Posts tagged ‘Austerity’

New Study Shows that Corporate Tax Cuts Won’t Create Jobs

New Study Shows that Corporate Tax Cuts Won’t Create Jobs


There’s no correlation between low taxes and job creation.

That’s the finding in a new report from the Center for Effective Government that refutes corporate CEOs, bankers and tea party members of Congress who engage in some serious magical thinking when it comes to taxes and job creation.

We’ve heard these voodoo economics before: cut taxes and jobs will appear.  Right now,corporate tax rates are at their lowest point in 40 years even as profits soar.  Meanwhile, our economy is still struggling. It’s about time we questioned why these policies have yet to result in the job growth that their proponents predicted. 

In the new study, The Center for Effective Government, a nonprofit group that studies the economic impact of public policy, analyzed the Fortune 500 companies that posted profits between 2008 and 2012. Then it compared the job numbers of the companies that paid the highest tax rates to those of the companies that paid the fewest taxes.  

Of the 30 companies that paid more than a third of their profits in taxes, all but eight added jobs between 2008 and 2010. As a group, these companies reported a net gain of more than 200,000 US jobs.

Compare that to the 30 corporations that paid the lowest rates.  Many of these firms are paying no federal income taxes at all.  Even as this group raked in $159 billion in profits, only half of them added any jobs.  In total, they cut more jobs than they added, for a net result of 51,000 jobs lost. 

These numbers tell a story that many of us already knew.  Corporations don’t seek out lower tax rates because they’re eager to start hiring.  They do it to boost profits, and they don’t intend to share those profits with the rest of us.

What it all means is that billions of dollars that could be spent on education and infrastructure that benefits everyone are instead being hoarded by corporate CEOs.  The Center for Effective Government estimates that we could raise $220 billion simply by closing tax loopholes that allow corporations to hide money overseas.  Raising the federal corporate tax rate by only a few percentage points would be even more effective.

Public opinion is starting to turn against trickle-down economics.  Even Pope Francis has come out against the idea. It’s time to use that momentum to push for a tax system that benefits everyone instead of one that chases after imaginary job growth at the expense of our public programs.

You can read the entire CEG report by clicking here.


Fiscal Cliff Trojan

Fiscal Cliff Trojan (via Market Shadows)

There's no cliff, there's no crisis. Excellent talk with Michael Hudson. Fiscal Cliff Trojan By Michael Hudson November 25, 2012 Fiscal Cliff An Artificial Crisis Michael Hudson: Fiscal cliff was manufactured to shift more of the burden of the crisis onto ordinary people. Transcript PAUL JAY, SENIOR…

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Protests as Spain passes crisis cutbacks

Protests as Spain passes crisis cutbacks (via AFP)

Spanish lawmakers passed 39 billion euros' ($52 billion) worth of austerity measures Thursday, prompting fresh protests by demonstrators angry at cuts to pay and public services. The government says the tough cuts in the 2013 budget are needed to fix the public finances of the eurozone's fourth-biggest…

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Thousands in Spain protest to defend pensions

Thousands in Spain protest to defend pensions (via AFP)

Whistles blowing and horns honking, thousands of people demonstrated Monday in Madrid to defend their pensions from the austerity policies of the right-wing government of Mariano Rajoy. Spain's government broke a key election commitment in November by saying it would fail to raise pensions in line…

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Former adviser: Romney lost because of the far right of this party

Former adviser: Romney lost because of the far right of this party (via Raw Story )

Former Bush Commerce Secretary Carlos Gutierrez said Sunday that he was shocked by Mitt Romney’s recent comments about President Barack Obama giving “gifts” to win re-election. “I was shocked,” the former Romney adviser told CNN’s Candy Crowley. “And frankly I don’t think that’s why…

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Are US IMF Austerity Measures The Real Goal For Corporatists?

Why are the real rulers of America pushing so hard for the US government to assume the banks private gambling debts?

Experts agree that the banks real losses dwarf any estimates seen so far, and that the eventual bill will be huge.

But, most Americans didn’t create those debts! WHY should we pay? Because the looting of America demands it! Because the bankers have so much power, thats why! The obvious endgame is that after assuming so much debt, not only would all social programs be put on hold indefinitely, eventually the US would eventually default on the deficit, forcing the US into IMF austerity programs.

Programs like Social Security and Medicare typically are eliminated in these national default situations.

Is the goal to force the US into the same kinds of IMF austerity programs that have caused riots in so many other nations?

Certainly, the US, which has been at the lead in pushing for these measures elsewhere, would not be able to escape having its own medicine applied to it.

Inquiring minds want to know.

“In economics, austerity is when a national government reduces its spending in order to pay back creditors. Austerity is usually required when a government’s fiscal deficit spending is felt to be unsustainable.

Development projects, welfare programs and other social spending are common areas of spending for cuts. In many countries, austerity measures have been associated with short-term standard of living declines until economic conditions improved once fiscal balance was achieved (such as in the United Kingdom under Margaret Thatcher, Canada under Jean Chrétien, and Spain under González).

Private banks, or institutions like the International Monetary Fund (IMF), may require that a country pursues an ‘austerity policy’ if it wants to re-finance loans that are about to come due. The government may be asked to stop issuing subsidies or to otherwise reduce public spending. When the IMF requires such a policy, the terms are known as ‘IMF conditionalities’.

Austerity programs are frequently controversial, as they impact the poorest segments of the population and often lead to a wider separation between the rich and poor. In many situations, austerity programs are imposed on countries that were previously under dictatorial regimes, leading to criticism that populations are forced to repay the debts of their oppressors.[1][2][3]”

The whole trickle down economics thing has been disproven mathematically. But people like Bush and unfortunately, now even Obama keep bringing it back in different forms again.

Tags: cashfortrash, IMF, International Monetary Fund, ponzi scheme (all tags)



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The Real Goal

 Perhaps allowing the world to slide into a prolonged deep economic depression would be the more prudent course, as I’m sure it would hurt the very rich while helping poor people across the globe.

by QTG 2009-03-21 08:53AM | 0 recs

Trickle down economics

So you believe in trickle down economics?  As the New York Times said..

“In the Real World of Work and Wages, Trickle-Down Theories Don’t Hold Up”

Did you realize that the banks knew that the loans were bad when they made them?

How does that figure into this?

by architek 2009-03-21 09:03AM | 0 recs

Re: Trickle down economics

 And you believe that MI and FL were stolen?

by QTG 2009-03-21 09:07AM | 0 recs

And you are living in the past

if you don’t understand the immediate meaning of the IMF austerity programs and how they would steal our future from ALL of us.

We must not assume any more of this toxic debt!

by architek 2009-03-21 09:20AM | 0 recs

Serious question:

Are you actually advocating policies that would cause even more extreme and prolonged economic calamity than is going to happen anyway – just to give yourself more opportunities to trash Obama?

(Now that I asked it, it seems more like a rhetorical question.)

by QTG 2009-03-21 09:30AM | 0 recs

No way..

I like Obama. I just think he’s got some kind of mistaken idea that the people want many things they obviously don’t.

Or something.

Its not being responsible to buy these toxic assets the way he’s doing while letting so many other pressing problems go unaddressed.

Still, I agree with what all of you keep saying in that Obama was a far better choice than McCain/Palin.

Even with the many problems that I saw coming due to his trying to be all things to all people.

I was also happy to see a black person getting to be President, even with all the problems they are giving Obama to clean up. He is doing very well except for his embrace of trickle down and the unwillingness to consider single payer when its the only way to fix the healthcare crisis legally. (the stuff he’s suggesting is against the WTO treaty)

Obviously, black people are impacted a LOT by things like our lack of universal healthcare.

Maybe the healing represented by having a black person as President will reduce some of the major issues many of them have with stress-caused diseases even as those same issues increase in other people.

One can only worry when thinking about the future and the economy.

BTW, I never considered doing anything other than voting for a Democrat.

Also, I admire smarts when I see it.

Whoever thought up the caucus crossover voter strategy, pure genius.

by architek 2009-03-21 01:20PM | 0 recs

Re: Are US IMF Austerity Measures The Real Goal Fo

Beware of anyone who throws around demagogic terms such as “the real rulers of America” and “corporatists” – an undefined enemy is an imaginary enemy.

by rfahey22 2009-03-21 09:47AM | 0 recs


I will do that..

BTW, I’m not the only one terrified by corporations and their frequent amorality.

The founders of this country were too.

by architek 2009-03-21 01:22PM | 0 recs

They were?

What corporations were our founding fathers terrified of exactly? British Tea and Knickers Incorporated?

by DTOzone 2009-03-21 09:37PM | 0 recs

Corporations are unable to say no

Groupthink.. Irving Janis

Yes, barbaric British corporations, and other colonial corporations that savaged their respective fiefdoms.

by architek 2009-03-21 11:49PM | 0 recs


I always thought King George III was a person…tell me architek, how is Parliament doing on the FTSE 100?

by DTOzone 2009-03-22 12:29AM | 0 recs

Its a sign of ethical collapse

to put meeting numerical targets ahead of ethics.

by architek 2009-03-22 07:01AM | 0 recs

WTF are you even talking about now?
by DTOzone 2009-03-22 11:52AM | 0 recs

Boy are you desperate

to change the subject

by architek 2009-03-22 08:18PM | 0 recs

Re: They were?

That would be the British east India Company, the guys whose policies forced the Boston Tea Party.

by David Kowalski 2009-03-22 11:54AM | 0 recs

Re: I’m SO There

if we get to dress up like Indians!

by QTG 2009-03-22 02:17PM | 0 recs

Corporate personhood

is where we went wrong. That was ths nations biggest mistake.

Ad it wasn’t even done legally The Santa Clara opinion was a scam.

Nobody ever voted on corprate personhood. We need a referendum on such an important issue. Corporations can’t die, they can’t be put in jail. They cannot be responsible.

Money is not free speech. What the hell is going on?

Repeal Santa Clara!

by architek 2009-03-22 08:13PM | 0 recs

Ah yes

I forgot the British East India Company took it upon themselves to exempt themselves from the tea tax and monopolize tea in the colonies…I mean not like Parliament had anything to do with THAT.

by DTOzone 2009-03-22 05:39PM | 0 recs

You needed to buy a stamp to do anything

Sort of like the ACTA, (which the Obama folk wont let be discussed.. like they are discussing now finally in Europe..)

For more, visit and other sites..

Treaties are above laws, on the level of the Constitution.

Secret treaties should be illegal.

BTW, WTO seems to ban many of Obama’s halfway healthcare proposals. Nobody has even discussed this except for Public Citizen, but it seriously threatens the whole idea of a public alternative for health insurance.

Was that planned? Who knows, nobody.

by architek 2009-03-22 08:17PM | 0 recs




Are US IMF Austerity Measures The Real Goal For Corporatists?.

More on the spurious victory claims of MMT



Led by Randy Wray (see this and this), supporters of so-called Modern Monetary Theory (MMT) are declaring that they were the first to identify the problems of the euro and that MMT has now proved itself to be the correct approach to monetary theory.

As regards these two claims, permit me to quote the following:

“5.3 Will capital still be able to veto policy?
…First, financial capital may still be able to discipline governments through the bond market. Thus, if financial capital dislikes the stance of national fiscal policy, there could be a sell-off of government bonds and a shift into bonds of other countries. This would drive up the cost of government borrowing, thereby putting a break on fiscal policy (Palley, 1997, p.155-156).” Read the rest of this entry »

From Financial Crisis to Stagnation: The Destruction of Shared Prosperity and the Role of Economics

May 9th, 2012

Many countries are now debating the causes of the global economic crisis and what should be done. That debate is critical for how we explain the crisis will influence what we do.

Broadly speaking, there exist three different perspectives. Perspective # 1 is the hardcore neoliberal position, which can be labeled the “government failure hypothesis”. In the U.S. it is identified with the Republican Party and the Chicago school of economics. Perspective # 2 is the softcore neoliberal position, which can be labeled the “market failure hypothesis”. It is identified with the Obama administration, half of the Democratic Party, and the MIT economics departments. In Europe it is identified with Third Way politics. Perspective # 3 is the progressive position which can be labeled the “destruction of shared prosperity hypothesis”. It is identified with the other half of the Democratic Party and the labor movement, but it has no standing within major economics departments owing to their suppression of alternatives to orthodox theory. Read the rest of this entry »

From Financial Crisis to Stagnation: An Interview with Thomas Palley

April 18th, 2012

Conducted by Philip Pilkington and posted on Naked Capitalism on April 18, 2012.

His latest book, From Financial Crisis to Stagnation, was recently published by Cambridge University Press, 2012.

A 20% discount is available when you purchase using this discount code.

[Select country location & enter code “palley2012” at checkout to get the discount]

Philip Pilkington: At the beginning of your book From Financial Crisis to Stagnation you refer to the 2008 crisis as a ‘crisis of bad ideas’. Could you please briefly explain why you refer to the crisis in this way?

Thomas Palley: A central and critical element of my book is its emphasis on the role of economic ideas in generating the crisis. This feature fundamentally distinguishes it from mainstream explanations that tend to represent the crisis in terms of surprise events and economic shocks (e.g. black swans).

My book starts with the fundamental idea that economies are made, not found. The way economies are organized and function is significantly the product of social choices, not the product of nature. Over the past thirty years we (society) have embraced a set of economic ideas that shaped economic arrangements – including the pattern of income distribution, the power of corporations and finance relative to labor, and the way in which the economy generates demand.
Read the rest of this entry »

The euro lacks a government banker, not a lender of last resort

December 19th, 2011

In his novel, The Jungle, the American muckraking author Upton Sinclair wrote about the horrendous work and sanitary conditions in the Chicago meat packing industry of the early 20th century. It is sometimes said Sinclair aimed for the heart but hit the stomach. That is because he aimed for progressive social and economic change but instead prompted the founding of the Food and Drug Administration. Read the rest of this entry »

Euro Bonds Are Not Enough: Eurozone Countries Need a Government Banker

September 6th, 2011

The eurozone’s public finance crisis continues to fester, reflecting both political and intellectual failure. The intellectual failure is the crisis has been interpreted exclusively as a debt crisis when it is also a central bank design crisis resulting from the euro’s flawed architecture. The flaw is the inability of eurozone governments to harness the central bank’s power to assist government finances. This systemic weakness explains why U.S. and U.K. government bonds are weathering the storm, whereas Spain confronts default rumors despite having roughly similar debt and deficit profiles. Read the rest of this entry »

A Global Minimum Wage System [1]

July 18th, 2011

Published in the FT Economists’ Forum, July 18, 2011

The global economy is suffering from severe shortage of demand. In developed economies that shortfall is explicit in high unemployment rates and large output gaps. In emerging market economies it is implicit in their reliance on export-led growth. In part this shortfall reflects the lingering disruptive effects of the financial crisis and Great Recession, but it also reflects globalization’s undermining of the income generation process. One mechanism that can help rebuild this process is a global minimum wage system. That does not mean imposing U.S. or European minimum wages in developing countries. It does mean establishing a global set of rules for setting country minimum wages. Read the rest of this entry »

Deaf to History’s Rhyme: Why President Obama is Failing

December 2nd, 2010

The great American novelist Mark Twain observed “history does not repeat itself but it rhymes.” Today the rhyme is with the 1930s, and if you don’t hear it read FDR’s great Madison Square Garden speech of October 1936:

“For twelve years this nation was afflicted with hear-nothing, see-nothing, do-nothing government. The nation looked to government but the government looked away. Nine mocking years with the golden calf and three long years with the scourge! Nine crazy years at the ticker and three long years in the breadlines! Nine mad years of mirage and three long years of despair! Powerful influences strive today to restore that kind of government with its doctrine that that government is best which is most indifferent.”

Despite this clarity, the Obama administration insists on hearing a rhyme with the 1990s. That tone deafness has its roots in political choices made at the administration’s outset and explains why the administration has stumbled so badly in its first years. If continued, the economic and social consequences will be grave. Read the rest of this entry »

Plan B for Obama on the economy

September 8th, 2010

TO: President Obama
FROM: Thomas I. Palley
RE: How to avoid stagnation and restore shared prosperity
DATE: Labor Day, 2010

Mr. President,

With hopes of a V- or U-shaped recovery fading, there is the increasing prospect of an L-shaped future of long stagnation, or even a W-shaped future in which W stands for something worse.

The reason for this dismal outlook is economic policy is trapped by failed conventional thinking that can only deliver wage stagnation and prolonged mass unemployment. Read the rest of this entry »

The Federal Reserve Should Raise Rates and Lower Them Too

August 30th, 2010

There is much debate over whether the Federal Reserve should tighten or further ease monetary policy. This dichotomous framing overlooks another possibility, which is whether the Fed should change the mix of its stance, tightening in some areas and further easing in others. Read the rest of this entry »

Europe’s debt crisis and Keynes’ green cheese solution

May 26th, 2010

The great German physicist Max Planck remarked that “Science advances one funeral at a time.” The situation is worse in economics which is subject to regress, as happened when the valuable but imperfect insights of Keynesianism were supplanted by the ideological blinkers of neoliberalism. Read the rest of this entry »

More on the spurious victory claims of MMT.