Home > economics, General Comment, political-economy, politics > Still more thoughts on Barack’s economic plan…

Still more thoughts on Barack’s economic plan…


Marx called you a proletarian – from the Latin proles, “offspring”, according to the Wiki, which has this to say about you:

The proletariat (from Latin proles, “offspring”) is a term used to identify a lower social class; a member of such a class is proletarian. Originally it was identified as those people who had no wealth other than their sons. The term was initially used in a derogatory sense, until Karl Marx used it as a sociological term to refer to the working class.

Lord John Maynard Keynes never understood Karl’s preoccupation with your condition, since it was obvious to him you were not fit for polite company – and you smelled badly, too.

(Yes, poverty has a smell.)

Said Lord Keynes of Karl’s rather sick obsession:

“How can I accept the [Communist] doctrine, which sets up as its bible, above and beyond criticism, an obsolete textbook which I know not only to be scientifically erroneous but without interest or application to the modern world? How can I adopt a creed which, preferring the mud to the fish, exalts the boorish proletariat above the bourgeoisie and the intelligentsia, who with all their faults, are the quality of life and surely carry the seeds of all human achievement? Even if we need a religion, how can we find it in the turbid rubbish of the red bookshop? It is hard for an educated, decent, intelligent son of Western Europe to find his ideals here, unless he has first suffered some strange and horrid process of conversion which has changed all his values.”

(We think someone should have informed him that, despite his distaste for the mud, fish actually end up there sooner or later.)

Imagine educated, decent, intelligent sons of Western Europe fawning over the mud of society – which, of course, is ironic considering how Keynes’ theories are enjoying something of a revival, at least in part because Harvard University professor N. Gregory Mankiw rediscovered you in 2000 and brought you, once again, into the making of economic policy.

What Mankiw empirically determined is that you – besides being days, weeks, or, months from starvation with the loss of your job – hate tax increases.

Of course, everybody hates taxes, so in this you don’t differ from your wealthier “normal” consumer counterparts in society – the ones who currently live on plantations where slaves like Frederick Douglass were beaten for daring to be fish, not mud.

But, you – you just are the most peculiar kind of odd character: While everyone else in society hates it when government taxes their income, you hate it when government proposes to increase taxes on your wealthier, “Frederick-Douglass-beating,” counterparts, too!

Based on the empirical data, Mankiw observes:

Let’s suppose that spenders [Mankiw calls you a spender, as opposed to savers, who only spent their time beating Ol’ Fred] are in the majority and therefore control tax policy. They have to pay for an exogenous level of government spending g, which can either be a public good or a transfer payment. The choice this majority faces is how much to tax labor income and how much to tax capital income. In making this choice, the goal is to maximize after-tax wages. Thus, the spender majority ignores the welfare of the saver minority.

Mankiw finds, however, that even when you – a penniless uneducated fucking hillbilly – considers the implication of taxing the people who own the plantations where slaves like Frederick Douglass were beaten for wanting to lives life as a fish, not mud, you are against those taxes as well!

This is true even though we have been doing the optimal tax problem from the standpoint of the spenders, who hold no capital.

Why do spenders want to exempt capital income from taxation? The reason is that the supply of capital is highly elastic in this model: In the long run, it is infinitely elastic at rate D. When capital is taxed, the quantity falls, which in turn depresses the real wage. This effect is large enough to make any tax on capital income undesirable, even from the perspective of people who own no capital.

If we strip out the economist’s gibberish from Mankiw’s observation, even a penniless, uneducated fucking hillbilly like you can understand simple math:  The same people who can afford to buy the plantations where slaves like Frederick Douglass were beaten for wanting to live life as a fish, not mud, are also the people who own the national capital, i.e., the companies to which you rent yourself out in our modern form of slavery.

Living hand to mouth, you certainly can’t afford to pay more taxes; and, if taxes on Donald Rumsfeld go up he will simply move his capital offshore – taking your job in the process to China.

If Barack in his victory speech on November 4, 2008 acknowledged, “we cannot have a thriving Wall Street while Main Street suffers,” you understand all too clearly, that the essential condition for your existence is quite the opposite: Main Street must suffer, so that Wall Street can thrive.

Any less, and you starve – you have no bargaining power.

This presents a dilemma for Barack: As a progressive, he has so many wonderful things he thinks Washington should do for you  – national health care, green technology, create 3 million jobs, stimulate the economy, divide the Red Sea…No, that would be Moses!

But, getting his hands on the revenues required to realize all those wonderful thing ain’t gonna happen – if he raises your taxes, he can kiss his new job goodbye; if he raises Donald Rumsfeld’s taxes, he can kiss your job goodbye, along with the taxes you pay and Donald pays as well.

So, today – Sunday – Barack will be methodically walked back on all his promises to bring real change to Washington, guided by the steady hand of that political whore George Stephanopolous, host of ABC’s This Week.

This will be followed by a gloating session, hosted by George, with three grinning white guys, and a sulking African-American woman brought in for balance.

But, there is one thing Barack won’t be walked back on: stealing more of the world’s resources through deficit spending to fund the American empire’s military machine – including the newest complement to that machine: the crew of the USS George H. W. Bush – all of which which will be sold to you under the banner: stimulating growth.

[NOTE: According to our records, the Rumsfeld family, having immigrated from Germany in 1876, never had the opportunity to beat Frederick Douglass for wanting to live life as a fish, not mud. This glaring hole in the family resume, however, was recently filled by Donald, who, having acquired Afghanistan and Iraq, immediately set about beating Afghanis and Iraqis for wanting to live life as fish, not mud. So, it appears entirely appropriate for him to be living on the plantation where Frederick Douglass was beaten for wanting to live life as a fish, not mud – he earned that right the old fashion way.]

[The authors hope this clears that up for you]

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