A Look at Recessions Part 1: By the President’s Political Party
by cactus
A Look at Recessions Part 1: By the President’s Political Party
I am going to have a few posts on recessions over the next few weeks. This one is short – I’m trying to get another batch of copy edits out to my publisher. In this post, I’m focusing on the period from 1929 on – that’s the period for which real GDP per capita is available. Because I’m swamped, I’m going to put up some graphs and let them do their own talking.
The graph below shows the length of each recession in our time period, in months. It also assigns a recession to the party of the President who happened to be in the Oval Office at the time the recession started.
Now, perhaps a recession that starts shortly after a president takes office is not entirely that President’s fault. Nor can you unambiguously blame someone who has already left office, as the former President might well have taken steps that might have avoided the recession had he not been in office. So the next graph only assumes a recession to a party if that party was in office for three or more years by the start of the recession. Three years seems a bit much for me, but I don’t have the time to argue right now, so I’m picking a big enough figure that nobody should complain. (Gray bars mean a recession falls into the three year no man’s land.)
What about the severity of the recession? Well, before I put up those graphs, a couple comments…
1. the BEA has quarterly data from 1947 on, and annual prior to that
2. I didn’t do any smoothing – I don’t want anyone complaining about what method I chose to do it. Thus, I simply assign each month the closest reported real GDP per capita. Thus, for instance, I assign Jan, Feb, and March of 1981 the real GDP per capita of 1981 Q1. Its not perfect, but it is what is and I don’t have to defend when I start downturns and how I’m going to smooth things when the recessions don’t start or end at the start or end of a quarter or year.
(Rdan…charts corrected)
So here’s the annualized loss by recession, also by party. Note that a very short recession could have a bigger annualized loss than a recession which lasted longer but had a bigger overall drop in real GDP per capita. Thus, there may be a trade-off between recessions length and monthly loss. (A topic for another week.)
And here it is with the 3 year deadzone pulled out:
Have at it.
it looks like Hugo Chavez might be getting involved in in the gold mining business:
http://www.goldalert.com/gold-price-blog.php#ch…
Cactus,
How many times are going to try to repackage your flawed analysis. Here are several misleading data points right off the top:
1) The 2001 recession was dated as starting in March and most likely started in December or January before Bush took office and March was before any policy was enacted by president Bush.
2) Carter created run away inflation to maintain employment and growth in the face of a constrained world supply and run away prices. He passed along sky high inflation that Reagan had to deal with. And Dealing with it caused the recession of early 1980s.
3) Johnson enacted a massive tax surcharge that put the economy in recession that he passed on to Nixon.
4) Bush #41 had a recession but it was mild and probably only became one because of the Iraq invasion of Kuwait with its disruption of the oil markets. Also, this was a run of 12 years of republican contol in the Whitehouse, and you are bound to have an economic downturn at some point.
– Edit – Moderate
Cactus,
How many times are going to try to repackage your flawed analysis. Here are several misleading data points right off the top:
1) The 2001 recession was dated as starting in March and most likely started in December or January before Bush took office and March was before any policy was enacted by president Bush.
2) Carter created run away inflation to maintain employment and growth in the face of a constrained world supply and run away prices. He passed along sky high inflation that Reagan had to deal with. And Dealing with it caused the recession of early 1980s.
3) Johnson enacted a massive tax surcharge that put the economy in recession that he passed on to Nixon.
4) Bush #41 had a recession but it was mild and probably only became one because of the Iraq invasion of Kuwait with its disruption of the oil markets. Also, this was a run of 12 years of republican contol in the Whitehouse, and you are bound to have an economic downturn at some point.
– Edit – Moderate
Did they delete my username to help you sell your book? Great site.
Three comments removed, one spam on gold.
Who will be the first ‘useful idiot’ to dispute this post? Come on step right up. Everyone KNOWS those Democrats are bad, bad, bad for the economy.
Onward wtih the ‘Party of No’…no regulation…no rule of law…no Habeaus Corpus…no middle class…no educational system. HeckFire, Ol’ Mitch ‘The Turtle’ McConnell is runnin’ out of things to destroy…
Whatever witll they attack next? Keep in mind that it’s coming up on….
….Mother’s day.
Cactus,
I’m not sure what to say anymore, you’ve got me laughing so hard at these posts, and I can only imagine how much fun it has been for you, to play these games.
I have to admit, your getting really good at it, but it’s a shame that all the new comers aren’t going to be able to learn anything.
This is classic, “Three years seems a bit much for me, but I don’t have the time to argue right now, so I’m picking a big enough figure that nobody should complain.”
You must have fallen out of your chair with joy, when you figured out you could put this graph together with this this type of spin, it really is masterful, but don’t you think it is little childish?
You know you only foolin the people who believe in your agenda anyway, so what’s the point? When can we get into the meat and potatoes of this debate?
Jimi, (and those newcomers reading this), we have been sorting through these figures for about four years, here on AB. We have juggled the “what ifs” and “who’s responsible’s” and the time before, after and during’s of each presidency, and the graphs above are still representative of the trend of R vs. D presidents, either from the Great Depression era, or from WWII onwards when pre-WWII figures are not available.
I don’t believe we’ve had a new objection to these figures in the last couple years.
Noni
Noni,
I don’t believe we’ve had a new objection to these figures in the last couple years.
You can go to the NBER and look at the start date and duration for all the recorded recessions since the 1800s. You also can match which president was in office when recession started. So the facts are not in question. Its their interpretation that are what should be debated. The presentation by the author seems to suggest that republicans are more likely to cause a recession because of bad policy. With the exception of hoover I doubt you can find a first rate economic historian that agrees with this interpretation of the data. If the author is not claiming causality that one has to question what his point is.
Jimi,
I’ll let you in on a secret. I picked 3 years on the dot for a reason. It pushed recessions for Ike, Nixon, Reagan and GW but left Carter untouched. In other words, I picked the amount of time that would make Republicans look best. I suspect you realize that and are just agravated that the graphs still look, er, inconvenient.
Noni,
I think your missing the point about what the actual complaint is.
The idea that economics can be judged and/or predicted based on Political Party is flawed, and I have always told Cactus that I was a believed, that he knows that, but pursues this tactic because the analysis of the data can be used in a fashion which favors that conclusion, but only on it’s face. Any indepth look or analysis begins to expose a flaw in this thinking, hence the reason Cactus plays these little “Graph Games,” and doesn’t ever get into who controls congress, or the actual policies that were the cause of the economic data.
In the ultimate conclusion (which typically has been implied), the premise is that, if you want a strong economy, you should vote Democratic-never Republican (but only for the President), and there are no serious people who beleive in this fashion, and as I said above, I do not believe Cactus himself believes that.
Cardiff,
I’ve had a series of posts on a whole host of topics. I happened to look at those topics by President. I realize that its not the way most economists look at things. But I find it hard to believe economists don’t think the President matters.
I imagine that on average, most economists who would have voted for most of, say, Reagan, Bush Sr., Bob Dole, or Bush Jr. in the past quarter century probably would not have voted for Mondale, Dukakis, Clinton, Gore, or Kerry. Conversely, economists who voted for most characters in the second group would have avoided voting for most characters in the first group? Why? People tend to vote for those presidents whose policies they think are best, not based on a coin toss.
Now, you cannot say – “I vote for group A because their policies are better than the policies of group B” and then turn around and state: “Well, it turns out that the difference in outcomes has no relationship to the fact that these two parties had different policies. ”
If the latter statement is true, then you might as well base your vote on a coin toss. If the former statement is true, then when series after series shows a discrepancy in performance, it makes no sense to turn around and claim its all a coincidence.
Jimi,
If you don’t think the President matters, do you base your vote on a coin toss?
Cactus,
I think you can do better than tossing a coin by analyzing each period, understanding what kind of policy was in place, and an analyzing trends in other countries to put what was happening in the United States in a global perspective. Eisenhower seemed to follow FDR’s policy, Nixon was a Keynesian, and Clinton mostly carried on Reagan’s economic policies as a new democrat. So today’s policy choices and party allignment does not seem to line up with the policies of past presidents. You really can’t say that Reagan had the same policy as Eisenhower and that Obama has the same policy as Clinton. Eisenhower was to the left of Reagan and Clinton was to the right of Obama. Therefore, I don’t see your boundaries very relevant to contemporary policy and political choice.
Cactus,
No these graphs mean nothing, you can selct any time period over which to analyze the data and it means nothing.
The answers as to “why” recesssions are showing the Republicans with poorer preformance are not being answered.
“The Republicans are big meanies,” doesn’t cut it!
Cactus,
“Yes,” I do agree that the party of the President does matter, but each situation just as each recession is different.
The flaw here is the assumption that Political Party Idelogy has not shifted over time. It’s not our Grandfather’s Democratic Party anymore, and conservatives are not represented anymore.
It takes a major swing to the left, in the public’s eye to bring conservatives back into the loop, which is beginning to happend now, because the Democrats have done such a good job hiding what they are really about.
Also, you front loaded the analysis. You selected the color based who was President when it started, what about the situation when the other party controls both houses, leaving the President hanging in the wind? By doing this you eliminated the effect the current Administrations had in the responisblity of making the situation worse, or better, or if they had any effect what so ever.
The point being, that the analysis isn’t telling me anything. If we look at the graph, basically your selling that a Republican takes responsiblity for causing the Great Depression, and then takes responsiblity for not fixing it even though he wasn’t in office the to fix it, and at the same token FDR gets a pass on whether or not any of the policies were good, bad, or indifferent to recovery. Also, with only a strict guidline of party affliation, we eliminate any analysis on whether a damaging policy falls in line with the typical position of that Party (i.e. Sometimes Demcrats act like Republicans and sometime Republicans act like Democrats, thus it’s the decision making that becomes the issue not whether they like Donkeys or Elephants)
That would be the same for the latest recession…just doesn’t seem like an honest way to move the debate forward.
Jimi,
I’ve had multiple posts trying to explain the why. I noted that there is one thing in common for all Rep admins going back to 1929 – they all cut the tax burden. Every one. And every Dem admin except Truman raised it. And no, if you look at things by Congress, you don’t see the same pattern.
So… Reps believe that tax cuts matter, fine. But then don’t say they don’t matter when they are correlated with poorer economic performance. (And yes, Truman was, by far, the worst performing Dem.)
Cardiff,
I go back to 1929 because the BEA has data that far back and only that far back.
And I’ve had multiple posts showing – as I noted above – that there is one common element among all Republicans – they all cut the tax burden. By contrast, every Dem except Truman, the poorest performing Pres, increased the tax burden.
If the tax burden matters, as Reps claim they do, and over a period of 82 years and all sorts of different conditions, every tax burden raiser but one outperformed every tax cutter but one (Carter slightly underperformed Reagan, the only exception to our rule, but Carter outperformed every other tax cutter, and Reagan underperformed every other tax raiser), then it kind of tells you something. For one, it tells you that cutting the tax burden doesn’t help, which means that the philosophy by which one of the parties governs is at best useless and at worst, dangerous.
Cactus,
What a minute, you just made another assumption without getting into any details.
“Reps believe that tax cuts matter, fine. But then don’t say they don’t matter when they are correlated with poorer economic performance.”
Your expecting us to take the leap of faith that the Public and Wall Street do not price in future adminstrations, and expect us to take the leap of faith that tax cuts have an end result in damaging economic performance. Your gonna need a bigger carrot before I’m ready to jump!
Cactus,
Clinton raised taxes initally and the economic indicators were strong, but it was not until the 1997 Tax Cuts which included the cut in Capital Gains, Implementation of the Roth IRA, and the increase in the estate tax exemption from $600,000 to $1 million, that the economy really took off and allowed Clinton to recieve credit for such a powerful economy, when it should have been slowing.
Jimi,
“Your expecting us to take the leap of faith that the Public and Wall Street do not price in future adminstrations, and expect us to take the leap of faith that tax cuts have an end result in damaging economic performance.”
I see. So Ike did poorly beginning in 1953 because everyone knew that JFK would come around a few years later and increase the tax burden. JFK (and LBJ) did well because the public anticipated that Nixon was going to come around later and set things right. But by the time Nixon took office, the public was already anticipating Carter. Maybe that makes sense to you, but I’m guessing that isn’t the story most people expect to hear. Also, why was Carter’s last year his worst, when people knew (by your story) that Reagan was just around the corner?
Jimi,
“but it was not until the 1997 Tax Cuts “
So you’re saying its really too bad that GW repealed the cap gains tax cut and raised income taxes in 2001, 2002, and 2003?
Cactus,
Nope…Not saying that at all.
But I am saying that you can’t punish behavior and expect that same behavior as a result. There is a time and a place at which raising taxes in certain areas makes sense, but the Theory that taxes hikes produce good economic results does not hold water.
I understand the way you can represent the data and results without having to manipulate it in any dis-honest way, that’s not the problem, but it’s the implied conclusions based on the Mile Wide – Milimeter Deep analysis that leaves a nasty taste in my mouth.
Cactus,
Ah…Not sure what you are saying here? Are you talking about the sunset? Are you refering to a particular income group?
Cardiff
i am not an economic historian but i can smell BS when it is served up to me. Clinton raised taxes in the face of 100% opposition from the Republicans. No doubt he was just being Reaganesque. The Republicans said the tax would kill the economy. Instead we had the eight best years in the last thirty. Of course that was all In Spite of the tax raise. It was really due to Reagan’s tax cuts ten years before.
This kind of “reasoning” makes me tired.
Cactus
it’s too bad you find yourself “arguing” with the likes of jimi and cardiff.
but i have a question for those who know more than i do. I can persuade myself that recessions are inevitable.. the consquences of “the business cycle” which has a certain physics analogy that appeals to me. But I could also persuade myself that how long a recession lasts could very likely depend on the government’s willingness to supply money for jobs and investments that the private sources are temporaritly unwilling or unable to provide. But, even more, I am persuaded that the government can lessen the suffering during a depression by direct aid, and those government sponsored jobs.
I’d be more interested in seeing that argument fleshed out, or refuted, than more of the red is a better color than blue. no it’s not. is too. not. is. stuff we are getting here.
hint, any appeals to grand theories don’t impress me at all. however nice the theory.
Cactus, Cardiff has voiced the most common concerns re: policy impacts. Unless and until you go that next step few but the believers and party ignoranti will consider the book meaningful.
Your facts are correct, your analysis is not supported by the facts. Correlation is not causation and causation is not a color/party. If you actually do believe that national economic performance revolves around tax policy, then you should be recommending changes to many Fed. agencies and departments, and to many other policies.
But you do not make those suggestions and therefore, I believe you are not committed to your conclusions.
BTW, one thing that strikes me is the similarity between the Great Depression and the Great Recession. Politically, controlling parties, economic policy, and depth and length all appear to be similar. So which policies were similar before (helped create them) and which polices are similar which helped deepen and extend them?
Coberly,
Clinton said the age of big government was over. I think that says it all and explains the success of his administration. Small government and dirt cheap energy is a good background for success. Clinton moved to the right and now Obama is trying to move us to the left. So my contrast between Clinton an Obama stands and you smell and BS posts marks you as a substandard poster.
CoRev,
All the democrats since the recession have been saying that now is not the time to raise taxes in the face of a recession or its weak recovery. I think they know that taxes are bad for economic growth and you need a fundamentally strong economy to support the increased burden of high taxes. In the 1980s we restructed our economy and made it much more efficient and this along with low energy prices allowed Clinton to raise taxes without driving the economy into recession. It worked for a while but then president Bush was correct to bring down taxes to successfully fight the recession in the economy he inherited.
Jimi,
This is 82 years worth of data. Its not that shallow. And when I use data other than the BEA produced GDP data, we get something similar. I believe the relationship starts breaking down in 1890 but the data really sucks back then.
And the conclusion I reached is that tax cuts aren’t helping at the level we’ve observed. I’ve been very clear in a number of posts… that doesn’t mean tax hikes are magic. Merely that when taxes are below some point (there’s a Laffer curve for growth), when you’re on the wrong side, raising taxes allows you to do things that lowering taxes does not. Also,m that when tax cuts come about dishonestly (through enforcement cuts rather than marginal rate cuts), its a sign that the administration in play also doesn’t care to enforce other laws… which is a problem.
My point… I’ve been at this for a lot of posts, and you continue to misunderstand what I am writing. I cannot repeat every point in every post. In my book, we put it all in one book, but even then, we cannot repeat everything in every chapter.
Cardiff,
I had a post a few weeks ago about where Obama has moved us so far. It doesn’t fit your narrative.
Second… among dems you’ve had big and small gov’t types. Ditto reps. The successful and unsuccesful types don’t divide up by size of gov’t. They divide up by tax burden.
CoRev,
“So which policies were similar before (helped create them) and which polices are similar which helped deepen and extend them?”
A decade worth of tax cuts is one thing that both had in common. Tax cuts then lead to other issues.
Cardiff,
There is some evidence that tax cuts have benefits in the short term, but they get outweighed once you’re more than 2 years past the event. (Again, multiple posts with data on this going back to 1929.) Thus… one can argue it makes sense to keep taxes low coming out of an economic mess.
I disagree, frankly. (Look at FDR’s response to the Great Depression.)
Cactus, so far i can decipher form yout comments that tax policy (in particular lower taxes), tax enforcement, and … matters for creating the conditions and increase the severity of depressions/recessions. If that is so please apply these policies to the past two. Both are assigned Red/GW responsibility.
Both events are universally described as caused by bursting economic bubbles. Are you saying that those bubbles were burst by (pick your best theory here).
I think you are having push back because these two events are really, really fresh in our minds, and the causal relationships you assign are far from obvious. Your mile wide and millimeter deep analysis is, however, intuitively obvious to those who are not true blue believers.
As I have said before, this blue administration is likely to be the exception that disproves your theories.
“Now, perhaps a recession that starts shortly after a president takes office is not entirely that President’s fault. Nor can you unambiguously blame someone who has already left office, as the former President might well have taken steps that might have avoided the recession had he not been in office.”
And, the steps of an incoming are also important. Tout le monde knew that the country was in recession in 1980, everyone except Ronald Reagan.
Jimi
what leaves the nasty taste is the pump handle you been sucking on.
really, the water comes out the other end.
Jimi,
You are conflating what you believe with reality. That fact that you believe something (something quite convenient to your political views, given what cactus has turned up) does not constrain others to believe it.
My own view was, before I became aware of the data, similar to yours. At some point, though, honest folk take new evidence into account. cactus is not the first to point out the consistency of adverse economic performance with Republican rule, though he is the most thorough. I also find the howling of useful idiots against the data to be somewhat compelling, in a negative way. If partisans hate the data so much, there must be something in them.
But nobody is constrained by my belief, either. What we are drawn here to consider is the facts, not partisan preference. Efforts to derail consideration of the fact, as noted above, are a bit counterproductive among those with open minds.
Kharris,
The typical game with the data has been “Here’s the data, I didn’t manipulate it, if you gotta a problem with the results, then your a partisian hater, if you don’t vote democrat in the next election your an idiot.”
The problem being here is lagging effects, historical events, and effects of variances in Political Party Ideology. When Cactus did some graphs in the past with lagging, he conformed to one strict lagging period, which in my opinion, was not realistic. I brought data including lagging effects that were different, and in my opinion, were much more realistic. The results showed big differences in the implied conclusion that Republican Presidents produce poorer economic performances.
Just displaying the data straight up without a strong analysis does not constitute reality, you can call it fact, but without looking at the data from every angle and determining why these are the results, you can’t truly draw any implied conclusion.
Ah, the “if we new what experts thought, we’d know they agree with me” ploy. Economic historians may believe any number of things, none of which are in evidence here. All that is in evidence is Cardiff’s assertion that they would not agree with things with which Cardiff disagrees. In reality, finding something like the weight of educated opinion on something like this would be quite hard, making Cardiff’s assertion a pretty safe one, if unsupportable.
We are also treated to the form of analysis that runs along the lines of “I like X (small government in Cardiff’s case), so X must be the reaon that the economy performed well.”
Funny how the “Democrats can’t make good policy” crowd (having ceased trying to argue that Republicans do make good policy) scoff at presentations of data which do not serve their purposes, and then come right back with assertions utterly unsupported by the data, but which make them happy. Makes you chuckle, until the start showing in in Congress.
Ah, analysis by insulting adjective. That’s the sign of a truly deep mind.
I have this rule of thumb about accepting the claims and analysis of a given individual – if the claim or analysis turns out to be exactly what I’d have expected before the fact, I assume that it is merely a narrow-minded repetition, and can be ignored. Here we have CoRev, repeating the “thin, shallow” routine, when cactus has looked at the actual data, instead of the Cato talking points, at great length. We have CoRev asking for story-telling analysis in place of data – same as always.
The day we see CoRev, or any of his fellow recitivists, write “ya know, there may be something to this data stuff,…here’s what I like about what cactus has shown”, I will applaud. As long as what we see is universal, propagandistic push-back, I’ll just make fun of ’em.
Jimi: “the Theory that taxes hikes produce good economic results does not hold water”
As a blanket statement, you’re correct that the Theory as stated is not necessarily true.
But for a moment, assume that there is a range of taxation and spending that is fairly optimum for a given country or type of country — a range that provides what’s necessary for the country’s economy to thrive.
I assume you believe that, and that that level is not zero — though you believe that level is lower than where we are now.
Putting aside for the moment whether the taxation and spending are allocated in the most efficient manner. That’s a totally different (and actually the more important and difficult) discussion. Assume those allocations are somewhere in the ball park.
Or even better: assume that given the allocations, there’s *still* gotta be an optimum range.
If taxation/spending are above or below this optimum range, the economy doesn’t perform as well.
Now let’s look at all the thriving, prosperous, technologically advanced, industrialized countries in the world, under the assumption that since they are the the ones that have succeeded over many decades, they are somewhere in/near that optimum range.
The U.S. taxes less than any of them, excepting Japan and (barely) Korea. We tax about 28%, while EU15 countries tax 30-50%, average about 40%. And economic growth over decades, EU15 versus U.S., has been the same:
http://www.asymptosis.com/europe-vs-us-who%e2%80%99s-winning.html
There is not a single thriving prosperous country of any size, anywhere in the world (excepting Japan) that taxes less than the U.S. Not one.
Given that fact, suggesting that lower taxes and spending would improve the economy smacks decidedly of utopianism. (“No-land”-ism.) And we know how utopian projects have turned out over the centuries and millennia.
While you may not agree, please acknowledge that it’s not crazy to suggest that U.S. taxation levels are teetering at the very lower limit of the optimum range at which a prosperous country like ours can operate or thrive.
If that is the case –especially if there are some threshold effects near the lower and upper bounds of the optimal range — then raising taxation levels to 30% or 32% of GDP — leaving us still as one of the lowest taxers — could significantly improve economic performance.
I believe this to be true, but what I’m mainly seeking here is for you to acknowledge that the evidence suggests it *could* be true. It’s not crazy, by any stretch of the imagination.
Meanwhile, of course, there’s all the difficult, messy, decades/centuries-long work of optimizing the taxation and spending regimes. Childish prescriptions for just making government smaller — as if, despite the evidence, it would miraculously solve all our problems without having to do all that messy work — are arguably just handy, and profoundly irresponsible, cognitive avoidance techniques.
Pubs/Dems/economists agree on a whole lot of the policy moves that would achieve greater efficiency: consumption and pigovian taxes, etc. The simplistic small-government fetish, and the inevitably resulting just-say-no strategies/tactics, actively prevent our political system from moving towards those policies. They make it politically impossible to do so.
Steve
http://asymptosis.com
KHarris,
Your dream may be possible, but it’s a two way street!
Much of the disagreement here is over unstated claims about changes versus levels.
We know that in the short term, especially during recessions, cutting taxes and increasing spending accelerates short-term growth. No duh.
We also know that over the long term, in modern, prosperous countries taxing between 28% and 50% of GDP, tax *level* has no significant correlation with growth. If there is a correlation, it’s slightly *positive.*
This is the unequivocal result of hundreds of econometric studies, analyzing the data in dozens of different ways.
http://www.asymptosis.com/small-government-spurs-growth-economists-say-no.html
Below that 28%-50% range, it’s the wild west. We have no idea, because there are no modern, prosperous countries to study that tax below that range.
OTOH, I believe we’ve gotten a strongly indicative taste n the last two years of what happens when you drop below that range for an extended period.
Steve,
“I believe this to be true, but what I’m mainly seeking here is for you to acknowledge that the evidence suggests it *could* be true. It’s not crazy, by any stretch of the imagination.”
Yes-I do believe that it “Could” be true,and as I have said before there are many cases when it is appropriate to raise taxes in certain areas, and certian income groups to keep up with the cyclical nature of an active & powerful economy. The problem many have is that at some point in the future, it is also necessary to lower those same taxes to keep up with the cyclical nature of an active & powerful economy, but this thinking has been demonized, and that’s what gets us to the heart of the debate.
Nobody is saying we don’t need Goverment and everybody understands that it’s Taxiation that is required to maintain that government. The debate is centered around the role of government and the size of government. What has become frustrating to many in this country is the need for more Taxiation/Spending to fulfill an Ideology, not just as regulatory measures to maintain a healthy economy.
kharris
while i agree with you, arguing with jimi is a bit like laughing at cripples. even when he is being “reasonable” he cannot see that he takes it once sentence at a time, and each sentence is informed by his ideology and not all of the sentences work together even to provide the “strong analysis” he calls for.
nevertheless, we all “conflate what we believe with reality.” it’s just the nature of human thought. we can, sometimes, with each other’s help, move a step forward in understanding reality, but after a dozen or hundred exchanges with jimi we learn to look elsewhere for that help.
kharris
yes. i used to console myself with the thought that Our Representatives in Congress were only saying stupid things because that’s what the people wanted to hear. then they started electing people who believed those things.
Steve,
“I assume you believe that, and that that level is not zero — though you believe that level is lower than where we are now.”
This is not correct, this exposes a real mis-understanding what the opposing view is really saying. The majority opposing view understands that you have to pay for what you spend. The issue has never really been how much we pay, it’s what are we buying….(i.e what is the value)?
It is a war of Ideologies not truth in analysis of Economics.
Collectivism vs. Individualism
Social Justice vs. Economic Freedom
The issues of taxes has been become a debate of fairness, not economics. Everybody knows the sunset is coming and we go back to pre-Bush levels of Taxiation, but everybody is asking why should we except the amount of reckless spending, that was not targeted properly in a Keyensian sense of recovery? Yes…I do agree with you the proper amount of Taxiation vs. Spending is very important, but that’s not what we have seen over the recent years.
Jimi
damn close to a rational statement. here is the problem i have with it.
basically that the “less taxes” cry is self serving and irresponsible. it gets people elected, and it makes the rich… who pay the taxes… happy in the short run and that is the only run they understand.
you could easily convince me that there is a lot of waste in government and that taxes could be lower. but i also know about waste in the private sector and that prices could be lower. the sad fact of human intelligence is that reducing this waste turns out to be a very hard job indeed. not helped by the people with the signs chanting “no to taxes.”
Taxes have been raised and lowered in my lifetime, not always in obvious response to the “cyclical nature of the economy.” I believe that taxes have a primary function… which is to pay for what we, as a community, need… and only a secondary function of trying to optimize the economy. I certainly believe that given the current deficits, income distribution, and state of the economy that a tax raise would do more good than harm.
I don’t think that we can have a productive debate about the ‘size of government” and the “optimum tax rate.” We could have a realistic debate about the details, keeping in the back of our minds our inchoate sense of the dangers of too big a government, or too much taxes, or even the limits of “welfare.” But it’s the details, not the grand theory, that drive the car on the road and not “to the right” or left of the road.
When you can’t win the arguement, drag your opponent into the mud so it doesn’t expose how dirty you are…Isn’t that right Coberly?
Steve,
Are you claiming that the current economic recession is based on not paying enough taxes?
coberly,
Patience comes to those who wait. I have several posts on recession in mind and a lot of questions I want to try to understand better.
CoRev,
“ If you actually do believe that national economic performance revolves around tax policy, then you should be recommending changes to many Fed. agencies and departments, and to many other policies.”
I do believe it. But there’s no point in recommending anything if nobody is going to listen. Its a long, slow process. I recall that two years ago, you were disputing the facts themselves. Eventually I will learn to make my case a bit better.
CoRev,
“Both events are universally described as caused by bursting economic bubbles. Are you saying that those bubbles were burst by (pick your best theory here). “
Nope. If anything, I’m noting that lack of enforcement may be creating the conditions that lead to failure. That is… the bubbles. Pricking of the bubbles – I have no theory about that.
“As I have said before, this blue administration is likely to be the exception that disproves your theories.”
Didn’t I just have a post a month or so back looking at Obama’s policies. I noted that in his first year, he cut the tax burden. That puts his first year in Rep turf. I’m guessing you don’t
Jimi,
Higher taxes are not the “cause” of faster economic growth. But when the tax burden is in the range its been in for the past eighty some odd years, higher taxes allow things to happen which are the precondition for growth. The closer we are to Denmark in the Ivory Coast to Denmark range of government responsibility, the better off we will be.
As to economic freedom… we’re all for it on the other side of the aisle too. Just less simplistic. Consider a post I wrote some time back, before we bought our house, my wife and I had to move… It seems that some gas drillers decided to excercise their economic freedom by drilling a couple of hundred feet from our living room. In the process, they exercised their freedom to run their equipment and not concern themselves with whether exhaust from their equipment filled our living room. I came home, found my wife and three cats puking in the fumes, and we upped and left.
That was us exercising our economic freedom to pay rent on two apartments at the same time (we weren’t about to wait for 30 notice to get out of there) and move at a very inconvenient time with no notice whatsoever. Apparently a few other people in the apartment complex exercised the same freedom, which in turn allowed the apartment owners (the drilling was not on their property) to exercise their economic freedom to lose money after people moved out. An efficient market outcome was enjoyed by all.
Cactus,
Sorry for the incident that occured to you, but a poor example of Economic Freedom. It does have a formal definition. One size does not fit all, America isn’t perfect and never will be, and life isn’t fair, but I do simpathize with your situation.
The moral of the story is that Republicans and Conservatives must not be demonized anymore just becuase they do not agree with the utopian view of Collectivism, or the view that the Big Government can solve our problems instead of relying on the historical tradition of rugged individualism. The opposing view to what Conservatives and some Republicans are saying must understand that it is not about eliminating Government or decreaseing taxes.
I know of not one single person who feels that they do not need to pay their fair share of taxes. I also know of not one single person who is unwilling to have an honest debate about increasing Taxes, the problem has alwasy been that the if we talk taxes, then we talk spending in the same conversation, and the opposing views just will not let that happend, and to many that exposes a real agenda driven mentality, instead of what is best for this great country.
jimi
i forgot you were listening. i don’t regard you as an opponent. on the other hand if you come to a debate you ought to be prepared to hear some opinions.
jimi
the majority almost never address the question of what taxes, when, on who. they “indulge in a war of ideologies not truth in analysis of economic” details.
you cannot logically go from, as i think you are saying here, the majority understands that you have to pay for what you spend.. the issue is what we are buying.. to “collectivism vs individualism.”
i would think that most of us “collectivists” prefer freedom and individualism up to the point where the injustice begins to stink and the individualism gets in the way of getting any work done.
i could agree with you about the reckless spending that was not well targeted… if i knew what you meant.
Jimi:
It appears the stats point to a particular conclusion. You can not change that no matter how much you manipulate the numbers, which Cactus has changed numerous time.
jimi
the thing about taxes punishing behavior
is that i pay taxes every year and yet i keep going to work.
cardiff
i am glad to see that you think what a politician says is more important than what he does.
Jimi,
What’s this collectivism thing? My philosophy is that growth is the best medicine if externalities ake kept in check.
Thus, I want a government that takes steps to prevent externalities and creates policies that lead to long term growth. (And btw… I think keeping externalities in check creates sustainable growth – letting someone ssphyxiate my wife, my cats, and me does not.) So did Abe Lincoln – after all, he said it first: “your right to swing your fist ends where my nose starts.” (I may have a word or two of the quote out of place, bt the sentiment is right.)
Jimi:
>Are you claiming that the current economic recession is based on not paying enough taxes?
I’m saying that for the last thrity years, based on the “government is always bad” mantra, we’ve underfunded government. I’m talking secular, *not cyclical.*
Look at the inflection point — 1981:
http://www.usgovernmentspending.com/downchart_gs.php?year=1930_2015&view=1&expand=&units=p&fy=fy11&chart=H0-fed&bar=0&stack=1&size=l&title=&state=US&color=c&local=s
The same idealogy — regulation is always bad — was a (the?) prime contributor to our current mess.
>the utopian view of Collectivism
I think I’ve demonstrated which side of the tax argument embraces a utopian view.
>It is a war of Ideologies not truth in analysis of Economics.
>Collectivism vs. Individualism
>Social Justice vs. Economic Freedom
Is this a *good* thing?
1. I agree that some on the left adopt these kind of quasi-religous, black-and-white positions. (I do not; argue with me, not them.) But they are *the* positions of the right. In lock step. Is this where you stand?
2. My whole point is that it *should* be about analysis of economics. And when it is, more progressive policies (not all, but in general) win the argument. We get more prosperity *and* more equality. A strong middle class, blah blah blah. Win-win, not either/or.
My whole point is that the religio-ideological warfare from the right prevents us from implmenting those kind of win-win policies. As soon as they’re proposed by dems/libs, policies that have been championed by the right become spawn of the devil. Not healthy.
Jimi
you say that talking about lowering taxes has been demonized. But you surely know that statement has it exactly backwards. People talk all the time about the purported benefits of lowering taxes–there are so many “think tanks” promoting lower taxes (and smaller government) as per se good that it is hard to list them all. Mainstream media spout the “taxes are bad for the economy” rhetoric as though it were God’s Truth. Those who talk about the need to raise taxes, or the need to recognize that we cannot have the public infrastructure and human capital development merited by our people without higher taxes, are the ones who are demonized.
Compared to the rest of the developed world, the US has fallen behind in education, transportation, national parks, health care and many other essential features of a good standard of living. ONe of the main reasons this has happened is that there has been a strong and well-financed group on the right pushing tax cuts as the cure-all for all problems (along with privatization, financialization, and militarization).
Why were the other 2 removed?
: )
Ponzi on all!
Wow no one could attack the stats!