Economic Policy Tutorial for the Presidential Campaign

There are basically two economic GOALS: more efficiency and more equity. There is a looming, binding, long-term CONSTRAINT, as well: sustainability. All three trade-off against one another (e.g., more equity is sometimes less efficient) but sustainability constraints must be obeyed or you destroy the ecosystem and/or natural resources needed to survive.

Economic policy must be evaluated against all three:
1. How well does it improve efficiency (what we get out of the resources we are free to use without creating an environmental debt that cannot be paid back)?
2. What impact does it have on equity?
3. Does such behavior keep us alive in the long-term or does it threaten to destroy the system or the environment (or both)?

There is a lot of chatter about economic policy that is nonsensical and/or deceptive.

For instance, there is talk of the US being a highly taxed economy. That's an outright lie. Neither businesses nor individuals are highly taxed in the US relative to civilized economies.

There is also deceitful chatter about how lowering corporate PROFIT taxes would improve economic activity. The logic is distorted and misleading. The maximization of profit leads to the same economic activity with higher or lower corporate taxes, with a few technical exceptions (and they have to do with businesses alternative investment opportunities -- which are actually too low in this milieu to be interesting to them). Do we want more jobs? Incentivize the creation of them by subsidizing new employment. Do we want more investment? Incentivize investments by making the net cost of investment even lower (interest rates are at an all time low, so this would require some form of subsidization). Do we want more domestic employment and investment? Again, subsidize such activity or penalize overseas investment and employment. There is no good argument for lowering corporate profit taxes -- taxes already close to a post-WW2 LOW and profits close to a WW2 HIGH-- as it is. This is simply one more plutocrat or lobbyist or demagogue fooling the trumpets into thinking we are not a pro-business nation -- a mantra that is simply untrue.

There is sometimes chatter about making the tax rates simpler by making them FLATTER. This has the potential to vastly DECREASE equity -- taking from the poor and giving to the wealthy -- and REDUCING overall economic activity at the same time, as the marginal rate of consumption is higher in the lower income brackets. Simpler may be good -- the complexity is inefficient and unfair -- flatter is NOT. It's lose-lose.

Listen to a candidate who says he wants a SIMPLER tax code -- that's win-lose (simpler is good but we lose the capacity to incentivize some important stuff -- like home ownership), but walk when he starts to talk about a FLATTER (regressive) tax code.

This leads some true haters to propose a CONSUMPTION tax. This is a way of both crushing the poor (who spend virtually all their income on the goods and services they need to survive) and further dampening aggregate demand -- and thus hurting economic activity, as well. A consumption tax is a massive lose-lose proposition. It is for those who never read Dickens and secretly like the idea of people starving in the streets, locked up in poor houses, and orphans begging for a second bowl of porridge.

With the exception of Sanders (and Reich on the outside looking in) we hear far too little about what must be done to even put a small dent in the monstrous raping of the 99%. The top 0.1% are in charge and are the recipients of virtually all the gains of our productivity (efficiency) growth for four decades. The rest of the top 1% are their foot soldiers, picking up some scraps. The bottom 90% have been done grave harm for decades. This is grossly inequitable, has caused massive tragedies, personal and community, and terrible inefficiencies, as well. A massive redistribution of income and wealth would be very, very likely to undo only a tiny % of the damage done by the levels of expropriation that have occurred since 1980. Political discourse -- even the most radical of it -- rarely even broaches the truth, as it is so extreme. Were we to undo the expropriation of the 99% that has taken place, we would have to dismantle the entire American system. Few want revolution. So most of us (the clear headed and fair minded and timorous among us) are willing to discuss much smaller compensations. But all economic policy offered by candidates should be assessed against this standard: how far are they willing to go to make this system more equitable? The kids are at the table and one kid has 99 cupcakes and the other 99 kids have one cupcake each. If a candidate thinks the kid with 99 cupcakes needs more cupcakes -- walk. If a candidate says everyone deserves a few crumbs more -- listen.

But remember that the perfect is the enemy of the good -- if you demand that every kid gets two cupcakes, no more and no less, you might get nothing.

Further, because of explicit racism over centuries and inadvertent racist impacts of the past four decades, African Americans are in trouble. Globalization has (intentionally and inadvertently) done grave harm to union workers, and Blacks had found a home in unions that gave them some insulation against outright discrimination. Globalization since the 70s has thus hurt all working men and women, but Blacks were hurt disproportionately more. Further, the financial crisis of 2007+ has caused an enormous loss of home equity -- and this loss has destroyed the vast majority of the assets of African American families. Many were hurt, but Black folks were disproportionately hurt and hurt as a much higher % of their savings and retirement money. As well, massive dislocations of urban economies has led to massive unemployment for young urban dwellers, with Blacks hurt more once again. If a candidate is not willing to offer some compensation and some plan for making good on what has been taken over and over again from the Black community (and are both clear headed and fair minded -- and do not want a revolution), walk.

Perhaps the second most threatening force in the modern American milieu is the militarization of the police. With the fall of the Soviet Union, the military needed "work" and the wrong element in government (those who call themselves "Law and Order" but are, and have always been, "Order without Law") employed them to help arm and train a civilian police force to become a standing army, just the sort of force the Founding Fathers warned us about repeatedly, and tried to protect us from in the Bill of Rights. A confluence of a few horrifying American cultural and political trends -- the white supremacist desire for a replacement for Jim Crow, the infiltration of police forces around the country by the KKK, a protective loyalist culture among police that got transformed from loyalty to one's brother (a good thing) into something insidious (most become acculturated into a culture of lying to protect murderers among their ranks behind the thin blue line), the Pentagon off-loading billions of dollars of insanely destructive war materiel onto local-yokel police departments, the massive growth in the equipping and training of SWAT teams, the vastly distorted and pernicious and racialized War on Drugs that gave these crazies an excuse to go to war against the people they were supposed to "serve and protect," and a for-profit prison complex -- and we find ourselves living in a dystopian nightmare in which Americans, many Black, must live in fear that if they are stopped for a traffic incident they could end up dead. Any candidate who does not address this (expect even the bravest to mumble in craven ways about how much police lives matter, for the American culture now makes that the opening prayer on this matter) must be rejected by fair minded and decent people.

Finally -- and for some of us this may be the good news -- we are threatening ourselves with extinction. That is, we just may admit, at least accidentally, that "we are the virus" and kill ourselves off. The planet (not this biosphere, but something hotter and drier) will survive without us -- and billions of sentient beings will be freed from the terrible suffering we inflict on them and each other. But, if you still cling to hope, then you must demand that your candidate say just what he or she thinks of climate change, the Paris Accords, and just how we are going to massively re-incentivize the economy to invest in and employ sustainable technologies and set aside the brutally destructive oil economy that is cooking us like a batch of boiled eggs. Surely, no personal vendetta against a candidate can free any fair minded and decent person from the moral obligation to vote for someone who is willing to at least stem the tide of global warming long enough for our children and perhaps grandchildren to live out their lives before humans enter the parched, dystopian future that is our destiny.