Sunday, January 24, 2016

Things Have Changed

Yes, they have.

From Scott Sumner at The Money Illusion.

In 1986 Ted Kennedy voted to cut the top income tax rate to 28%.  In 1987 the NYT advocated eliminating the minimum wage.  In the 1990s Paul Krugman spoke up for sweatshops.  By 1999 he was ridiculing the idea that Japan should rely on fiscal stimulus, when monetary stimulus was the obvious choice.  In the 1990s lots of liberals favored ideas such as a progressive consumption tax, and health savings accounts. They favored free trade agreements.  I miss the 20th century.

Eight years ago the minimum wage was $5.15/hour, and people were proposing a 40% increase to $7.25/hour.  Cynics said, “if $7.25 is such a good idea, why not $15?”  The minimum wage advocates said that this sort of reductio ad absurdum argument was ridiculous, no one is advocating $15/hour.  Until now.  So I’ll ask the obvious question—if $15/hour is such a good idea, why not make it $30?

Speaking of which, THC has read accounts of the arguments over President Kennedy's proposal for deep cuts in personal tax rates which he claimed would to stimulate the economy and were opposed by many Republicans concerned about budget deficits; the tax cut was passed in 1964 after JFK's death.

Sumner is an economist focused on monetary policy and who is not pleased with either Democrats or the GOP.  He blames the Great Recession (not the housing bubble) on the tight money policies of the Fed.  THC does not understand everything he writes about but finds him useful to check in with on a consistent basis.

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