The man who promised to restore hope and bring change to America, has announced a plan to open five corporate plantations in the United States. On Thursday, President Barack Obama, whose policies have resulted in the greatest number of public sector job losses in US History (Public sector jobs have declined by 718,000 jobs since Obama took office.) announced the opening of five “Promise Zones” located in San Antonio, Philadelphia, Los Angeles, southeastern Kentucky, and the Choctaw Nation of Oklahoma. According to an article in USA Today:
“Under the proposed Promise Zones, the federal government plans to partner with local governments and businesses to provide tax incentives and grants to help combat poverty.” (“Obama to name 5 ‘Promise Zones’ for assistance“, USA Today)
Combatting poverty’ has nothing to do with it. Obama plans to shower the nation’s biggest corporations–which recorded record profits in the last year and are presently sitting on more than $1.3 trillion in cash–with more lavish subsidies and tax breaks while providing an endless source of cheap slave labor to boost future earnings. The president believes that the wealth generated in these profit zones, er, promise zones will trickle down to the area’s residents, even though–as the Christian Science Monitor notes–”it can be hard to tell whether a program’s benefits reach the poorest people, rather than flowing largely into the hands of the business owners who get the tax credits.”Wait, it gets worse!
According to the New York Times: “White House officials said the Promise Zones initiative would not provide new money, rather it would be aimed at providing the local governments and agencies “aid in cutting through red tape to get access to existing resources.”
No new money??Read on. It gets even worse.
Counterpunch
Obama’s Corporate Plantations — Deregulation, Privatization, and Cheap Labor
Mike Whitney
9 comments:
"No new money??"
You can't believe this moron Ryan, here he had an interview with Brian Williams this week on I guess the "new" GOP approach to "poverty":
http://inplainsight.nbcnews.com/_news/2014/01/09/22150091-reporting-the-story-brian-williams-interviews-paul-ryan-journalists?lite
COM-PLETE-LY ignorant of the monetary aspects of "poverty" eradication...
Its like this moron thinks the eradication of "poverty" has no monetary implications...
Apologize in advance if you have to vomit if you go to the link...
rsp,
Why not payroll tax holiday?
"Existing resources" - like slave prison labor ...wal-mart is going to be really mad n jealous.
Matt needs to pour a little of his Greek fire on this
goog,
It looks like the payroll tax holiday doesnt work either...
I may have to agree with Whitney on this one... what seems to happen is that those with jobs are able to save more rather than increase spending which would increase intra-non-govt sector flows and hence foment increase in output and employment.....
Economists look at GDP this way:
GDP = C + S + T
Consumption + Savings + Taxes
(these are all flows)
If you reduce someones taxes, the flow can be diverted into savings and GDP stays the same as it was. (T goes down while S goes up)
This is Laffer-type stuff (trickle down) ... I dont see how it can work...
If govt reduces tax flow, then additional T-bonds have to be issued to make up for the lost revenue as govt must maintain a positive balance in the Fed account.
This means someone in non-govt has to agree to move balances "into the savings account" before the govt will spend an equivalent amount, and savings is a leakage so this part of it is a wash...
If you look at JD Alts diagram in my post downthread, this is the horizontal flow...
I think the Laffer stuff is all BS. Does not look like it can work mathematically...
What probably always has happened with these "supply side tax cuts" is that at the same time as the tax cuts are put in, the vertical flows are increased too and the non-govt recipients of these increases in the vertical flow can take that increase in income "to the bank" and bank credit is increased which ends up doing the job (ie increasing intra-non-govt sector flows)....
The tax cuts result in increased savings for all intents and purposes.
The concurrent increase in vertical flows is what always does it... cant see how it can happen otherwise...
rsp,
To make fictional worlds, such as these corporate plantations in economics or politics, well it is part of the way humans work, we tell stories to simplify and make our worlds easy to understand, convey values, communicate struggles. This is what Obama is telling us he would like the world to be, it is the paradigm he imagines, the rule that he is bending is that government, when it works closely to help industry helps people. Unfortunately, it is flawed in the same way as most his economic policy has been. You can see WHY Obama would think of industry as being helpful though, it has always helped HIM, been there for him to move to the next level of government.
Actually, Matt, saving after a debt binge precedes renewed spending. A lot of the FICA suspension went to private debt reduction, as expected.
@ Ryan
As a teacher of mine used to say, "the logic is perfect — but the premises are wrong."
That's the story of both conventional economics and interest politics.
Right Tom so now we saw in 2013 when they let the payroll tax holiday expire, GDP just kept on muddling thru as the taxes were increased and savings was reduced...
I dont think the Laffer-type supply side tax cuts help at all...
Its an increase in govt xfers and direct consumption that creates the increase in incomes that are then leveraged which does it...
rsp,
But I would add that the increase in leverage cannot happen unless the govt increases spending YoY...
The govt increases its flow to the non-govt and then its fiscal agents can facilitate leverage of the govt flow increase via bank loans...
No increase in govt flow, no increase in lending by fiscal agents. This is what we have experienced over the last 4 or 5 years...
rsp,
The FICA suspension was equivalent to a wage raise and a lot of people used it to pay down debt.
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