McCain Re-Embraces Supply-Side Theories That Are ‘Beyond The Reach Of Economic Science’
McCain Re-Embraces Supply-Side Theories That Are ‘Beyond The Reach Of Economic Science’
In 2000, while he was first running for president, Sen. John McCain (R-AZ) broke from conservative orthodoxy and argued against “giving tax cuts for the rich.” Explaining his change of heart, McCain told The New Republic’s Jonathan Chait that he “didn’t pay nearly the attention to those issues in the past” that he should have and that he was only “a supply-sider” because he didn’t understand the issue:
“In the interest of full disclosure, I didn’t pay nearly the attention to those issues in the past,” he recalls. “I was probably a `supply-sider’ based on the fact that I really didn’t jump into the issue.”
But now that McCain has clinched the Republican nomination, he’s helping supply-side economics make “a political comeback.” Last week, the New York Times reported that as McCain pushes for the Bush tax cuts to be made permanent, “his camp increasingly cites as justification the supply-side effect on upper-income families.”
Like his previous support for supply-side economics, McCain’s re-embrace appears to also be more faith-based than fact-based:
“What really happens is that the economy grows more vigorously when you lower tax rates,” said Kevin Hassett, an adviser to the presumptive Republican nominee, John McCain, and the director for economic policy studies at the conservative American Enterprise Institute. “It is beyond the reach of economic science to explain precisely why that happens, but it does.”
As Brendan Nyhan noted in January, McCain has repeatedly pushed debunked supply-side theories while on the campaign trail:
“Don’t listen to this siren song about cutting taxes. Every time in history we have raised taxes it has cut revenues.” — McCain, [1/17/08]
“I would suggest that most economists agree that there was an increase in revenues… associated with the tax cuts.” — McCain, [12/5/07]
“Tax cuts—tax cuts increase revenues. The tax cuts, the revenues increased because of it. The spending outpaced the tax cuts.” — McCain, [11/27/07]
“Tax cuts, starting with Kennedy, as we all know, increase revenues. So what’s the argument for increasing taxes? If you get the opposite effect out of tax cuts?” — McCain, [3/5/07].
As the New York Times points out, tax revenues saw an “average annual increase of 6.5 percent in the eight years of the Clinton administration” while “the annual per capita revenue from income taxes fell 1 percent under President Bush.”
The Center for American Progress Action Fund’s Robert Gordon and James Kvaal recently noted that McCain’s tax cut proposals would “cost the federal government more than $2 trillion in tax revenue over 10 years.”
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Johnny McEconomicdisaster
Only person on the planet who could make Chimpy McFlightsuit seem worthy of being a columnist for Forbes magazine ………….
March 31st, 2008 at 3:09 pmHumanity might be “sitting on a ticking time bomb,” but Gore’s home in Carthage is sitting on a zinc mine. Gore receives $20,000 a year in royalties from Pasminco Zinc, which operates a zinc concession on his property. Tennessee has cited the company for adding large quantities of barium, iron and zinc to the nearby Caney Fork River.
Lets vote for Al Gore!!
March 31st, 2008 at 3:19 pmVoodoo Economics: Act III
March 31st, 2008 at 3:19 pm“What really happens is that the economy grows more vigorously when you lower tax rates,” said Kevin Hassett, an adviser to the presumptive Republican nominee, John McCain
All reality-based evidence to the contrary. I wonder how they’ll explain that away?
“It is beyond the reach of economic science to explain precisely why that happens, but it does.”
Ah, question answered: it’s magic!
March 31st, 2008 at 3:19 pmI am dumbfounded as to why anyone in this country would even concider putting this man anywhere near the oval office. Are we this stupid? Common folks, it’s about time we stop giving this job to someone who the media tells us is right for the job. COPR OWNS MEDIA = CONTROL INFORMATION TO REPRESENT A BIAS VIEW. CASE IN POINT; DON SIEGLEMAN WAS RELEASED FROM PRISON ON FRIDAY TO TESTIFY IN WASHINGTON. WHY DIDN’T ANY NEWS AGENCY NOT REPORT THIS STORY? BESIDES BLOGS AND INTERNET NEWS SITES NOT OWNED BY CORPORATIONS. For once, can’t we be free thinkers?
March 31st, 2008 at 3:20 pmSo he was against piss-trickle down before he is for it now?
March 31st, 2008 at 3:21 pmralph the wonder llama Says:
March 31st, 2008 at 3:19 pm
“What really happens is that the economy grows more vigorously when you lower tax rates,” said Kevin Hassett, an adviser to the presumptive Republican nominee, John McCain
All reality-based evidence to the contrary. I wonder how they’ll explain that away?
“It is beyond the reach of economic science to explain precisely why that happens, but it does.”
Ah, question answered: it’s magic!
Guess Shrub the 1st was on to something when attaching the moniker “Voodoo Economics” to it……….
March 31st, 2008 at 3:21 pmMcLame: It’s true BECAUSE I WISH IT.
See how that works…? Magic.
March 31st, 2008 at 3:22 pmYea, ever heard of piss running up your leg?
March 31st, 2008 at 3:22 pmcut taxes, contune to pay for war… where’s the money coming from Johnny??
china
March 31st, 2008 at 3:22 pmMcCain: “My friends, now that I am the age that Reagan was when he became President, I embrace supply-side economics, the voodoo science that is beyond the reach of economic science. And I will embrace any other faith-based science that is beyond the reach of real science if that’s what it takes to get me elected. I’m old enough, my friends, to know better and old enough to not care.”
March 31st, 2008 at 3:24 pmActually, the way it really works is Bernanke waves his magic wand, they ring the bell four times, and presto! The corporate giants take all your money!
March 31st, 2008 at 3:27 pmMcCain =
Johnny-come-lately: “NOW, I understand!”
March 31st, 2008 at 3:28 pmsomewhat OT… just found this at C&L… i missed this part on suday:
This Week: Will’s Law and Agreeable Auxiliaries
By: Nicole Belle @ 11:31 AM – PDT
Worlds collided on Sunday and I found myself actually agreeing with George Will. Apparently, EVERYONE on the This Week with George Stephanopoulos agreed with George Will when he posited Will’s Law:
http://www.crooksandliars.com/2008/03/31/this-week-wills-law-and-agreeable-auxiliaries/
worth a looksee… i won’t use up any more space here…
March 31st, 2008 at 3:29 pmRU; McJowls was against voodoo economics before he was for it.
March 31st, 2008 at 3:35 pmThis guy is a pupet for the neocons, period. Look at the similarities between Bush and McCain. Both can’t speak proper english. Both have advisors who know the cercumstances. Both pandered to religious groups with racest ideoligy (haggy)and both are dumb f*&^^s, who through their friends have put themselves in a position to take over the highest office in the land. However, I hope we learned our lession; last time we elected a man who;
A)Was a draft dogger- and we thought he was a better to run a war then a man who served in Vietname .
B)Never ran a sucsessful company – Tax cuts work for the rich. More tax cuts so we can invest with more jobs (for China)
C) Government without scandles – I don’t want to take up the hole site to list.
D)Loyal to Friends – suppling government jobs to friends with no clue about the job there were hired for.
So I guess McCains the perfect choice!
March 31st, 2008 at 3:37 pmWhen you get down to it, mcBUSH is pretty damn ignorant on just about everything… he has the death brand backing him… (R)
March 31st, 2008 at 3:37 pmThe Economic Policy of Gramps McSame in a nutshell:
1. Provide taxcuts for the rich.
March 31st, 2008 at 3:41 pm2. ???
3. Success! Healthy Economy!
Now, I am no economist, but this hardly makes any sense:
Huh? Why would this be so? Really, it just makes my head hurt trying to understand why anyone would even say such nonsense and then expect anyone to believe it.
Presumably, economics follow the same (or similar) processes as do other sciences. This would mean that any causality for any economic outcome can be studied, explained and predicted. Or do Republicans apply their “faith based” theories to economics as well as to everything else?
The truth is that supply-side economics (more commonly known as “trickle-down” or “voodoo” economics) simply does not work. It didn’t work for Reagan. It didn’t work for Bush 41. It hasn’t worked for Bush 43 and so there is zero possibility that it would work for McCain or anyone else.
What DOES work, however, is DEMAND-SIDE economics. While Clinton didn’t hold to the theory completely, it was characteristic of his economic recovery packages. Put money into the hands of people who don’t have any and quite predictably they will spend it. The economy is stimulated; goods and services are sold; demand is presented and met; opportunities are created. In the end, the rich make even more money this way!!
“A rising tide lifts all boats.” While capitalism is a failed system in terms of distributing wealth throughout a population, its faults and inherent weaknesses can be mitigated in the short term by responsible economic planning and execution of strategies. In such a scenario, all participants in the economy benefit, not just a few.
Ultimately, however, capitalism must be supplanted with an economic system that is more fair and more equitable in the way in which wealth is distributed. Only by expanding economic security to all will our economy survive and prosper over the long term.
March 31st, 2008 at 3:45 pmMy wages fell 25% under Bush, so with inflation I am making 45% Less than in 2000, trickle down my butt. And my wife at age 45 had to enter the work force to make ends meet, not a pretty picture, stay at home mom thrown into the pits because of Bush’s 911 attack on the USA. FY Bush, all the hell and back.
March 31st, 2008 at 3:45 pmOT: see the article by Ray McGovern at http://www.commondreams.org
Isreal is willing to fight Iraq & Iran to the last American.
March 31st, 2008 at 3:47 pmIt’s just not fair for American fascist corporations…China has 10 workers that work w/o benifits and can be worked to death as compared to 1 for the USA. American corporations should get more government subsidies.
March 31st, 2008 at 3:49 pmSouthern Man Says:
March 31st, 2008 at 3:41 pm
ralph the wonder llama Says:
March 31st, 2008 at 3:19 pm
“What really happens is that the economy grows more vigorously when you lower tax rates,” said Kevin Hassett, an adviser to the presumptive Republican nominee, John McCain
All reality-based evidence to the contrary. I wonder how they’ll explain that away?
“It is beyond the reach of economic science to explain precisely why that happens, but it does.”
Ah, question answered: it’s magic!
Do you believe that the tax system we had under Clinton were fair for everyone? I have no faith in the tax structures that are changed under every new administration. I don’t agree with taxing social security and I don’t agree with giving the top 1% such a large tax cut. Where is the balance?
Clinton’s tax system was not “perfect” , but it was a hell of a lot more equitable than any horseshit GOP president’s has been for the last 40 years…………..
March 31st, 2008 at 3:50 pmYou would think that even Old Johnny McNumbNuts would realize how silly he sounds. There may have been a time when selective reduction of some taxes actually had a positive effect on economic vitality and tax revenues. The problem today is that Johnny and the rest of his republican butt-buddies think that there can never be enough of a once-good thing. In their universe, they likely believe that revenues would go up even more if rates were 0 percent.
This is what we are contending with — a bunch of folks who really believe there is a straight-line inverse relationship between tax rates and tax revenues. It’s no wonder that they don’t have any other coherent policies, either.
March 31st, 2008 at 3:51 pmmcINSANE is like the underwear gnomes from South Park…
step 1 – collect
step 2 – ?
step 3 – profits!
sums that senile old man up!
March 31st, 2008 at 3:56 pm“What really happens is that the economy grows more vigorously when you lower tax rates,” said Kevin Hassett,…
This is false. Economic growth, i.e., the growth rate of RGDP was 3.3% in the 1970’s, 3.1% in the 1980’s after Reagan’s tax cuts and 3.1% in the 1990’s after Clinton’s tax increase on the wealthiest 1%.
Do these people think they will get a free ride from everyone because the capitalist, corporate media let them lie with impunity.
March 31st, 2008 at 3:56 pm27 posts and no on has mentioned the phrase FUZZY MATH yet?!
well let me be the first!
FUZZY MATH!!!
March 31st, 2008 at 3:59 pmSo what does it say of his moral leadership potential:
He didn’t understand the economy, but was making laws to influence it. Laws that would affect almost every person in the country.
March 31st, 2008 at 4:02 pmSouthern Man Says:
March 31st, 2008 at 3:41 pm
Do you believe that the tax system we had under Clinton were fair for everyone?
How did my comment imply that the tax system under Clinton was fair for everyone?
I did imply that there is no evidence for the assertion that McCain’s economic advisor made, nor is there any theoretical backing for the claims of “trickle down economics”.
I know that under Clinton, the poverty rate declined every year, and under Bush, the poverty rate has climbed. Under Clinton, the economy grew far more robustly than it has under Bush.
That tells me something about the relative values of the economic policies, and it also tells me something of what we can expect under McSame.
March 31st, 2008 at 4:02 pmYes, tax cuts do work to increase revenues and to spur investment. Kennedy proved this to be true. However, what was the marginal tax rate at the time? Oh, yes, it was 91%. Kennedy lowered it to 70%. Now, there is such a thing as diminshing returns on any economic endeavor. This is something that McCain does not understand. McCain’s logic would actually result in a tax rate of 0% thus giving us an unlimited increase in tax revenues. Right! Obviously, McCain is an idiot responding to the desires of the well heeled Republican elite to further line the pockets of the corpocracy.
McCain also does not understand the whole purpose of supply side economcs. It was never about just raising tax revenue to the government. It was about creating more investment in the US economy with more and better paying jobs for US citizens. We have seen jobs offshored by multi-national companies. We have seen profits offshored to tax haven shell corporations. We have not seen an investment in the US economy. We have not seen an increase in the wages of working or middle class. Those sectors have been stagnant or falling. Only the wealthiest 5% have seen an increase. Of those, only the wealthiest .05% have made out like bandits.
Even the most ardent supply siders now admit that tax cuts will not create greater revenues than they cost. It is the long term impact of domestic investment that counts. However, we see that that will not happen in the current economy. The tax cuts becoming permanent will only result in cuts to social safety net programs by those already ravaged by their inability to participate as an equal partner in this economy.
March 31st, 2008 at 4:03 pmWhen I think of supply-side economics, I think of bloodletting. This practice of removing blood from patients to cure a multitude of different ills was accepted for about 2,500 years. Unfortunately, people who lost a lot of blood tended to get even sickers, leading to more bloodletting, etc. It wasn’t until the end of the 19th century that the medical profession finally acknowledged that bloodletting was sheer quackery (and dangerous!) except in a very few cases.
Today the cure for all ills seems to be giving tax cuts to the rich. No matter what the economic ailment is, tax cuts for the rich is the cure. National debt skyrocketing to unprecedented levels? Cut taxes, and the economy will boom, resulting in all kinds of revenue rolling in. Revenues low? Cut taxes and the revenue will go up. Revenues even lower because of tax cuts? Cut taxes even more.
All we have seen with these various incarnations of Reaganomics is that the national debt has zoomed up to the point where we are paying half a trillion dollars a year just on the interest. And because of our occupation of Iraq, combined with insufficent revenue, our indebtedness just keeps galloping upward. And McCain wants to cut taxes on the rich.
Enough bloodletting, and the patient will eventually die.
March 31st, 2008 at 4:03 pmShorter McCain: Trickle-down Economics work. Because it’s MAGIC.
March 31st, 2008 at 4:04 pmMcCain Re-Embraces Supply-Side Theories That Are ‘Beyond The Reach Of Economic Science’
And another bullshit GOP myth is concocted : Supply-side economics is bascially a “miracle”. Will wonders never cease ?
March 31st, 2008 at 4:13 pmThe only way that he is going to be able to pay for his 100 year war is to raise taxes on the middle class.
When shrub first took office, my husband and I were paying around 11 maybe 12%. When I filed this year, we were almost at 17%.
March 31st, 2008 at 4:19 pmOld wine in a decrepit bottle.
March 31st, 2008 at 4:27 pmNot only is it time to elect a new President, It’s time to destroy the Republican Party. They (Republican party)have no money. They are having a very difficult time raising money. There turn out is very low at political events not to mention voting in the primaries. The main backers of Republicans, Corporations and wall street are in deep trouble. THIS OUR MOMENT TO MAKE UP FOR THE MISTAKE IN OUR LAST ELECTION. THIS IS THE TIME TO MAKE SURE THE AMERICAN CITIZEN COMES FIRST NOT THE CORPORATION. THIS IS OUR TIME.
March 31st, 2008 at 4:32 pmHeh.
Faith-based economics.
Hallelujah, thank you, Jebus!!
March 31st, 2008 at 4:37 pmInsanity: doing the same thing over and over again and expecting different results.
Albert Einstein
I think he should be tested and committed…..
March 31st, 2008 at 4:58 pmTo the nearest Veterans Hospital…
March 31st, 2008 at 5:01 pmPresident Bush had a Republican controlled Senate…and a Republican controlled House of Representatives….and Every Tax cut he proposed was passed into Law.
SO…are you better off today than you were 7 1/2 years ago???
I agree with Katy…there are Two kinds of Republicans…economically speaking…Millionaires and Suckers.
March 31st, 2008 at 5:23 pmI see what the oldman is saying , give tax cuts to the wealthy so they can buy stuff they don`t need or want and in turn it makes stuff for us cheaper. So the top 1% of our public that is wealthy will stimulate the economy for the other 99% of us. This guy is a McMoron!!!!!!!!!!!!!
March 31st, 2008 at 6:02 pmMcMoron will have tax cuts just like the CHIMP during WAR Time!!!!!!!!!
March 31st, 2008 at 6:05 pmY’know, one might think that these guys would have more sense than to make blanket statements like:
What really happens is that the economy grows more vigorously when you lower tax rates
Every time in history we have raised taxes it has cut revenues.
and
tax cuts increase revenues.
when, after seven years of nothing BUT tax cuts, the economy is sinking into recession and the deficit sets new records every year.
But I guess they’re counting on American Idol to distract the nation, and the yumminess of wishful fairyland economics to dazzle everyone. After all, it worked for Reagan, right?
March 31st, 2008 at 6:12 pm“Conservatives” never question that mantra, Ralph, no matter how often someone trots out actual statistics that refute the claim. That’s when they put fingers in their ears and chant the LA LA LA LA chant.
March 31st, 2008 at 6:14 pmYou need to understand the Republican take on why Democratic administrations always do better economically than Republican administrations. The Republicans always have so much worse luck. Everything that caused poor GDP growth, greater poverty and higher deficits was always just a chance misfortune. However, the Democrats always benefit from the wise and better economy structured by the Republicans before they lose power. Yes, no correlation between results and power.
March 31st, 2008 at 6:21 pmgumm, they get a lot of use out of that LA LA LA LA chant, don’t they?
Sure wish I owned the songwriting royalties on that one.
March 31st, 2008 at 6:37 pmEconomics 101 says that when you cut tax rates you bring in less revenue but when combined with spending increases the deficit spending provides the economy with a stimulus. Duh.
A better term for supply side economics is bubbles economics. It seems to work for awhile followed by the inevitable crash. But the new twist is that each crash transfers a huge amount of wealth from the middle-class to the super rich. Then it is time for another bubble. Boy, that is one dim bulb McCain has for an economic advisor.
April 1st, 2008 at 12:03 amBoth have advisors who know the cercumstances. Both pandered to religious groups with racest ideoligy (haggy)and both are dumb f*&^^s, who through their friends have put themselves in a position to take over the highest office in the land. However, I hope we learned our lession; last time we elected a man who;
A)Was a draft dogger- and we thought he was a better to run a war then a man who served in Vietname .
B)Never ran a sucsessful company – Tax cuts work for the rich. More tax cuts so we can invest with more jobs (for China)
C) Government without scandles – I don’t want to take up the hole site to list.
D)Loyal to Friends – suppling hp l2000 battery,hp dv1000 battery government jobs to friends with no clue about the job there were hired for.
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