Econ4 has released the first video in its series, The Bottom Line. This offering debunks the propaganda that tax cuts for the wealthy create jobs. In fact, it show the reverse is true, that tax breaks for the rich lead to concentrations of wealth at the top, which lowers economic growth.
This segment is addressed to a generalist audience and I hope you circulate it widely.
This video is part of Econ4’s effort to promote economics that is both more empirical and more oriented towards sustainability and fairness. To learn more about Econ4, please visit its site.
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Yves,
Haven’t looked at the video yet, though am eager to check it out. I have some people in mind who could use the education, (if they’d just unplug their ears). But poked it mainly to make sure you hadn’t blown away. I’m glad you’re okay, it looks like NYC got hit pretty hard. I hope you are staying warm and safe inside. Similar sentiments to any others hit by the storm.
The spring of 2004, I moved to Northeast FL. I asked my sister how often they got hurricanes there. She reassured me they DIDN’T get hurricanes in that part of FL (we grew up in S. FL), had an explanation involving the geography of St. Augustine made it virtually impossible. That summer we had 3 (three) hurricanes. Summer in FL with no AC. Aargggh. I moved in with same sister whose husband had a generator that could have powered the local hospital, and fuel preferred delivery status. Like the hurricanes, I told her I wasn’t really there, she was just imagining it.
Unless you enjoy camping type accomodations, if you know any similar individuals, you might want to accept any invitations extended.
The sins of Big Finance hath wrought this storm.
I have mixed feelings about the video.
While I agree that we need to start conversations about alternatives to what is being shoved down our throat, I don’t see how this shotgun approach to stimulate discussion works in the real world of Joe6pak. I saw the Joe6pak take away from the video as the government needs to stimulate demand and create jobs related to new and existing infrastructure…and tax the rich to do so. To me this is a simplistic band aid approach to structural socio-economic problems.
All public and private investment policy is being made by the global inherited rich at this time. Until that public control is eliminated along with private ownership of accumulated property and wealth via ongoing inheritance that power structure stays the same……only the lipstick on this pig of social organization changes color.
Show me a video that talks about nationalizing the Fed and I will get excited.
I applaud the effort and agree with the ideas put forth, but this video is not well done.
Mary Bess: It’d be great if you suggested some specific improvements.
For starters the video should contain some economics stated as cause and effect rather than an endless series of statements. It would also be great if it quite repeating the endless myth that spending creates jobs and drives economic growth. Yes I know that some people feel spending will help get the US out of recession. But the reality is that long term economic growth is built on innovation, specialization and trade. Too many people keep repeating nonsense. Statements like “if only businesses paid employees more the economy would grow. ” wages are not set by corporations. They are determined by markets and the path to higher wages is increasing your skills and abilities.
The video also once again depicts the economy as a fixed pie with the assumption that if you get more I get less. The entire industrial revolution has destroyed this myth.
Push for short term government spending if you feel it is the best action to take, but don’t spread economic nonsense in the process. Longer term this country needs to start building human capital if wages for the lower 70% are going to start to grow at a faster rate.
A quicker path to a good job or economic security is to inherit a great deal of wealth, or have a father or mother that’s a senator, congressman, a well connected business executive, or a member of an exclusive country club.
Let’s face it, the world doesn’t offer a level playing field and never will. That’s why a democratic people rely on a government, to make sure that economic opportunity doesn’t become too skewed toward a certain class(and granted they are not doing a very good job at the present).
Government spending does create growth. The fact that you suggest otherwise says you’ve been brainwashed. Every time the US has tried running a surplus, a recession has resulted. for starters. Great Britain had a very high debt to GDP ratio (this before our modern financial “deepening” so it was even more significant relative to extant financial markets) during the period of England’s greatest industrial growth. Victor Shih has done granular work on China, and says similarly their government debt to GDP ratio is very high for a developing economy, more like that of an advanced economy (62%).
I can’t really comment how well the “content” is of the video…..
The “reception” was/is terrible!
Mary Bess, I agree that this video doesn’t sell well.
We have been steeped in propaganda for a very long time, that the government spends more than it takes in and we must tighten our belts and get serious about balancing the US budget before we go broke, or China slaps us silly, or something like that. Even our “Kenyan, democrat-party, socialist, deficit-exploding” president realizes that it is time we get serious and “tighten our belts”. He says something like that in the video.
During the Presidential debates, at least one moderator framed some questions from a starting point that implied this point of view was an established reality, and what are you going to do about it. (That made me turn the TV off so I didn’t get any more BS spewed on me, or throw something at the TV, hurting my actually constrained personal budget.)
So a bit of counter propaganda to try to balance the “austerity, because we have a problem with the ‘deficit'”, is a good thing. But it has a lot of prior BS to push aside. An up-hill battle.
This video doesn’t sell the story well. It has several problems…
First, it doesn’t flow well with a plot that makes it clear what is the “bad story” and what is the “good story”.
Then, the good side is presented mostly by a group of “talking heads”, but unfortunately, the lighting on all of them makes them look harsh, strange, and unappealing. I wanted to turn away. The “bad guys” looked much better at the first-impression visual level than our team.
And there is a background sound track with a rhythm that didn’t seem to match the story being told. It made me uncomfortable.
I sympathized with the subject and I wanted to like the video, but it kinda creeped me out. Sorry. Not something I’d feel good about linking to people I want to sway.
This video just summed up one of the many reasons I’m voting Green this year.
They are the only political party willing to wrestle with these difficult issues with the gravity they require.
Bill Clinton already proved that raising taxes creates a healthy vibrant economy.
The video makes obvious points about how a real economy works. It seems that many industries do not have demand to support hiring and, yet everybody claims that the US does not have the proper skill set and we need training with Government support. This crap about overqualified for job, not trained enough, lacking skill set etc. is plain outright bullcrap. It only serves those running companies as cover for their own incompetence. says nothing about HR departments that are useless in many areas. Point is – we have a demand problem created by the great theft and grand illusion of the plutocrats. Tax the ill gotten gains back into productive investments in the real production and consumption economy.
As far as skill – I have not known, in my lifetime of work, of anyone who lacked the ability to rapidly accumulate necessary skill sets while on the job. However, most times, management has been too above the fray to give a damn about producing, teaching, participating in anything but hiding their own asses through mis-applied metrics and laziness – even they are redeemable if given leaders (for the most part even more self serving) who encourage practices that benefit long term growth and innovation within the company as opposed to the short sighted grab-the-money-and-run mentality prevalent among the self-anointed ones.
As Simon Patten, the first economics professor at the nation’s first business school (the Wharton School) explained, public infrastructure investment is a “fourth factor of production.” It takes its return not in the form of profits, but in the degree to which it lowers the economy’s cost of doing business and living. Public investment does not need to generate profits or pay high salaries, bonuses and stock options, or operate via offshore banking centers.
Of course, corporations privitise profits and socialize the costs of production. Education and skills are a cost to be passed onto the public at all cost. Ah the fallacies of capitalism go on and on, and are preached like religion to the masses as gospel fact.
When the name of the game is sheering sheeple, it only makes sense that green pastures make for happy sheeple which leads to more wool to sheer.
I have no problem with this video. It is good information. I think it might be nice to clarify what kind of demand we want to create and in my opinion, an the opinion of all my friends, it should demand for the least destructive and most sustainable products. And it should be things that last and can be repaired. That makes the economy we have been living in – an economy manufacturing planned obsolescense doo-dads, a goner.
And two things impressed me: 1. the long list of economists who are coming together on this Econ4.org site; and 2. the manifesto wherein I found my pet idea to create what they are calling a new construction and conservation corps. i think the best resource we have will be utilizing the unused capacity of the military – put it to work to jump start this revolution to clean, heal and protect the planet while we create jobs and new useful products.
The bad political harmony these days about cutting taxes and cutting spending is a threat to America; it is a threat to our vital national interests.
I just wish that the video had been a little clearer/more direct on the point that the US gov’t. DOES NOT face a budget constraint; that unlike a household, the US gov’t, to quote Geenspan, faces a, “0% chance of default.”
To my mind, this is the one message that has to be driven home to people before we can start talking real sense about the macro economy: the fact that comparing the US budget with a household budget is totally illegitimate.
Also, I think there could be a bit of emphasis on the fact that public sector employment could include not just “one off” infrastructure projects or repairs, but also continuing human services, e.g. visiting and helping elderly folks, tutoring k-12 students, being a “big brother” or “big sister;” that kind of thing.
But on the whole I applaud the effort. It is at least moving in the right direction. Thanks for taking the time to make it.
This video goes fine with Nick Hanauers talk on TED talks : http://www.youtube.com/watch?v=bBx2Y5HhplI
I found the video a disappointing repetition of partial truths (maybe having a monopoly game example would help to provide more structure and context?). But that seems to be the state of economics: everyone has gotten hold of some part of the truth and is pulling…
Let me join the fray.
1. Unbridled credit creation generated excessive demand. Demand must ultimately be met by the environment (contra Stiglitz/Solow). It takes so long for an apple to form and ripen irrespective of the demand out there. Inflating demand with debt does not cure this despite Monsanto’s best efforts at engineering. Eventually the excessive demands need to contract to bring them back in line with what the environment can offer and on the time scales in which the offering occurs. Reflating inappropriate demand by having the government step in is ultimately counterproductive. I acknowledge the tragedy of unemployment as much as the tragedy of gangrenous limb amputation.
2. Without fixing the system, deficit spending will simply further enrich the wealthy because that is how the system currently functions. Consequently, the benefit to society will be short-lived unless deficit spending becomes permanent (having the rich get richer but keeping the poor in jobs). Permanent deficit spending will ruin the environment as per #1 above.
3. Given that the US government does not face a budget constraint, the solution to economic woes is simple. States should secede. Then they would not have budget constraints. Thereafter, counties should secede to dispense with their budget constraints. Municipalities are to follow – what works for the hen works for the rooster. Then, finally, households could secede, and voila, they too will be free of budget constraints. In other words, IMO, this notion that the USG does not face budget constraints is a fallacy.
In the end it all boils down to false absolutes…