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6 Responses to “Fed Chairman Ruml got it right in 1946”
Warren, interesting find, but completely over the heads over any Huffington Post reader who’s not already familiar with your work. It’d work better to cite Ruml’s article (or Jack Kennedy’s Yale and Economic Club speeches) as support while explaining your own proposals. And while Ruml is 100% correct about the corporate income tax, you are running in a Democratic primary after all. You’re already up against the cognitive dissonance created by your call for tax cuts (which most people associate with Republicans), Mentioning the benefits of ending corporate taxation just makes it that much harder for the average CT Democratic primary vote to be willing to give your platform a second look.
Ruml mentioned an undistributed profits tax instead of corporate income taxation, that is interesting idea. But I’m still a fan of cutting income taxes and using a bank transaction tax to regulate monetary and fiscal policy simultaneously (an Australian writer, David J. Campbell has proposed something similar, which he calls “flow taxation”). http://www.jesaurai.net/new_way/
I really do appreciate you putting your shoulder to the wheel to get our political system out of the ditch of deficit hysteria economics, I think its already starting to pay off since Blumenthal has endorsed a payroll tax holiday.
Professor DeLong just had a new post talking about nationalizing the energy industry and how that would break the backs of the kleptocrats and regulatory capture. I thought big government was the warrior pushed forth to fight big business on behalf of the little guys, but in a rising fascist state they join forces no? So why have 8000 banks, make bank america our 1 national bank in the new command and control economy, sure would save a lot of waste no? Warren’s bank can become a bank america branch.
The real economic interest and proper policies of 300 million cannot be adequately handled by 500 congress people – no matter who is put in office – will be lobbied and corrupted. We have too small a representative government. As our population grew from tens of million to hundreds of millions, our national government (congress) has not scaled to accomodate. We need 5000 national congress people, this would make local agents votes be much valuable and national congree people more beholden to local concerns.
The structure of our government must change before the economy will change, everything else is an afterthought.
There is a function of the corporate tax that goes beyond raising revenue, that is to favor partnerships, that are fully liable for any damage that they might do, over corporations which have limited liability. I like to look at the corporate tax as an insurance payment. It surprises me that so few corporations become partnerships in order to avoid the double taxation, this must mean that the insurance value is greater than the cost (the corporate income tax). (BTW I see the S-Corp as a real ripoff).
BTW an argument has been made that investment banks recently changing from partnerships to corporations contributed to the recent financial crisis by encouraging more risk taking.
Perhaps we should call the corporate income tax insurance and price it appropriately. Then the Fed Gov could charge more for insurance to Goldman Sachs than to KO or PG.
I am a libertarian but I am open to the idea that insurance could be better provided by Government.
This would imply:
That SS should be made insurance i.e. everyone gets the same payout. SS is insurance against living too long and not earning enough and not building good strong relationships, having a long period of poor health that precludes work etc.
Unemployment insurance should be similar everyone gets the same payout regardless of how much they made in the past.
That true health insurance should be Gov. provided with high deductibles. The deductible could equal to one’s last years adjusted income minus the poverty rate.
Home insurance would be the same – very high deductibles to keep people out of the flood plains etc. The fed end up providing this insurance anyway.
People seem somewhat irrational when it comes to insurance. Everyone talks like they hate insurance companies and yet most people are grossly over insured.
Not sure how DeLong proposes to nationalize the energy industry (by which he means “oil and gas” apparently) when the majority of supplies are located overseas. A government can certainly expropriate domestic economic resources, but expropriating foreign economic resources by means short of military occupation is all but impossible.
What we could do without expropriating any private property is for the US Government to fund the development of energy resources on government-owned land (and letting the TVA or Navy build nuclear power plants– both have decades of reactor experience– on government property and selling the electricity generated to private power distributors makes more sense than going into the oil and gas business). Oh, and the government should buy out the patent rights of these guys forthwith. http://peswiki.com/index.php/Directory:Global_Resource_Corp:High-Frequency_Attenuating_Wave_Kinetics_or_HAWK
This is *fantastic* — it is so clear and precise. I particularly like the way that Ruml treats what amount to the concerns of those who use the phrase “monetize the national debt” – as Ruml states, this is simply about the question, “Do we want a dollar with reasonably stable purchasing power over the years?” This question seems so much more useful to me than the “money-printing” questions that monetizers seem focused on. Implicit in the question is the importance of *demand*, in that it is the stability of purchasing power (a function of both aggregate demand and the supply of money), *not* merely the supply of money, which is the focus.