Wisconsin, Egypt – It's the Economy, Stupid

Wisconsin Governor Scott Walker is trying to stimulate the economy by eliminating corporate income taxes and regulations on businesses and cutting taxes on wealthy people. These kinds of activities do stimulate GDP. Here's how.

Wealthy people, like Lindsay Lohan, Brittney Spears, Mel Gibson, and Charlie Sheen have people, including paparazzi and media people following them around. That costs money. They do things in a spectacular way, and when they do stupid things in a spectacular way they have lawyers get them out of trouble. Economists call this “multipliers.” The lawyers, paparazzi and media folks need to eat, sleep, rent hotel rooms, etc. And they don't camp out and chow down on toast, water, and dried fruits and nuts. Celebrities often require high powered consultants from the sex and pharmaceuticals industries. When they trigger rapid increases in the entropy of hotel rooms, by “trashing” them, carpenters, electricians, decorators, architects and others need be hired to restore the room – all this costs money, and stimulates GDP.

When regulations are lax or eliminated businesses regulate themselves. This stimulates GDP. Consider the recent GDP stimulus of Wall Street, when those npw-legendary credit default swaps raised real estate values (until they crashed). Similarly, when industries are releived of the burden of environmental regulations, they create products which increase GDP and pollution which is not counted in GDP. When the pollution is cleaned up, at taxpayer expense, the GDP again increases. We see this dramatically in Tennessee, at the site of the Kingston Steam Plant. When a flood released 1.2 billion gallons of toxic coal ash sludge from the coal-fired power plant, December, 22, 2008, the cleanup costs were added to the bills of the people who buy power from the TVA.

Note that there are people who think about ecological economcis understand the costs of cleaning up pollution, and other things they call economic bads, should not be considered a component of the health of an economy. They favor the use of indices like the Genuine Progress Indicator, GPI.

However, in words Alan Greenspan might use, “with a syncopatedly integrated interperiodic boom-bust bubble-pop series of microeconomic events pursuant to macroeconomic cyclical patterns we will sustain high employment with simultaneous episodic high unemployment, causing elevated productivity and de-elevated wages, giving many people virtually sufficient purchasing power to buy most of the necessities they need to live productively, work their entire lives, create terrific negative net worth, also known as debt, and give their children some of the education they will need, unless or until they get sick or incapacitated."

Wisconsin Governor Scott Walker is trying to make Wisconsin business friendly by eliminating corporate income taxes. What he could do is use the power of Eminent Domain to take over a few mansions and then give them to Lohan, Spears, Gibson, and Sheen. Those four, by themselves, could stimulate the economy, especially in a small state like Wisconsin. Imagine what they could accomplish working, or playing, together. The synergies would be terrific. Walker could recreate Madison as "The Hamptons North West" or "Hollywood North East" - he could pay the Post Office for special zip codes, for example, 90210-A and 11937-B. Their lifestyle would stimulate the economy in a significantly more dramatic, and probably less unsustainable manner than cutting taxes for Koch Industries and rich folks and their hangers on who would jet off to Paris, the Riveria, or the real Hamptons and stimulate the economy in those places.

The Governor is probably legally required to balance the budget. Should he do this by raising taxes or cutting spending and cutting taxes and regulations on corporations and wealthy people? If he cuts taxes and regulations, and those corporations pollute more than would if the taxes and regulations were in place, then the citizens will have to pay the costs of cleaning up the mess. As described above in the description of the Tennessee coal ash flood, this stimulates GDP.

Walker seems to want to eliminate health and other benefits from government jobs, except for police (and no doubt the Office of the Governor) in order to balance the budget and continue to allow him to cut taxes. This will shrink the GDP. Greenspan might refer to this as “Negative Growth.”

Roosevelt and Keynes proved that government spending stimulates the economy. Walker should be raising taxes to cover spending. Cutting wages and benefits stimulates employees to leave. The long term impacts of destroying your education system are on display in West Virginia and Mississippi.

On the other hand, maybe Gov. Walker and the Koch brothers are right. If there are no jobs for the young people of Wisconsin it may be better to keep them uneducated. If they get educated they might get uppity, they might demand "Rights." As the Taliban in Afganistan knows, if you want to keep people in line, it is easier if they have no education. Former President Hosni Mubarek found this out in Egypt. The revolution in Egypt was led by young educated young people who don't have jobs. The people in China have jobs and are not revolting - they're too busy working 7 days per week and trying to save some money. An educated citizenry revolts. If you don't want your citizens to revolt, keep them stupid.

Links:
On Egypt:
Freidman, NYTimes, Postcard from Cairo, 1, Postcard from Cairo, 2
Pharoah without a Mummy
On Wisconsin:
Klein, at Washington Post
Talking Points Memo

The Invention of the Necktie

London, England, circa 1776. And English "Lord" with a rebellious son in New York - Brooklyn as a matter of fact (or fiction - the accounts vary) was troubled. Torn between loyalty to his son and fealty to his king.

So torn as he was between fealty and loyalty - his son may have been a signatory to the Declaration of Independence - this Lord, who shall remain nameless, retreated into madness. He began to wear gowns in his wife's closet. This, by the way is the origin of the phrases "out of the closet" and "closet Queen," which was originally "Lady of the closet."

He recovered from his madness and chose loyalty to his son over fealty to his king and was compelled to leave London in haste.

He also understood that kilts were one thing, and more out of place in New York than in London, and ladies gowns on men quite another. The “New World” may have been radical in its approach to the rights of (white) men, it was not in its approach to the roles of men, or their dress.

So he took a knife and cut off two inches of the lower hem of the favorite four of his wife's gowns - two of which had his crest in a swirling teardrop of bold green and yellow - he was the Earl of Paisley. He tied one around his neck in what has become known as the Windsor knot, and left England.

Upon arrival he reunited with his son, a young Captain in Washington's command. He was able to counsel Washington on British strategies until captured by Cornwallis, and hanged by his tie - which thus became a symbol, like coffee, of American Independence.

A true story. Or truly a story.

Brittney, LiLo, Snookie, Ann, Sarah, and W.

Brittney Spears, like Lindsay Lohan, really cares about America, and humanity, particularly young women, young girls - their fan bases. Like Nicole "Snookie" Polozzi their "antics" are a carefully thought out existential drama designed to show girls and young women, their mothers, fathers and brothers, especially those in lower socio-economic strata - all of us - that wealth doesn't buy happiness, that no matter how much money you have, you still have to wrestle with intoxicants, people who don't want to share, men who treat you as sex objects . . . . How else do you explain Brittney's famous act of performance art in emerging from a cab in a short skirt hiked up to her waist, with her panties carefully concealed?

Like other visionary women, they are misunderstood. Ann Coulter - at first glance you would think she personally hates Bill Clinton, Hillary Clinton, and Meghan McCain. However, if you look beneath the surface you might find a coke-whore who secretly wants to have Bill's baby, McCain's baby, or Hillary's baby, but knowing this is impossible, masks her tragedy in addiction, anger, and best selling rants and diatribes.

Or Sarah Palin. The former Governor who earned $13 Million in speaking fees may be the barely educated former governor of a state who's population is about the same as Monmouth County, New Jersey, or Bensonhurst, Sheepshead Bay, and Coney Island, Brooklyn. She may be the former mayor of a town with a population about the size of an apartment building in the Bronx or on the Upper East Side of Manhattan. But she challenges our assumptions about what it means to be coherent. She recently said "those protesters in Egypt, I don't know if they are telling the truth." While I realize she said that while walking AND chewing gum, what are the protesters saying? They seem to be saying "We want Mubarek out of office." But that phrase is so wrought with ambiguity - do they want to take him out for drinks? (Well, not the Moslem Brotherhood). How about a nice lunch of roasted lamb with rice and tea? Maybe they want him out of his office so they can paint it? Regardless, she challenges our assumption that the office of the President of the United States should be held by someone who can think deeply, and make decisions based on rational assessment of the facts and scientifically observable data. After all, W held it for 8 years, 8 long years during which we lurched from one catastrophic decision to the next as if passengers in a bus driven by a nearsighted drunk on magic mushrooms. How hard can it be?