JONATHAN CHAIT AUGUST 18, 2010
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One aspect of the current bout of right-wing economic hysteria that nobody seems to mention is that the exact same thing happened in 1993 when Bill Clinton passed a deficit reduction bill that raised the top tax rate. It was class warfare, socialism or worse. Publications like Forbes and Fortune wrote stories urging rich people to give up their citizenship or flee the country in order to spare themselves Clinton's punitive anti-rich policies. There were bumper stickers depicting the "C" in "Clinton" as a hammer and sickle.
Las Vegas Review-Journal columnist John L. Smith (h/t Eric Kleefeld) digs up a letter from Sharron Angle from that period that reflects the tenor of the conservative worldview:
I and the majority of my fellow Nevadans are sickened by the passage of the recent huge tax increase bill. With YOUR help the quality of life in America has taken another step into the pit of economic collapse. Clinton's mother-of-all tax packages is the world's biggest tax increase ever. It increases government spending by $300 billion, increases the national debt by $1 trillion, it is retroactive to January 1, and probably the most offensive, it schedules 80 percent of the promised spending cuts to take place after the next Presidential election. ...
"Please take the following words of Professor Alexander Tyler to heart. He said, 'A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves a largess from the treasury. From that moment on, the majority will always vote for the candidates promising the most benefits from the public treasury, with the result that a democracy always collapses over loose fiscal policy.'
A couple points. Obviously, none of these predictions came true -- the ballooning of the deficit, the collapse of the economy, the end of democracy. As I've noted before, the climate of opinion around Clinton's economic program is strikingly similar to the climate of opinion around the Affordable Care Act. In both cases, liberals were disappointed at what they considered a watered-down compromise, moderates were very cautious in their praise, and conservatives utterly hysterical in their opposition. The utter failure of the conservative doomsaying to come to pass -- any element of it at all, from the recession to the ballooning deficit and spending to economic collapse and dictatorship -- prompted no rethinking whatsoever on the right. It's just on to the next bout of hysteria with the old one forgotten.
Second, the quotation from "Alexander Tyler" appears to be fictitious. The quote seems to have originated sometime around the middle twentieth century on the American right, with the author's name and exact predictions undergoing numerous changes along the way. The durability of the line suggests a deep fear of economic democracy on the right. After all, in a democracy, people can vote to raise taxes on others and spend money on themselves. The most fundamental element of modern conservative belief is an abhorrence of economic redistribution, and the need to concoct an 18th century prophet to give voice to this fear is a reflection of the centrality of that fear.
9 comments
Chait wrong again. Not sure if he is actually this inept - but he forgets to compare the 93 Clinton tax hike with the 97 Clinton tax cuts that the Republicans forced him to sign The Clinton example is superficially plausible (the only requirement for a Chait argument), but it fails under closer scrutiny. Economic growth was solid but hardly spectacular in the years immediately following the 1993 tax increase. The real economic boom occurred in the latter half of the decade, after the 1997 tax cut. Low taxes are still a key to a strong economy Chait fundamentally misses the point ---- tax cuts work better than tax hikes to stimulate private sector. This point isn't even up for debate economically outside the alternate world of liberal political economics.
- mr_rationale
August 18, 2010 at 2:35pm
Mr Rationale has no idea what he's writing about. I don't know if he's dishonest or just confused, but economic growth in 1996-97 was equal to economic growth in 1998-99, so it is pretty difficult to credit the Taxpayer Relief Act of 1997 with producing the "real economic boom" in the 1990s. Secondly, Mr Rationale writes that the Republicans "forced him to sign" [him being President Clinton] the Taxpayer Relief Act of 1997. That's a pretty curious/hilarious assertion, considering that 80% of House Democrats and 82% of Senate Democrats also voted for the Taxpayer Relief Act of 1997. Why would they do that? Because much of the cuts were to the benefit of the middle class. From President Clinton's signing statement: "I have long considered tax cuts for middleincome Americans and small businesses a top priority. In 1993, I worked with the Congress to cut taxes for 15 million working families by expanding the Earned Income Tax Credit, and by providing investment incentives for small businesses. A year later, I proposed my Middle Class Bill of Rights, including child tax credits, deductions for higher education, and expanded Individual Retirement Accounts. Then, in 1996, I signed into law a number of other tax benefits for small businesses and their employees—including greater expensing for small-business investments, greater deductibility of health insurance premiums for small businesses and their employees, and expanded and simplified opportunities for retirement savings. Also in 1996, I signed into law a $5,000 tax credit for adoption expenses ($6,000 for adopting children with special needs) and higher limits for tax-deductible contributions by spouses to Individual Retirement Accounts. "This year, I once again proposed my Middle Class Bill of Rights. On May 2, 1997, the congressional leadership and I reached a historic bipartisan budget agreement that included the broad outlines of key elements of my tax-cut plan." Mr Rationale, please come back when you've found a brain or a conscience. Thanks for your time.
- DC Spence
August 18, 2010 at 2:53pm
The hammer-and-sickle motif reminds me of a startling sight some years ago in North Carolina. I was driving in to the Duke University campus one morning on a research trip, and found myself behind a pickup truck. Obviously the owner was a bit upset over the fact that Duke Medical Center had issued a smoking ban. In any case, the truck had a bumper sticker showing the No-Smoking sign morphed into a Hammer and Sickle, with the tag "What Next?"
- colablease
August 18, 2010 at 2:54pm
Regarding class warfare, I don't have a problem it. I don't know why the middle class would either. There's far fewer wealthy. If they want to move to China, so be it, someone will replace them eventually. Life can be made difficult for those small Caribbean islands too, in the days of the Patriot Act. I don't think the wealthy have too much to worry about though, they have our finance ministers, Geithner, Summers, and to a now slightly lesser extent, Rubin, protecting their interests (Rubin is trying to reestablish the estate tax, credit due). If I do join the ranks of the wealthy someday, I'll wage class warfare on the lower classes myself then. I'll also expect whatever administration to protect my interests as well.
- jet
August 18, 2010 at 3:41pm
I can't provide an precise reference, but the quote from "Professor Tyler" sounds a lot like something out of Robert A. Heinlein's late science fiction. I'll take a close look at "The Moon Is a Harsh Mistress" when I get home.
- dabowers
August 18, 2010 at 5:05pm
Quote of the day to jet!
- Nari224
August 18, 2010 at 7:30pm
Rationale is just plain dumb, spence. And it it so common that the most fatuous are out there strutting about, as if they were smarter than anyone else. Characteristically, r. says nothing about J. Chait's central point, Republican hysteria over Bill Clinton's tax hike. I remember this period vividly. Former Representative Dick Armey was another conservative predicting economic disaster because of the tax hike. A few years after the tax increase, someone from our very own TNR called Armey's office and asked whoever answered the phone about Armey's failed prediction. As I recall, the Armey functionary refused to answer the question and cantered off. So Jonathan C's post goes to show what many TNR readers already know, that epistemic closure on the right is not of recent provenance.
- liberal reformer
August 18, 2010 at 10:49pm
mr_rationale: "Chait fundamentally misses the point ---- tax cuts work better than tax hikes to stimulate private sector. This point isn't even up for debate economically outside the alternate world of liberal political economics." First, there's the countervailing Bush tax cuts which led to...anemic growth at best. Not a surprise, since most analysis shows tax cuts to be not very effective as stimulus, and tax cuts at the highest levels even less so. Second, who advocated that tax hikes "stimulate" the private sector? The tax hikes being considered are not for stimulative purposes but to get a handle on the long-term deficit that conservatives are wringing their hands about. Straw man. Third, it's indisputable that conservatives gave doomsday predictions that the Clinton tax hikes would kill the delicate economic recovery. And it's indisputable that it didn't happen. One can argue cause and effect, but one can't dispute that the conservative prediction was just wrong--and that their wrongness still hasn't caused them to reconsider their views or rethink their positions. Being an ideologue means never having to look at evidence, I suppose. If the facts conflict with the theory, throw out the facts.
- dsimon
August 18, 2010 at 10:56pm
How does Mr-Rationale always get in first? I see the reflection of the computer monitor in his face as he stares at "Chait's square." Suddenly, he leans forward, "Chait wrong again." ---The rates weren't changed in 1997 and at the time of the 1997 act, Clinton signed the Balanced Budget Act of 1997. Now, that is responsible government. None of this "cut rates and, like magic, more money will flow into the government." Or ineffective trickle down economics plus deficits while we have two wars going on.
- Nusholtz
August 18, 2010 at 11:40pm