Bush's Economy is a Lie (as if we didn't know that)

Ask Bush about why he lowered taxes, and he'll probably say something along the lines of "people should do what they want to with their own money." In other iterations, he says that lower taxes encourages economic growth, because people and companies are more likely to invest in future growth areas.

Well, I'm not saying he lied, but at the very least he was dead wrong. As if we didn't know this was coming.

Look-ee here!!

Here are some excerpts:

U.S. corporate profits have increased 21.3% in the past year and now account for the largest share of national income in 40 years, the Commerce Department said Thursday.

BUT!!!!

Meanwhile, the share of national income going to wage and salary workers has fallen to 56.9%. Except for a brief period in 1997, that's the lowest share for labor income since 1966.

Interesting.

"It's a big puzzle," said Josh Bivens, an economist for the Economic Policy Institute. "If this is a knowledge economy, how come the brains aren't being compensated? Instead, the owners of physical capital are getting the rewards."

Now I'm going to kick it up a notch with the punchline:

Despite the flood of cash coming in the door, corporations are investing comparatively little in expanding their operations. Capital spending has been below average, especially considering the strength of the economy, the level of profits and the special tax breaks given to boost investment.

In the fourth quarter, business fixed investment increased just 4.5%. In the past year, investment has risen 6.8%. The growth rate has been falling for the past four quarters.

BAM!!!

I don't know who Josh Bivens is, but I think he's an idiot. It's not a puzzle at all. Tax cuts to corporations in no way encourages growth. The right wingers would have you believe that putting people on Welfare makes them lazy and unwilling to work - the argument is that getting a "free lunch" takes away any incentive to work (and seriously, we all know how well those people live!!). But just like the way they are pro-death penalty and anti-abortion, their logic twists when they are talking about hand outs for corporations.

For some reason giving corporations a "free lunch" will make them energized and more likely to spend money. Hmmm... so if I'm Exxon, and I make $6 Billion in profits... and that is raised to $8 Billion with absolutely no work what so ever, raising my stock shares and making my CEO look great, what should I do? Risk the money on growth, or keep the money and bask in its glory? Tough call.

So while the money holders expand their wealth through complete inaction, the men who actually sweat and work for a living get shafted through poor/stagnant wages, no health care, loss of pension plans, stripped public service programs.... but at least they get that $300.