government. Which do you think most people would choose?