Trumps economic plan

This is good. Read it all the way through.

link:http://www.counterpunch.org/2016/11/25/trumps-economic-plan-this-isnt-going-to-work/

see link……
……I can’t figure it out, after all, Bannon sounds like a true believer, a no-nonsense, red-blooded, blue collar working guy who hates the Wall Street, the Republican establishment and the mainstream media. What’s not to like about that?

But how does Bannon’s hardscrabble upbringing, his commitment to tea party uprising, and his take-no-prisoners combativeness, jibe with these flagrant tax giveaways, this anti-worker deregulation, and a fiscal policy that only benefits the uber wealthy? I don’t get it??

In an extremely persuasive interview with Buzzfeed News, Bannon disparages the new strain of “Ayn Rand” capitalism that objectifies people and turns them into commodities. He expands on this idea by giving a brief synopsis of the financial crisis that many will find galvanizing. Here’s a clip:

“The 2008 crisis, … which, by the way, I don’t think we’ve come through — is really driven I believe by the greed, much of it driven by the greed of the investment banks. …
And one of the reasons is that we’ve never really gone and dug down and sorted through the problems of 2008. Particularly the fact — think about it — not one criminal charge has ever been brought to any bank executive associated with 2008 crisis. And in fact, it gets worse. No bonuses and none of their equity was taken. So part of the prime drivers of the wealth that they took in the 15 years leading up to the crisis was not hit at all, and I think that’s one of the fuels of this populist revolt that we’re seeing as the tea party…

The bailouts were absolutely outrageous, and here’s why: It bailed out a group of shareholders and executives who were specifically accountable. …

In fact, one of the committees in Congress said to the Justice Department 35 executives, I believe, that they should have criminal indictments against — not one of those has ever been followed up on. … (and) Middle-class taxpayers, people that are working-class people, right, people making incomes under $50,000 and $60,000, it was the burden of those taxpayers, right, that bailed out the elites. …

It’s all the institutions of the accounting firms, the law firms, the investment banks, the consulting firms, the elite of the elite, the educated elite, they understood what they were getting into, forcibly took all the benefits from it and then look to the government, went hat in hand to the government to be bailed out. And they’ve never been held accountable today. Trust me — they are going to be held accountable.” (This Is How Steve Bannon Sees The Entire World, Buzzfeed News)

Repeat: “They are going to be held accountable.”

Bravo! He wants to lock them up. He wants the bankers to be held accountable and locked up! Who doesn’t want that? Every working slob in America wants that. This is why Bannon has attracted such a loyal following; it’s because his analysis of the financial crisis and its aftermath are “dead on”. The American people know they were ripped off, know that Wall Street is infested with crooks and parasites, and know that the country is governed by a corrupt and unaccountable oligarchy of racketeers.

Bannon has tapped into powerful feelings of frustration and rage, and he’s built a thriving movement on top of them. But where’s the beef? His economic policy just doesn’t deliver the goods. Bannon is talking the talk, but he’s not walking the walk.

The tax cuts don’t deliver for working people and neither does deregulation. So what about the third part of Trump’s economic plan, the fiscal stimulus component?

Bannon says he’s the driving force behind the $1 trillion infrastructure development program. Unfortunately, the program is little more than a scam. Let me explain:

Typically, when people think about fiscal stimulus, they imagine expensive Keynesian “shovel ready” infrastructure projects with lots of well-paid government workers building bridges, roads, rapid transit systems and even schools. That’s not what this is. According to economist Jared Bernstein:

“Instead of just allocating the needed resources as in the traditional approach, they propose to “offer some $137 billion in tax breaks to private investors who want to finance toll roads, toll bridges, or other projects that generate their own revenue streams.”

Since the plan depends on private investors, it can only fund projects that spin off user fees and are profitable. Rural roads, water systems, and public schools don’t fall into that category. Neither does public transit, which fails on the profitable criterion (it depends on public subsidies.” (Trump’s misguided flirtation with Keynesianism, Politico)

This isn’t going to work. It’s completely self defeating. This is just more of the same, more handouts to big business. The whole point of fiscal stimulus is to get money in the hands of the people who will spend it fast, rev up the economy, boost growth, generate more demand and get the economy out of its eight-year-long funk. The rebuilding of infrastructure is secondary, in fact, it doesn’t even matter. What matters is getting money circulating in the perennially-moribund economy. Caspice?

Here’s more on the Trump infrastructure boondoggle from an article in the Washington Post:

“Trump’s plan is not really an infrastructure plan. It’s a tax-cut plan for utility-industry and construction-sector investors, and a massive corporate welfare plan for contractors. The Trump plan doesn’t directly fund new roads, bridges, water systems or airports, as did Hillary Clinton’s 2016 infrastructure proposal. Instead, Trump’s plan provides tax breaks to private-sector investors who back profitable construction projects. … There’s no requirement that the tax breaks be used for … expanded construction efforts; they could all go just to fatten the pockets of investors in previously planned projects…

Second, as a result of the above, Trump’s plan isn’t really a jobs plan, either. Because the plan subsidizes investors, not projects; because it funds tax breaks, not bridges; because there’s no requirement that the projects be otherwise unfunded, there is simply no guarantee that the plan will produce any net new hiring. …

Buried inside the plan will be provisions to weaken prevailing wage protections on construction projects, undermining unions and ultimately eroding workers’ earnings. Environmental rules are almost certain to be gutted in the name of accelerating projects.” (Trump’s big infrastructure plan? It’s a trap. Washington Post)

These so called “public-private partnerships” are just another way for big business to suck money out of the government. They don’t help the economy, not really, and they don’t help workers either. If Bannon is serious about building his coalition on the back of a robust economy, there’s an easier way to do it. First get rid of the corporate ideologues and supply side radicals whose theories never work. Then hire a team of reputable economists who have first-hand experience implementing thorny stimulus programs of this magnitude. (Joseph Stiglitz, James Galbraith, Dean Baker, Michael Hudson, Jack Rasmus)

Then start with the low-hanging fruit, that is, put money into already-running programs that will produce immediate results. For example, in James Galbraith’s epic article “No Return to Normal” the economist recommends increasing Social Security payments. Think about that. It’s a complete no-brainer. The people who live on Social Security spend every dime they get every month, which means that — if their payments go up by, let’s say, $200 or more per month– then all that dough goes straight into the economy which is what fiscal stimulus is all about. Also, increase food stamp funding, lower the Medicare age of eligibility, and rehire a portion of the 500,000 federal workers who lost their jobs in the Crash of ’08. These policies will put money into the economy immediately, boosting growth, increasing wages, and strengthening the prospects for whatever political party happens to be in office.

The point is, fiscal stimulus doesn’t have to be a boondoggle and it doesn’t require “shovel ready” jobs. All that’s needed is a competent team of economic advisors who know what the hell they’re doing and the political will to get the job done. Trump’s economic plan doesn’t do that, all it does is slightly improve GDP while trillions of dollars are transferred to the bank accounts of behemoth corporations and Wall Street cronies.

If Bannon is serious about fixing the economy and rebuilding the Republican party, my advice to him would be: Give Galbraith a call.