Powell Testimony House Financial Services

Wow!  What a day.

Powell did a good job of answering questions, unlike those who do a lot of talking to run down the clock.

Okay, The Phillips Curve doesn't mean what it did 50 years ago.  Back then, however, labor had more clout.

The one thing Robert Reich said that was halfway sensible was "If you want to stimulate the economy, give tax cuts to people who spend money."

That causes a problem with revenue.

The next solution is the old canard, the 93% tax rate that Reich propounded.  However, as his article extolled the virtues with full employment, factories humming, and everybody was happy, he omitted that when the tax rate was 93%

A Black man earned half of a White man's wage.

Women were kept "barefoot and pregnant."

Mexicans & Filipinos picked lettuce & grapes for pennies a day.

There was no EPA

We were rebuilding Europe after WWII.

This is a celebration of Racism, Sexism, Xenophobia, Pollution, and Imperialism.

Need I tell you where those revenues were spent? 

Now, this is no longer the age of JFK.  And I will address the remarks by President Kennedy to the New York Economics Club.

"In short, it is a paradoxical truth that tax rates are too high today and tax revenues are too low and the soundest way to raise the revenues in the long run is to cut the rates now."

Again, this is not 1962.

However, as the Republicans and the Democrats have opposite views on solving economic problems, I am compelled to say that "because this is Congress, it is not ironic that they are both wrong."

You can neither cut your way nor tax your way to prosperity.

Slim's Paradigm.

Capital Investment + Economic Stimulus = 
Economic Development + Growth.

Merkelism and the Economic Crisis of Europe proves spending cuts don't work.

President Kennedy, quoting Nikita Khrushchev on Russia surpassing the US in production proves that tax hikes don't work.

President Obama touted 
Creative, Innovative, High-Tech Entrepreneurs.

Entrepreneurship means capital investment and Economic Stimulus. Two factors absent among the poor.

I wrote the article

Tax Policy to Increase Wages $5 an Hour. Now!

To demonstrate how the important factor is to put money into the hands of people who work for a living.  However, this burdens business as the tax write-down does not prove to be a sufficient incentive.

The American Widget Company will not hire one single additional widget maker, until it has an order for one widget more that it can produce when operating at maximum capacity and optimal efficiency.

The explanation on how to make it work

The Multiplier Effect (Don't dare call it trickle down economics)

Increased government revenues (properly) are all included in the article.

There are three ways for the Government to raise revenue.

1.  Increase taxes
2.  Increase the number of tax payers
3.  Increase the wages of the tax payers.

Number three is best.

An illustration of The Multiplier Effect

There are other factors to consider that were raised at the hearing.

Michigan.

I think of Detroit and Battle Creek.

If Americans choose to buy foreign cars and stop eating cereal, Michigan is in trouble.  This is something the Fed cannot fix.

If Americans choose to move to the coast for the surf and the sand, and leave Iowa, this is something the Fed cannot fix.  Other efforts are necessary.

Closing the Gap


Remember, "Grow the Pie" is only a slogan. And a bad one.

If Archie Bunkers gets a promotion and a raise to a management job, he gets a bigger paycheck.  A bigger piece of the pie.  But he must take his suit to George Jefferson's Dry Cleaners.  George Jefferson also gets a paycheck.  However, he also makes a profit.  Why? Because he owns a piece of the bakery that bakes the pies.  Entrepreneur.  And he creates jobs.


Warmest regards,

Slim.

If you find anything here to be helpful, please don't hesitate to send me a really tricked out Mac Book and to tuck a few dollars into the envelope along with the thank you note. Slim.

Bob Asken
Box 33
Pen Argyl, PA 18072

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