Barney Rubble Economics
Here’s a revealing video clip of Barney Frank, chairman of the House Financial Services Committee, on CNBC’s Closing Bell. I found it pretty hard to decipher, but he does say something along the lines of “there are some very rich people we can tax.†I find this revealing for several reasons.
First, it seems to be yet another example of losing all pretense that we’re in a capitalist economy – we’re just going right after the “rich†people’s money. Second, the typical member of Congress (i.e., those not in leadership positions) earns just shy of $170,000 per year. It’s very lucky, I suppose, that this annual salary is just south of Obama’s $250,000 cutoff (no tax increase for Barney?).
Frank’s statements are also revealing for their lack of economic logic. He calls for a “dose of Keynesianism,†but Keynes is unlikely to have advocated tax increases in the middle of an economic downturn precisely because they tend to slow down the economy. Aside from whether his policies are good or bad Keynesian policies, they certainly are poor economics.
Frank is advocating the following:
(1) “Spend†more tax dollars than we currently collect to boost the economy.
(2) Cut taxes to boost the economy.
(3) Wait a little while.
(4) Raise taxes to get those tax dollars back.
(5) Ignore the fact that tax cuts and tax increases provide opposing incentives.
I guess it is possible that Frank is nothing more than a politician playing to his base. But, if not, at least he is making his agenda clear – he wants to take money away from rich people. I guess the little people should just hope that those making more than $250,000 don’t run out of money too soon.
NM