Newspapers Across the Land

October 24th, 2011 at 7:39 am

Yours truly in the NYT this AM, on small biz—I think I’ve got a pretty balanced view of the issue but not sure NFIB will agree.

Also, on the road today, and while my stodgy penchant is to pick up the NYT and WaPo when I’m out of town, a wise person once told me that when you’re on the road, read the local paper.  So that’s what I do and I’m glad I did, because I like the St. Petersburg Times.  Check out this sensible editorial.

Ironically, on the next page was an oped from the WaPo by Robert Samuelson touting this deeply annoying theme of a pox on both houses for our fiscal problems.  Bush, Clinton, Obama—all bad.

I’m not saying they’ve all been pillars of fiscal rectitude but come on, Bob.  Clinton raised taxes, progressively, I might add, and achieved a surplus (that was “good luck” according to RS)!  President Obama has done precisely what you keep badgering him to do: proposed significant cuts—over $300 billion—in entitlements (Mcare and Mcaid).  I get that this doesn’t go far enough for you, but seems worthy of mention, no??

The primary drivers of our structural deficits at this point are the Bush tax cuts, the fact that revenues are off the R’s table, and longer term pressures from the health care costs.  If you’re writing about fiscal challenges and you’re not writing about those challenges, I’m not sure what you’re up to.


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9 comments in reply to "Newspapers Across the Land"

  1. Bearpaw says:

    The fact that the US invaded and occupied two countries might’ve been a contributing factor too, maybe, especially since the costs were simply dumped onto the national credit card.

  2. Ken says:

    Nice work in getting people to re-examine the small business meme. Unfortunately, you are fighting an uphill battle versus a general consensus that small business is the best case for the U.S (of course, that is exactly why it is critical that you are taking on those widely held beliefs).

    Perhaps the reason why small business iniatives may have been a good focus in the past is because individual marketplaces were awash with various brands from all company sizes. However, it seems that the larger brands have become so much more sophisticated than the mid and small businesses that the local guys can’t strategize (and perform all the functions associated with materializing a strategy) effectively enough to compete.

    That said, all the more reason for the green and locally grown economies to hopefully flourish in the not-so-distant future. It’s almost as if we need the inefficiencies of the “old normal” to re-emerge to get employment back to an acceptable level. Middle men are disappearing, and while it is good from an efficiency standpoint (and a corporate profit standpoint, considering the MSRPs do not seem to be dropping) I don’t see how it can help with U.S. employment levels.

    All this said, this quote will never be heard on the stump.. “Let’s be more inefficient!”

  3. Michael says:

    Um, you read the WaPo? Do you watch Fox News, too?

  4. Peter K. says:

    Gavyn Davies has an article in yesterday’s Financial Times titled “Great Recession may cost US economy $5,900 billions.” Could have been much worse but for the policies Obama enacted over Republican objections. B

  5. John says:

    I am surprised by your statistics which can be easily checked using Table 758 (2008 data) from US Statistical Abstracts 2011.

    That table shows that 20.4% of employees are employed by companies with more than 500 employees and that doesn’t include the people in the single person companies.

    It also shows that only 26.7% of payroll goes to companies with more than 500 employees.

    Not sure what tables you used; maybe there are other tables lying around.

  6. Martin Weil says:

    Great to see you and Krugman on the same editorial page, hope it happens more often and in other newspapers!

  7. perplexed says:

    Great job setting the record straight on not just the real impact of small businesses on jobs, but the real story behind NFIB efforts as well!

    You point out that “The primary drivers of our structural deficits at this point are the Bush tax cuts…” It appears from comments on other posts here that many people still don’t understand that these, combined with other tax cuts overt the last 30 years, are the primary drivers behind our enormous wealth and income concentration that is imposing such a drag on our economy at this critical time as well We could continue this debate forever as the unemployed & impoverished languish in their misery or we could take a different tack all together.


    Millions of people are out of work, the wealth of the middle class of country has been destroyed, and our government has been effectively neutered to eliminate any real possibility of solving the problem, so the unemployed are forced to wait and watch the problem try to solve itself while our poverty rate continues to increase to unprecedented levels. Maybe its time we recognized that we are in a set of circumstances that is truly unique and that we should make every effort to seize this rare opportunity to resolve these economic questions that prevent us from taking the action we need to in order to solve these problems.

    Economists often complain about the lack of “natural experiments” that are available to provide sufficient, compelling evidence of the ability of certain theories to accurately describe the economy and yet, when we are presented with an opportunity that is almost too good to be true and rarely exists in history, no economists even bring it up. Its not very often that a democratic republic is in a liquidity trap and has the wealth and income concentration of a banana republic or third world country as we do here in the U.S. today. These circumstances are typically found only in autocracies, monarchies, or totalitarian regimes of some kind where it is impossible to implement type of experiments that could lead to our greater understanding of how the economy operates. We have these conditions today in a supposedly democratic republic; a rare occurrence indeed. We are thus in a position to learn a great deal about the operation of our economy to the benefit not only of ourselves, but to successive generations that would be spared similar disasters of inaction in the years to come. Let’s resolve the freshwater/saltwater debates and put the zombies to rest; permanently.

    As Keynes advised: “Increase the propensity to consume by any means necessary…” If what Keynes was saying about managing the “marginal propensities to consume” to grow the economy and reduce the negative wealth and income concentration side effects of a capitalist system are correct, then a substantial wealth tax on the wealthiest individuals, distributed to those we know have the highest marginal propensity to consume, would resolve our current crisis and put us back on the road to the kind of growth we need to resolve our longer term health care and debt problems. If Keynes was right, hundreds of millions of people would benefit in the U.S. alone (not to mention others around the world and future generations that would be spared the gridlock these argument provide), while those paying most of the tax would likely fit in singe college football stadium and still be incredibly wealthy even after the tax was paid. Even if Keynes was completely mistaken, they would still be among the wealthiest group of people ever to have graced the planet. We would likely need to combine this with markedly higher marginal income tax rates to prevent this kind of concentration from occurring again in the future. A tax of $5 trillion, spread across the top 5% would leave them with more than $37 trillion in combined wealth (which would still be more than 60% of the nation’s wealth, (even if the $5 trillion in additional spending generated no additional wealth for this group which is highly unlikely). So let’s give it shot and settle this thing once and for all. If Keynes was right, a few pissed off powerful, wealthy people would likely never again be able to hold millions of people hostage to their self-serving ideologies and would again fear the wrath of the majority when they attempt to concentrate all of the Country’s wealth and income in the hands of few. The only mistakes we could make would be thinking too small or letting what’s meant to be spent go to savings or deleveraging instead.

    How is that 1 in 10,000 of us are controlling the options available to all?

  8. Wayne says:

    Why did tax receipts as a percentage of GDP go up under Bush?