Political Animal
Blog
When Newt Gingrich and Rick Santorum have gotten attention for criticizing safety net programs for the poor, it has usually been because of the supposed racial undertone of their comments. But they’re saying something else too, something that recalls one of the most enthusiastic and influential proponents of supply-side fiscal policy: Jack Kemp.
Earlier this month, Newt Gingrich said “I think we want to replace the safety net with a trampoline. Policies that help the poor become middle class, help people get out of poverty.” And today at a Tea Party event in Michigan, Rick Santorum promised to “talk to minority communities not about giving them more food stamps and government dependency, but about creating jobs so that they can participate in the rise of this country.”
And while these remarks sound a bit goofy, they fit closely into the Kemp view of how tax cuts and other “pro-growth” policies will make everyone better off, especially the poor, thus finally allowing Republicans to make inroads to the minority vote. Here’s how Kemp put it in a 1990 Wall Street Journal op-ed:
It was this economy, triggered by President Reagan’s supply-side revolution of tax cuts in 1981 that generated 21.5 million new jobs, more than four million new businesses, relatively low inflation and higher standards of living for most people. This economy has created more jobs in the past decade than all of Europe, Canada and Japan combined. And according to the U.S. Treasury, federal income taxes paid by the top 1% of taxpayers has surged by more than 80% to $92 billion in 1987 from $51 billion in 1981.There is another economy — a second economy that is similar in respects to the East European or Third World socialist economies. It functions in a fashion opposite to the mainstream capitalist economy. It predominates in the pockets of poverty throughout urban and rural America. This economy has barriers to productive human and social activity and a virtual absence of economic incentives and rewards. It denies black, Hispanic and other minority men and women entry into the mainstream. This economy works almost as effectively as did hiring notices 50 years ago that read “No Blacks — or Hispanics or Irish or whatever — Need Apply.”
But Kemp’s supply-side anti-poverty revolution didn’t amount to much, practically or politically, in the 1980s or 1990s, when he was most influential. That’s probably because poor and minority voters don’t view the estate tax or high-ish marginal rates on high earners as the root cause, or even a major contributor, to their condition. Furthermore, Kemp was positively evangelical in his belief of the efficacy of market-based and supply-side social policy, whereas Gingrich and Santorum make it seem like they’re only talking about the poor because liberals are forcing them to.
But more importantly, the “lift all boats” approach that Kemp pioneered has some serious empirical problems. It was not widely noticed at the time, but this Financial Times article reporting on new research by University of Arizona inequality scholar Lane Kenworthy raises serious problem for the view that economic growth is all that’s needed to raise the living standards of the poor:
The study looked not just at what happened to post-tax incomes during periods of faster and slower growth but also the effects of the transfer of a variety of benefits of cash or near-cash benefits.All of the countries that saw living standards rise for lower income groups - the UK, Norway, Sweden, Finland and Denmark - had programmes in place when economic activity was strong that benefited low-earning households.
However, in countries that had few or no transfer programmes in place during high-growth periods - the US, Canada and Switzerland -low-earning households saw little benefit. This finding means “that as a general rule, growth has not trickled down to low income households through wages or employment”, the report concludes.
When government transfers haven’t grown, wages and employment haven’t stepped in to take their place. Instead, low income households have had little or no income growth,” it says.
Just something to remember next time Newt Gingrich talks about trampolines.
Facebook
Twitter
gregor on February 25, 2012 12:19 PM:
A Flying Persian Rug metaphor would be more appropriate as you would want them to go up and stay there flying about, and not jump up only to come down on the trampoline. It would also be as much of a fantasy.
j on February 25, 2012 12:36 PM:
All republicans sing in a chorus, they all will balance the budget! I could be wrong but the last republican to balance the budget was Eisenhower, and he did it with higher taxes.
The last democratic president to balance the budget was Bill Clinton, who left us with a surplus, which the republicans quickly turned into the present deficit.
Matt on February 25, 2012 12:40 PM:
And today at a Tea Party event in Michigan, Rick Santorum promised to “talk to minority communities not about giving them more food stamps and government dependency, but about creating jobs so that they can participate in the rise of this country.”
How stupid of us! All the while we were angry at minorities for their food stamp dependency and failure to help the country, but it turns out they were simply never asked to "participate in the rise of this country!"
It's like when you hold a gala garden party but forget to sent the invitations to the engravers! Whew... good catch, Rick. That would have been awkward.
smartalek on February 25, 2012 12:56 PM:
Wait, wait --
You mean a Publican was wrong about something???
Stop the presses!
SYSPROG on February 25, 2012 12:57 PM:
Nice. I'll have to read that study. I love all this rhetoric about helping the poor and today Santorum comes out and calls the President a 'snob' for wanting to make college more affordable. Gosh Rick. I thought that WAS the American Dream. So now they're telling the poor and middle class 'stop dreaming. You're here to support US.'
jpeckjr on February 25, 2012 1:14 PM:
There are low-income white people, too. That seems to escape the notice of Republicans.
longwalkdownlyndale on February 25, 2012 1:33 PM:
Great stuff Matt! I have to say as a Northwestern Alumni you represent wildcat pride quite well. (By the way where are you writing this from? I like to imagine you manning a war room in BOB-the cinderblock dorm/fortress known for its ridiculous party scene for you non Evanstonites-or possibly a once elegant 1920’s hardwood floor apartment off Ridge Ave? A high tech “situation room” in the bowels of tech?) Here’s my real comment: the Kemp reference it totally right, but I would say in a different way. Back in the 96 race I remember seeing a SNL sketch of a GOP debate. In it Jack Kemp argues that he will apply the same leadership style he had in football “where I made the team give 110%” to the Presidency “by making the budget give 110%” and thus have 10% more money for capital gains tax cuts! It’s funny because the Mittster’s campaign guru’s have probably pitched that talking point around during debate prep…
mudwall jackson on February 25, 2012 1:42 PM:
reminds me of the governor of our fair state, rick scott, trying to relate to a group of students at florida a&m, an historically black university, by telling them he grew up in the projects. "governor," the students replied, "we're not poor."
somebody might want to inform gingrich and santorum that the president of the united states is a minority and he ain't on food stamps.
pj in jesusland on February 25, 2012 1:58 PM:
Institutions of higher learning like Forsythe Community College in Winston Salem are the hub of growth in their communities. Forsythe is training the returning vets, the recently unemployed along with high school graduates to do the increasingly high-tech management and production line support work at places like Baptist Hospital, Fedex, Caterpillar and elsewhere. Community college researchers are developing new kinds of crops, doing genetic research, etc. etc.
Who on earth is against education? Rick Santorum is so out of touch with America I'm amazed he has gotten as far as he has. Fortunately it looks like his trip will end soon.
schtick on February 25, 2012 2:03 PM:
Hey Rick! Great idea! Create jobs! You should use that for your sales pitch! Might want to have the tealiban congress use it, too. Oh wait. Nevermind.
j on February 25, 2012 2:21 PM:
For Sheer enjoyment people please watch the conversation
between Michael Higgins (pres of Ireland) and teabaggers, he is wonderful the video has been out for awhile and I think is now on Democratic Underground.
DJ on February 25, 2012 2:33 PM:
I love all this rhetoric about helping the poor and today Santorum comes out and calls the President a 'snob' for wanting to make college more affordable
Subsequently, Talking Points Memo unearthed a screenshot from Santorum's failed re-election campaign, where he bragged about...you guessed it...his efforts to make college available and affordable to all Pennsylvanians.
The latest example of what happens when a truly stupid man tries to run for president.
biggerbox on February 25, 2012 2:38 PM:
There's a reason it's called "trickle-down economics" and not "flow-down economics" or "gush-down economics". The gusher of money that comes in at the top only gets to the bottom very, very slowly, and much reduced in amount.
I'd just like to remind everyone, since the GOP candidates all seem to suffer from amnesia about this, that we recently had a two-term Republican president who wasn't at all shy about trying these old school GOP economic theories, and it was a disaster of historic proportions.
JS on February 25, 2012 2:42 PM:
There are low-income white people, too. That seems to escape the notice of Republicans.
Not when an election comes around, and they remind these same people about welfare recipients spending 'their' tax dollars on Cadillacs, and how 'teh gays' are to blame for the moral morass that led to their teenage daughter getting pregnant.
- - - - - - - - - - - - - - - - - -
I was prepared to defend Jack Kemp as being an honest (if misguided) true believer in supply-side economics.. but if he was writing about Reagan's '81 tax cuts in 1990? That would seem to omit the eleven times Reagan raised taxes because the budget was getting blown to hell for lack of revenue.
And make Congressman Kemp just another propagandist in the face of clearly observable facts.
cwolf on February 25, 2012 2:54 PM:
@ j on February 25, 2012 12:36 PM
Didn't you mean "...which the republicans quickly turned into Two Cadillacs in every One%r's wife's garage?
Joe Friday on February 25, 2012 3:10 PM:
KEMP: "It was this economy, triggered by President Reagan's supply-side revolution of tax cuts in 1981 that generated 21.5 million new jobs...."
Unfortunately, at the time they were known as "McJobs".
According to the IRS, there were ZERO NET NEW jobs created during Reagan's eight years in office that paid more than $20,000/annually.
"....and higher standards of living for most people."
Lord no.
The Standard of Living of the vast overwhelming majority of American workers went BACKWARDS during Reagan's eight years in office, which is why prior to Reagan entering office, the majority of married women worked INSIDE the home, and by the end of Reagan's two terms, the majority of American women had to work OUTSIDE the home in order to supplant the family's declining Standard of Living.
"And according to the U.S. Treasury, federal income taxes paid by the top 1% of taxpayers has surged by more than 80% to $92 billion in 1987 from $51 billion in 1981."
But only because their income rose so dramatically. Their tax burden, as a percentage of their income, massively declined.
golack on February 25, 2012 3:33 PM:
Nice job Matt
Thanks Joe for pointing out the issues with Kemp's statements.
And I've always liked Robin Williams take on trickle down economics--"the poor are getting pissed on..."
The main difference was that Kemp didn't seem to have contempt for the poor that is so prevalent with today's POG's.
exlibra on February 25, 2012 6:19 PM:
[...] today Santorum comes out and calls the President a 'snob' for wanting to make college more affordable. Gosh Rick. I thought that WAS the American Dream. -- SYSPROG, @!2:57
Goodness gracious me, SYSPROG, whereever did you get *that* idea? No, no, no! The American Dream is to hom skul yore chillun, so they don't hafta go to colij and loose there fath their.
pj in jesusland on February 25, 2012 10:36 PM:
Where does this notion of "trickle down economics" come from, anyway? If it just went in one direction we'd all be millionaires. Some money trickles down but these days most money soaks up.
bob h on February 26, 2012 7:48 AM:
The fact that the great growth in food stamp use in the George W. and our eras has coincided with low tax rates on the high earners is neither here nor there.
Patango on February 26, 2012 8:38 AM:
Matt
""How stupid of us! All the while we were angry at minorities for their food stamp dependency and failure to help the country, but it turns out they were simply never asked to "participate in the rise of this country!""
LOL ..And how many more decades do we have to watch msm types like "microphone up his ass dave gregory" allow the gop to tell these lies with no retort?
Leroy and ricky would do exactly what the tea baggers did in 2010 once they were in office , and claim gov does not create jobs , so wtf are all you people talking about?
The only way to REALLY create jobs in poverty stricken areas is for gov to get really involved and bring in business's to the communities , it would take a massive effort, but it can be done and it would be worth it ...
The only thing the GOP ever offer is the total opposite , the destruction of any form of positive governing , and enriching the already wealthy with even more wealth , they never really offer any thing else ....
Go look up how proactive china is in creating new manufacturing etc. for their communities , it is mind blowing , and exposes the gop as the neanderthals they are about business models , and economic security ..
berttheclock on February 26, 2012 10:29 AM:
I thought Newt just wanted to attach bungee cords to the ankles of the poor and have them believe that first bounce upwards was due to his support.