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Agree.
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.
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