On October 30,2019, Kian Malekanian writes on North 99:
By now we are all familiar with the usual economic talking points of right-wing politicians. They tell us, with the utmost confidence, that cutting taxes for the rich will incentivize investment and job creation. The lower the corporate tax rate the more people these benevolent corporations will employ. That, in a nutshell, is the mantra of conservative economics.
Abhijit Banerjee and Esther Duflo, this year’s winners of the Nobel prize for economics, beg to differ. Their work suggests that not only does this strategy intensify economic inequality, it also doesn’t do much to induce economic growth.
As Banerjee puts it, “You don’t boost growth by cutting taxes, you do that by giving money to people.” Modest increases to the taxes paid by the wealthiest could fund welfare programs that put more money into the pockets of average folks. They, in turn, return this money into the economy in the form of consumption. It is their spending which increases demand for goods and services and boosts investment, jobs, and overall growth.
Banerjee and Duflo’s advice flies in the face of right-wing economic policy. Conservatives, in Canada and abroad, are reducing taxes for corporations and wealthy elites in the hopes that they will invest some of the cash they are hoarding.
Take the United Conservative government in Alberta for instance. This year they announced plans to slash the corporate tax rate from 12 percent down to 8 percent. They call it the “Job Creation Tax Cut”. This year a 1% reduction was implemented, which did indeed cut costs for corporations and leave them with more cash on hand. Husky Energy which had benefited to the tune of $233 million from the tax cuts, then proceeded to lay off hundreds of workers. Far from creating employment, the “Job Creation Tax Cut” did nothing to save Albertan jobs from the chopping block.
Worst yet, the tax cuts resulted in a loss of government revenues. To offset these losses, the Conservative government in Alberta is gutting welfare programs that would have left more money in the hands of consumers. If Banerjee is even slightly correct, these changes will not only do little to attract investment and employment, they will have adverse effects on economic growth and inequality.
So, on one side we have a Nobel prize-winning economist that tells us to increase taxes and give more money to average folks who will spend it. On the other side, we have Conservatives like Jason Kenney that are decreasing welfare spending and giving more money to rich folks who are hoarding it. Take your pick. It’s not a hard choice.
Right wing neoliberal economics are the same economics that the Clintons and the establishment leadership fo the Democratic party support and have supported for the last 40 years.
And neoliberal economics are part of the 1% globalization scam that has helped the rich get richer by taking advantage of slave labor all over the world in countries where their leaders were willing to sell their people out.
Neoliberal economics is an out growth of a world view held by the 1% that ssys it’s perfectly OK to grab what ever you can grab–whether it is natural resources or labor of people. If you are successful, that just proves you deserved to get what you can take. If the others wanted it bad enough they would figure our how to grab more than their fair share as well. That is what these people believe.
Yes, this is a worl
