The Econ 101 every Supplier Sider ignores, and why the Tickle Down isn't coming

[mercos]

We can't save all of the manufacturing jobs that we lost, but we have to bring some back or we will continue on our downward spiral. Manufacturing jobs are needed because they are generally low skill jobs, and there is a good section of the population that is never going to develop high skills to handle high tech jobs. It is also not a good idea to allow another country to completely control the manufacture of items that are essential to our own country. We are already at China's mercy when it comes to precious metals.

[Drachen]

That's NAFTA.

What about the trade agreements that followed. Did they have as much republican support as NAFTA?

Well I got you started, but there is a website to help you can answer that question.
http://bit.ly/uxMA6H

[FuzzyLumpkins]

Free trade was inevitable, as was manufacturing moving to lesser developed, lower salary, lower regulation countries. It is a global economy. No use ing about it now. The US has moved into a mature service economy. People need to adjust their expectations.

I always love it when you spout 1990's rhetoric, CC.

[Wild Cobra]

Free trade was inevitable, as was manufacturing moving to lesser developed, lower salary, lower regulation countries. It is a global economy. No use ing about it now. The US has moved into a mature service economy. People need to adjust their expectations.

But if we keep having more unemployed than we have available paying service jobs, then maybe we will have to reintroduce indentured servitude.

[Wild Cobra]

Our biggest sore spot with trade is the U.S.–China Relations Act of 2000. Although signed by president Clinton, the major supporters in the House were republicans, and about equal in the senate.

This, was in my view, was the permanent downturn of our economy.

[Wild Cobra]

Well I got you started, but there is a website to help you can answer that question.
http://bit.ly/uxMA6H

Not funny.

I used wiki and Thomas.

[CosmicCowboy]

Our biggest sore spot with trade is the U.S.–China Relations Act of 2000. Although signed by president Clinton, the major supporters in the House were republicans, and about equal in the senate.

This, was in my view, was the permanent downturn of our economy.

Who knows? It could have also prevented WWIII.

[Drachen]

Not funny.

I used wiki and Thomas.

well I thought it was funny and you know what they say "if you cant laugh at yourself...."


So, Please show us the tallies for all trade agreements which have ever been passed (since you didn't narrow it down).

[Drachen]

Who knows? It could have also prevented WWIII.

For now . . . . .

dun dun DUUUUUUNNN!

[CosmicCowboy]

For now . . . . .

dun dun DUUUUUUNNN!

Seriously...you can't go back 20 years and say "If we hadn't done x then everything would be hunkydory"...it just doesn't work that way...there are cause/effects from every decision...if we had tried to block China from the world economy who know what would have happened? There was still India, Malaysia, Vietnam, Thailand, Korea, etc.

[Clipper Nation]

Our biggest sore spot with trade is the U.S.–China Relations Act of 2000. Although signed by president Clinton, the major supporters in the House were republicans, and about equal in the senate.

This, was in my view, was the permanent downturn of our economy.

Not even close to our biggest sore spot with trade, which is NAFTA.... it's not actual free trade, it's corporatist-managed trade that threatens our sovereignty and our ability to create and keep domestic jobs, all for the sake of enriching special interests....

[The Reckoning]

not enough derivatives and charts tbh

[The Reckoning]

Not even close to our biggest sore spot with trade, which is NAFTA.... it's not actual free trade, it's corporatist-managed trade that threatens our sovereignty and our ability to create and keep domestic jobs, all for the sake of enriching special interests....

actually it hurts mexico more than anyone else...flooding their market with our cheap goods and running out compe ion. i think the US has been better off with it .

just not ollll meh-he-co

[Wild Cobra]

well I thought it was funny and you know what they say "if you cant laugh at yourself...."


So, Please show us the tallies for all trade agreements which have ever been passed (since you didn't narrow it down).

I can laugh at myself quite well. I simply hate that slow typing Google thing. I've never been diagnosed, but I think I have ADD. That site posses me off because it's too damn slow.

[FuzzyLumpkins]

I can laugh at myself quite well. I simply hate that slow typing Google thing. I've never been diagnosed, but I think I have ADD. That site posses me off because it's too damn slow.

I dont think its ADD. or at least not only add

[LnGrrrR]

I dont think its ADD. or at least not only add

Cruel but funny.

[Juggity]

Add the Environmental Protection Agency, Homeland Security, and Department of Education to that list and you've got a deal.

This explains so much

[scott]

http://papers.ssrn.com/sol3/papers.c...act_id=2112482

Tax Cuts for Whom? Heterogeneous Macroeconomic Effects of Income & Payroll Tax Changes


Owen M. Zidar
University of California, Berkeley - Department of Economics

July 24, 2012


Abstract:
This paper investigates how tax changes for different income groups affect macroeconomic activity. Using historical tax return data from NBER’s TAXSIM, I construct a measure of who received (or who paid for) postwar tax changes for each income and payroll tax change that Romer & Romer (2010) classify as exogenous. At the national level, I aggregate tax changes for all taxpayers in the the bottom 90% and the top 10% of AGI and relate these aggregates to output, employment, and consumption growth. At the state level, I construct Bartik instruments for state tax shocks using national tax changes and each state’s share of high income taxpayers. If tax cuts for high income earners generate substantial economic activity, then states with a large share of high income taxpayers should grow faster following a tax cut for high income earners. I find that the negative relationship between tax changes and real GDP growth over a two year period is almost entirely driven by tax changes for the bottom 90%. The empirical relationship between tax cuts for the top 10% percent and job creation is negligible in magnitude, statistically insignificant, and much weaker than that of equivalently sized tax cuts for the bottom 90%.

Number of Pages in PDF File: 26

Keywords: Tax Cuts, Heterogenous Agents, Fiscal Policy, Paradox of Thrift, Business Cycles

JEL Classification: E32, E62, H20, N12

[CosmicCowboy]

Isn't it a little simplistic to attribute growth/shrinkage in a states economy to a single variable?

Is his conclusion really justified by the data?

[scott]

Isn't it a little simplistic to attribute growth/shrinkage in a states economy to a single variable?

Yes, but I don't think that what is being implied by anyone.

Is his conclusion really justified by the data?

Not just the data, but the fundamental theory behind it. Based on what reason does anyone believe that tax cuts for the wealthy will create jobs? Real investment in physical capital or jobs is already taxed advantaged and reductions in personal income tax for the top don't correlate (in theory or reality). On the other hand, higher income individuals spend a lower % of their income on consumer goods (conversely stated: they save a higher % of their income) and consumer spending has the greatest direct impact on job creation.

[boutons_deux]

"consumer spending has the greatest direct impact on job creation."

yep, is why QE1,2 got no traction, because Fed lending to the financial sector didn't "trickle" to the consumer level. The financial sector took those cheap $100Bs and increased their own incomes in the Wall St Casino, trading, speculating, etc. The Fed is outta bullets.

[CosmicCowboy]

Yes, but I don't think that what is being implied by anyone.



Not just the data, but the fundamental theory behind it. Based on what reason does anyone believe that tax cuts for the wealthy will create jobs? Real investment in physical capital or jobs is already taxed advantaged and reductions in personal income tax for the top don't correlate (in theory or reality). On the other hand, higher income individuals spend a lower % of their income on consumer goods (conversely stated: they save a higher % of their income) and consumer spending has the greatest direct impact on job creation.

But the same survey in a different economy could have had an entirely different conclusion.

This data was for 2010, right?


If you look at all the wealth that was lost in 2010 in real estate, the stock market, etc. A cut in tax rates may have had a negligible positive impact compared to the negative impact of wealth lost in these other areas.

[scott]

But the same survey in a different economy could have had an entirely different conclusion.

This data was for 2010, right?

If you look at all the wealth that was lost in 2010 in real estate, the stock market, etc. A cut in tax rates may have had a negligible positive impact compared to the negative impact of wealth lost in these other areas.

The data was going back all the way post-WW2. The 2010 reference is only to a previous study.

Edit: if a study attempted to draw a conclusion by only looking at 2010 it would never get published, and the author would probably get fired by his university.

Edit 2: Mr. Zidar is a current PhD candidate at Berkeley, so he wouldn't get fired... he would have never gotten in (if he made that mistake). Here is his CV, for those who may want to question his credentials: https://docs.google.com/viewer?a=v&p...zNiNTU0NDM3Yjk

[FuzzyLumpkins]

I would recommend framing the discussion in how to test the effects of a variable on a system and how systems are analyzed in general rather than continue allowing him to pigeonhole the discussion into this particular version of 'things are just too complicated for us to understand' dismissal.

[scott]

I would recommend framing the discussion in how to test the effects of a variable on a system and how systems are analyzed in general rather than continue allowing him to pigeonhole the discussion into this particular version of 'things are just too complicated for us to understand' dismissal.

Will you have me teach an entire semester on econometrics on this forum while I'm at it?

Sheesh!