Saturday, September 06, 2008

Reisman on Obamanomics

After an absence of three months, George Reisman returns to blogging with two posts. In the brief, more recent post, he shows that Sarah Palin and Barack Obama have much the same approach when it comes to economics. After illustrating how their equivalent policies are wrong headed, Reisman declares:
Obama and Palin are both obviously ignorant of economics. John McCain, who picked Palin to be his running mate, has admitted his own lack of knowledge of the subject. Knowing little or nothing of the subject himself, he could not be expected to realize that Palin knew nothing of the subject either. An examination of the record of Obama’s running mate, Senator Joseph Biden, would probably turn up a more extensive record of comparable ignorance of economics, given his greater number of years in public life as a leading spokesman for the Democratic Party.
But Reisman's long August 28 post is the more worthwhile one. In it Reisman defends the proposition "Why Everyone Should Be in Favor of Tax Cuts for the “Rich”" on detailed economic grounds, taking for granted that individuals are interested in greater prosperity and economic growth. In addition, it shows the counter productivity of tax cuts without corresponding reductions in government spending as well as the negative long term effects of the Federal Reserve's easy credit policy. Reisman's conclusion is as follows:
Of course, in a further display of their ignorance and blindness, members of the left will undoubtedly characterize the line of argument I’ve presented in this article as the “trickle‑down theory.” There is nothing trickle‑down about it. There is only the fact that capital accumulation and economic progress depend on saving and innovation and that these in turn depend on the freedom to make high profits and accumulate great wealth. The only alternative to improvement for all, through economic progress, achieved in this way, is the futile attempt of some men to gain at the expense of others by means of looting and plundering. This, the loot‑and‑plunder theory, is the alternative advocated by the redistributionist critics of the misnamed trickle‑down theory. The loot‑and‑plunder theory is the theory of Obama, of the Democratic Party, and of much of the Republican Party. It is time to supplant it with the sound economic theory developed by generations of intellectual giants ranging from Smith and Ricardo to Böhm-Bawerk and Mises.

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