 |
|
Title: The End of Prosperity: How Higher Taxes Will Doom the Economy--If We Let It Happen
ISBN: 1416592385
Author:
Arthur B. Laffer
Stephen Moore
Peter Tanous
Publicate Date: 2008-10-14
Publish: 2008-10-14
List Price: $27.00
Average Customer Rating: 4.0
Format: Hardcover
 |
|
|
|
|
Amazon Lowest New Price: $15.54
Amazon Lowest Used Price: $17.10
Amazon Merchant Price: $17.82
|
|
|
|
|
|
|
|
|
|
|
| Customer Review: |
|
1: Prosperity challenged
While there is more to the economy than taxes, "The End of Prosperity" offers a cogent analysis of the things government does right (increases incentives, minimizes its own role in making thisgs happen) and wrong (protective enterprises and industries of changes that should happen and regulating the financial system). The authors are pessimitic because they conclude that the age of incentivizing risk-taking through lower taxes on capital is all but at an end.
If timing is everything, the authors' timing was poor, not that they had any control over it. The financial crisis, the collapse of equity prices, and the economy in turmoil did not get the treatment is deserves. Why we are here and how we get out of it is not addressed in this book which is unfortunate. I would like to know the authors' analysis of what went wrong and of government's response to it. They need to do a new last chapter, not an easy thing to do when the book is aleady published. A revised edition anyone?
|
2: We can't say that we were not warned
This book was pretty much what I expected: a loud siren acting as a wake-up call to the Obama administration. But, to my surprise, it turned out to be a lot more. I learned a great deal here.
The most surprising thing: JFK was a supply-sider! Back in the early 60s, Democratic President John F. Kennedy was proposing tax cuts to get the economy moving, and the NAY-SAYERS were a bunch of curmudgeonly Republicans. (In a similar vein, you will be astonished to learn that this story goes back all the way to Warren Harding!)
Kennedy got his tax-cut package passed (just as Ronald Reagan did) and the economy took off. Tragically, Kennedy was shot dead, and America unfortunately entered what the authors call the "Four Stooges" period of the American Presidency: LBJ, Nixon, Ford, and Carter. Particularly interesting was the slicing-and-dicing of Richard Nixon. He has become known as "The Watergate Villain," and almost nobody remembers his disastrous, idiotic mismanagement of the economy. Wage and price controls, anyone? "We are all Keynesians now?" Ford and his silly WIN buttons helped not a bit, and then Jimmy Carter managed to drive the misery index to its highest level in decades. The Four Stooges, indeed.
I haven't finished this book yet, but I've already learned so much from it that I thought I should post this review. And I will close with a single image, which may be helpful to those who still think that the U.S. President can do as he pleases. This is Bill Clinton, who is getting sound advice that his re-election depends on maintaining credibility with key financial markets.
Clinton is so angry he pounds his desk, and shouts, "You mean to tell me that the success of the program and my re-election depends on the Federal Reserve and a bunch of *(%@&(% bond-traders??!!"
I suspect that this Clinton Moment is due for a replay in the very near future.
In the meantime, read this book. It is excellent in every way.
I sometimes wonder why we don't teach economics in high school!
As for those who think this is a "pro-Republican book," or an "anti-Democrat book," please go back and read this review again. The book heaps praises on JFK, trashes LBJ, Nixon, Ford & Carter, praises Bush Senior until his tax-betrayal -- and, in sum, is almost totally indifferent to partisan politics. What counts, for the authors, is how we will manage our economy.
Can we find a candidate willing to commit to a goal of economic growth? I suspect the White House is waiting for him.
|
3: Absolutely essential that every U. S. citizen understand these principles
As we stand on the edge of socialism, the ideologues are unconcerned. The leftist is comfortable with the direction we're headed, and the capitalist despises the turn.
But the great majority of us simply want to know what works. Socialism, capitalism, etc., etc., - what matters is what delivers the greatest degree of economic liberty and security to the greatest number of people. That is where the principles in this book come in.
"The End of Prosperity" does a masterful job of discussing precisely why higher taxes are suicidal to an economy. This isn't about politics or party and it isn't about philosophy - it's about what HAPPENS under various tax regimes, WHY those things happen, and WHY these lessons apply as we chart a course for the future.
This information has never been so urgently needed. As a result, this book is essential for any responsible citizen.
|
4: Lots of statistics
Being written by economists, I expected there to be a lot of statistics and there were. I love statistics and find them the perfect antidote to a lop-sided argument. As a nation, I think this book invites the idea that we should sit down and redraw the notion of what income constitutes "middle class." Certainly, the "middle class" makes more money than they once did, but where exactly is the middle class? While I didn't find all my questions answered in this book, it did offer many intriguing figures to bolster my opinion one way or another.
This book spends a fair amount of time going after Obama for his tax policies (prior to his election win.) I was reading this book during the election and completed it after the results came in. I wonder if the predictions laid forth in this book will be annoying to readers. If Obama doesn't follow through with tax hikes, then a large part of this book will be void. It doesn't mean the principles in the book aren't sound ones, I'm just saying that it will be annoying to read about how horrible Obama's tax policies will be, if he never instates them. I think this book was meant to be read prior to the election and I really wish it hadn't been written that way and so slanted as to mention Obama a jillion times. I was not an Obama voter and I have no need to defend his tax policies. I'm merely stating that there are plenty of politicians and civilians who share these crazy economic ideals. I wish the authors hadn't spent so much time on that one particular person.
I still recommend this book, however, for its breadth of knowledge on the subject of the economy. I found it easy to read and have already thrown some facts and figures from it into meaty economic conversations.
|
5: Smoke, Mirrors, ... and a Stunning Lack of Logic
As a disclaimer, I have not been a big fan of either the Laffer curve, or supply-side economics since sitting through my undergraduate economics class in the late `80's (Friday afternoons. Ugh. I was one of the few students who showed up with any regularity. As a beginning student of psychology, I found it fascinating that the instructor never acknowledged the lack of student attendance, choosing instead to drone on about best-fit lines and John Keynes and such. But I digress.).
At the time, Economics, with it's "given" of rational consumer behavior, stood out in stark contrast to my psychology classes (Hey economists, ever read Freud?), as well as my classes in Catholic social justice teaching (care for the poor, anyone?). It took economics several decades to catch on to the notion of irrationality, with books like Dan Ariely's PREDICTABLY IRRATIONAL and others. As for Catholic social justice, we've just passed through a presidential election where universal healthcare for all Americans was branded as "socialism," and should be "kept out of the hands of government." This, in spite of the fact that our military, police, fire departments, trash collection and other basic services are run by our government.
As a further disclaimer, I see myself as neither liberal nor conservative. I am not opposed to supply-side economics, or any other theory in and of itself. I simply follow the words of the U.S. Catholic Bishops, ""We believe that every person is precious, that people are more important than things, and that the measure of every institution is whether it threatens or enhances the life and dignity of the human person."
Anyway, on to THE END OF PROSPERITY.
Having taken only two classes in economics in my undergraduate years almost 20 years ago, I make no claim that I am an economist. As a life-long student of the human psyche, I have studied logic fairly extensively. After barely making my way through the introduction and first chapter of PROSPERITY, I would strongly recommend that the authors take up the study of logic. The arguments presented in PROSPERITY are filled with logical flaws and imprecise use of language.
I expect better from those who have advised presidents.
Let's begin. I'll point out only a few of the more egregious logical errors I found at the start of this book:
1. YEA, TEAM!
I found the introduction by Mr. Kudlow to be little more than cheerleading for supply-side economics. In light of the recent economic crisis on Wall Street due to rampant deregulation, Mr. Kudlow's words on page xiii are particularly disturbing:
"We should adopt an America-first energy program that completely decontrols and deregulates our natural resources ..."
2. WE'RE NUMBER ONE!
On the first page of the first chapter of PROSPERITY, I found myself highly concerned by narcissism in the authors' statement, "By contrast, we DO believe in the idea of American exceptionalism." (the word "do" written in italics in original) ... followed closely by Ronald Reagan's quote from the 1980 speech about America's "divine providence ... [to be] a refuge for all those people in the world who yearn to breathe freely."
Any economic treatise that begins with an appeal to narcissism and Divine intervention is, in my book, serious trouble from the start.
3. A METAPHOR IS ...
Furthermore, I found the authors' metaphors to be woefully lacking. In other cases, the metaphors were right on target ... but not in a way I imagine the authors intended. For example, on page 3, the text reads, " ... but what is undeniable is that the economy surged in the 1980s and 1990s as if injected by performance-enhancing steroids."
My initial thought to reading these words was: "Yes, and performance-enhancing steroids can kill you!" (Source: U.S. Department of Justice, http://www.usdoj.gov/dea/concern/steroids.html). While the authors may defend themselves by claiming this was just a metaphor, I actually think the metaphor fits quite well. My concern about much of supply-side economics as championed by Laffer and others is exactly the same as those who push steroids: Impressive short-term results, but significant damage over the long term.
3. THE POOR
On page 3, those authors give several statistics that suggest that American's are financially "movin' on up." However, this page reads as a better argument for the rich getting richer. In addressing the poor, the authors note that the percentage of families earning between $5,000 and $50,000 has dropped 19% since 1967. Please. Let's compare apples to apples. What a $50,000 annual income could buy you in 1967 and what a $50,000 annual income buys you in 2008 are completely different things. Those numbers are not an accurate basis of comparison.
I would offer the following numbers:
FACT: Almost 20% of American children live in families with income below the federal poverty level. (Source: National Center for Children in Poverty www.nccp.org)
FACT: Federal guidelines set the poverty level at $21,200 a year for a family of four. Most experts agree that the federal guidelines are not realistic. "Research shows that a single parent with two children typically needs to earn $16.50 an hour full-time--or about $34,000 a year--to provide for the family's basic needs." (Source: National Center for Children in Poverty www.nccp.org)
Consider how many more American children would be reported as living in poverty if the federal poverty guideline was set at $34,000/year.
4. POOR AND OWNERSHIP
On page 4, the authors sing the praises of how many consumer goods the poor own today. Yet they have absolutely no discussion of credit issues ... or predatory lending practices targeted at the poor. I spent 10 years in community mental health working with the poor. Yes, many of these folks have more consumer goods than I did ... with most families carrying debt-levels far over their heads. Hardly an argument for a flourishing economy.
5. PREACHING THE MYTH ...
On page 4, the authors continue to spread the myth of America as a meritocracy, saying, "And moving up the ladder is the rule, not the exception, in America today."
Really?!? Seriously?!?
Have any of the authors' spoken to any working poor or middle class people lately? I work with these folks on a daily basis, and I can assure you, there are many, many people out there who are frustrated by an inability to "move up the ladder," as the authors would suggest. It's easy to be born on third base and believe that you've hit a triple. Unfortunately, this experience is not true for everyone.
6. OH! FINALLY!
On page 6, the authors admit to the "financial challenges" (note the language used here ... not "barriers," "obstacles," or "problems." "Challenges.") ... such as "paying for health care, college tuition, making mortgage payments in a downward spiral of housing values, and filling up the gas tank at the pump."
Then, the authors inanely state, "But we always have to ask the question: compared to what? Today the poor generally have access to more modern goods, services, and technology than the middle class did in the middle of last century."
Seriously? This is their argument?!?
Yes, as unbelievable as it may seem, the authors seem to think pointing out that people have access to "more modern" goods and services in 2008 than they did in 1950 is the basis of some argument. It's not: people will have access to "more modern" goods and services in 2058 than in 2008 ... and more access in 2108 than in 2058.
This is a moot point. These words are a simple statement of the fact of technological progress. It says nothing about the validity of any economic viewpoint, supply-side or otherwise. Words like these simply show that the authors have a firm grasp of the obvious.
Furthermore, in another example of imprecise use of language by the authors, I would point out that the phrase "having access to," is not the same as the phrase "being able to purchase." For example, chief author Laffer's academic credentials are from Yale and Stanford University, two top-level universities. In theory, every American interested in attending college has "access" to Yale and Stanford. Few Americans, however, have had the opportunity to participate in an education that would make them a competitive applicant to Yale or Stanford. Still fewer American have the financial resources that allow them to purchase an education from Yale or Stanford.
Again, "access to" does not mean "being able to purchase."
7. MOST DAMAGING ARGUMENT OF ALL ...
The most harmful evidence of the authors' inability to reason lies in their psychotic approach to the current Bush administration (disclaimer: I am no fan of President Bush).
In a frighteningly Orwellian statement that bears repeating at length, on page 11 the text reads,
"One thing is certain: If Washington turns all the policy dials in the wrong direction, just as sure as the sun rises in the morning, the U.S. economic growth machine will grind to a halt. It's already happening, as evidenced by the housing crisis, high gas and food prices, and the collapse of the dollar. That is, in fact, the central premise of this book: Economic policy matters."
After reading these words, there I sat, waiting expectantly for the excoriation of Bush's economic policies of the past 8 years. "Surely," I thought, "the authors will take Bush to task for failing to follow sound economic policy!" I couldn't wait to keep reading.
What I got ... was nothing.
Rather than tackling Bush's inept economic policies (The authors themselves wrote the words, "It's already happening ...," remember?), the authors launch into a confusing discussion of the economic policies of the 1930's and 1970's.
So, I'm off to the book's index to find a coherent discussion of Bush's failed economic policies. "Here it is," I read, "starting on page 136." On page 138, I find, "Shortly after than White House meeting [in January 2003], President Bush officially became a supply-side president."
So ... President Bush practices what the authors' preach.
That's enough argument for me. I stopped reading the book.
Note to Authors: Separating damaging evidence with 135 pages of text does little to help one's argument.
CONCLUSION
Admittedly, I have only read the introduction and the first chapter and a few other pages as noted above. After reading all the logical errors in the first chapter, I was unwilling to commit any more time to this book.
Authors who want to argue a point of view should be able to make logically coherent arguments. Otherwise, they should be selling self-help books, where apparently, the skies is the limit regarding what nonsense one can make up.
Beware of this snake oil.
Tim Warneka, author
Black Belt Leader, Peaceful Leader: An Introduction to Catholic Servant Leadership
Leading People the Black Belt Way: Conquering the Five Core Problems Facing Leaders Today
The Way of Leading People: Unlocking Your Integral Leadership Skills with the Tao Te Ching
Healing Katrina: Volunteering in Post-Hurricane Mississippi
|
|
|
|
|
