The Rubinian Candidate

...Democrats are afflicted with the Curse of Robert Rubin. They think that Mr. Rubin persuaded Bill Clinton to boost taxes in 1993 and that, while the move was unpopular (it helped cost Democrats control of both houses of Congress for the first time in four decades), the tax hikes cut the deficit, which, in turn, reduced the "crowding out" of private investment by government borrowing, which, in turn, drove down interest rates....

Unfortunately ... there is no correlation between budget deficits and interest rates. In fact, no sooner did Mr. Clinton sign that tax legislation than interest rates began a relentless climb. The 30-year Treasury bond went from 5.87% to more than 8% in a little over a year. The economy, which had begun a big recovery in the second half of 1992, hit the brakes. The economic growth rate for 1993 was less than it had been the previous year, when President Bush senior was running for re-election and Mr. Clinton was crying, "It's the economy, stupid." It was not until 1996 that the economy surpassed the growth rates it had achieved in the latter half of 1992.

The Curse also ignores the real factors that made the 1990s possible: the virtual elimination of inflation, which was the equivalent of a tax cut, particularly for capital gains; the 29% slash in the capital gains levy in 1997; the virtual elimination of capital gains taxes for most home sales (which triggered a housing boom that's still with us); ... and a new GOP-controlled Congress that would kibosh any more idiotic Clinton initiatives like national health care, and at least for a while, exercised real spending restraint. Being a bond man, Mr. Rubin himself has little understanding of entrepreneurial capitalism and the vital impact of tax incentives and disincentives.

Anyone here think that Mr. and Mrs. American will ever understand this, let alone see it?

I'll confess that economics is dreadfully confusing to me. Bottom line, where is the FREEPER website for newbies to the basics of how the U.S Economy works?

For example, I get the fact that when the Fed raises interest rates, they are, in effect, taking real dollars out of circulation. That when interest rates are lowered, they are in effect, promoting 'cheap money' such that more people will borrow - and thus add dollars to circulation.

What I don't get is this: how our money, and how the Yen, Pound, and Euro interact. Fundamentally, I don't get how banks operate with each other across national boundaries ... esp Swiss banks, and Cayman Island type banks.

I 'get' for example, that there is no WAY Kerry will ever be elected for a simple reason: he will make the average TV viewer less likely to spend than Bush will. Carter lost for that reason too. Spending, and feeling secure, go hand in hand.

What I don't 'get' is how one half of the population pays for the US Govt operations to the tune of 6 percent ... while the other half pays 94 percent. What I don't get is how income taxes ever got off the ground, why they are forcibly collected by employers (the fact is simple: change nothing but, make Americans PAY their own income tax ... talk about creating a incentive to understand economics).

There are 'doom and gloom' websites. There are 'eternal optimist' websites. Where is the 'economics for those who want the big picture' websites? The one that discusses the roles of 'ordinary' economics, as well as illicit economics, like the impact of the drug trade? Something that discusses matter of factly how going to single currencies is a sure fire ticket to losing national sovereignty?

Heck, where is the matter of fact, authorative discussion of who arranged the 13 stars above eagle in the Great Seal of the United States into the Seal of Solomon? I've looked everywhere, including the State Dept, for an official explanation. Yet, none is available despite the fact it's on the back of every dollar bill .... why is it so 'uncool' to understand even this??

At the risk of sounding flippant: Why not start a thread, for this very thing? I'll lay my next promotion on the fact that it'd go 300 posts...

I'll confess that economics is dreadfully confusing to me. Bottom line, where is the FREEPER website for newbies to the basics of how the U.S Economy works?

Go back and read the economic speeches of Ronald Reagan. Learn the basics of capitalism (private property, and investment). And by all means, at least skim through Das Kapital by Karl Marx. You've got to know what the enemy is up to, and you'll be amazed how some conservatives embrace some of the fundamentals of communism. The last thing you should do is take an economics course. I remember the course I took in college was all about scarce resources and guns vs. butter. There was nothing about the positive effects of innovation, or the markets.

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