Thursday, December 9, 2010

So When IS the Right Time?

You may have noticed a certain audacious argument coming from elite circles about why we shouldn't be letting the Bush era tax cuts expire. The argument is that in the middle of a recession, it's the wrong time to ask people (even very rich people) to pay more in taxes. They need to have more cash in hand so as to spend more, which means industry will produce more, which means they'll hire more people...a virtuous circle leading to economic recovery.

It's funny how corporations, bankers and politicians who used to think they could control the economy simply by raising or lowering interest rates have rediscovered John Maynard Keynes just when they might have to fork over more in taxes. But the audacity of the argument is that it can be used at any time. If we are in recession, we don't want to raise taxes lest it make things worse. If the economy is improving, that's the wrong time, too: do you want to choke off the recovery before it really takes effect? And if the economy is going great guns, why raise taxes and ruin the great thing you've got going? It's as if the whole purpose of government were to avoid taxing people--not to spend taxes wisely for the public good.

Now we are hearing a similar argument about putting people out of work. It seems it's always a good time to "downsize" and never a good time to make sure more people have jobs. "That's the story at State Street Corp., which recently announced the elimination of 1,400 jobs, including 400 in Massachusetts. Those jobs are gone, even though State Street last reported profits of $427 million, up about 20 percent from a year ago," reports Joan Vennochi in the Boston Globe.

There's a word for this in Yiddish: chutzpah. The old joke said that chutzpah means murdering your parents and asking the court for mercy because you're an orphan. The new joke is the chutzpah of corporate fat cats who justify their huge profits because they "give us jobs"--and then increase their profits by taking those jobs away.

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