Tuesday, August 8, 2017

Republican love for the poor

I had a discussion with some conservative relatives recently that got me thinking.  I asked if they supported Trump's tax cut for the rich that would kick millions of people off their health care plans.  Is that what our country needs right now?  Give people making over $250K a tax cut and kick 20 million people off of health care?  Seems obviously terrible.

"Well, they aren't being kicked off.  They are choosing to not buy insurance.  They now have a choice that they didn't have before.  Before they were forced to buy insurance they didn't want.  Now they can spend money as they choose."

You see how brilliant these conservative think tanks are?  That's probably where this argument originated.  From there to Fox News, to my brother's head.  The think tanks get paid to craft arguments.  Arguments that advance the agenda of the rich.  This is the kind of stuff they come up with.  The rich want tax cuts.  How to make this palatable to the public that doesn't think this is a good idea?  Pretend it is our concern for the poor that drives us.  We only want these poor people who can't afford health insurance to have the choice of not buying it.

I realize that this is a strategy you get over and over.  You know why we shouldn't raise the minimum wage?  It will hurt the poor.  The first person to lose his job when minimum wage goes up is the person with the least amount of skills.  Probably the poorest person.

Isn't it strange that poor people advocacy groups don't advance arguments like this?  They're always flowing from the right wing think tanks whose goal is to advance the arguments of their wealthy backers, like the Koch brothers.

I asked my brother to think this through with regards to health care.  Families making less than $25K get full medical coverage for free right now under Obama Care (if they are in a state that accepted Medicaid expansion).  These people are obviously not better off when you take away their subsidy and they lose health coverage.  People that make between $25K and $60K get a subsidy that phases out the closer you get to $60K.  So people making $30K or $35K are getting a significant subsidy.  We're taking away that subsidy to make the tax cuts for the rich possible.  We're doing this because we're concerned about the poor rather than the rich?

"Yes.  When you take away a person's subsidy this motivates them to stand on their own two feet and pull themselves up by their own bootstraps."

Grrrr.  Again, isn't it strange that Oxfam or other anti-poverty groups do not advance arguments like this (to my knowledge).  They don't say "When can we strip the poor of Medicaid so we can finally see some improvement in their lives."  It's the institutions representing the interests of the rich that advance these arguments.

And it's a common strategy.  We need fewer environmental protections.  Removing regulations will cause the economy to blossom, providing jobs desperately needed by the poor.  We need to invade Iraq to relieve the suffering of the poor, oppressed Iraqi people.  Wealth trickles down.  Tax cuts for the rich, like a reduction in environmental protections, is a shot in the arm for business and will allow them to hire more people.  It's a mere happenstance that my wealthy backers from the coal industry don't want us to pursue reductions in fossil fuel emissions.  What I'm really concerned with is the poor miners in West Virginia.

One thing we know about our government generally is that it is not responsive to the concerns of the non-wealthy.  They justify their policy positions by pretending they do it all for the common man, the poor man.  It's total crap.  What's frustrating is that many common men buy it.

6 comments:

HispanicPundit said...

Curious Jon, what are your thoughts on why the economy is roaring? Black unemployment, for example, is the lowest in recorded history. Thoughts?

HispanicPundit said...

Here is my explanation of why: http://www.nationalreview.com/article/455175/trickle-down-economics-work-no-matter-liberals-claim

Jon said...

I don't think I would agree that the economy is roaring. It's improved a lot since 2010. Boom and bust cycles are typical of our now deregulated financial system, with the busts getting larger and larger. We're in a boom, but there's a lot of talk about how it's not so boomy as other recoveries. I'm sure you know that people aren't counted as unemployed if they haven't looked for work in a while. The labor force participation rate is not great.

It's a slow, steady boom. GDP growth has been about 2% for a while. Not amazing by historical standards.

So it's Trump's deregulation according to National Review. Did things take off under Trump as compared to Obama? I don't think so. The economy has been steadily adding jobs for many years, including prior to Trump. OK, Trump passed a tax cut, but that hasn't taken effect. NR wants to believe good things are due to corporations anticipated the benefits of Trump. But then where is the change? People were expecting Hillary to win throughout the whole election cycle. Were things bad during that time and only got better when Trump won?

The stock market is up, but that's a lot different from the economy. By and large that means the rich are doing better. The top 10% control 80% of all the stocks. The bottom 50% doesn't have stocks at all. So sure, when a corporation no longer has to contain it's pollutants, they can just dump them in the river, profits go up because costs go down. Kind of a temporary benefit. When we all start getting sick though, that's when the price is paid.

Jon said...

Generally I don't think the tax cuts will make things better. I believe inequality hurts the economy. Give billionaires twice as much money and they won't buy twice as many houses, twice as many cars. It doesn't spur a commensurate amount of demand. Give the poor twice as much though and they will spend it, creating demand that makes for jobs.

Instead to balance the budget we'll see cuts to things given to the poor, like Social Security benefits, Medicare benefits. The poor will have to decrease their consumption of consumer goods to fund other necessities, demand falls, and the economy slows. For now everybody gets a tax cut and we just explode the deficit (unless the predicted growth materializes, I don't believe it will, neither does the Congressional Budget Office). Maybe running up debt is good for the economy short term, I expect it's not good long term.

HispanicPundit said...

Few counter points:

The labor force participation rate has largely been the same for a while, yet the unemployment rate has been dropping....again, signs that where it matters most, the economy is doing great.

Stocks performance is showing its biggest post-Election Day gain in more than 70 years. GDP growth is up since election day, see here: https://tradingeconomics.com/united-states/gdp-growth.

All mere coincidence then huh?

Jon said...

Not sure why that's a sign things are great. Falling unemployment along with no change to labor participation rate. It could mean job additions are only maintaining the rate needed for population growth. People that lost their jobs are not able to find new ones, so the unemployment rate falls because they are no longer counted as unemployed.

I mean, it could be good. Could be people are so rich they are retiring. By itself though it's not a sign the economy is doing great.

I already talked about the stock market, how it is affected by Trump policies, and that's not necessarily good. Not a coincidence.