Just a quick question. I know there's an adage that you don't raise interest rates in a recession. Of course I don't know of any recession in the past where interest rates were essentially zero.

My theory is that raising interest rates would cause both business and consumers to buy so that they could lock in today's rates. I think the main reason we're not recovering is that there's no reason for businesses or consumers to "buy now". If the fed started raising rates people would want to re-fi. They'd want to buy a new car. Any large purchase they'd been putting off they'd potentially make to avoid having to spend more in the future. Obviously you can't raise rates forever, but we know an economy can run just fine with interest rates in the middle single digits so why not try?

What's the flaw in my logic?

Great article from Salon on the fact that lower taxes have never been particularly good for our economy.

Though the Reagan zeitgeist created the illusion that taxes stunt economic growth, the numbers prove that higher marginal tax rates generate more resources for the job-creating, wage-generating public investments (roads, bridges, broadband, etc.) that sustain an economy. They also create economic incentives for economy-sustaining capital investment. Indeed, the easiest way wealthy business owners can avoid high-bracket tax rates is by plowing their profits back into their businesses and taking the corresponding write-off rather than simply pocketing the excess cash and paying an IRS levy.

Let's jack them up. I had a stupidly low effective tax rate last year. And while we're at it let's talk about the wisdom of having a Fed that has said they're never going to raise interest rates. How is that going to get the economy going? Telling business owners they'll have free money available in perpetuity is going to do what? Make business owner postpone investing and hiring in perpetuity. Got to give them a reason to jump Fed!

Of course, we're talking about religious beliefs here. You're not going to be able to convince most people that they could have more and better roads if we raised taxes. No matter how stupidly obvious that is.

Trickle down is a myth. It doesn't work. It hasn't worked. The only reason it's even pretended to work is because we had two major bubbles created by fraud that made it appear that our economy was still growing. Give up the dream.

In the US we like to "vote the bums out" every 4 years or so. It's amazing how frequently we've done this in our history. Yet if you look at history we've gotten nothing for our effort.
This year I encourage you to try something different. Vote for the party in power. Give them an overwhelming majority. I think the best way to create real change is to strangle the Republican party off completely. The reason that Democrats have trouble reaching consensus is that they represent pretty much every reasonable adult in our nation. They've got fiscal conservatives, labor unions, most of the LBGT community, and most importantly the majority of US citizens vote for Democrats. Sure the electoral college and Senate give the appearance that there are a lot of people voting Republican, but it simply isn't true.
I'm not saying the Democrats are deserving of your vote because they have all the answers. I think they're deserving of your vote because they will be good stewards of your vote until the Republican party is choked off completely. Once Democrats get 60-70% of the vote almost all corporate funding will go either to Democrats, or to the best third party. Suddenly the Republican party will start having to compete with the Libertarians, Greens, and who knows whom else for cash and ideas. Votes that prove you follow through with your beliefs will again become important. Once this ecosystem emerges the Democrats unnatural majority will instantly evaporate as voters move towards viable third parties that more accurately reflect their views. Hopefully this could be done within just one or two election cycles.
So don't vote the bums out this year, vote them in! Spread the word and vote for real change.

Just posted this is a comment on Spike's piece at the Austinist on Whole Foods CEO Mackey and his stupid ideas to "fix" healthcare.

Mackey sounds like he's got all sorts of great ideas and is the savior of private health-care. The problem is that his solutions don't work. My company recently moved to an HSA (which he advocates). It's only 20% less than our previous health plan, and yet it provides almost no benefits. The only benefit is for me. Since I and my family are healthier than average we can afford to bet (and make no mistake, HSAs are gambling) on the fact that we won't be too unhealthy in a year to make it cost too much. And since our household makes more money than 80% of households in the U.S. we can afford the high deductible by putting away over $5000 a year as a hedge against getting sick. That $5000 is to cover our full deductible on top of the over $300 per month I pay. But how exactly does a Whole Foods "team member" afford that plan?
I wholeheartedly endorse these "healthy" plans as a benefit for workers. In much the same way that other employee assistance programs (gym memberships, flex time, etc.) are good. It's great to encourage your employees to be healthy. But being healthy doesn't prevent accidents, or genetic diseases, or disease caused by external factors like pollution.
It does not solve the problem of how a minimum wage worker without $2000 hanging around in the bank (because what percentage of workers in that bracket can afford to sock away over 12% of their income for health care? and then they're supposed to save 12% for retirement too?) can afford care with an HSA. Maybe because I've had minimum wage jobs I realize how ridiculous that idea is.
HSAs exist. The market, that great god at whose altar Mackey worships, has wholeheartedly rejected them. Why? Because they cost too much and do too little. They're health care for rich people. If you're having trouble deciding where to invest your money an HSA might be for you. If you're wondering how you'll pay your rent this month, it's probably not.
Until we expand the insurance base to include all healthy and unhealthy citizens it will become increasingly unaffordable. And conservatives have presented no ways to fix that. Democrats have presented three - socialized medicine, a public option, and requiring the purchase of health insurance. HSAs don't fix this problem. They just temporarily make health care cheaper for employers. CEOs who think this is a solution rather than a stop-gap should be fired for being ridiculously short-sighted.

So the Republicans are voting on a number of non-binding resolutions in their primary this year. Most of them are fairly uninteresting, but then I got to this one:

The third proposition seeks to eliminate the federal income tax.
“In addition to aggressively eliminating irresponsible federal spending, Congress should empower American citizens to stimulate the economy by Congress cutting federal income taxes for all federal taxpayers, rather than spending hundreds of billions of dollars on so-called federal economic stimulus.”

It brings up some really good questions. But most prominent in my mind is "Are they simply ignorant of what our federal income taxes pay for or are they really willing to get rid of the military?" And if not, are they really suggesting that they would be willing to have a special military tax? That seems like a really bad idea, since if people knew what they were paying for the military they might be even more upset about our military jaunts to Iraq.