It’s been too long since we had a nice big bubble
A historian of the Depression points out that this “make the rich richer” approach to taxation has been tried before.
The crash followed a decade of Republican control of the federal government during which trickle-down policies, including massive tax cuts for the rich, produced the greatest concentration of income in the accounts of the richest 0.01 percent at any time between World War I and 2007 (when trickle-down economics, tax cuts for the hyper-rich, and deregulation again resulted in another economic collapse).
Yet the plain fact that the trickle-down approach has never worked leaves Republicans unfazed. The GOP has been singing from the Market-is-God hymnal for well over a century, telling us that deregulation, tax cuts for the rich, and the concentration of ever more wealth in the bloated accounts of the richest people will result in prosperity for the rest of us. The party is now trying to pass a scam that throws a few crumbs to the middle class (temporarily — millions of middle-class Americans will soon see a tax hike if the bill is enacted) while heaping benefits on the super-rich, multiplying the national debt and endangering the American economy.
Even though 2008 isn’t even (quite) a full decade ago. Remember 2008? When all the wheels came off?
In 1926, Calvin Coolidge’s treasury secretary, Andrew Mellon, one of the world’s richest men, pushed through a massive tax cut that would substantially contribute to the causes of the Great Depression. Republican Sen. George Norris of Nebraska said that Mellon himself would reap from the tax bill “a larger personal reduction [in taxes] than the aggregate of practically all the taxpayers in the state of Nebraska.”
Same now for Trump and the other richies. Same for Trump’s whole damn cabinet of richies.
A few months after he became president in 1981, Ronald Reagan praised Coolidge for cutting “taxes four times” and said “we had probably the greatest growth in prosperity that we’ve ever known.” Reagan said nothing about what happened to “Coolidge Prosperity” a few months after he left office.
Growth in prosperity! Followed by a plunge off a cliff into the deepest and longest depression in recent history. Sound like a bubble much?
When Bill Clinton proposed a modest increase in the top marginal tax rate in his 1993 budget, every Republican voted against it. Trickle-down economists proclaimed that it would lead to economic disaster. But the tax increase on the wealthy was followed by one of the greatest periods of prosperity in American history and resulted in a budget surplus. When the Republicans came back into power in 2001, the administration of George W. Bush pushed the opposite policies, which had invariably produced calamity in the past. Predictably, that happened again in 2008.
And now they’re determined to do it yet again.
It is a matter of faith among Republicans that any tax increase is bad, any tax reduction (for the wealthy) is good, and that the government cannot do anything right. Because it is an article of faith, they do not require proof that is works, and in fact, will believe harder the more it is demonstrated untrue.
The problem is, the rot is spreading. My millennial liberal friends all believe that garbage, too. They believe that tax cuts are going to stimulate the economy, and that there is literally nothing the government can do right. I had this discussion with a young friend of mine the other day (who, by the way, is a government employee, so he not only dissed me but himself, but didn’t realize it). I presented a number of cases of things the government can, and does, do better than private industry. He agreed, but…still insisted that the government does not do anything right.