This is one of those stats that’s sure to be both repeated and disbelieved, courtesy of Bill Clinton’s speech at the phenomenal DNC 2024 last night: since the end of the Cold War in 1989, the cumulative tally of job creation between the two parties is not even close: 50 to 1. Out of the 51 million jobs that have been created since then, about 50 million of them can be attributed to Democrats (under Clinton, Obama, and Biden who account for 97.4% of the total), and only 1 million to Republicans.
That is a pretty stark objective review of right-wing economic ideology. Which is billed, by the way, as “job creating” policy. Trickle down economics, supply side, Reaganomics, libertarian theory, Mudsill Theory — by whatever name you call it, the policy of giving massive tax cuts to the rich while cutting spending on the middle class is supposed to magically create great prosperity for all. Instead, the numbers show the exact opposite — prosperity is not trickling down. It is in fact being hoovered up.
Since 1989, the U.S. economy has created 50 million jobs. What's the score?
I hope to write more about the overall amazing, vibrant, and joyful atmosphere of the DNC this year — delivering not just the strongest support for Kamala Harris and Tim Walz possible, but bringing back the sense of hope and optimism from the Obama years in the most refreshing and much-needed way. But for now I’ll just say that the Democrats are driving home this economic message that has already been wildly successful under Joe Biden: when we invest in the middle class, the economy truly does grow for everybody.
When the middle class is strong, America is strong. It’s a lesson we learned in the post-war era of the 1950s but have drifted away from since the 1970s when corporate leaders and big business interests mounted a concerted effort to turn the tide against the New Deal value system that lifted us out of the Great Depression and the economic policy that ushered in that broad distribution of wealth in the U.S.
It feels like the fever is finally breaking. The decades of epic gaslighting fomented by the merchants of doubt may have reached the peak disinformation tolerance of the American people. Here’s hoping the real economic stories will now get told — and that Americans will go to the polls this November and cast their ballots accordingly.
At least, not according to what Republicans promised when they passed them. The Trump tax cuts didn’t work to grow the economy, increase revenues, alleviate the debt, or benefit ordinary Americans as alleged.
The Tax Cuts and Jobs Act (TCJA) was introduced by then-Speaker of the House (and fiscal hawk) Paul Ryan and signed into law by then-President Donald Trump on December 22, 2017. It permanently reduced the corporate tax rate from 35% to 21%, and lowered the overall tax for all brackets — seems fair, right? Except the wealthy walked away with 50 times the amount of tax benefit as the lower brackets.
Trump tax cuts add $1.5 trillion to the deficit
Not only did the tax cuts not raise revenue as promised — they became a liability on the balance sheet when almost immediately going into the red. The Joint Committee on Taxation (JCT) estimated the TCJA would add approximately $1.5 trillion to the federal deficit over 10 years, after accounting for any temporary growth effects. The national debt will rise to accommodate as we borrow money to make up the shortfall between earnings and expenditures.
The Trump tax cuts reduced federal tax revenue, with significant declines in corporate tax receipts (surprise, surprise!). They did the exact opposite of what they promised to do — leaving our economy in a more precarious position even before the pandemic hit.
Who benefited from Trump’s tax cuts?
Conservatives and right-wing economists claim that tax cuts will help ordinary people by raising wages. In reality, however, corporations instead used their tax windfalls to do other things: stock buybacks, dividends, and executive pay. In fact, this happens over and over again each cycle of empty promises from so-called “fiscal conservatives” who in large part know exactly what they do.
They seem to believe they are entitled to the lion’s share of America’s money (as they have been since at least Mudsill Theory in 1858 and even before) and by gum, nothing is going to stop them — not democracy, not a sense of decency, not a sense of institutional preservation as used to be the very core pillar of Conservatism. No longer. Now it’s a will to power and to plunder. It’s not so much trickle down as it is hoover up.
Reaganomics, Trickle down, Laffer curve, Supply-side economics — it’s all the same
The magical revenue-generating power of tax cuts has been long promised and never delivered by right-wing Republicans. Since the 1980s edition, Reaganomics — the economic “theory” drafted on the back of a cocktail napkin dubbed the Laffer Curve for the slightly drunken man who scribbled it — has moved immense amounts of wealth upwards into the hands and coffers of the 1% and 0.1% at the expense of the masses.
The argument is that rich people will take the extra billions in returned tax money and use it to innovate and grow the economy — except that never happens. And why would they? They don’t have to earn revenue the old-fashioned way, through free market competition — they can just sit back on their laurels, buy a Senator or two, and rake in a huge windfall every few years that a GOP officeholder is in the White House. It is rock solid orthodoxy for the right-wing now, that tax cuts are almost the only policy initiative they care about — along with a side of deregulation and the slashing of the social safety net.
We’ve seen this movie before. The rich guys take the money and run — in many ways literally, into the arms of tax-free havens like the Cayman Islands or Seychelles. They do not return it to the American economy — although they do inject it into American politics, to skew the playing field even further in their favor despite already extracting extraordinary privileges and benefits to themselves from all aspects of their coziness with the political elite and their direct capture of various institutions.
As LBJ once said:
“If you can convince the lowest white man he’s better than the best colored man, he won’t notice you’re picking his pocket. Hell, give him somebody to look down on, and he’ll empty his pockets for you.”
President Lyndon Baines Johnson, 1960
The economic elites are dividing us over race and religion, in order to pick our pockets. This is why we can’t have nice things. We should boot them out and have nice things.
Strong economic messages of the Keynesian buttressing of the middle class that is Bidenomics were everywhere in evidence at last night’s State of the Union address, Biden’s third since taking office in 2021. In SOTU 2024 he spoke about stabbing trickle-down economics in its gasping heart as a repeated failure to the American people. Instead of giving another $2 trillion tax cuts to billionaires, Biden wants to give back to the people who he says built America: the middle class.
The President delivered strong, sweeping language and vision reminiscent of LBJ’s Great Society and FDR‘s New Deal. He also delivered a heartwarming sense of unity and appeal to put down our bickering and get things done for the American people.
“We all come from somewhere — but we’re all Americans.”
This while lambasting the Republicans for scuttling the deal over the popular bipartisan immigration bill thanks to 11th hour interference from TFG (“my predecessor” as JRB called him). “This bill would save lives!” He is really effective at calling out the GOP‘s hypocrisy on border security with this delivery.
“We can fight about the border or we can fix the border. Send me a bill!”
He is taking full advantage of being the incumbent candidate here. He has the power and the track record to do all these things he is promising, and he’s telling the exact truth about the Republican obstructionism preventing the American people from having their government work for them.
I love that he calls out Trump in this speech, without naming names — almost a kind of Voldemort effect. He who must not be named — because giving him the dignity even of a name is more than he deserves.
He says that Trump and his cabal of anti-democratic political operatives have ancient ideas (hate, revenge, reactionary, etc.) — and that you can’t lead America with ancient ideas. In America, we look towards the future — relentlessly. Americans wants a president who will protect their rights — not take them away.
“I see a future… for all Americans!” he ends with, in a segment reminiscent of the great Martin Luther King’s “I Have a Dream” speech, with its clear vision of power and authority flowing from what is morally right and just, instead of what is corrupt and cronyish. It gave me hope for the future — that Americans will make the right choice, as we seem to have done under pressure, throughout our history. 🤞🏽
Some people like to argue that more economic inequality is a good thing, because it is a “natural” byproduct of capitalism in a world of “makers and takers,” “winners and losers,” “wolves and sheep,” [insert your favorite Manichaean metaphor here]. However, too much inequality is deleterious for both economics and politics — for with oligarchy comes the creep of fascism.
Those who amass exorbitant wealth often increasingly use a portion of their gains to capture politics. While the mythological premise of trickle-down economics is that we must not have progressive taxation, because giving more money to the already wealthy is the only way to spur economic investment and innovation and create jobs — in actual fact the majority of tax cut windfalls go to stock buybacks, offshore tax havens, regulatory capture, political lobbying, and campaign donations in the form of dark money (and regular money). All this is a runaway amplifying feedback loop that tilts the playing field further away from equal opportunity, social mobility, and democratic process — the original American Dream.
In the oligarchy, your vote doesn’t matter
Wealthy elites seek to preserve the power structures that have benefitted them, and keep them (and their descendants) in the ruling class. It is a slow recreation of the aristocratic societies of old Europe that we fought a bloody war of independence to separate ourselves from. Yet the erosion of civil values, public engagement, and collective will — largely as fomented by the conservative elite over the past 50 years in America — and the ascendancy of the myth of “rugged individualism” have conspired to create a perilous condition in which corruption operates so openly in today’s White House [2018] and Wall Street that democracy itself is in great danger. The creep of fascism is felt in the fell winds that blow.
Moreover, we have learned these lessons once, not quite a century ago, yet have forgotten them:
“Where there is a crisis, the ruling classes take refuge in fascism as a safeguard against the revolution of the proletariat… The bourgeoisie rules through demagoguery, which in practice means that prominent positions are filled by irresponsible people who commit follies in moments of decision.”
Regardless of whether or not you agree that slashing spending, fiscal austerity, balanced budgets, and a low federal deficit are good ideas, the fact remains that the Republican Party does not generally live up to its aims of expense reduction and small government.
As hard as it is to believe, there are still some people who think that Reagan cut the size of government, although Reagan was a big spender and laid the groundwork for the immense national debt we live with today.
Then there was Ol’ Dubya with his two disgraceful wars, TARP bailout, auto bailouts, fiscal stimulus, and tax cuts. Not to mention yanking the election out from under Al Gore’s popular win via a leg up from Florida governor brother Jeb.
Turns out, not even gridlock is a decent strategy for preventing escalating expenditures, under the theory that not getting anything done would prevent the government from growing. Apparently not:
Total gridlock is the worst outcome, where impact to the budget is concerned. Total Democratic control of the White House and Congress is the most fiscally responsible since the presidency of Richard Nixon. So the idea of Republican leanness is a fallacy whether you believe that’s a worthy goal or not — and there’s a lot of evidence to suggest the tide is turning toward a wider appreciation of John Maynard Keynes’ approach to sensible fiscal spending when there is unemployment (puts idle resources to work and reduces government welfare expense; gives people a sense of purpose; builds community), if it is accomplished by debt financing (i.e., issuing Treasury Bonds — allowing individuals, pension funds, and so on to invest in the United States as sort of national asset class) and is used to build goods and structures that benefit the public at large: infrastructure, research and development, public resources, public health services, job training, paid volunteer work, parks and public spaces, etc.
Keynesian and Classical theory have oft been at odds, but are better understood now as complements: in a healthy, roaring economy, government should take its boots off the throttle and avoid tipping over into the kind of speculatory gamesmanship that got us into hot water in 2007-8. But in a depression or recession, or when the economy is recovering sluggishly, it should be a goto solution to start thinking about where to apply government funds (i.e. our money!) to things that need doing anyway; services that invest in our economy’s greatest resource: its citizens; programs that position us for the future by having the luxury to think ahead boldly.
Although the economy has recovered nicely for some — especially those in higher tax brackets — it has clearly left a number of Americans behind. It’s only added to a trend that had already started in the 70s, when inequality began widening in the U.S. The populist white nationalist ire unleashed in the 2016 presidential election was something perhaps few saw coming, even though in hindsight the far right has been whipping their base into a frenzy for years — arguably since Reagan, if not with Nixon. That means there’s still a healthy place for government spending, especially in areas we already know we’re in sore need of a boost: roads and bridges, a public health care option, basic research, advanced manufacturing, the pivot to a renewable energy economy, to name a few. Luckily, that’s what Hillary Clinton wants to do:
Use the revenue from closing corporate loopholes and cracking down on tax inversions to invest in small business, long-term growth, R&D, advanced manufacturing, and job training
Manufacturing Renaissance Tax Credit: to help revitalize communities hit hardest by the collapse of manufacturing
Create an American Parks Trust Fund to invest in the country’s natural preserves
Restore and refresh more than 3000 city parks within 10 years
Create a new Water Innovation Lab and a Western Water Partnership to help manage our water challenges over the coming decades
Become the world’s clean energy superpower: install more than half a billion solar panels by the end of term 1; generate enough renewable energy to power every home in American within 10 years; create a grant and award-based Clean Energy Challenge with states, cities, and rural communities; Solar X-Prize; tax incentives for renewables; foster energy innovation
Help build the new tech economy on Main Street: create a lifelong learning system more geared towards 21st-century jobs; invest in STEM education; invest in science and tech R&D; help ensure benefits are flexible and travel with workers, not their employers; commit to 100% of households with broadband access by 2020; deploying the 5G wireless network; building free wi-fi infrastructure in punlic places and transport hubs; launch digital community projects to improve connectivity more affordably
Public health initiatives: substance abuse treatment and prevention; expand mental health services; services for autism spectrum disorder; reduction of co-pays and deductibles; reduce the cost of prescription drugs; double funding for community health centers
Expand the role of national service, both paid and volunteer, with expansions of programs like the Peace Corps, AmeriCorps, Habitat for Humanity, the Red Cross, and the creation of a National Service Reserve for millions of Americans to contribute volunteer time to local challenges in their own communities
#ImWithHer by the way: Her plan plans to finance itself by making wealthy individuals and corporations pay their fair share in taxes, and would not appreciably add to the deficit beyond any existing projections from the OMB;but here’s the best explainer I have found about why we should seriously loosen our collars over the national debt. There is no reason to pay it down; and indeed, it would be dangerous and deleterious to even try to, because we’d be starving the economy of the circulation it needs to keep operating and growing:💰money💰.
