In response to Massachusetts Senator Elizabeth Warren’s April 19 appearance on the mummified Charlie Rose Show, it's rumored that DC politicians are considering a new welfare bill designed just for her.
This one would give Senator Warren a clue.
In their edge-of-your-seat chat to help her promote her scintillating new book, "A Bald-Faced Liar's Life" (or something like that), Warren waxed fictitious and deceptive about the effects of tax cuts. And, guess what? She thinks it’s a bad idea to let people keep more of their own money! Hard to believe... But, indeed, this collectivist believes it, knows much more about the subject than we do, and wants to enlighten us! In this segment, we can see her argument against tax cuts for the so-called “wealthy”, and it becomes clear that she might be as adept at using slippery language and abbreviated historical data as she is at being completely blind to the laws of economics.
Sadly, there's this troubling thing around us called reality, so let's compare her words to it. In her screed against tax cuts for the never defined “rich”, and against Reagan’s so-called “trickle-down economics”, Warren claimed that during the 1960s and ‘70s, “Everybody outside of the top 10%... 90% of all America… got 70% of all the wage growth created in this country… The pie got bigger, and everyone was doing better.”
But when Warren says, “The pie got bigger… and everyone was doing better,” does she mean that the economy, aka her “pie”, grew at a good rate during the Sixties and Seventies? Does she mean to imply that it grew better, faster, and stronger for more quintiles (each 20% of earners) than in the 1980s after those evil Reagan tax cuts? At what point in the Sixties would she like to begin?
Would that be during the period immediately following JFK’s Reagan-like broad-based tax cuts that reduced the top marginal rate from 91% to 70%, and saw explosive economic growth and job creation? Or would that be after President Johnson’s collectivist reversal of Kennedy’s plan and his institution of Great Society welfare handouts and federal deficit spending that destroyed the value of the Dollar, forced Nixon to decouple from the so-called “Gold Standard”, and ushered in years of economic malaise known as “Stagflation”?
Here is some simple information, via Stephen Moore and William Niskanen, at the Cato Institute, that Ms. Warren conveniently avoided:
· On 8 of the 10 key economic variables examined, the American economy performed better during the Reagan years than during the pre- and post-Reagan years.
· Real economic growth averaged 3.2 percent during the Reagan years versus 2.8 percent during the Ford-Carter years and 2.1 percent during the Bush-Clinton years.
· Real median family income grew by $4,000 during the Reagan period after experiencing no growth in the pre-Reagan years.
· Interest rates, inflation, and unemployment fell faster under Reagan than they did immediately before or after his presidency.
· The only economic variable that was worse in the Reagan period than in both the pre- and post-Reagan years was the savings rate, which fell rapidly in the 1980s.
But, clearly Warren’s goal is not to inform with facts, but to promote the idea that since taxes were lowered for the evil "rich", “wage disparity" has increased, the government has decreased spending on “education” (patently false - the budgets have never decreased), “job training” and other handouts (again, false), and corporations have run rampant (the ones tied to the feds sure have). But all these claims are offered despite the facts that the top 25% of earners pay over 86% of all income taxes, the US has one of the highest corporate tax rates on Earth, and US regulations have driven many corporations to other nations year after year.
She does admit that “African Americans” were “locked solidly at the bottom" in the ‘60s and ‘70s, but even there, she gilds the poverty with classic collectivist paternalism. During the long ‘70s recession, she tells us, “the idea of opportunity had taken hold.”
How nice. Here’s your “idea” of a job, a paycheck, a meal on the table. Enjoy.
Thomas Sowell noted some facts about this “idea” that government spending helped African Americans:
Despite the grand myth that black economic progress began or accelerated with the passage of the civil rights laws and “war on poverty” programs of the 1960s, the cold fact is that the poverty rate among blacks fell from 87 percent in 1940 to 47 percent by 1960. This was before any of those programs began.
Over the next 20 years, the poverty rate among blacks fell another 18 percentage points, compared to the 40-point drop in the previous 20 years. This was the continuation of a previous economic trend, at a slower rate of progress, not the economic grand deliverance proclaimed by liberals and self-serving black “leaders.”
Here is John Perazzo, offering additional insights that help expose her claims for the fantasies that they are:
Since 1965, more than $22 trillion of taxpayer money (in constant 2012 dollars) has been spent on means-tested welfare programs for the poor… As of 1965, the number of Americans living below the official poverty line had been declining continuously since the beginning of the decade and was only about half of what it had been fifteen years earlier. Between 1950 and 1965, the proportion of people whose earnings put them below the poverty level had decreased by more than 30%. The black poverty rate in particular had been cut nearly in half between 1940 and 1960. And in various skilled trades during the period of 1936-59, the incomes of blacks relative to those of whites had more than doubled.
But Warren’s adored “Great Society” flipped this on its head:
Between the mid-Sixties and the mid-Seventies, the dollar value of public housing quintupled and the amount spent on food stamps rose more than tenfold. From 1965-69, government-provided benefits increased by a factor of 8; by 1974 such benefits were an astounding 20 times higher than they had been in 1965. Also as of 1974, federal spending on social-welfare programs amounted to 16% of America’s Gross National Product, a far cry from the 8% figure of 1960. By 1977 the number of people receiving public assistance had more than doubled since 1960.
Please. Ms. Warren, tell us again about how “African Americans”, “though locked solidly at the bottom” during this terrible late ‘60s-70s economy, somehow grabbed hold of the “idea” of opportunity while their job prospects flat-lined, inflation rose, and welfare programs skyrocketed. Tell us how stopping low-skilled workers from entering the market by imposing minimum wage laws was at all helpful. Tell us how that gave people the “idea” of opportunity rather than, say, actual opportunity…
And just who are “the rich” she derides? As Thomas Sowell has often noted, in a vibrant economy, “We are talking about an exchanging mixture of people over time, and not the same people.” In fact, “Many of the people in the bottom of the 20% are the children of the people in the top 20%.”
As with many contemporary collectivists, Warren’s final focus is on the subject of “equality” and “wage disparity”. But did Charlie Rose ask her to define her terms? When she says “wages”, does she mean hourly wages, or total income? With a population skewed towards aging Baby Boomers who have amassed decades’ worth of stock and other assets, total income from those will far outpace the rises in income for other quintiles who don’t possess such assets. This is even truer in a mercantilist, Federal Reserve-pumped economy that sees cozy bankers and stocks receive trillions of bucks in made-up currency. The stocks rise, investments and dividends skyrocket, and “income” for the Baby Boomer rich grows much more rapidly than for the “poor”.
And if she really does mean “wages”, then has she factored in the non-monetary compensation of health insurance that flooded the market thanks to tax laws and the so-called Obamacare mandates? Perhaps, just perhaps, monetary wages for “the poor” might have increased if politicians like her had not forced businesses to offer non-monetary wages. Perhaps employers would not have dropped workers because of these mandates. Perhaps leaving decisions and money in the hands of the people earning the money is better than politicians like her making elitist demands and redirecting the funds.
Perhaps the veteran interviewer, Charlie Rose, could have gotten a ladder long enough to join her on her high horse and asked her these questions.
Of course, he’s an employee of PBS, so can we expect him to actually do any work?