^{Democracy & Technology Blog} Talk about shifting rationales

Also via Don Luskin, we note our favorite hedge fund commentators GaveKal Research on the Bush tax cuts, and Paul Krugman’s shifting criticisms:

“As religious readers of Paul Krugman (the New York Times columnist), we had expected the Bush tax cuts to be an unmitigated disaster. Because of President Bush’s “fiscal recklessness” we thought, in 2003, that the US would stay in a recession.
“Then we felt that the recovery would be a profitless recovery. When the profits hit record highs, we then feared that the recovery would be jobless. When the US economy ended up creating more jobs than anyone had thought possible, we fell back on our default position, namely that the Bush tax cuts had endangered the US fiscal position and that we were set to leave mountains of debt to grand-kids etc… (at least the US, unlike Japan or ever larger parts of Europe, has grand-kids to leave debt to!).
“And today, here we are, with our back against the wall as tax receipts in the US are absolutely booming. Maybe, instead of reading Mr Krugman, we should have remembered what Milton Friedman once told us: “I’ve never met a tax cut I did not like”. If so, we may have been able to foresee that, over the past six quarters, tax receipts have been growing at 2.5x the growth rate of US nominal GDP?”
Gavekal Research

The new, new argument, of course, is that the “benefits” of the tax cuts have not been “evenly distributed,” when guaged by the erroneous measures of narrow wage rates and “how much John Doe got back in tax breaks.” Wages always follow profit increases, and wages have now begun to rise, and will likely continue doing so with low unemployment (4.6%) signalling a tight labor market. Also, many workers who pay little or no income taxes in the first place — and thus could not get a “tax cut” — have seen large increases in their retirement savings and home values.
GaveKal has a great little self-published paperback book on globalization and structural changes in the U.S. economy. It’s called Our Brave New World. You should read it.
-Bret Swanson