This page was last updated on September 4, 2004.

Where does Mr. Miskulin get his “information?”

Below is a detailed critique of the subject letter.

“I once read about the Spanish conquests in North and Central America.  Those conquests made Spain so rich that it was poor.”

[RWC] Huh?

“We see that happening in America now with the shipping of jobs overseas and the tax cuts for the wealthy is a sort of bipolar economy.  You have elation for the rich and despair for the middle and poor classes, which are losing purchasing power.  The middle and lower classes are and will be paying for the economic policies of the past 24 years.”

[RWC] We’ve been shipping some jobs overseas since before the American Revolution and we always will.  Likewise, we also import jobs.  Do the American plants of BMW, Honda, Michelin, Sony, Toyota, et cetera ring a bell?  The ebb and flow of jobs across borders is a necessary result of free trade.  A product must be made where it makes the most economic sense or everyone suffers.

Regarding “tax cuts for the wealthy,” yes they did get cuts because everyone got cuts.  What Mr. Miskulin didn’t write was that the relative income tax burden of the wealthy actually increased.  That is, as a percentage of income taxes paid, the wealthy bear a larger share now than they did before the Bush tax cuts.

The real disposable income of American workers has increased every month since at least January 2003 with the exception of September 2003.  Explain how that is “losing purchasing power.”

“America is so rich that it’s getting poor, and Federal Reserve Chairman Alan Greenspan believes Social Security benefits and Medicare should be cut.  This will further aggravate the vicious cycle we’re in.”

[RWC] These programs are a Ponzi scheme and the number of workers paying into these programs is dropping relative to the number of people who will try to draw benefits.  Unless we gradually eliminate these misguided programs or change how they are funded, benefits will likely need to be cut to avoid having the plans eventually go belly up.

“Greenspan was a big fan of Reaganomics and deficit spending by the government.  As he seeks to find and embellish his place in history, we see him losing interest in the plight of middle America.”

[RWC] Actually, Mr. Greenspan does not look favorably on deficit spending and always speaks out in favor of fiscal discipline.  When President Bush proposed his tax cuts, Greenspan argued that either spending should be cut or other revenue should be found.  That said, when he has to choose between a healthy economy and deficit spending, Mr. Greenspan chooses a healthy economy.

“From where Greenspan sits, he looks down on all of us while maintaining all of his ideals.  Do you think we got a good deal?”

[RWC] Alan Greenspan has been chairman of the Fed since 1987.  Over that 17-year period, I think it’s safe to say the economy has performed well overall.  Consider that over the last 3½ years we had a recession, the 9/11 attacks, the anthrax attacks, and the Iraq War, yet we have the fastest growing economy in the world, we’re adding jobs every month, and the unemployment rate is 5.4%, 0.2 below the “good old days” of 1996 when President Clinton ran for re-election.

© 2004 Robert W. Cox, all rights reserved.