[lbo-talk] Dems & the proletariat

Michael Hoover mhhoover at gmail.com
Mon Oct 9 11:08:17 PDT 2006


On 10/8/06, Doug Henwood <dhenwood at panix.com> wrote:
> As I recall, the supply-siders liked it because it lowered top rates
> markedly, and included a big investment tax credit - i.e., it was
> oriented towards capital, and therefore supply-side. It was not a
> more "liberal" approach that would have cut middle- and lower-bracket
> rates for reasons of demand stimulus and equity. Maybe I'm
> remembering the mix wrong.
>
> Doug
<<<<<>>>>>

there weren't any supply-siders at the time, friedman (i know, i know, a monetarist) comment about everyone being a keynesian applied to chamber of commerce, national association of manufacturers, american bankers association, new york stock exchange, afl-cio, and a number of trade association...

fourth recession in a decade had not ended when jfk was inaugurated, more people were unemployed during the first months of his presidency than at any time in the post-WW2 era to that point...

1960 election polls suggested that that votes of recently unemployed in a number of state were greater than kennedy's victory margins in those states (in two key states of that time, where this occurred - illinois and michigan - it was african-american votes that delivered jfk the presidency), nixon ran worst in cities with highest unemployment rates...

kennedy may not have understood economic idea but he understood well political dynamics, by mid-point of his first year in the white house, economy was in 'pause' mode and recession fears were running high, political concerns about chronic unemployment was biggest influence upon tax cut decision (as i mentioned in previous post, white house debate almost led kennedy to propose tax increase to raise revenue for cold war military buildup)...

kennedy people certainly thought that corporate/business support was important and they framed measure in such a way to retain it, cuts were divided between corporations and individuals with latter distributed through all tax brackets, this balance was retained until the end (there were was very little 'tax reform' included)...

jfk was dead when congress legislated the tax cut in 1964, unemployment was already down by that time as the economy had begun to grow after the second quarter of 1961, thus, for the first time in u.s. history a substantial budgetary 'stimulus' deficit was deliberately created during relative prosperity, maybe not keynesian per se, but heller and the 'new economists' (among whom was galbraith) traced their lineage and inspiration to keynes, the phrase they used was 'full employment surplus'...

moreover, conveniently forgotten/ignored by supply-siders are the accelerated public works projects and expanded job training/retraining programs that contributed to declining unemployment and increasing tax revenue during the kennedy years.. mh.



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