Thursday, March 20, 2003

Econ 101
According to the WaPo, the administration is still fighting for its massive tax cut, despite the cost of war. The administration is giving it a new spin, however, by calling it a jobs program. Commerce Sec'y Evans claims that, "It will benefit stocks, which encourages investment, which leads to jobs creation." Maybe the good Sec'y should have taken more econ classes, because his logic is more than faulty. Investment does not necessarily lead to job creation. The investment the secretary is speaking of is not business capital investment, but consumer investment in stocks, or at least that is what his quote leads me to believe. I would have to wonder how it is that increased investment in the market will generate jobs. Unless one takes the circuitous route and claims that increased investment drives stock prices up, which results in increased cash flow for some investors, who may then spend that money, which would then increase consumer demand, and ultimately some jobs would be created. A much more direct route would be to target a package of tax cuts at middle and lower income people, who spend a higher percentage of their income on consumer goods, thereby increasing demand and creating jobs.
Either the Bushies failed Econ 101 or they simply do not care to do more than pander to their wealthy patrons.


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