Just Another Day

"Any idiot can handle a crisis, it's day to day living that wears you out." - Chekhov

Saturday, January 08, 2005

Supply-side Bullshit

If he actually could argue from a logicl standpoint as regards economics then we might be able to listen to his arguments without spewing soda, very painfully I might add, through our nose. Larry Kudlow argues that the tax cuts are creating jobs and all the naysayers were wrong while praising Mankiw. If Kudlow would actually refer back to Econ 101, he might remember that economists, including Mankiw in his popular intro econ book, believe (based on actual observed data, by the way) that the effect of tax cuts on spending is short lived and then spending returns to their pre-tax levels. In other words, we should have seen the effect almost immediately after people started reaping the lower tax benefits. Of course, we know that those benefits were largely skewed towards those who need less than the rest of us so the effects of the tax cuts have been minimal. Actually, the rise in employment can be attributed more to economic optimism on the part of employers and the need to ramp up activity in the wake of smaller than average inventories to supply this optimism. Boy, won't we have fun when the optimism dies as the spendthrift, take-no-responsibility president drives the deficit up and sends that optimism into the ditch along with all of his ideas? Plus, much of the employment gained since 2003 can be attributed to workers filling in while our national guardsmen and women are being tooled off in the flight of fancy known as Iraq and to a massive increase in government payrolls. Also, Larry, regardless of what the Atlanta fed has said, the continuing need to maintain employment rates is 150,000 a month, or thereabouts, and one of the major reasons that labor-force participation is lower is that many people have given up. Forgot that little truth, din't you, you hack?