Is Krugman for real or just a b.s. spin artist?
Did anyone read Paul Krugman’s opinion column in the New York Times on Sunday? He put forward an uncut socialist prescription for an economic golden age. It was called “The Twinkie Manifesto” and it extolled at least one thing that Mr. Krugman finds good about the 1950’s - income taxes were high. He writes:
“Yet in the 1950s incomes in the top bracket faced a marginal tax rate of 91, that’s right, 91 percent, while taxes on corporate profits were twice as large, relative to national income, as in recent years. The best estimates suggest that circa 1960 the top 0.01 percent of Americans paid an effective federal tax rate of more than 70 percent, twice what they pay today.”
Contemplating those long-lost times, Mr. Krugman waxes nostalgic:
“… the high-tax, strong-union decades after World War II were in fact marked by spectacular, widely shared economic growth: nothing before or since has matched the doubling of median family income between 1947 and 1973.”
Before making this call for America to go back to the future:
“Along the way, however, we’ve forgotten something important - namely, that economic justice and economic growth aren’t incompatible. America in the 1950s made the rich pay their fair share; it gave workers the power to bargain for decent wages and benefits; yet contrary to right-wing propaganda then and now, it prospered. And we can do that again.”
Mr. Krugman, Mr. Krugman, so you want to go back to the days when America competed with the rest of the world at a 91% income tax rate?
Okay, so in preparation for this we are going to have to duplicate the conditions in which all of our competitors’ centers of industry have been bombed over the course of a six-year world war that has killed millions, displaced millions more, and utterly smashed the economic lives of the nations of Europe and the East. All except the United States of America, whose cities were not bombed. Whose manufacturing centers were not turned to rubble.
What about competition from the European Union? Well, Great Britain was never conquered and came out on the winning side, but they were still cleaning up the wreckage of its main commercial centers ten years after the war. In fact, the economy was such a wreck that rationing of basic consumer items like meat continued until mid-1954. That was one reason why the voters threw out the socialist Labor government in 1951.
The rest of what was to become the European Union - its city centers, manufacturing towns, and agricultural regions - had been fought over, most of it not once but twice. All of eastern Europe ended the war occupied by the Soviet Union and shackled to a retrograde communist economic system.
Germany, the economic engine of the future European Union, was bombed to pieces and its population reduced to a barter economy. Until 1950, the war’s victors pursued a policy of “harvesting” what remained of economic value in Germany - dismantling thousands of factories, seizing raw materials like coal, and removing that nation’s technological brain power.
Reparations were not only assessed against Germany, but against Italy, Romania, Hungary, Bulgaria, and Finland as well. Having won the war, the Soviet Union’s economy was exhausted and had lost 40 million of its population. It took years for the economy to reach pre-war levels and three decades for the population to rebound.
Japan, now occupied by American military forces, had suffered two atomic blasts as well as high-explosive bombing and fire-bombing campaigns that had seen its centers of economic life destroyed and 4 percent of its population wiped out. Future economic powerhouses suffered too, like Singapore, which lost nearly 7 percent of its population.
China and Korea faced great loses in the global war only to be plunged into civil war once it had concluded. China suffered 20 million deaths during the war, to be followed by millions more during the revolution and its aftermath, which plunged China into economic and cultural darkness for decades. Korea was the site of a devastating war that “ended” in 1953. Another future economic powerhouse, India, lost 2.5 million during the war only to face partition and the loss of another million lives and the displacement of 12 million more. The economic life in all of these future industrial centers was in tatters while America enjoyed its halcyon of the 1950’s.
Mr. Krugman ignores all of this and then accuses others of “propaganda”?
Well, he might want to go back there, but it will take a lot more than a 91 percent tax bracket to replicate the world economic conditions that existed then. Today, all of these broken, battered nations are strong economic competitors to the United States. But hey Mr. Krugman, you have President Obama’s ear, so does the Times. Go ahead and advocate for it, give it a try and see where all the capital flows. Nothing will test your theory like doing it.
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