Re: The long and short of it

[Tom Walker]

Au contraire, Arthur. I suspect that Reich is finessing the structural implications of his proposal precisely because he is aware that the conventional wisdom is not interested. The conventional wisdom is interested in stimulating demand, so that's how Reich has packaged it. The pitfall here is that it leaves the "general" proposal open to being hi-jacked and made over into an across-the-board cut in payroll tax rates. For the most part, the natural constituency for progressive taxation doesn't even know what the game is or how to play it. By contrast it's the only game in town to the constituency for regressive taxation.     Arthur Cordell wrote, The article notes the problem as:   The problem after the late-90's boom and subsequent collapse is that there aren't nearly enough buyers for all the goods and services the economy can produce. Businesses have cut their capital spending because corporate profits have fallen. And with disappearing profits, businesses can't give their employees pay increases and benefit packages. Instead, they have to cut wages and health-care benefits. And they aren't in any position to add more jobs. Such businesses also don't buy more components and equipment and they don't rent more space. They stop investing. Eventually profits of their suppliers begin to disappear, too, as do suppliers' payrolls. And Reich offers a conventional solution.  OK.  An industrial age solution to an industrial age economy.  An article that could have been written in the 50's, 60's etc.  Nothing new. I think that Reich could do better.  He is not "living up to his potential"  His article says nothing about the "new" economy.  About what happens when an economy moves from producting tangible goods to intangibles....etc. etc. etc.