The two great lies of right-wing economic policy are that environmental regulations cost jobs and that cutting taxes for the very wealthy creates them.
Yesterday, I wrote about the first lie and President Obama's unwitting capitulation to it in his wrong-headed decision to quash stronger environmental standards for ground level ozone.
Today, let's put a stake through the heart of the Right-Wing Big Lie Number Two.
President Bill Clinton kicked off the longest economic expansion in American history with a tax increase. His policies resulted in a robust economy that was actually starting to close the gap between the richest and poorest Americans. And we were looking at budget surpluses as far as the eye could see. The poor and middle class were doing better and so were the rich. We would have been in even better shape both economically and environmentally had Congress accepted his proposal for a carbon tax.
Fast forward to George W. Bush, who turned those surpluses into massive deficits almost overnight with his tax cuts and wars. Never before in American history have we decided to wage expensive wars while cutting taxes. That's why it's so outrageous that Republicans now have discovered that deficits are a problem. They enthusiastically endorsed the very policies that got us into this mess in the first place. In fact, the Bush tax cuts account for more then twice as much of the current budget deficit as Obama's stimulus bill. And stimulus investments create far more jobs than tax cuts.
It's no accident that the highest concentrations of wealth have occurred in 1928 and 2007, years just preceding the two deepest economic downturns of the last century. High concentrations of wealth aren't good for anybody, including the wealthy. They lead to social instability and a weaker economy because if the middle class had more to spend they'd spend more and stimulate the economy, growing the pie.
As Robert Reich pointed out the other day in the New York Times: "Those at the top would be better off with a smaller share of a rapidly growing economy than a large share of one that's almost dead in the water."
And finally, there's Warren Buffet, who has made billions working with investors. Here's what he had to say about taxes in a recent Times op-ed:
Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.
I didn't refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone -- not even when capital gains rates were 39.9 percent in 1976-77 -- shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what's happened since then: lower tax rates and far lower job creation.
Tax the rich to feed the economy.
