Tom Elia, writing at The New Editor,
has a long piece about how the public, in polls, is not recognizing that the economy is doing extremely well. Hurricane Katrina gave the MSM the opportunity to paint a largely untrue narrative about President Bush and the Federal response. the constant hammering on that story line has succeeded in driving President Bush's poll numbers to ridiculous lows. That has been aided by the ineptitude of the administration in public relations and communications, in general. Tom writes:
Let me walk you again through some of the statistics about this current economic expansion -- but instead of looking at what's happened from the official recession bottom in November 2001 to now, let's also look at what happened from April 2003, which is the last month-end before the tax cuts were enacted into law.
Let's start with the stock market. From the recession bottom to April 2003, the S&P 500 actually lost 18%. Since April 2003, the S&P 500 has gained 51%. Now that's a bull market -- but you just have to start at the right place.
From the recession bottom to April 2003, 1.03 million payroll jobs were lost, and the unemployment rate actually went up from 5.5% to 6.0%. Talk about a jobless recovery! But since April 2003, payroll jobs have increased by 5.11 million, and the unemployment rate has fallen to 4.7%.
From the recession bottom to April 2003, real GDP grew 3.2%. Since April 2003, it has grown 11.3%.
From the recession bottom to April 2003, S&P 500 earnings increased only 7%. Since April 2003, earnings have grown 59%.
From the recession bottom to April 2003, manufacturers' new orders fell 5%. Since April 2003, they have increased by 38%.
From the recession bottom to April 2003, non-residential fixed investment fell 1%. Since April 2003, it has increased by 35%.
And here's the most remarkable of all. From the recession bottom to April 2003, federal income tax receipts fell by 11%. Since April 2003, they have increased by 26%, and now stand at all time record highs. Think about that one for a second. We cut taxes on personal incomes, capital gains, and dividends -- and tax receipts went up.
Let's hear it for voodoo economics. It works.
Why does it work? It's really so simple. Tell people they will get to keep more of the fruits of their labors and the fruits of their investments, and they will labor more and invest more. The economy will grow -- and so will tax receipts.
But there's something else at work when you cut the taxes on dividends and capital gains in particular. By doing that, you've directly removed a disincentive to risk-taking and capital formation. There has never in history been any kind of economic growth that came from anything else. Risk-taking and capital formation are what it's all about -- and when you lower the taxes on them, you get more of them. So you get more growth.
It really puts Dr. Charles Wheelan's piece, "
Debunking One of the Worst Ideas in Economics", in a bad light. He doesn't believe that tax cuts generate enough revenue to pay for themselves (he is a columnist at
Yahoo Finance). You have to suspect that Charles Wheelan must be of the lefty persuasion.