Paul Krugman should be the Economic Czar of the USA. His unparalleled understanding of the economy and his ability to explain it are critical to laymen when the information cloud includes so much distortion and misrepresentation shrouding the facts and good faith analysis.
In his latest offering as a New York Times Op-Ed columnist, Corporate Cash Con, he lays out the cause of our continuing economic difficulties the way a wise and celebrated doctor might prescribe treatment for a minor ailment. The symptoms lead him to an easy diagnosis and then to a clear course of treatment.
Our economic troubles, he tells us, are related to our bad habit of believing in trickle-down economics, the idea that money put into the economy at the top will "trickle-down" to those at the bottom. Its been tried before and it failed. It failed so badly, in fact, a better name for it might be drivel-down economics. It's the kind of sophistry medicine show charlatans like Eric Cantor offer to the suckers who need something to cure what they don't understand.
In this latest round, we're being told by drivel-downers that tax free repatriation of foreign profits earned by US corporations will be the basis of a recovery. The huge hoard of cash being held overseas would be brought home and used by American capitalists to invest in the American economy.
Krugman joins others in the exposure of the scheme by reminding us it already has failed us. In 2004, we allowed US corporations to repatriate profits but they didn't use them for job creation. They "used that money to pay dividends, pay down debt, buy up other companies, buy back their own stock -- pretty much everything except increasing investment and creating jobs." We have no reason to believe corporations wouldn't do pretty much the same thing in 2011 as they did in 2004.
The Krugmans goes on to point-out a fundamental truth of economics, economic actors do more of what best serves their interests. A second tax giveaway will give these "companies an incentive to move even more jobs overseas, since they now know that there’s a good chance that they’ll be able to bring overseas profits home nearly tax-free under future amnesties."
The question then arises, does anyone really believe corporations need more money? Krugman reminds us corporations already are swimming in cash. They're hoarding $1.9T because they have no reason to invest it. The lack of consumer demand would make any investment a waste. Consumer don't have the money to buy anything but they would if government created jobs and gave stressed home-owners mortgage relief.
Government created jobs and mortgage relief only part of what we need but they're good enough ideas to make Paul Krugman a candidate for Economic Czar of the USA.