Saturday, February 20, 2016

Bernie Sanders: Not as Big a Socialist as Eisenhower!

A priceless moment in a Sanders versus Clinton debate last year!



In reality of course, Bernie is just an honest New Dealer who wants a Western European social democracy.

And as for the top US federal marginal tax rates under Eisenhower, we can see them in the graph below. This graph shows the top US federal marginal tax rates on (1) earned income (in red) and (2) (where it diverges from the latter) ordinary income (in blue), from the the data here.


And yet even with rates under Eisenhower and Kennedy, in terms of virtually every economic measure in the book, this period was a golden age of US capitalism. A more serious issue with Sanders is the tax on speculative activity, especially if it is meant to be a Tobin tax proposal. One has to be careful with this (see Davidson 2002: 205–210), as it may not be a good thing.

What Sanders needs are good economic advisers, but I’m not sure who is advising him. What America also needs desperately is an industrial policy: government polices to incentivise, encourage and perhaps even subsidise re-shoring of manufacturing and accelerate a technological revolution in manufacturing to reduce costs of production, so that production in the US can compete against third world labour.

BIBLIOGRAPHY
Davidson, P. 2002. Financial Markets, Money, and the Real World. Edward Elgar, Cheltenham.

11 comments:

  1. according to steve keen stephanie kelton (fellow MMT Post-Keynesian) is the main economic advisor of bernie sanders

    https://en.wikipedia.org/wiki/Stephanie_Kelton

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    Replies
    1. Bernie Sanders = MMT president?

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    2. I hope so at least its way better than neoclassical president specially in times of enoroums private debt which cause lack of effective demand,mmt policies will be really effective to create long term sustainable economic growth

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    3. Yes it is Kelton, it was Sanders who hired her as the chief economist for the minority on the Senate Budget committee.

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    4. Because without serious fiscal stimulus there is no way to achieve sustainable growth for a long time because the enoroums private indebtness create serious constrain on effective demand and on economic growth generally.

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  2. I am not sure the top marginal rate is a useful number for comparing tax policy.

    Because you could have a 90% marginal rate, but virtually nobody might be rich enough to pay those rates.

    And on the other hand, you could have a 70% marginal rate, but with a much larger rich population that would be paying those rates.

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  3. "see Davidson 2002"

    Which one?

    Do you have the title or a link?

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    Replies
    1. Its Paul Davidson, 2002. Financial Markets, Money, and the Real World. Edward Elgar, Cheltenham. pp. 205–210.

      You should be able to read it on Google books.

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  4. As Stalin said, what really matters is who punts the vote. Hillary is much better at counting than Bernie.
    http://theamericanmirror.com/video-hillary-supporters-register-after-voting/

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  5. 'but I’m not sure who is advising him. What America also needs desperately is an industrial policy: government polices to incentivise, encourage and perhaps even subsidise re-shoring of manufacturing and accelerate a technological revolution in manufacturing to reduce costs of production, so that production in the US can compete against third world labour.'

    I read this blog quite regularly over the last few years and have come to quite enjoy it. But this statement makes zero sense to me. Please can you clarify ?

    ReplyDelete