Economically Speaking

Economic policies are among the most basic differences between the Democrats and Republicans. While there some on each side that lean toward the policies of the other, there tends to be a profound difference between the two. So it should not be surprising that these policies reflect the overall empahsis placed by each party on certain sections of our citizenry. It is my opinion that the differences began in the fight between John Adams and Thomas Jefferson, both great men of their time. While Thomas Jefferson is recognized as the founder of the Democratic Party, I believe that John Adams was the forerunner of the Republican Party.

Thomas Jefferson named his party the Democratic Republican Party, or the Party of the Common Man. John Adams argued for only allowing landowners to vote while working on the Constitution. While that is a simplification of some very complicated men and their thinking, it does illustrate where they wanted to place the most power and wealth - either with the average person or with the wealthier citizens and businesses.

History shows that the overall economy tends to perform better under Democratic policies. While I knew that the average citizen is better off under Democrats, I was surprised to see that the stock market also tend to perform better under Democrats as well. Check out this article from Edward Jones:

http://www.edwardjones.com/cgi/getData.cgi?file=/pdf/media/Politics.pdf This shows the averages from 1901 to 2006. Democrats do better with stocks, while Republicans do better in controlling inflation. I would like to see a corresponding record of income and job rates. My experience has shown a higher unemployment rate under Republicans.

Certainly there are differences between different Democratic administrations and differ Republican administrations. These reflect the attitudes of the individual in charge as well as the differing factors when each came to power. However, there are some basic ideals that each has a tendency to demonstrate. Democratic economic policy leans to providing an environment where an average person can have a better chance to increase their income and standard of living. We believe in progressive tax models, not to penalize the wealthy but to give greater opportunity to those on the lower end of the pay scale. We also support small businesses, which create about 80% of new jobs. Under Republican administrations there are a few wealthy citizens and corporations that become far wealthier, while under Democrats the majority of citizens do better though the top percentage of income earners do not build their wealth in the exponential numbers they do under Republicans. Democrats tend to be a ground up party and Republicans top down. We do not believe in trickle down, but in building up.

History has shown us that when there has been an extended period of Republican economic policies, there has occurred either a recession or a depression. It happened in the 1970's after Nixon and Ford, again in the 1980's after Reagan, the Great Depression of the 1930's followed Hoover, and the 'Panic' of 1893 came after Benjamin Harrison. The current administration has placed in motion the worst economic policies since Herbert Hoover in my opinion. We have seen the greatest redistribution of wealth from the poor and middle class to the wealthy since the 1920's. We have also watched their policies create an environment that has produced the greatest export of wealth ever from the United States to foreign countries, esp. China and the middle East.

At the end of WWII corporations paid approximately 52% of all taxes in the US. Today they pay around 7%. While I do not believe in taxing a company out of business, I also do not believe in rewarding them while hurting our overall economy. In the first year of the George W. Bush administration new regulations were enacted that allowed multi-national corporations, such as large oil companies, to create shell companies in Bermuda and other areas to shield up to approx. 40% of their income from US taxes. On top of this they were given huge cuts in their tax rates and then many of these same companies began receiving large tax rebates and other incentives. This took a large amount of money away from the US Treasury.

In the 1960's the average CEO made approximately 30 times what the average worker in their company made. Today that CEO makes a little more than 400 times what an average worker makes. In other words, the average worker has to work almost a year and a half to earn what the CEO makes in one day. These exhorbitant incomes need to get back in line somehow. It is a drain on the companies they run and on the economy as a whole. It has even got to the point where executives that produce losses are still given multi-million dollar bonuses and salaries. Nothing seems to be based on performance and I do not believe anyone is worth what some of these men are making.

There is coming a time that we will pay for these excesses and I don't believe it is far off. The economy is not as strong as many people want us to believe. Too many people are out of work and too many people are not making enough to cover their living expenses. As gas prices continue to rise it is putting a further strain on the budgets of most Americans.

I do not wish bad times on our country or our citizens. I do believe harder times are coming though and I only hope it starts before Bush leaves office so most people will know where this problem started. That being said, I believe it is very important that our Democratic and Republican legislators begin working together for the good of the country. The economy has always been a complicated system and it is even more so now. It is imperative that we have the best minds from both sides working together to solve these problems.