Ben Buckman.net

 A relative in finance wrote to me saying we need tax cuts to stimulate the economy. Fed up, I replied with this:

The tax cuts mantra has become so amusing to me that I made a site, gopproblemsolver.com, all about it. Bush cut $1.4 trillion in taxes. The result was a few years of phantom growth focused at the top and in housing, followed by a systemic collapse. For most people during the Bush years, actual living standards declined, and now they're in the pits. So what was the problem, he didn't cut enough? What empirical evidence would it take to put to rest the dogma of tax cuts?

I remember you supported the initial TARP plan on the premise that it would be profitable for the government. It's clear now that it won't, and the plan that you thought could be profitable had to be scapped because it was unworkable. (It looks like the only way we'll know what toxic assets the big banks have, in order to get rid of them, is if we nationalize them.) So I find everyone in your industry incredibly hypocritical, to say the least: you/they supported the bank bailout (duh - it's your asses that got bailed out), but the minute regular irresponsible people get bailed out of their mortgages, all hell breaks loose on the trading floor, Santelli goes on his rant, and "this is America!" And everything your industry did was *responsible*? BoA leveraging itself 45 times over was responsible? Finance was built on a house of cards that made a lot of people in your profession very rich. The house collapsed. Where is the industry's self-reckoning? To say the answer is tax cuts, after all this, is astonishing to me.

I followed up with this:

Just so it's clear, too, I'm paying more taxes this year myself than I ever have, and after filing my taxes I have to pay another big chunk that weren't already taken out. I don't *like* taxes. No one likes taxes. But the idea that tax cuts will save the economy are just empirically wrong and ideologically dogmatic. You'd be out of a job if it weren't for federal bailouts funded by the promise of future tax revenues. We're not always at the right side of the Laffer curve; at some point taxes need to go up to pay for all the stuff we want. Zero taxes won't mean infinite revenue. You told me a long time ago that there's a legitimate role of government in helping the really helpless who are trying to help themselves. Now that counts millions of people, thanks largely to your industry. (The housing crash alone would not have toppled the world economy, if an over-leveraged bubble hadn't been built by overpaid casino bankers on top of its promised unlimited growth.) Why don't we nationalize BoA and Citi and sell their junk to pay for their own bailouts? Wall Street is lucky the government loves them too much, but you'd never know it listening to them.