Beware Republicans Bearing Tax Cuts

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DDTaxes continue to be the shiny object that blinds Republicans to truth! Never discussed as the world’s 5th largest GDP or the foundation for the safety nets that stabilize society in support of consumer demand and the US labor market, the GOP denies the benefits of taxes as a force multiplier within the economy (paying for infra-structure, collecting and sharing knowledge and data about diverse markets from energy to wheat; managing regulations that protect trade from fraud and corruption).

Instead, Republicans focus on a special benefit: tax cuts for businesses, esp. mega corporations. (Recently, they have added small businesses to the circle of tax cuts, but have no furnished any data related to their inclusion. Small businesses would benefit the most if tax cuts are progressive; equal cuts for all incomes are actually regressive for small businesses.) These massive tax cuts, Republicans claim, will create jobs!

Really? Apple’s cash on hand ($347 billion!) ranks 32th among global GDPs (its cash on hand nearly doubled (from $180 billion!) in the last 3 years!)–how much more does Apple need to create jobs? Even if Apple returned all of its overseas capital to the US, how exactly would it bring consumers to buy new iphones/ipods/watches, beyond its current market share?

Only one thing creates jobs: demand. (Apple’s sales have matured, moving capital will have no effect on US job creation!). The vast amounts of record capital hoarded and distributed around the world, some secreted away the in the Cayman’s, is static and growing–but it does not create jobs or raise wages–or create demand.

To cut taxes without a plan to increase consumer or corporate demand, to cut taxes without identifying global markets with rapid or sustained expansion (food, healthcare, rails), simply makes the rich richer–and creates no jobs. China’s 40 year creation of the world’s greatest economic engine, the Pearl River economic zone, did not involve a single tax cut. Yet it eclipsed American manufacturing through textbook practices for development: clustering, infra-structure development, traffic planning, financing, and oversight authority. China achieved growth without a tax cut in sight! In manufacturing, starting from scratch, Communist China beat Capitalist America in global free markets without tightening a budget!

market1
The true shiny object driving the tax cuts the Republicans propose is not sound economics, or common sense, or evidence, but greed. The allusion of jobs is a false appeal to blind us to their unending plot and demand for greater wealth.

China, no tax cuts, created record numbers of new manufacturing jobs over 4 decades, serving a global demand for products and parts purchased by corporations and consumers, from buttons and pianos to auto parts and chips. The US, esp, Republicans, focused on tax cuts, have seen the death of manufacturing and the stagnation of wages in many states; manufacturing jobs have declined as US manufacturing was no longer tied to global demand and Republicans cried and made false promises (proved by the fiasco in Kansas, which now cannot operate its schools, while gaining no jobs!) about jobs and wages miraculously born from tax cuts.

These are the same folk who will not raise the minimum wage!

Pearl River Drinking Water Quality1

 

Chinese workers in the Pearl River zone.

Chinese workers in the Pearl River zone.

The Putin Factor

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DDFirst, a few facts: Russia’s economy is the size of Spain’s, for the last 3 years, it has showed negative growth, a 3.7% decline in 2015. Its largest source of state revenue is Gazprom, the state-owned energy company which supplies Europe with natural gas for energy and winter heat.

Europe’s dependence on Russia natural gas (for consumers/businesses/GDP growth) is key to understanding the region’s soft resistance to Russia’s aggression. Russia focuses little elsewhere; its threat is its nuclear weapons; its military technology is outdated.

That said, Russia holds a psychological edge, esp. over Trump. Russia seeks not friends, but Pavlovian figures who respond to its bell ringing with teethless bites and empty threats–Putin (he does not want to be liked!) uses these threats to bolster his presence/power on the world stage, creating fear he uses to extract geopolitical concessions. Putin’s power depends on the US making him the bad boy. He revels in hardscrabble edge.

Putin has no “pals,” only lapdogs! He demands submission. He alternates between olive branches and sticks. He measures carefully the fear he instills. By failing to raise Russia’s cyber interference in the election, by forewarning Russia of the Syrian base attack, by not cancelling the Moscow meeting, Putin revealed Trump as a President with an lack of skills in statecraft who puts vanity before policy, ego above substance. Skilled in psychological profiling and its leverage, Putin has turned Trump into a tart, one who values appearances over achievements. What Putin sees in Trump is hesitation and weakness, uncertainty, no long or short game. Putin cares nothing about trust, only power. The timing in Syria tested Trump: he failed. Unwittingly, he followed Putin’s bell.

The Syrian Shayrat airfield base is pictured in undated before and after (taken April 7, 2017) satellite imagery, in Homs Syria. ImageSat International N.V. © 2017/Handout via REUTERS

The Syrian Shayrat airfield base is pictured in undated before and after (taken April 7, 2017) satellite imagery, in Homs Syria. ImageSat International N.V. © 2017/Handout via REUTERS. Note the runways are undamaged.

 

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