>Shocking News Alert! Once again, it's not the headline that's shocking, at least not for those of us who have even a tertiary understanding of the laws of economics. What's shocking is where it came from, Harvard.
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>Recent research at Harvard Business School began with the premise that as a state's congressional delegation grew in stature and power in Washington, D.C., local businesses would benefit from the increased federal spending sure to come their way.
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>It turned out quite the opposite. In fact, professors Lauren Cohen, Joshua Coval, and Christopher Malloy discovered to their surprise that companies experienced lower sales and retrenched by cutting payroll, R&D, and other expenses. Indeed, in the years that followed a congressman's ascendancy to the chairmanship of a powerful committee, the average firm in his state cut back capital expenditures by roughly 15 percent, according to their working paper, "Do Powerful Politicians Cause Corporate Downsizing?"
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>http://hbswk.hbs.edu/item/6420.html
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>"It was an enormous surprise, at least to us, to learn that the average firm in the chairman's state did not benefit at all from the unanticipated increase in spending," Coval reports.
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>It never ceases to amaze me that the "best and brightest" cannot grasp these seemingly simple and historically proven economic truths.

RE: It never ceases to amaze me that the "best and brightest" cannot grasp these seemingly simple and historically proven economic truths. I agree. Furthermore, over taxing 'the rich' forces the rich to move their business to a country where taxation is much lower. On a personal level, over taxation of the wealthy is an incentive to not work hard to succeed, and who would if everytime he made a fortune the government stole it from him. Bottom line - The less a government intrudes into the lives of the people, the more financially successful the government becomes.

At either end of the logic for this are:
1. Completely honest people with no government intrusion would become very wealthy and all people who desired it, would be employed.
2. Completely honest people with total government control would be financial slaves to that government and there would be no employment.

The fight over the middle ground is where we live and a swing to the Libertarian side in the next election would help the recovery.