August 30, 2007
Forbes and Giuliani
Please excuse me... I'm just finding out about this, mostly because I pay as much attention to Rudy Giuliani as I do to Sister Ruth when she whines about how much I drink. Apparently, Steve Forbes, who (like Paris Hilton) is a recipient of the ovarian lottery, endorsed Rudy and joined his campaign as an economic adviser. Here's what happened back in March the endorsement came to life and Rudy was forced to embrace one of Steve's signature issues, the flat tax.
In 1996, when Mr. Forbes first ran for president, Mr. Giuliani, then the mayor of New York City, disparaged a flat tax in general and Mr. Forbes’s plan in particular. The Forbes plan called for a single tax rate above a certain income, instead of several rates based on income. Mr. Giuliani said that a central part of the proposal, eliminating deductions, would hurt taxpayers in urban areas and reduce tax revenues for populous cities and states.“You’re giving them more authority, more autonomy, and you’re giving them less resources to deal with the problems,” he said then in an interview with CBS, calling the proposal “a mistake.”
He used stronger language on CNN a few days later, saying the Forbes plan “would really be a disaster.”
Eleven years later, Mr. Giuliani is the one running for president, and with a record on social issues to the left of most Republicans, he has been trying to appeal to fiscal conservatives. In those circles, the word of Mr. Forbes, the magazine executive who also ran for president in 2000, carries considerable weight.
These days, Mr. Giuliani calls himself an advocate of supply-side economics and tells audiences that he cut taxes and restrained spending as mayor. He said several times yesterday that the federal tax code should be vastly simpler.
We already knew Rudy was a giant whore (and no, I'm not talking about just his drag performances) but this is something entirely new. This is out and out pandering from the 'hero of 9/11'. Yeah, Rudy, I totally think you're brave. Fucko.
What disturbs me most about him is that there is a possibility he might win. And that has the potential to put Forbes, who is well known for his diminutive intellect and horribly written magazine, in a policy making position where he can help push through some of his other stupid ideas... like a return to the gold standard. Like most 'gold bugs' (so-called because they love gold and are as smart as insects), Forbes believes this is the only way to run a monetary system.
Seriously, it's a bad idea. I could spend a few paragraphs on why, like the fact that while fiat currency (like those in use EVERYWHERE IN THE WORLD TODAY) can be inflationary at times, it can also just as easily be deflationary when needed. It's also far more responsive to demands for credit. The gold standard is based on a metal dug up out of the ground and removes the ability of a central bank to effectively act as a lender of last resort. Which means that when you have a credit crunch (which we have now) the Fed can't respond effectively to it. Currently, I think the situation we are in will lead to a shallow recession. Under the gold standard, it would have already started a deflationary death spiral into a depression.
How do I know? Because it's happened before. Throughout the 19th century. Which is why we dropped the gold standard in the 20th.
Posted by mcblogger at August 30, 2007 12:18 AM
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