I think we need a good psychoanalyst to consult here as much as a classically-trained economist.
I am glad to have made Terry Laving laugh. It never ceases to amaze me how willing some people who live in glass houses are to throw stones. Here we have a man who is extolling the virtues of manufacturing and the evils of the financial and service sectors. He apparently believes that the government should set "leverage quotients" and decide who should go into what professions. Bonuses on paper profits? The horror! Perhaps he'll disclose how he's achieved his great wealth and position of privilege in the ruling class.
As to Jeff Goldman, this is rich: "That's the problem with ideologues. They fit the facts to meet their beliefs. Pragmatists, with any luck, have a set of principles, but when things change, are willing to listen.".
There is a concept in psychology called projection. It is a defense mechanism where we project or attribute one's own undesired characteristics or thoughts to others. Jeff, my friend, you are a dear mean with many, many good traits, but being pragmatic when it comes to politics is not among them. Dogmatic, yes. Willing to change and listen? Not so much.
One example: you keep bringing up the need to tax capital and labor the same and take great delight in exposing conservatives as economic or market hypocrits. Now, on more than a couple of occasions I've tried to explain that many of us would be content if government stopped the double taxation of dividends, the straight taxation of investment interest income without first deducting interest expense, and the taxation of business profits, but, instead, tax all income at the individual level without regard to its source.
I have also tried to explain the rationale for having different rates for capital and labor by which government seeks to encourage the former due to its importance and scarcity relative to the latter. Anyways, to the extent that many of us believe we're heavily over-taxed and that government today is inappropiately in the business of determing winners and loses, we'll take any break we can get. Given the last year, this is sort of a moot point, wouldn't you agree? So why do you keep bringing it up? Your pragmatism acting up again?
I must admit, you are well read, but how did you say it earlier, might you be fitting your facts to meet your beliefs? I doubt very much that supply-siders considered Friedman a "hack", though such an accusation may have been tossed around in the spirit of academic competition. BTW, did you get this divide and conquer tactic from the Chicago or national party playbook?
I think that most principled pragmatists after a carefull reading of Friedman and Wanniski or Laffer would conclude that both camps have much in common- namely a bedrock belief in the inability of government to do much good in the economy and a propensity to do great harm. Even their disagreement relative to monetary policy and its importance in the economy was one of degree and not direction. Both believed monetary policy had to be independent of politics. One believed that the money supply should increase slowly, steadily, predictably to accomodate economic growth. The other prefered tying it to an objective standard, a relatively scarce commodity that could not be manipulated wildly for political reasons. Both camps believed that the economy would work best for all with markets made up of millions of individuals making decisions freely with minimum government interference. Common to both, a preference for low tax rates and small government naturally follows.
As to the Nurenburg comment, it is inappropriate and way beneath you. This is an analogy, one that is not only offensive on its face, but totally, grossly inaccurate. Your side which is now calling for reconciliation and understanding could never help itself during the last eight years, making frequent comparisons of Bush to Hitler and denigrating Christians. Now Stalin and Nurenberg. You guys sure know how to capture minds and hearts.
Craig Sweet,
The old chicken or the egg mystery does not apply to labor and capital. If capital was so easy and derivative of labor, we wouldn't have a nation of employees and we wouldn't have a party that since at least 1930 has been engaged in a highly devisive class war. Most of us should thank God and/or our lucky stars that there are exceptional men and women in this world who create and invest their capital so that we have employ. In this great country where some 45% don't pay any income taxes and many live in relative comfort, we should be doing this at least couple of times a day.
I have known people who have saved during much of their life to start a business. Any savings, be it from eating more beans and less beef, riding a bike vs. driving, or paying less to the government (a tax cut) as opposed to paying more, is money in their pocket and a step closer to their dream. BTW, I've worked in manufacturing and one often doesn't wait to receive an order for widgets before making them. In many businesses, a product is created long before there is demand for it. I know you ideologues are blocked on this, but supply often does beget its own demand.