Supply-side economics flame-out!

Over at The Smirking Chimp, there's a very excellent article about the clear evidence of the flame-out of Supply-Side economics as a viable model for how modern economies function. In fact, it's never been a successful economic model. Ever. All it's served to do is to make the rich richer and the poor poorer. Michael Fox has this to say about our current automotive situation.

It’s time to re-brand the concept of ECONOMIC PATRIOTISM (formerly known as protectionism). If you believe that it is contrary to contemporary trade policies, well, precisely! Supply-siders? Just look at the overflowing shelves at any department store (70% discounts notwithstanding), or car dealerships with acres of unsold 2008 and 2009 models – in spite of enormous sales incentives - oodles of supply and no demand! That is to say, nobody’s buyin’ nuthin’ – especially cars.

He goes on to point out that back in the 1920s, Henry Ford realized that if he paid his workers more money, they could afford to buy his cars. Shocking, nasty, socialist demand-sider that he was, he drew the logical conclusion that without demand, supply is meaningless.

While I don't agree that "ECONOMIC PATRIOTISM" will solve our economic ills, clearly we need to rebalance the playing field so that companies that benefit from the infrastructure of the USA are obliged to return the favor by hiring American workers.