With straight faces, the salesmen for the Trump tax cut have promised a miracle: increased corporate profits, a surge of investment in CAPX, more and better jobs with higher pay, all to be paid for by accelerated economic growth. In fact, the all-white, all male finance committees of both Houses of Congress, with Treasury Secretary Mnuchin and Chief Economic Advisor Hassett say that the US will grow at 3% p.a. or more for the next ten years – no recessions – and that the tax cuts will actually generate a profit for the government of $300 billion in that time. Sadly (and no irony intended) this combination of goodies is a pipe dream. In the next few paragraphs I will explain why, and why Trump and the Republicans are selling snake oil to the suckers. What is surprising is how many financial professionals are buying it.
Can inequality within and between societies be explained in terms of merit and intelligence, or are the most important determinants of inequality beyond individual control? Both economist Henry George and geographer Jared Diamond essentially asked this same question, examining the fundamental forces that have shaped human history. They come to startlingly similar conclusions. These similarities have not, until now, been connected and compared so directly.
One day, a very long time ago and in a faraway place you have probably never heard of, or so the legend goes, a huge forest fire was raging all around the countryside. All the animals were terrified, running around in circles, crying and helplessly watching the impending disaster.
But there in the middle of the flames, and above all the cowering animals, was one tiny hummingbird busy flying from a small pond to the fire, each time fetching a few drops with its beak to throw on the flames. And then again/ And then again. And yet again.
After a certain time, an old grouchy armadillo, annoyed by this ridiculous useless agitation on the part of the hummingbird, cried out: “Tiny bird! Don’t be a fool. It is not with those minuscule drops of water one after the other that you are going to put out the fire and save us all! ”
To which the hummingbird replied, “Could be. But I’m still going to do my bit”.
It’s the weekend, the world economy is seriously wounded and running out of control. Hmm. Maybe it is time to sit back and consider all the issues and alternatives. So relax, take off your shoes, get comfortable and sit down to read this challenging 1992 essay by Robert V. Andelson.
“It would require less than the fingers of the two hands to enumerate those who, from Plato down, rank with Henry George among the world’s social philosophers…[He is] certainly the greatest that this country has produced. No man … has the right to regard himself as an educated man in social thought unless he has some first hand acquaintance with the theoretical contribution of this great American thinker.” ~John Dewey
With the fall of the Iron Curtain, people all over the world seem to be searching for a “Middle Way.” Except in North Korea and Cuba, doctrinaire Marxism has been repudiated virtually everywhere, even by the Left. Socialism has become passé. Its adherents are no longer riding the crest of the wave of the future. Even the most energetic apostles of federal meddling, John Kenneth Galbraith, for example, eschew the Socialist label.
Yet, on the other hand, the free market economists of the classical period would scarcely recognize Capitalism as we know it in America today. Such luminaries of industry and finance as Lee Iacocca and Felix Rohatyn advocate a measure of government intervention that would have seemed entirely insupportable to Cobden or Ricardo. In the political field, the major candidates differ mainly on matters of degree. It is not so much a question of “Shall there be federal aid?” as of “How much federal aid shall there be?” or of “How shall it be administered?”. As long ago as the late 1940s, “Mr. Conservative” himself, Senator Robert A. Taft, sponsored a bill for federal housing. Later, another Senate Republican leader, Bob Dole, was a major architect of the food stamp program, which is itself a dole, not just for the poor, but, above all, for agribusiness. A Republican president, Richard Nixon, instituted price controls, and cut the dollar loose from its last tenuous backing with the cynical quip, “We are all Keynesians now”.
But what we are presented with, from Right to Left, is not a coordinated structure embodying the best elements from both sides, not even a well-thought-out attempt at syncretism, but rather a bewildering welter of jerry-built solutions, each one based on political and emotional considerations and lacking any functional relationship to a unified system of socio-economic truth — let alone any rootage in a grand scheme of teleology or ethics.
A little Socialism here, and a little Capitalism there; a concern for the public sector here, and a concession to the profit motive there; a sop to the “underprivileged” here, and a bow to incentive there — put them all together, and what have you got? Nothing but a great big rag-bag, a haphazard pastiche of odds and ends without any bones and without any guts!
Nevertheless, there is a Middle Way. . .
Tax cuts, wages and salaries: Will lower taxes help workers? And the economy?
For several weeks, the guest experts on CNBC and Bloomberg News have been talking about the coming tax cut legislation (for corporations) that the Republicans finally seem to have in their grasp. The Bill, as it is currently proposed, will eliminate the insurance mandate for health care and may leave quite a lot of upper middle class salaried people, worse off, especially in high tax states.
The sure winners will be the shareholders of multinational corporations and “pass through” enterprises, especially real estate partnerships. The “supply-side” cheerleaders for the plan, both in Congress and the White House (Mnuchin, Cohen, Mulvaney, et al) argue that economic growth be much faster, that it will pay for the cuts, and that wages and salaries will rise, thanks to a burst of new investment.
By contrast, virtually all top economists say that the cuts won’t pay for themselves, that the deficit and the national debt will increase, and that growth will not accelerate.
More often than not the concept or application of what is called”Circular Economy” is treated as an entirely new toolbox or approach, that is to say somehow historyless,. Like Athena, at birth springing full formed from the head of Zeus. This is of course far from the case.
The goal of the above quickly fashioned mosaic is to serve as an explicit reminder — an incomplete reminder to be sure— of some of the great men and great thinking that came before, with this listing taking us up to the beginning of this still-new century,. (Surely I have missed here some of the important figures, who to my mind constitute the Founding Fathers of Circular Economy. So please do not be shy and share your thoughts on this with us.)