The New Republic

When I started my career (in the 1970s) interest and dividends were taxed at rates up to 70%, earned income (salaries and bonuses) was taxed at a maximum rate of 50%, and capital gains were taxed at a maximum rate of 35%. Those were halcyon days for tax lawyers, converting ordinary income into capital gains and passive income into earned income (and current income into deferred income without any "passive activity loss" rules to deal with). Of course, today earned income is subject to the highest tax rate (at marginal rates up to 50% when payroll taxes are included in the calculation), whereas capital gains, interest, and dividends get the most favorable treatment. Whether the 1970s were dismal is debatable, but we never suffered from the kind of economic calamity we suffer from today (unless you count the oil embargo, which was the result of politics not economics). The good old days.

- rayward

November 23, 2011 at 7:41am

Here is where I am disappointed with the President:

"Paul Krugman sends us to a paper by Peter Diamond and Emmanuel Saez that suggests the optimal tax rate on the highest incomes ould be around 70 percent."

- Nusholtz

November 23, 2011 at 8:16am

"He needs to articulate a message that top rates can go up without damaging the economy and make a budget based on that assumption." Two words: Walter Mondale.

- timteeter

November 23, 2011 at 9:31am

The Eurozone situation is fascinating. I hope it doesn't fail because of the potential for economic disaster, but yet, it really doesn't make sense. Economies that are fine relative to each other are not fine relative to Germany, and being pegged to the same currency is bankrupting them. Also, if I'm reading things correctly didn't German banks buy a lot of bad American sub-prime mortgage paper? How is that Greece's fault, or Italy's, and why do people there have to pay for bad decisions on the part of private German (and other) banking institutions? For that matter why do American "regular people" have to keep paying for idiotic decisions by corporate and government leaders here?

- Sophia

November 23, 2011 at 12:29pm

I find the idea that liberals are constantly disappointed in Democratic Presidents stupid, frankly. Every President--even Reagan, even W.--has partisans on their side that believe that they are disappointments. For Obama, there was plenty of liberal satisfaction with the health care outcome; there was even some satisfaction with the tax cut outcome for obtaining some stimulus. Like most Americans, the breakdown came when Obama seemed to show no spine in confronting the loose-cannon Republicans on the debt ceiling, and no vision in taking his eye off the ball on jobs. It was that moment that suggested that Obama was, in fact, rather clueless--for independents and liberals alike.

- polcereal

November 23, 2011 at 12:30pm

As to Grover Norquist etc: we are watching something bizarre and frightening on the Right, indeed the whole GOP has been infected with it, and nobody seems capable of confronting it. "Fair and balanced" "news" narratives are big part of the problem. People are tripping over themselves trying to be "fair" when in fact, something is rotten and Denmark and people should be yelling about it. This has got to come from journalists - post modern history, emphasizing narrative over facts, is interesting in retrospect (albeit dangerous to history that is actually, you know, true) but in real time it's threatening our perceptions as well as our institutions.

- Sophia

November 23, 2011 at 12:33pm

Arrrgghhhh. I mean, rotten IN Denmark, etc. Anyway, narratives have a role in history. Hearing from the point of view of individuals in war, in peace, "little people" who see things from a unique perspective - that's a fascinating and vital aspect of history. But trying to pretend that something completely irresponsible, a real threat to our society, to our democracy and our ability to govern ourselves is just another point of view - that's something else.

- Sophia

November 23, 2011 at 12:36pm

"Also, if I'm reading things correctly didn't German banks buy a lot of bad American sub-prime mortgage paper? How is that Greece's fault, or Italy's, and why do people there have to pay for bad decisions on the part of private German (and other) banking institutions?" Sophia, there are some different paths to the situation many EU countries find themselves in, and in Greece it was the fact that the government was essentially cooking the books in terms of the proportion of spending to GDP that was a requirement for Euro membership. In Ireland, however, that was not the case. The Irish situation emerged because the government, in a moment of panic in Sept 2008 deliberately induced by the banking sector, agreed to guarantee the private debts of banks, especially the money borrowed from German banks and invested in property development that suddenly nobody was buying. The Irish case is unique as it involves the government (and the parliament who passed the legislation with almost no scrutiny) making the state responsible for the debts of private individuals and corporations.

- ironyroad

November 23, 2011 at 12:47pm

Sophia - Has there ever been a situation in our history where a private citizen has held sway over an entire branch of Government? Certainly in the past we've had our Father Coughlins and yes, Billy Graham, but the spectacle of elected legislators, who should be beholden to their constituents and to defending the Constitution, to sign a pledge and essentially surrender their obligations to a private citizen/interest group must be unprecedented.

- dubyadoubte

November 23, 2011 at 12:50pm

policereal. The thesis that liberals are constantly disappointed in Democratic Presidents is not only stupid, but dishonest. It is basically a meme by Obama acolytes to rationalize why BHO is the best of all possible Progressive/Liberal choices. What a load of.... BHO has made error after error that, together with intractable Repub opposition, has led to the mess we are in. Starting with not making eliminating the Senate fibiluster job 1, continuing through a too weak stimulus touted as just right, bad decisions on Afghanistan and BP, weak health insurance reform reather than strong health care reform, disasterous agreements on budgets and debt ceiling-- and no real understanding of Keynesisan economics. Re-electing BHO in 2012 is hardly a pressing matter for Progressives. In fact, as far as economic issues are concerned, the US may be significantly better off with multiple-choice-Mittens than Blithe Barack.

- drofnats1

November 23, 2011 at 2:08pm

Some of the discontent regarding healthcare reform may also stem from 1. The appalling process Obama put it through 2. The complete lack of coherent support for it from the President 3. That it's a GOP scheme that tinkers around the edges of a crappy system without introducing a single payer alternative 4. Not HCR, but what pocreal said re other topics Now the scheme will probably succeed at many of it's goals. But it's lack of support right now belongs to the president an no-one else, his many accomplishments notwithstanding. Chair seems fixated on decrying liberals "bad attitudes", but since they're the voters and perception is reality, who has the problem here?

- Nari224

November 23, 2011 at 3:37pm

What dubyadouble said - this is the crux of the matter with the Norquist pledge; also, there's evidence and plenty of it that the constituents themselves don't support these rogue Congresspeople. It's almost like a coup. Maybe it is a coup. Thank you to ironyroad for the clarification. The Irish situation - wow. But with the austerity plans and the troubles in Italy due to lack of investor enthusiasm - aren't these at least somewhat similar in that ordinary people within those states are on the hook for private debt? Italy's economy is apparently ok in and of itself; plus what about the fact that others in the Eurozone buy German products?

- Sophia

November 23, 2011 at 5:29pm

And, as reliable as ever, the liberal kvetching class, as I like to call them (lovingly, of course) come storming to the front line to defend themselves against perceived slights. Once again, highlighting the myriad ways in which everything could be so much better, if only...only to highlight, in my eyes, how nothing is ever good enough for them. And so fatalistic are these types that they have promised to withold their votes for Obama because another 8 years of Republican domination couldn't possibly be an iota worse than the minute by minute evisceration of this fine Republic by Barry O.

- GSpinks

November 23, 2011 at 7:07pm

Timteeter "Two words: Walter Mondale." That's exactly my point, someone had to undo what started with Reagan and that was the doctrine that tax policy and budget concerns are unrelated. Reagan was the first advocate of decoupling revenue from a balanced budget and that, along with Bush II's implementation of that principle, (Reagan proved deficits don't matter, said Cheney) led to today's huge debt problem.

- Nusholtz

November 23, 2011 at 9:19pm

Disappointed liberals often raise the filibuster issue -- if only Obama had pushed for its elimination or major reform. But was there any serious appetite to do that among any non-liberal Senators? If not, then it seems like an unrealistic expectation. I've also heard that Joe Biden should have taken the radical step of declaring the filibuster (or, at least, the filibuster in its current form) unconstitutional. I get the legal arguments, and don't find them crazy, but, politically, I think it would have been seen as a liberal president monkeying with the rules in an unprincipled fashion in order to ram through his agenda. History judged FDR harshly for threatening to appoint additional Supreme Court justices. Court-packing was perfectly legal, and you could certainly argue that the conservatives on the Court who were blocking the New Deal were themselves engaged in unprincipled, consequentialist jurisprudence. Still, it was seen as not playing fair, and even if major filibuster reform were possible at all, I could become a political disaster. Besides, liberals shouldn't forget their other foot. The filibuster protects the status quo, which now includes health care reform, the most important liberal policy accomplishment in decades -- one that remains under threat.

- JakeH

November 24, 2011 at 1:08pm

The bottom line is that the recovery is stuck in neutral, it might have accelerated with a bigger/better stimulus, but bigger/better stimulus was and is too difficult to achieve. To suppose that Obama could have energized the nation on behalf of Keynesianism with a bunch of a great speeches or something is magical thinking. He gave and continues to give plenty of good speeches.

- JakeH

November 24, 2011 at 1:15pm

JC is way underrating how hard it was for Bill Clinton to pass the '93 budget and the value of what it achieved. Regardless, look, I'd give Obama a A- or B+, but this bashing of liberals who are disappointed with him is insane: Obama had more political capital when he came into office than any President in memory, even Reagan. Liberals will likely NEVER have the opportunity Obama had in his honeymoon period to fundamentally shape policy, and people like Krugman were all but screaming at him that the stimulus needed to be bigger and better focused or the recovery would stagnate and it would be too late to do anything later. JakeH is wrong: had Obama insisted on a bigger stimulus in the winter of '09, with the wave of popularity he and the Dems were riding and the economy in freefall, there's no way Congressional Dems would have sabotaged his presidency from the get-go over the size of the stimulus. Especially when Obama turned over the shaping of the stimulus to Congress and filled it with destined-for-pork block grants to the states.

- Lymon1

November 24, 2011 at 11:44pm

Lymon is right on. One needs a new breed of hard-nosed liberals in power. That won't happen with BHO as Prez-- much to the chagrin of the Presbyterian** blue dogs/DINOs that now highly poplulate the bloggers and editors of tnr (Lipmann has been spinning in his grave for over a decade!!). It doesn't take political genius to know that breaking of the filibuster is the key to Senate reform-- and that BHO had the politcal capital to do so in February 2009. And all it took was an understanding of Keynesian economics to know the proposed stimulus was too small-- and without some outside stimulus (wider Mideast-war, anyone??)-- would produce exactly what it produced. **Subscribers to the ideology that all is pre-ordained. Napoleon B, Abraham L, Adolph H, Benito M were all pre-ordained--- and folks like James Buchanan or Neville Chamberlain are inappropriately denigrated for what they didn't do to try harder to prevent historical tragedies.

- drofnats1

November 25, 2011 at 11:57am

"One needs a new breed of hard-nosed liberals in power"
I've been railing against the spineless invertebrates for years now. But I'd settle for senators and congresscritters that didn't bend over and spread em every time a hard-nosed Republican comes trolling for a fight. Love me some grandma Pelosi!

- GSpinks

November 25, 2011 at 3:32pm

GSpinks: that's all well and good, but what matters is results. FDR kept winning elections until he died (despite problems with his base) under considerably poorer circumstances. 2 years after the GOP should have had the worst economic disaster in memory pinned squarly on them (whether warranted or not), they win the house and only didn't take control of the senate due to some poor candidate choices. That's the definition of failure in politics. Everything else is inconsequential, as it becomes vulnerable to future disassembly or rebranding if the political capital of your party cannot sustain it, which makes similar future endeavors more difficult to boot. Here's a simple example of why "liberals" are infuriated with BHO. Why are we still talking about the Bush tax cuts, and not the Obama tax cuts? This is basic message control theory; you don't start by ceding the advantage to your opponent! As for more fighting Democrats; perhaps if the person with the biggest bully pulpit used it (even if the value is more psychological than substantive), we might get more of them. Instead we read about how congressional democrats often feel hung out to dry.

- Nari224

November 25, 2011 at 6:56pm

Along with regular Democrats.

- Sophia

November 27, 2011 at 10:59pm