a minor rant about Wikipedia's entry on Reaganomics

[hfojvt]

Here's the short version - it's a load of crap.

Sometime in the near future I will be gathering data to engage in an editing war over this. It chaps my hide, and should irk all of us, since Republicans are still preaching the lie that 'Reaganomics worked'.

Here's an excerpt:

http://en.wikipedia.org/wiki/Supply-side_economics

"Supply-side advocates respond by pointing out this is a conflation of revenues and expenditures--the Laffer Curve says nothing about budgets (an arithmetic operation, the sum of revenues and expenditures) but only speaks to revenues. They would point to the sizable increase in tax revenues under Reagan ((link to a CBO) Table 1) as proof that moving down the Laffer Curve from a prohibitively high rate to a more appropriate, lower rate does increase revenues."

That is a true statement in one sense. Supply side advocates do respond that way. However, the larger truth is that they are just plain wrong when they do so. They do two things which are either ignorant or blatantly dishonest.

1) they combine revenues of all taxes. Particularly combining income taxes, which Reagan cut with FICA taxes, which Reagan increased. If Reaganomics worked, then the income tax cuts should have produced increases in income tax revenue. It is simply a measured fact that they did not. Wiki's link to CBO's table makes that error.
2) they do not use 'real' numbers. It is basic economics to distinguish between 'real' and 'nominal'. $2 in 1903 is not the same thing as $2 in 1987. The 'real' value is what the $2 will buy, how long it will keep you paperboy at bay, for example.

All I need now are some links with the facts, as I wrote to my now former Congressperson:

"Seventh - Do you have information about income tax revenues? Here it is, in billions of constant (1982) dollars.
1977 - 241.05
1978 - 256.22
1979 - 286.07
1980 - 286.93
1981 - 306.63
1982 - 297.92
1983 - 276.77
1984 - 275.94
1985 - 301.2
1986 - 304.12
1987 - 336.86
1988 - 332.64
1989 - 355.03
1990 - 354.49"

There it is in hard data. Reaganomics did not work. The Laffer curve is a joke.

Now it is bedtime though, since I sorta put in a 13 hour workday today. Plus, I still have to research a rebutal to the stupid William Rusher article that lead me to this BS on wiki.

[ima_sinnic]

1. I heartily encourage you to follow through and edit

In some ways Wikipedia is a curse. It is open to all sorts of distortions, as this example shows. And, as a copy editor for a general-services editing website, I see undergraduate papers in which it is the only reference. Hopefully professors are cracking down on this laziness. In my day it would have been unheard of to cite, say, Encyclopedia Britannica.

On the other hand, also as a copy editor I often find it all too easy to refer to synopses and other summaries on Wikipedia to get a handle on the copy I am editing.

[Silverbug]

9. The laffer curve IN PRINCIPLE is correct however

We can argue forever on what the proper tax rates should be, but logically it is possible to increase revenues by reducing rates...because behavior certainly does change depending on the amount taken from your paycheck.

A tax rate of 90% would bring in far less revenue for example, than a rate of 10%....because very few people would work if they were taxed at 90%. If on the other hand they got to KEEP 90% of what they earned, there would be a huge incentive to work and produce as much as possible. And government would benefit from that.

[ProfessorGAC]

11. Two Dimensional Nonsense

In fact, since no economy operates in two dimensions there is absolutely zero proof that manipulation of tax rates in within the middle three quintiles has any effect at all. Therefore, the Laffer curve only works at the extremes, within a massive set of assumptions, and is meaningless for at least 60% of its intended range of influence.

It's mathematically and statistically laughable.
The Professor

[Silverbug]

12. are you saying...

people will work just as hard with a 70% tax rate as they would with a 20% rate?

They wouldn't be more likely to seek alternatives to traditional employment and/or go into the "underground" market?

[hfojvt]

15. Do you currently, or have you ever had a job?

It is hard for me to believe that somebody who has had a job, other than a sales job, can believe that 'how hard you work' has something to do with 'how much you are paid'.

It is a little bit like a pop machine. My friend made the same total income when he charged 50 cents a can as he did when he charged 35 cents a can. Yes, paradoxically, you can make more money by lowering the price, but with a huge drop, like your 70% to 20% you'd have to get way more volume to make up for the loss of 50%.

[ProfessorGAC]

33. Yes That's What I'm Saying

And, there is no data to support your contention. People in Sweeden show statistically identical productivity as here in the U.S. Just compare Canada to the U.S. There's no measurable difference in productivity per worker. None.

So, your premise is fatally flawed. The data merely demonstrates how flawed it is.
The Professor

[hfojvt]

14. In principle, yes. But in reality, it did not happen

That is the key. It simply did not.

The question always was - where are we currently on the Laffer curve? Are we at a point where reducing rates will increase revenue? Because the curve does not always show a revenue increase with every tax cut.

The numbers have been measured. The results are in.

Reagan cut income tax rates - income tax revenues fell.

JR Bush and Co preached the same voodoo economics and cut income tax rates - income tax revenue fell.

Those are the facts, and Republicans who deny those facts are either ignorant or dishonest.

[jmowreader]

32. I am going to tell you, right now, why Arthur Laffer is wrong

According to history, American productivity and innovation is highest when the American worker has the living SHIT taxed out of him.

Here is my proof, and it is irrefutable. The period in American history when there was the greatest positive economic activity ever was between the end of World War II and the start of the Arab Oil Crisis in the 1970s. More businesses were founded at that time--good wealth-creating businesses, not fucking MLM crap, retail and day trading, but manufacturing, mining and forestry. More homes were built. More road was built. More scientific discoveries were made. More useful products were invented. We put a man on the Moon, for God's sake. More people were employed in better jobs--at that time you could afford to buy a house, a car and keep up with the Joneses on a single income. We exported more than we imported. And the national debt was very low. It was truly the Glory Days for America--at least economically it was.

This was also the period in American history when income taxes were at their zenith--over 90 percent on everything over $400,000 until JFK came into office, and he cut it into the 70-percent range.

Here's what fucknuts like Laffer and Reagan fail to realize: The only way you can start an "engine of economic activity" is by feeding money into it--and normally the money comes from the federal government. Let's say the government were to come to Fayettenam right now and build a six-lane freeway from the Research Triangle Park in the Raleigh area through Fort Bragg to Wilmington. It would probably cost $175 million not counting right of way. Of that $175 million, the only parts we'd have to bring in would be the bitumen and fuel--we've got gravel, we've got sand, we've got plenty of people who would build road for $20/hour, and the general contractor owns the equipment already. Let's throw out a number and say there's $50 million worth of petroleum in a $175 million road. The remaining $125 million would go into the region's economy. Add to that the businesses that would start up along the road, the wealth-creating ones who would open in Fayetteville because they can haul freight to Wilmington easier (there's a huge ocean port there) and the ones who would beef up in the Triangle because it's even less fun to get from RTP to Wilmington, the people who would be hired to work in these businesses...the guy who owns South of the Border would probably open a huge beach shop to capitalize on the tourist trade because right now, getting from Raleigh or Fayetteville to The Beach takes a lot of winding around. Let's use a conservative figure and say you're looking at $5 billion per year in increased economic activity from this road. Five billion dollars a year would throw off a shitload of tax dollars...but it will never happen, CAN never happen, without the road...and without the tax revenues to finance construction, there never will be a road.

I'll throw out another one: Factories. We don't build factories because most of the good sites--the ones that ALREADY have a power substation, roads, and potential employees around them--are brownfields and no one wants to pay to remediate the contamination companies that have been dead twenty years pumped into the ground. Would it be possible, ASSUMING we had the tax revenue to fund its development, to come up with a "brownfield baseline"? An "anything but what's here now is yours and you'll be held responsible for it" agreement with a new factory? Right now we expect a company to remediate a brownfield down to the feasible detectable contamination limit before they're clear of liability. That's expensive, so people either try developing greenfields (which runs into all sorts of other problems) or they sidestep the whole problem by offshoring. We could, assuming we had the technology, figure out what's in the ground around the site. The assay comes back that there's lead, cyanide and chromium in the soil because they were plating bumpers and making car batteries there...but the new factory is making housewares from nylon 6 and polyurethane, which don't contain any of those things. With this baseline, we could inform the producer that he's not responsible for remediating the 50years' worth of lead in the soil but he IS responsible for any caprolactam or toluene diisocyanate that show up in the groundwater. We could do that at a 50-percent top marginal rate. We CAN'T do it at 28. Couple that with new technologies that allow one American running one state-of-the-art molding machine to make more melamine tableware or polyester parts bins cheaper and more ecologically-soundly than ten Chinese people can make those things in their factories?

[Lasher]

34. I'll tell you another reason why Laffer is wrong.

When you have billions of dollars from the wealthiest 1% funding stink tanks that are expected to find moral justification in taking from the poor and giving to the rich, this is the kind of bullshit you see.

[JHB]

20. Wikipedia can be a good starting point...

...as long as one makes the journey to doing real research (i.e., check and verify source material, etc.)

[wakeme2008]

2. You are wasting your time, Wikipedia is run by a group of Freepers that

re-write history as they want. Andy's bio was deleted and I have re-edited a number of time the entry on the Bush letters being done on a word processor because there was no real type writer around back then when in fact IBM has a couple.

[Cessna Invesco Palin]

3. Wikipedia cannot be run by freepers.

The spelling and grammar are far too good.

[BlooInBloo]

19. It's not. DUers just like to say that whenever something they don't like happens.

[Name removed]

28. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Balbus]

29. Hmmm, I see only one person unhinged in this thread...

Who has the problem?

[BlooInBloo]

30. Even to the point of deliberately misquoting. LOL!

[BlooInBloo]

31. There's really only one thing to say to that....

[JHB]

23. More accurately: the most obsessive wind up having the final say.

On any issue people obsess about (nearly all of them, to someone), it's the most obsessive who keep plugging away and "updating" Wikipedia. That's why it's a place for clues, not facts.

[Tesha]

38. That's entirely accurate: the most obsessive wins. (NT)

[hfojvt]

4. we will see

It will be good to find that out. Sort of.

Pretty lame that they play 'he said, she said' with fairly basic numerical facts. Do they also have a section on the flat earth. "Supporters of the flat earth theory contend ..."

[Lasher]

5. Links with facts

Myth: Carter ruined the economy & Reagan saved it
Reagan's Debt
National Debt Graph
The Real Reagan Legacy: Debunking Myths About Reagan
The Ronald Reagan Years - The Real Reagan Record
unemployment & deficits, 1969 to 2004

Shoot me a PM if you want me to help on your project to set the Wiki record straight on Reaganomics.

[dave_p]

7. Another

Why Reagan's tax cut didn't boost tax revenues - can't vouch for its objectivity, but it has lots of links too.

[Lasher]

10. Very good. Bookmarked in my Saint Ronnie of Reagan folder.

:thumbsup:

[hfojvt]

36. to me, these are the key links

with an anonymous thank you to the local reference librarian who found the SAUS online (after I complained that they did not have older editions which showed facts for the 1980s).

Showing income tax revenues for the 1980s
http://www2.census.gov/prod2/statcomp/documents/1990-04.pdf

to pick up the mysteriously missing year of 1981
http://www2.census.gov/prod2/statcomp/documents/1982_83-03.pdf

to figure the CPI using the Inflation calculator
http://www.bls.gov/cpi/

showing the increases in social security tax rates under Reagan.

http://www.ssa.gov/history/pdf/t2a3.pdf

I note that I got different numbers for income tax revenues in constant dollars than the ones I posted. Adjustments in the CPI or in revenue totals. The gist of it stays the same though, real revenues from income taxes fell after 1981 and did not return to previous levels until 1987.

[Lasher]

39. Economic Report of the President: 2006 Report Spreadsheet Tables

Have you considered this resource?

http://www.gpoaccess.gov/eop/tables06.html

Tables B-78 thru B-84 might be particularly worthy of your interest.

[hfojvt]

40. to an extent, I do not trust anything put out by this administration

but my main problem there is that they are xls files and without Excel, they might as well be in hieroglyphics

[Lasher]

41. Oh, too bad you don't have Excel

The tables are useful and it's fun to cite Junior as a source of information that confirms Saint Ronnie sucked. I will convert to another spreadsheet program or plain text if that is your wish.

[HughBeaumont]

6. Reaganomics worked. Yeah, and if you WEREN'T a well-monied white male . . .?

Just to give you an idea, John Snow constantly invoked the Laffer Curve as sensible practice during Rea-Gone Redux. And we know, just as we did back in the 80s when our dads were getting laid off, their pensions/wages slashed and their plants moved offshore, that it was a pile of bat guano.

[hfojvt]

22. it works for all of the well monied

Even for Oprah. Reagan's policies probably helped her get to the Fortune 400. Because of his tax cuts, if she makes $10,000,000 she pays $3 million less in taxes because of Reagan's tax cuts. The top rate was cut from 70% to 40% by Reagan, and now to 33% by Bush, so Oprah and Tiger and Michael Jordon and Hallie Berry, etc., etc., etc. are keeping 30% more of their ginormous salaries.

[dave_p]

8. Interesting

I'd never seen this: I knew they'd fallen as a proportion of GDP but I hadn't realised the absolute drop was so persistent. I did the same calculation to 1992 using the current-price data from the 2006 Budget Historical tables adjusted to 1982 prices by (1) the GDP deflator at EH.Net and (2} the price deflator used for US Federal government revenues generally (from the first source), and they tell the same story:

(1)
1977 - 231.3
1978 - 248.1
1979 - 275.8
1980 - 283.3
1981 - 303.4
1982 - 297.7
1983 - 277.9
1984 - 276.7
1985 - 301.0
1986 - 307.2
1987 - 336.4
1988 - 332.4
1989 - 355.9
1990 - 358.9
1991 - 347.5
1992 - 345.6

(2)
1977 - 238.7
1978 - 257.1
1979 - 285.1
1980 - 289.2
1981 - 306.3
1982 - 297.7
1983 - 275.7
1984 - 271.2
1985 - 293.9
1986 - 299.3
1987 - 327.4
1988 - 324.8
1989 - 347.4
1990 - 352.9
1991 - 338.8
1992 - 333.3

The Budget deflator produces even slower growth and a bigger drop in 1981-84, though the versions differ as to whether revenue in 1986 surpassed the 1981 total in absolute terms.

[baldguy]

13. pssst!...

you can edit Wikipedia yourself!

[hfojvt]

16. I know I can

but I need to gather links. Also I am not sure how to re-write it.

"Reaganomics clearly failed in the 1980s to produce revenue increases. But defenders of supply-side economics are still using bogus numbers to defend their failed theory ..."

Can I use wiki's former entry as an example of that bogus defense?

[ComerPerro]

17. for the most part, on debated issues like this wiki will only tell you opinions

[hfojvt]

18. calculations should not be debatable

If the numbers proved me wrong, then I should have to deal with it, not be some kind of 'mathematics denier'. When I taught college economics in the late 1980s, this was not even subject to debate. It still should not be, unless the Heritage Foundation and Cato Institute are printing textbooks (which would not shock me).

[ComerPerro]

21. but it becomes debateable in the sense that even numbers can be spun

[hfojvt]

24. when they are unspun though

then the debate is over to any objective observer who can do the math.

[JHB]

25. Key point: Not who "can" do the math. Who DOES do the math

Most don't bother, especially those most likely to remove your posting.

[ComerPerro]

26. which is why it rarely becomes fully "unspun"

[Breeze54]

27. Why are you waiting? NOW is the time!!!!!

Go get 'em and kick that SOB's Dead Ass!!!!

[Forkboy]

35. Minor rant,Castro-length rant...if it's against that jackass Reagan it's all good.

:)

[Tesha]

37. Most political articles on WIkipedia are a load of crap.

> Here's the short version - it's a load of crap.

Most political articles on Wikipedia are a load of crap.
Because there's no one in authority over there, the ar-
ticles eventually take the form dictated by the editors
with the most endurance/willingness to game the system.

And, no surprise, this is often the most partisan people.
They routinely stretch and bend the rules, pushing their
personal points-of-view. And at least a few of them are
obviously paid partisans.

And when called on their actions, they naturally go
whinging about how *THEY* are the ones being "wronged".

Wikipedia is just the newest media on the block and
the Reich Whingers are just as set on controlling that
piece of the media as they are on every other piece of
the media. In this case, unlike with most media, there's
something you can do about it: *GO EDIT WIKIPEDIA
YOURSELF*! Pick any article that's under attack from
the Whingers, put it on your watchlist, and help keep
it in shape.

Tesha

[DemBones DemBones]

42. Wikipedia is a load of crap, period. What kind of "reference"

allows anyone to write articles and anyone to edit articles? The concept is stupid.

People hack in and plant false info which gets copied to other sites before Wikipedia deletes it.

It's viral misinformation.

[NuttyFluffers]

43. "it's viral misinformation" yup, wiki in a nutshell

the premise is naive ridiculousness on its face. can't stand wiki, and i'm glad more professors give auto deductions on reports for even using it as a source. can't wait 'til people wake up and learn how to do real research.

[hfojvt]

45. in a nutshell, but not very accurate or precise

How much is misinformation? How long does the misinformation last before it is corrected? How free is any human project of errors and omissions? One project I liked to do back in the 1990s was to study reference books for bias. One of the more subtle forms was 'the memory hole'. Certain people were not deemed important enough to warrant an entry.

[hfojvt]

44. not an exclamation point?

This does not seem so bad.
http://en.wikipedia.org/wiki/Haymarket_Riot

and I helped with this, adding the part about Denison House and removing an acerbic comment
http://en.wikipedia.org/wiki/Vida_Dutton_Scudder

They are still calling it a stub though, so I should add to it, perhaps her controversial involvement in the textile workers strike in Lawrence.

They mention strengths and weaknesses, but the information in the two entries is not inaccurate, unlike the crap they had about supply side economics.

http://en.wikipedia.org/wiki/Wikipedia:About#Strengths.2C_weaknesses.2C_and_article_quality_in_Wikipedia