PLANK JANUARY 21, 2013
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Much of the reaction to the president’s speech so far has taken the form: He used to be obsessed with process—with driving the rancor and cynicism out of politics—whereas today he set aside the procedural mumbo-jumbo and tipped his ideological hand. As James Fallows put it: “[I]t's almost as if he … knows he will never have to run again and hears the clock ticking on his last chance to say what he cares about.”
There’s no question that Obama spent most of his 2,100 words today laying out what he cares about. But I don’t think that’s what makes it such a departure for him. Obama has laid out his worldview in a variety of settings, even in big thematic speeches like this one. It would be hard to read, say, his June 2008 victory speech without a sneaking suspicion the guy is a liberal. The key difference is that Obama actively defended his worldview this time, which is not something we’ve see him do on these stages.
At the start of his first term, Obama was of the naïve if admirable view that most people don’t really disagree about the objectives of public policy, or even about the policies themselves. The problem in his mind was that our political system had become an impediment to doing what most people want done, rather than the means for accomplishing it.
In his early speeches, Obama would assert the existence of this consensus rather than make the case for the policies it encompassed. Here, for example, is a typical riff from his 2004 Senate campaign:
[T]he American people at their core are a decent people. And they get confused sometimes. They watch Fox News, they listen to Rush Limbaugh. Or they read President Bush's press releases. … But if you sit down with them and you ask, “What do you expect out of your government, and what do you expect out of life,” it turns out their expectations are extraordinarily modest. They know they've got to work hard, to raise their families. They know that nobody's going to do it for them. But what they do expect is, if they're able and willing, they should be able to find a job that pays a living wage. That they shouldn't be bankrupt when they get sick. They should be able to send their child to a school that is comparably funded, and when that child is old enough, and they've done the work, they should be able to go to college, even if they don't come from a wealthy family, and they expect that every senior citizen should be able to retire with some dignity and respect. That's it. That's not a lot.
And when you tell them that we could be delivering those things, just with a slight change in priorities … then people respond.
Put simply: We basically agree on the need for good jobs, reliable health care, quality education, and a dignified retirement, and for a role for government in all of the above. The only reason it’s not happening is that people sometimes get distracted by the bloodsport that is politics. Just end the bloodsport, and the problems would very nearly solve themselves. Or as Obama put it in his first inaugural: “[W]e come to proclaim an end to the petty grievances and false promises, the recriminations and worn-out dogmas that for far too long have strangled our politics.”
What Obama has learned over the past four years is that we don’t actually agree on that much. A lot of people—a huge chunk of the country, in fact—emphatically disagree with him. It turns out that the bloodsport aspect of politics isn’t so much a cause of our dysfunction. It’s largely an effect—an extension of the fact that people have really strong feelings on both sides of these questions. And if you want to win some of them over, it’s not enough to raise the level of political discourse and treat one another with more civility. You’ve got to change how people feel about the underlying questions of policy and values. You’ve got to explain to them why too much income inequality is counterproductive and why the safety net is indispensable.
The change we started to see in late 2011, when Obama kicked off a series of populist speeches after his failed negotiations with John Boehner, reflects Obama’s belated recognition of this. And that change was on full display today. Pre-2011, Obama would suggest that the need for “a basic measure of security and dignity” was a matter of consensus and then fulminate against the procedural hurtles to realizing it. Since then, he’s been much more aware of the fact that tens of millions of people disagree with what he regards as a commonsense role for government, and he’s been much more focused on defending it. Today he explained that “no matter how responsibly we live our lives, any one of us, at any time, may face a job loss, or a sudden illness, or a home swept away in a terrible storm.” He added that Medicare, Medicaid, and Social Security don’t “sap our initiative,” as Mitt Romney and Paul Ryan would have it. “They free us to take the risks that make this country great.” Those are simple enough points, but they’re powerful and can’t be made enough.
Of course, you could argue that there wasn’t much new in Obama’s speech if it reflects an m.o. he adopted well over a year ago. But I disagree. Since his emergence on the national scene, Obama has clung to the Eisenhower-era distinction between campaigning and governing: You make your case during election season, then take down the TV ads and stump speeches when it’s over so you can get on with policymaking. Before today, it was possible to believe Obama still clung to that distinction. Yes, he’d started down this new path in the fall of 2011. But by that point the presidential campaign had effectively begun, so a campaign posture made sense. And yes, he’d kept it up during the recent lame-duck period. But, then, it was easy to see the "fiscal cliff" negotiations as an extension of the presidential campaign.
An inaugural address is unambiguously different though. It’s the thematic roadmap to a president’s forthcoming time in office. By choosing to start his second term with a case for liberalism, Obama announced that arguing for his worldview isn’t a separate task from governing. It’s central to governing. And that’s a development you can’t cheer loudly enough.
57 comments
Boy was I glad to hear that speech. It was powerful, a strong defense of the people, of New Deal programs, and a vow to include everybody since we're all equal; and a remarkable declaration that we must confront climate change.
- Sophia
January 21, 2013 at 5:40pm
Plus, I hope the secessionists-cum-lately were listening to the music. A more beautifully rendered version of The Battle Hymn of the Republic would be difficult to imagine.
- Sophia
January 21, 2013 at 5:42pm
@Sophia -- completely agree about the song! Boo-hooed the whole way through....
- Wonderland
January 21, 2013 at 6:26pm
A lot of people—a huge chunk of the country, in fact—emphatically disagree him. I disagree with him, the teabaggers screaming that government should keep their hands of medicare is an example of this. And when has any Republican President ever significantly shrunk government (taxes yes, government no) hell, when has any Republican even stopped the rate of growth? A small group of people with a ton of money, like the Kochs, and the club for greed, Norquist, and the like have aligned themselves with religious zealots and gun nuts to acheive their aims; low taxes and moralistic government without real morality.
- blackton
January 21, 2013 at 6:52pm
One thing that has surprised me in all the commentary about the speech is how little attention has been paid to the passage near the end when he emphatically said that progress depended on what we all said "as citizens .. to shape the debates of our time". I felt that this almost amounted to a recruiting pitch for Organizing for Action, and an indication of how he hoped to accomplish some of his goals by mobilizing public opinion in support of them. Did the commentariat miss this because they are too wrapped up in "within the Beltway" strategizing?
- stanleybro
January 21, 2013 at 8:56pm
No, Noam. The calls for bi-partisan civility is required. Bush did it to great effectiveness. It's calculated, not naive. There have been two things that have driven the national political scene leftward: (1) upper income tax cuts and (2) opposition to Iraq. The latter is over and the former has been repealed, and with the phaseout of itemized deductions and the 40 percent excise tax to hit employer-provided health care in 2018, there isn't much revenue to come from tax "reform" on higher earners (And, please spare me the raise cap gains because the top rate adding the ACA tax is 24 percent now which is higher than Canadas- plus its peanuts.). I simply don't think the American people want to pay for the government the President has in store for them. And he's running out of other people's money to pay for it.
- bob1239
January 21, 2013 at 9:25pm
Bravo, Mr. Scheiber. I agree with every word and dearly hope you are correct on all counts. bob1239, that is nonsense. As Paul Krugman pointed out again today, the increases in taxes on upper-income earners barely put a dent in the increase in their income share since 1980. The top 10% could pay the entire operating cost of the Federal government, that is, everything other than entitlements that are at present funded with payroll taxes, and still have a larger share of national net income than it did in 1980 when Reagan rode into town with his ouiji board and voodoo economics. There is plenty of money there. What is clear, however, is that the top 10% not only has 50% of GDP, but wants to keep all of it. Obama is declaring that that is not what his administration intends to have happen. We shall see.
- roidubouloi
January 21, 2013 at 10:23pm
McCain commented that it was a fine speech but he didn't hear any conciliatory remarks "reaching across the aisle." Damn right. Obama appears to have learned that that is futile, contra bob1239, and sounds ready to fight for the Democratic agenda, at last. We will soon see whether Republicans are ready to follow their toot-and-nail resistance of the last four years with "reaching across the aisle."
- roidubouloi
January 21, 2013 at 10:26pm
bob1239, If the Republicans had the guts to help Obama create jobs for Americans, the tax revenue would be there. Jobs are the main creator of revenue. But the GOP is determined that very few of them are going to be created while Obama is president--even though corporate America has trillions of dollars in the bank. If rich people had the courage to hire Americans, instead of Third World men, women, and children, taxes on the rich wouldn't have to go up. It's six of one, half a dozen of the other: rich people don't create jobs; rich people pay higher taxes. That's life. I feel so sorry for rich people. They do struggle so.
- magboy47.
January 21, 2013 at 11:25pm
Well pretty soon they won't have to go overseas to find Third World men, women and children because we'll be living here in the USA, courtesy of the GOP Inc. Unless people listen to Obama and help him keep this a progressive, rich, inspiring country; GOP and rich guys, do you really want to live in a banana republic where you need a private army? In any case it doesn't matter how rich you are if the planet dies you're going with it. So - get a grip.
- Sophia
January 21, 2013 at 11:32pm
Hey bob1239 - Republicans simply want ignore what's obvious - social issues drove the country insane, not to the "left." Americans are utterly fed up with bigots of all stripes, rape obsessives, science haters, hectoring millionaire preachers, Fox News idiots. The continued systematic destruction of the middle class (while smirking about it ala the universally loathed Mitt Romney) didn't help. I had to laugh at all of the mystified right wing commentary that they lost the Asian American vote 80/20, but gee - we're for hard work and family blah blah, why wouldn't they like us? Well, Democrats actually support the needs of working families through student loan reform and the ACA, you're also science denying, education bashing, bigoted kooks who I would imagine most people of any sophistication or racial background find mostly insulting. Iraq War my ass, except for military families America stopped paying attention years ago. Oh yes, a terrific piece Noam and a thrilling speech - I was in a van load of people careening down he highway of various races, classes, ages who were cheering at the top of their lungs as we listened to it. Good for Obama, bring the fight right to the hateful bastards, Roi, Sophia, et all - all great commentary as always.
- WandreyCer
January 22, 2013 at 6:12am
The calls for bi-partisan civility is required. Bush did it to great effectiveness. Wow. I didn't know anyone believed that. The stupid 10 year sunsetting provisions of the Bush Tax Cuts were passed with budget reconciliation because they couldn't pass a filibuster and because, under the Byrd rule, Senators can object if budget reconciliation is used and significant deficits go beyond 10 years. Or how about the 3 hour extension of the vote on the prescription drug benefit while Nick Smith was bribed and the true costs were concealed. Were those examples of effective civil bipartisanship?
- Nusholtz
January 22, 2013 at 7:44am
Successful presidents campaign in a highly partisan manner but then move toward the opposition when governing. Obama's history is doing the opposite: he campaigns as though we are all friends but then moves away from the opposition when governing. Consider Jefferson and the election of 1800, when the Republicans (Jefferson, Madison) depicted the Federalists (Adams, Marshall) as monarchists, hell-bent on returning America to the British. Once elected, however, Jefferson expanded the power of both the national government and the executive branch far greater than the Federalists ever imagined. Sure, Jefferson rejected some of the trappings of royalty (like the fancy carriage Adams used as President), but he exercised the power of the executive like unchecked royalty. When presented with what was his greatest accomplishment in terms of expansion of national power, the Louisiana Purchase, he at first indicated that the President alone did not have the power to complete the purchase without approval of Congress, but then went ahead and completed the purchase without even seeking approval of Congress. As I have commented before, Jefferson's greatest asset as President was hypocrisy, in the case of the Louisiana Purchase espousing a limited government while exercising broad executive power, setting the precedent for the powerful executive. And that's but one example, conducting a foreign war (against the Barbary Pirates) without approval of Congress being another. By establishing as much distance between himself and the opposition while campaigning, he allowed himself much greater room for governing (including compromise when necessary). Obama, by establishing little distance between himself and the opposition while campaigning, allows very little room for governing (or compromise). The reaction to Obama's speech yesterday, by Scheiber and many others, is that Obama staked out a more partisan position, more like Jefferson. But isn't the inauguration a little late, especially after having conducted a campaign that was conciliatory in tone? Sure, the 2012 campaign wasn't the post-partisan campaign of 2008, but it didn't create a stark contrast between himself and the opposition as Jefferson did in 1800, when Jefferson and other Republicans accused the Federalists of treason. As between the actions of the Federalists then and Republicans today, I'd say a stronger case could be made that Republicans today are treasonous. Maybe the inauguration isn't too late. We shall see.
- rayward
January 22, 2013 at 8:54am
"Successful presidents campaign in a highly partisan manner but then move toward the opposition when governing." Ray, you're going to have to offer examples other than Jefferson to persuade me of that. The conventional wisdom is that the highly partisan campaigning ends once the party's nomination is secured, then the candidate campaigns in a substantially less partisan manner for the general election. I suppose the caveat that your comment applies only to "successful" presidents may allow it to be true, but based on what you provided as evidence, I'm unconvinced. And anyway, when you say "he campaigns as though we are all friends", I'm not even sure who this Obama person is you're talking about, because that would be a mischaracterization of the last campaign of Barack Obama. I'll leave it to you to dig up the many, many examples of Barack sternly criticizing his opponent and Republicans in general.
- Fishpeddler
January 22, 2013 at 9:41am
Ray: "he campaigns as though we are all friends but then moves away from the opposition when governing." I'm with Fish on this one. All you need to do is go back and read Aaron and Roid on the various Obama compromises with the Republicans in the first term, and indeed over the fiscal cliff, to see that at least the second half of the sentence is not borne out by the evidence. As for Obama campaigning as though we are all friends ... well, I suspect Mitt "Bain" Romney would disagree with that. I think it is important to bear in mind that the "campaign" is more than just Obama himself; it is the choices he makes about the entire campaign - what Liddel Hart means by "Grand Strategy" in warfare - is the relevant point to consider. Obama himself was pretty direct in the campaign, but no one who saw Clinton at the Convention, and who knows that that would not have happened without Obama's blessing, can suggest that "he campaigns as though we are all friends".
- icarus-r
January 22, 2013 at 10:07am
Lol, Nusholtz! My point is that Presidents mouth bipartisanship even when the President has a very partisan agenda. I guess the Bush tax cuts couldn't have been all that bad because about 85 percent of them are now permanent. Tim Noah, Rob Reich and Howard Dean are right-- to create the government the President envisions for us, they all needed to go. And we need a pretty big VAT too. Plus many more price controls in health care and a hollowing out of our military. I just don't see it. Can I do a quick review of the bi-partisanship of the President's first term?? In the last tax bill, there was bi-partisan consensus that the CLASS Act from the ACA needed to go. The President resisted this and kept in his budget even when it was shown unworkable, but he did eventually submit to bi-partisanship. There was the repeal of the 1099 reporting requirement for small businesses paid for by a cutback to the exchange subsidies. The President resisted this too, but signed it when a bi-partisan consensus emerged. And, of course, the biggest act of bi-partisanship was when the Republicans and a number of sensible House Democrats opposed the passage of the ACA because creating a new entitlement when we really can't figure out how to pay for the ones we already have might not be the greatest idea in the world. So there was solid and strong bi-partisan opposition to ACA. And, no Noam, the ACA was not crafted to obtain GOP votes -- it was crafted to obtain the votes of about a dozen moderate Senate Dems who didn't want to create a new entitlement with double digit unemployment. In the end they decided that a new Dem President couldn't fail on his signature legislation. On foreign policy, there was a bi-partisanship consensus that sanctions on Iran needed to be escalated and tightened, which the President has moved on once he realized that Senators of both parties disagreed with his policy. I expect there will be bi-partisan consensus as well that the President wants to cut the military too deeply in what is still a very dangerous world. There was bi-partisan consensus that the President should move trade legislation, which he finally did, reluctantly, after being nudged by Senators of both parties. So there has been considerable bi-partisanship in the President's first term, mostly in opposition to the President's agenda.
- bob1239
January 22, 2013 at 11:50am
Bob1239, thanks for providing the dose of mindbendingly skewed analysis that has been in relatively short supply around here lately (Mr. Rat, I miss you). Rather than start the day-long project of pointing out everything wrong with your latest comment, I'll just pick out one example: "I guess the Bush tax cuts couldn't have been all that bad because about 85 percent of them are now permanent." You would have been better off leaving out the word "because". I could have still respected you in the morning if you hadn't made the nonsensical insinuation that the survival of some of the Bush cuts was evidence that they deserved to survive. I'll be ready to cut you some slack, though, if and when you follow your own logic to its natural conclusion and say, "I guess the ACA couldn't have been all that bad because about x percent of it is now permanent (or at least just as 'permanent' as the Bush tax cuts)."
- Fishpeddler
January 22, 2013 at 12:10pm
Hey Ray and Fishpeddler: I will give you two very modern examples and they are actually from the last two Presidents who left office with approval exceeding 60 percent. Clinton campaigned hard in his reelection against Dole in 1996 on opposing reductions on Medicare spending. "Mediscare." But then (guess what?) he committed to most dramatic reduction in Medicare spending in the program's history in the Balanced Budget Act of 1997. (It had things Clinton wanted too, like education tax credits/ deductions and a child health program, but those were small compared to the Medicare cuts.) Reagan campaigned hard in 1984 on no tax hikes and staying firm against the Soviets. Then, after being reelected, he supported progressive tax reform (which, as Don Regan used to say, "even The New Republic endorsed") which raised revenue, as well as some arms control. The President is in a pickle here. He has a sequester coming that, in addition to cutting other things, will make ACA implementation (which is already on life support) rough. It will be awful tough for states to expand Medicaid when education and other block grants to states are being cut and when HHS employees are being furloughed. Sir, why not offer up some minor tweaks to SS and Medicare to off-set the sequester? Naah, that would be too creative and might, heaven forbid, concede the opposition has a point. Better to see if I can rally the country around more tax hikes instead. Good luck with that.
- bob1239
January 22, 2013 at 12:16pm
"Sir, why not offer up some minor tweaks to SS and Medicare to off-set the sequester? Naah, that would be too creative and might, heaven forbid, concede the opposition has a point." Sir: under the ACA, Obama cuts Medicare spending - through lower remittances to health care providers, to the tune of, oh, $716 billion. Ryan, in his ill-fated privatization attempt, proposed to cut the same amount - but in terms of reduced services. Different philosophies, different impact o people, same number. Then - if you and I inhabit the same planet - Romney/Ryan, for whom you voted, ran on a platform of "restoring the cuts to Medicare." As Clinton said, that took some brass. And, in the same vein, it takes some brass for you to show up and suggest that Obama should be "offering up" a red cent in cuts to SS and Medicare. What, so that Rubio runs around the country for the next four years accusing the Democrats of generational warfare against the bluehaired biddies who want "government hands off my medicare"? Are you for real? Really? I mean, it's one thing to hold Obama in contempt for lack of negotiating or political skills - it appears to be a national sport. But your suggestion here is asking us - the rest of us, who are not quite as feckless or clueless or whatever as Teleprompter Barry - to forget the "restor the cuts" nonsense. Republicans want cuts, they should spell out, in political blood, what it is. Then they should go to the bluehaired biddies in Alabama and say to their face, "we are cutting, gutting, your SS and Medicare for the good of the country, and the xxx in the WH won't let us." Then I should you bipartisanship ... Jeez. Times like this, I really do hope Obama takes roid's advice.
- icarus-r
January 22, 2013 at 12:29pm
*show you ...
- icarus-r
January 22, 2013 at 12:42pm
I believe bob is a visitor from the alternate universe in which Romney was always winning the election and the polls showing Obama winning were a conspiracy by Nate Silver, the Republicans during Obama's first administration were always open to compromise but Obama was prevented from extending his hand by left-wing fanatics in his own party, and operating budget deficits are caused by SS and Medicare. Greetings stranger for another universe! We of earth salute you. Here on earth, it is past time for Obama to kick Republicans' asses in the arena of public opinion and keep on kicking them, when they are up, when they are down, and when they are well nigh unconscious until they are begging for bi-partisan compromise. If he hasn't figured that out yet, he missed the last four years. Oh, and bob, there were hundreds of alterations in the ACA meant to satisfy Republican concerns. The only thing Obama forgot to do was tell them that the only way those things would get into the final bill was in exchange for their votes. Had the ACA been drafted first to secure a Democratic majority and then modified in exchange for Republican votes, it would have looked quite different and the process would not have taken months. If you are in any doubt about the history in this universe, bob, please see your local death panel for clarification. You may also want to review such other bipartisan triumphs as the First Debt-Ceiling Hostage-Taking.
- roidubouloi
January 22, 2013 at 1:05pm
"I guess the Bush tax cuts couldn't have been all that bad because about 85 percent of them are now permanent." The 85% permanent tax law is incorrect. First off, the term "permanent" now means that the tax law does not have an expiration date, something which had been instituted in 2000. So, no. None of the tax laws are ever permanent. Secondly, the ACA increased tax rates for certain income, which raised taxes higher than pre Bush. Capital gains and dividends were raise by 8.8% for top incomes. And don't forget, the estate tax was not repealed, which was the big one for Bush. Bush's basic idea of top rate tax cuts to help the economy was rejected.
- Nusholtz
January 22, 2013 at 1:28pm
I love debating with people who know what they're talking about. That's why, even though I'm older and no longer a lefty, I joined TNR. So take all of this in the spirit. Icarus has a point that the GOP should spell out the cuts. I think they did that in the House when they passed the Ryan budget and most of those guys were reelected. But shouldn't Dems spell out their tax hikes? I watched former Speaker Pelosi say she's "agnostic" of where $1 to $ 2 trillion in tax hikes should come from. Wow. Everyone who reads this page knows that to juice that kind of revenue you need to pick at brackets a heck of a lot lower than $200k (the "millionaires and billionaires") which, repeatedly, was the President's mark for what marks the affluent. I suspect you need to raise revenue from everyone who's "rich" enough to actually pay the income tax. That's why the brightest bulbs on the left (like Tim Noah, Rob Reich, Peter Orzag and even Howard Dean) knew that the President needed to let all the Bush tax cuts expire. I think once the American people know, chapter and verse, which taxes will be raised where, when and how, support for the President will plummet. I could be wrong. But he's just not going to get any help or bi-partisan cover from the GOP. We are not tax collectors for the welfare state. Provider cuts in Medicare are tougher. About 20 percent of doctors already refuse Medicare patients because the reimbursement rates are too low. That may change as more people retire and enter the program -- there will be more volume. You can't cut payments to providers and pretending that it does not affect access or quality to care. In the end, words like "co-pay," "deductable," and "cost sharing" have to stop being dirty words in the left's vocabulary, if you want health care that is both accessable and affordable. And that's regardless of whether Medicare stays in its current form or shifts to premium support. Finally, Icarus, what I don't think you're getting is that, under the sequester, the GOP does not need to outline, chapter and verse the cuts because there are automatic cuts to discretionary spending happening anyway. Do nothing and EPA, Energy, Head Start, Education and Labor are cut in real terms (not just the usual budgetary reduction in an increase) every year. (Defense too, which you may or may not like, but we can decide whether we need 9 or 11 aircraft carriers sometime in the future.) Now, you might say the sequester was not supposed to happen! The Super Committee was supposed to come up with entitlement reforms and, according to the President, tax increases were to make up this $1.2 trillion in cuts. OK, well the President won and he he does have this $700 b tax hike on top of the ACA tax hikes which are just starting to take effect. Sir, respectively, where are your entitlement reforms? My point is that there is very little reason for the GOP to not just sit on their hands and wait this out. If the President wants to lead he needs to come forward with entitlement reforms. Or across the board budget cuts it is.
- bob1239
January 22, 2013 at 1:31pm
"I think they did that in the House when they passed the Ryan budget and most of those guys were reelected." Er ... except that the architect of the Budget 1) did not mention it once on the stump; and 2) lied through his teeth about the implications of Obama's reforms. The so-called Ryan budget was a gimmick and thought to be so at the time, and the people who drafted and advanced it ran away from it as soon as the votes were cast. As for the House reelections ... yeah. Seriously, buddy? You think the gerrymandered election by a minority of votes is a mandate in support of the Ryan budget? "If the President wants to lead he needs to come forward with entitlement reforms. Or across the board budget cuts it is." If the Republicans were so sanguine about the sequester, there would be no drama - especially, there would be no requirement for the Senate to push a budget their way before the extension of the debt ceiling runs out. The "we don't care about defense cuts" pose is just that: it is yet another gimmick by a band of self-described hostage-takers to escape responsibility for any cuts that may or may not be needed to so-called entitlements. The real question is not the sequester. It is the one that your many paragraphs fails to mention once: why is it that Republicans do not put forward a real proposal - not the Ryan gimmick, but one that can form the basis of actual negotiations? They do not do so because they know it is going to be political poison. They know that as soon as word gets out to the old biddies in Alabama and Appalachia that the Repbublicans want to cut their non-government Free Enterprise non-taker Medicare - and not just that of potential beneficiaries ten years hence - you can see the remnants of Republican support in the reddest of the red yahoo counties drop. This is the only reason you are asking for a Presidential lead: typical of the Romney "I served my Vietnam war in France" generation, you are unwilling to accept any responsibility for the hardships you want to impose on the country. Well, you know, if Obama is now forcing the Republicans to set out in chapter and verse how they propose to stick it to the elderly, bully for him.
- icarus-r
January 22, 2013 at 1:58pm
Nuscholtz is right on taxes -- the top brackets are higher than with Clinton. It's 39.6 but with phaseouts of itemized deducations and the personal exemptions, it's more like between 41-42. Add a payroll tax of now 3.8 and we're at 45. Which means in California (our largest state) it's 55.3 percent of every additional dollar earned. Now, you got to make some serious income to get there. I get that. But ask yourself this -- if you're married and in that bracket is your lower earning spouse really going to work anymore? If you're an S corp and in that bracket, aren't you going to register as a C corp? (and please don't say raise the corporate tax rate -- the U.S. corporate tax rate is the highest in the world). Won't you think that maybe you should move to a lower tax state to avoid this confiscatory taxes? Or just work a little less? We're going to have a useful demonstration in the next few years as to whether government actually collects more or less revenue with that bracket and, if so, how much. (And, before I am accused of being a closet rich person whining about my taxes -- no, I am not in that bracket.) But I do think that's the point of taxes .... ya know, to actually raise revenue. Guys, I hate to break it to you, but the President is against a wall. If taxes were popular, he would have campaigned all of the Bush tax cuts, not the bracket upon which few pay. He needs to outline a plan to reform entitlements or just fess up that he doesn't think $1 trillion deficits are that big a deal right now. I think he doesn't think it's a big deal at all. (No mention of "debt" at all in his speech.) He should just tell the American people that and let them make up their minds.
- bob1239
January 22, 2013 at 2:00pm
Even in their gimmicks the Republicans can't accept responsibility for what they do: "The House plans to vote Wednesday on a measure that would leave the $16.4 trillion debt limit intact, but declares it 'shall not apply' from the date the measure passes until mid-May. This approach -- novel in modern times -- would let Republicans avoid a potentially disastrous fight over the debt limit without actually voting to let the Treasury borrow more money."
- icarus-r
January 22, 2013 at 2:01pm
"Icarus has a point that the GOP should spell out the cuts. I think they did that in the House when they passed the Ryan budget and most of those guys were reelected." Bob1239, I gotta credit you on the density of your misrepresentations. I was going to pick on just this one comment for the sake of simplicity, but even this small segment is rich with problems. For starters, the Ryan budget was a study in magic asterisks and sticking it to the powerless (and only the powerless). The larger point being made by Icarus is that the GOP should stop hiding from the political fallout from the austerity they are preaching. But they continue to hide, and the Ryan budget was evidence supporting Icarus' argument, not yours. Then you end this segment with the vague suggestion that the mere reelection of the guys who supported the Ryan budget was somehow evidence that the public supported that agenda. So are we now supposed to read the past election as a mandate in favor of a non-enacted budget proposal that has had zero tangible effect on public policy and thus is essentially invisible to almost the entirety of the American public?
- Fishpeddler
January 22, 2013 at 2:02pm
Icarus: I don't think it's a mandate for the Ryan budget, but I am shocked (and pleasantly surprised) that they casted their votes and lived to tell about it. One of the few House members who ran away from it (Rehberg in Montana) lost in a run for the Senate in Montana because he drew a challenger from the Libertarian party because he was too statist. Times are changing. If the Dems voted for a tax hike like that they would be wiped off the planet. Like in 2010. Or 1994. Don't even get me started about gerrymandered districts. I live in Maryland and they gerrymandered all of the GOP down to one district. 1 out 8. Ditto for Illinois. Or California. Anyway, I can't help it if all you liberals decide to live all clustered together. Get out and see America! It's a great country! --Bob
- bob1239
January 22, 2013 at 2:17pm
stanleybros is quite correct in underlining the President's new strategy for mobilizing the country behind his agenda, to overcome Congressional resistance and inertia, and to transform the poll numbers in support of his legislative priorities into legislative votes. Obama made the point during the campaign, and again, in closing out the last debate, that he can't make change happen without our active support and our energetic participation in the process. I'm looking forward to seeing this new strategy unfold, and I plan to be part of it.
- purcellneil@aol.com
January 22, 2013 at 2:22pm
Now you tell us !
- srenshon
January 22, 2013 at 2:23pm
Fishpeddler: You do realize that the Senate refused to pass a budget for 3 years because Harry Reid wanted to protect his members from casting a vote that either (1) raised taxes (beyond the expiration of the top two Bush brackets); (2) reformed entitlements; or (3) showed truly mind boggling deficit projections? The House does its work. The Senate does cross words. Lol. --Bob
- bob1239
January 22, 2013 at 2:27pm
Oh, and the President talks. The public will listen ... for about a year. And then it will move on.
- bob1239
January 22, 2013 at 2:28pm
"Anyway, I can't help it if all you liberals decide to live all clustered together. Get out and see America! It's a great country!" Silly me, I thought gerrymandering was an unjustifiable act to manipulate the democratic process for more positive outcomes for the 'in' party. Now I find out it is just a way of encouraging a scenic drive. If only liberals were more open to new experiences -- you know, like conservatives are reknowned for being.
- Fishpeddler
January 22, 2013 at 2:29pm
Bob, I'm trying to take you seriously and not simply dismiss you as a goofball, but c'mon, it's like you're deliberately trying to make that impossible. The dead horse non-issue of the non-existent Senate Budget Resolution is irrelevant to anything discussed so far in this post. You said you are old, but I refuse to believe it; this is sophomore stuff. You can do better.
- Fishpeddler
January 22, 2013 at 2:35pm
Uh, bob, yes you, the one from the other universe. Why exactly do we need entitlement reforms other than the fact that conservatives keep on insisting that we do? Do we need them to keep these programs solvent or to allow conservatives to continue to underfund the rest of government in order to ensure that the top 10% keep the maximum possible amount of their 50% of GDP? Cuz, ya know, bob, if the concern is the solvency of entitlement programs, which is not at all an immediate issue but one we need to resolve in the next 10 years or so, the way to do that would be to means-test benefits and impose the current payroll taxes on all income, not just the income of wage-earners. That means salaries above the current cap and income from capital. Ya still on board with entitlement reform, bob, or is your enthusiasm beginning to wane? Plus, if we did this things, we could afford to use our roughly $400 billion a year of Federal debt capacity, the amount we can borrow without increasing debt as a percentage of GDP, to help fund entitlements while the Baby Boom demographic bulge works its way through the system. But then, bob, contrary to libertarian economics and W. Bushenomics, we really do need to have a structurally balanced operating budget. That means high-end tax increases, bob, unless that is you want to cut military spending significantly. Do you? Because that is the source of the increase in discretionary spending since 2000. Military spending has gone from 3% to 6% of GDP. The rest of discretionary spending has been reduced 5% since 2000 as a percentage of GDP. So, tell us, bob, are you ready to extend the tax base for entitlements to all income and to means-test benefits while increasing the marginal income tax rate to 50% and eliminating the capital gains preference? Or do you just like the way the words "entitlement reform" and "balanced budget" sound when you figure that the poor and the working middle class are going to take the hit so that the wealthiest can have more? Or maybe you want to return military spending from 6% of GDP to the 3% of GDP that it was in 2000? Or some combination of these things? Please share with us the wisdom from the alternate universe. If you want fiscal responsibility, bob, the words "income share" are going to have to stop being dirty words on the right, because all the rest of this stuff is a bunch of economic baloney along with your insistence that we are running out of high-end income to tax. With income now grossly skewed to the top 10%, we can afford all of government, with money to spare, if we are willing to structure taxes so that the after-tax income share of the top 10% approaches what it was in 1980, before Reagan economic nuttery took over the country. Are you with me, bob, truly ready for reform that will pay all our bills and restore the relative income equality that was the driving force of economic growth from 1940 to 1980? Or really, is all this mumbo-jumbo or yours about deficits and entitlements just an excuse for the endless reactionary project of shoveling income from the pockets of workers into the pockets of the wealthy?
- roidubouloi
January 22, 2013 at 4:15pm
Bob forgets that we Democrats HAVE seen this great country of ours. And yes we do love it, bigtime, which is why we, who live clustered together in Blue States, are always sending money to Red States, which then refuse to fund disaster victims in Blue States.
- Sophia
January 22, 2013 at 4:21pm
Fishpeddler: I think i've given you a lot of policy to chew on and have refrained from mimicking platitudes from the right. You asked whether any second term president has suceeded by going center second term (and selling out their base, for some degree) and i gave you two, reagan and clinton, and offered specifics. I've offered specific arguments relating to tax and spending. And i've pointed out that Dems are much more vague about the taxes they want to hike than Republicans are vague about the spending they want to cut. We'll get a budget from the Senate now and we'll see how undertaxed Senate Dems think the American people are. Absent agreement on spending, I will take across the board on discretionary, Gramm Rudman style (jeesh, i am old) if we can't agree. Of course, you love our country Sophia. The cluster joke was just me being cute but i have noticed my lib friends tend to hide out together - the hole up in academia, in non-profits and in government. The world of tenure and lifetime employment. Just an observation.
- bob1239
January 22, 2013 at 4:39pm
"Fishpeddler: I think i've given you a lot of policy to chew on and have refrained from mimicking platitudes from the right." So that silliness about the Senate not having passed a budget was an independently arrived at silliness, and was not at all the result of listening to poorly reasoned right-wing talking point silliness? If true, that's even more depressing than if you were just mimicking platitudes.
- Fishpeddler
January 22, 2013 at 5:01pm
Oh, roid, a lot there. First, i accept a graduated income tax as the best way of raising revenue. I think the folks who want a single rate consumption tax (whether it be exempting cap gains from tax or a national sales tax - they're really the same thing) are insane. I'm not for endless redistribution, but taxes should, as they always have fall more heavily on those who can afford to pay them. They did in 2012 and they will in 2013, just more so. Whether it actually raises more revenue is yet to be seen. Tax cap gains as investment income? Well, except for brief periods, its never been higher than 25 percent even when nominal rates were much higher. Our global competitors tax it around that rate and some in europe even tax it lower. I suppose there would be an argument for taxing it as ordinary income if there was a deduction for capital losses, but there really isn't. If you make an investment, there's no guarantee of returns. There's a reason why Presidents like Carter and Clinton signed cap gains cuts and that's because high rates stop growth. (I don't honestly believe that lifting it from 15 to 23 will make much difference so i'm not going to argue that.) I get it, you got a problem with Reagan. Let me tell you something- the period of 1968 to 1981 was awful for the American economy. Inflation exceeded growth through that entire period and three very steep recessions where unemployment topped 10 percent. The country was miserable, but if it gives you some sollace that we were all miserable more equally. I guess to each their own. The income tax brackets weren't adjusted for inflation then and a decade plus of inflation pushed taxpayers into brackets previously reserved for plutocrats. Across the board income tax cuts and indexing the brackets to inflation are exactly what the doctor ordered. And, until the panice of 2008, it lead to 30 years of peace and prosperity. Times are different now, but the entitlement crisis is real so if the President thinks that all he needs to be is the anti-Reagan, he's going to lose all but the left wing of the Democratic party pretty quickly.
- bob1239
January 22, 2013 at 5:15pm
What a lovely thought. Too bad you're wrong. Talk is cheap. Action is what counts. And the actions so far have been those of someone with no particular bedrock convictions.
- mlottman
January 22, 2013 at 5:31pm
No Fishpeddler, i think forcing the Senate to pass a budget makes sense politically. Your average voter has thing called a "life" and is not as politically obsessed as you and me. Right now, the focus is on the debt ceiling and to the internal divisions in the House GOP caucus. Change the subject to the internal divisions among Senate Dems because they are pronounced. If you're a Senator from Montana, Arkansas, Louisiana, West Virginia, Alaska (all up for reelection in 2014, i guess rockefeller finally saw the writing and retired) you really do not want to be signing on to the President's agenda and a mammoth tax hike. Smart politics. I'm impressed the House GOP leadership apparently convinced its members to do so.
- bob1239
January 22, 2013 at 5:33pm
Greetings, bob. Capital gains taxes stop growth? Really? Do you have any evidence for that, bob, or is that just one more of those matters of right-wing economic theology that you all so enjoy repeating endlessly. There is no evidence for that proposition. It is indeed just a matter of empirically unsubstantiated right-wing theology that, of course, you like to repeat in the complete absence of evidence. See here for example: http://www.forbes.com/sites/leonardburman/2012/03/15/capital-gains-tax-rates-and-economic-growth-or-not/ The problem with you guys from your alternative universe, bob, is that your economic theories simply don't work. They are wrong. You can look at almost whatever evidence you like from the last 120 years and what you claim as economic dogma quite clearly fails every time, while the Keynesian policies that you reject succeed. However, not only are you utterly indifferent to economic reality, you are perfectly willing, along with your fellow travelers, to invent economic history to suit your theory. You don't just ignore the facts because they contradict your claims, you invent new facts that you like better, such as that Reaganomics was "just what the doctor ordered." Let's look at some actual economic facts, shall we? Here are the ANNUAL job growth rates under successive Republican and Democratic administrations. These are annual rates over the entirely of each Republican or Democratic period of governance, whether 4 years or 16: Harding/Coolidge/Hoover 0.23% Roosevelt/Truman 4.29% Eisenhower 0.96% Kennedy/Johnson 3.37% Nixon/Ford 2.07% Carter 2.30% Reagan/Bush 1.65% Clinton 2.10% Bush -0.17% Obama 0.72% What do you see here, bob? Do you observe that every period of poor economic performance by Republican administrations is bracketed by superior economic performance, both before and after, under Democratic administrations? Republican administrations are all worse than the Democratic administrations that precede them and succeed them. And where is the Reagan economic miracle, bob? Economic performance under Reagan was worse than under Carter or Clinton. In fact, the only Democratic administration that has done worse than Reagan since 1920 is Obama, and we do recall that he inherited from Bush an economy sinking like a stone, don't we? We should also bear in mind that, with the exception of his initial stimulus plan that without question brought the economy out of free-fall, Obama has been carrying out Bush's tax and fiscal policies, made worse by spending cuts forced by Republican deficit-whoring. Obama has had Bush's tax policies, until now, and Bush's fiscal policies plus a dose of the anti-Keynesian spending cuts that you and your kind advocate, bob. Pretty shitty results, no? Now add in the fact that, overwhelmingly, the rise in income inequality since 1980 actually took place during the Reagan/Bush administration. And then consider that, in every post-war administration until Reagan, national debt as a percentage of GDP fell. Under Reagan/Bush's voodoo economics, it rose, then fell again under Clinton to the point where we actually had surpluses, and then rose again when Dumbya doubled-down on Reagan, culminating in an epic financial bust. True, it has risen under Obama, but he inherited Bush's mess and has largely continued Bush's tax and fiscal policies due to Republican intransigence. So you see, bob, the very economic policies that you advocate have given this country nothing but economic disaster. There is no silver lining, no balance of cost and benefit. No tradeoff between growth and inequality. What you advocate produces slow growth, rising income inequality, epic deficits, and epic economic instability, a perfect economic storm. The fundamental reason is that what you advocate is nonsense, pure and simple, totally divorced from economic reality. And you don't care. You don't care that there is absolutely no evidence for what you proclaim, you don't care that all the actual evidence is to the contrary. If the evidence does not support you, you just declare that it does and move on. As to the so-called real crisis in entitlements, sorry, bob. More nonsense. The one thing that the impending shortfall in entitlement funds, 10 years out, is assuredly not is REAL. In REAL terms, we can clearly afford a decent retirement for all of our people. What we cannot afford is to finance that retirement entirely with regressive taxes levied exclusively on wage-earners. That worked when young workers were a large enough share of the population and when their earnings had not been sapped by the very economic garbage that you advocate. You see, bob, not only has the balance of workers to retirees shifted, but the income of workers, especially the portion reached by payroll taxes, has declined as a share of GDP, again because of the voodoo economics you advocate. So the tax base for entitlements is shrinking in relative terms just as the need is growing. But that doesn't mean we don't have sufficient wealth, bob. What it means is that the wealth has flowed to places, income from capital and the top tier of earners, where it completely escapes taxation to support entitlements. We have merely to reform the financing to include all income in the tax base and to be much more progressive, reflecting that income distribution has become much less progressive, and voila!, the phony entitlements crisis is solved. True, we cannot afford Medicare into the future, but that is not because of entitlements, it is because we cannot afford medical care into the future. It is 18% of our GDP and rising, while in France it is 11% with universal coverage and outcomes as good as ours. And why can we not afford it? Because market theocrats like you will not countenance the one solution to medical cost control, single-payer, that every other advanced industrial economy has adopted as the necessary solution. Is there nothing you can get right? The answer, I am sorry to say bob, is that there is indeed nothing that you get right and nothing you can ever get right because you persist in believing things that are as nonsensical as the belief that the earth is flat and was created in its entirely 6,000 years ago. Finally, bob, as to your little snide remark about liberals living on handouts and such, please note that the blue states, where liberals predominate, are far more successful and productive economically than the red states, where people like you predominate. If you take away the mineral wealth of places like Alaska and Texas, the difference would be even more stark. Further, the blue states, through a variety of means, transfer enormous wealth every year to the red states. Otherwise, the red states would probably be living at about the economic level of Syria. You cannot get even the smallest detail right, bob, because you persist in believing in your economic theology in the face of all reality. Your theology tells you that liberals should be less productive than the people who believe your nonsense, but the reality is just the reverse. Here again, you prefer your theology to reality. Maybe in your alternate universe economics works the way you think it does, bob. But not in this universe. So, what to you and the right-wing constantly urge upon us? Why, of course, more of the failed economic policies that have so burdened us. Have a nice day, bob. Enjoy the scenery here on earth. When will you be leaving for you alternate universe?
- roidubouloi
January 22, 2013 at 7:19pm
if you're married and in that bracket is your lower earning spouse really going to work anymore? If you're an S corp and in that bracket, aren't you going to register as a C corp? Ahhhhh, the myth that people won't earn because instead of keeping 65% of their income, they only keep 57% (even though the consensus of those that do believe in the Laffer curve think that 70% is the optimal top rate). And then there is the misinformed belief that a C corp will yield lower taxes for the individual, when, in fact, the only time the lower C corp rates will apply is if the married shareholder does not ever receive the income (if they come out as dividends or capital gains, a second tax!).
- Nusholtz
January 22, 2013 at 8:07pm
Roid: i wasn't being snide. If you actually read my comments instead of creating a straw man you could knock down you will note, as I said, that i didn't think raising cap gains from 15 percent to 24 percent (which it is now, with the ACA and 2013 tax change) would make that much difference. You argued it should be taxed as ordinary income or higher with payroll tax and, yes, that just won't work. I like Burman from Forbes. He's a bright guy and his chart proves my point. Since you posted it, you should look at it. The very few times that the rate on cap gains drifted above 25 percent, growth collapsed. Seriously, look at his chart (if you need help, the vertical axis shows the rate. It shows 1970s it drifted above 25 percent and growth collapsed. Same after tax reform in 1986. Hey, guys, there's a reason why Presidents Carter and Clinton cut it. Nusholz: In the state of california it is now a 55 percent rate when you add federal and state income taxes, payroll taxes and phase outs. We'll see whether we get more or less revenue from it when it was 5 points lower. If you don't think that keeping only 45 cents of every additional dollar is a disincentive, we'll have to agree to disagree. The "consensus" is that 70 percent is optimal? Where, in Paul Krugman's mind? Cripes, Great Britain is at 45 percent, Canada about the same. France is trying to push it to 70 and may back off because it just don't work. Rich people are threatening to move to Belgium and Britain. But France has had double digit employment forever now and no growth. They are, in economics speak, "completely hosed." My point, gentlemen, is that the President has no where to go on taxes. I think you're going to find it hard to find "economists" not named "krugman" who agree with you. And the deficit is still a trillion because the President is still spending at 24 percent of GDP. We'll see if we can readjust his sails on that. Should be fun.
- bob1239
January 22, 2013 at 11:35pm
(sound of an epic shmacking! [or, like, three, actually] )
- Curran1
January 23, 2013 at 12:23am
"I think you're going to find it hard to find "economists" not named "krugman" who agree with you." Have you heard of Joseph Stiglitz? On the other hand, you don't really believe that so-called "supply-side economists" are actually economists, do you?
- roidubouloi
January 23, 2013 at 12:46am
I'll limit myself to two points: first, your claim that the GOP winning 49% of the two-party Congressional vote (in the House) after having voted for the Paul Ryan plan vindicates putting real cuts on the table is ridiculous for several implicit reasons, but most notably because Ryan's plan relied mostly on...NOT PUTTING CUTS ON THE TABLE. Ryan's magic asterisk was the 'function 920' category. It's a catch all for fiscal issues to be specified later, and in absence of other action is parceled out evenly. Whenever Obama and others brought up numbers the function 920 cuts implied, the GOP screamed at the top of their lungs that they absolutely, under no circumstances, had legislated any such cut. So, yeah, you tell me about budget tricks and political cowardice. Second, Bob, as for the President having 'nowhere to go on taxes,' that's dramatically untrue for the following reason: as Roid notes, income shares have changed: if we taxed only income above 500,000...that's still a pool of 1.29 trillion to grab from (and would fall only on the upper income of the 1%). 1.29 trillion. Annually. When the economy's still recovering from recession. And that's leaving out reasonably rate rises that could happen to folks making, say, 100 grand a year and up (or 250, if you choose Obama's preferred line--either brings much more revenue on the table). The data point on the 1.29 trillion comes, oddly enough, from the Wall Street Journal, in an article arguing, like you, innumerately, that there's nowhere to go in taxes on the rich. "Even if they taxed 100% of every dollar earned by every American who earned more than $500,000 in 2010, the feds would take in $1.29 trillion, or not much more than the entire 2012 deficit." Right, so if we moved the rate up to, say 50 percent (just on the income above 500 grand) from the circa 23 percent effective rate (after deductions and exemptions) it was at last time I checked, that'd get us...what, 350 billion? That number is a bit off, surely, but you get the general range (and it's worth mentioning that Reagan's 1981 Tax CUT ended with a top bracket at 50%). And that's annually, not over ten years. So, yeah, that's how the numbers work on Earth, in the US of A, circa 2011-2013. Credit due: I got that quote above from Johnathon Chait. Like Bill Clinton, though unlike, say, George Will, he knows some basic arithmetic, and here's his laugh out loud post about it: http://nymag.com/daily/intelligencer/2013/01/math-victimizes-journal-editorial-page-again.html
- Curran1
January 23, 2013 at 12:56am
Bob, your 'points' are...mostly grotesquely garbled, even when the points of difference from reality are unimportant. Roid is correct about the economic literature on the Laffer curve. See here: http://www.jstor.org/discover/10.2307/2534678?uid=3739832&uid=2&uid=4&uid=3739256&sid=21101694903497 Or, if you're lazier or don't have access to the scholarly article, try the summary of Peter Diamond's version: http://www.motherjones.com/kevin-drum/2011/11/raw-data-laffer-curve-rich For what it's worth, the rest of that article's thesis is wrong because the rich during the Kennedy years paid an EFFECTIVE top rate closer to 45%, NOT 70%, because of all the junk deductibles and exemptions. But Diamond's analysis itself seems solid enough (he, like Krugman, has won the highest award given in the field of economics--and I'd note that Krugman seems to have been right on every major economic question of our times in the last six years or so, though others, say, Dean Baker, were more prophetic about the crisis [i.e. they saw it coming much earlier--this is all in contrast to the conservatives who started addressing the crisis in 2006 by claiming there was no bubble and sort of went downhill from there). In any case, the economic analyses that have been done all favor a maximal rate of no lower than about 65%. Right-wingers claim lower, but I've never seen a study done supported by, you know, actual data and analysis and not just Friedmanesque magical thinking.
- Curran1
January 23, 2013 at 12:58am
*'Johnathan' Chait. And the above info is of course for Bob (welcome to TNR, as well as the US since the New Deal). PS - A hint for you on your sources of info: NO ONE ON THE RIGHT EVER ADMITS THEIR PAST ERRORS, SO THE MISINFORMATION CAN BUILD UP AFTER A WHILE. Props to Roid!: "And I just made the observation that the blue states, in which liberals predominate, are far more productive than the red states, where people who believe like you do predominate, and that the red states are dependent on income transfers from the blue states. So, maybe you a peculiar set of liberal friends, or maybe what you are noticing is that conservatives, not being a terribly well-educated lot, cannot get jobs in academia, non-profits, or government. Or maybe your anecdotal observations are bullshit. I report, you decide." Hilarious! Mean, yes, but, in this case, called for.
- Curran1
January 23, 2013 at 1:06am
PS - Article dealing with the Laffer Curve that notes that Federal revenues are at a sixty year low of 15% of GDP. Just saying. http://crooksandliars.com/jon-perr/economists-fail-republicans-laffer-curve
- Curran1
January 23, 2013 at 1:12am
From Chait's article in NYMag linked by Curran: "That’s the point at which a good propagandist would have just kept the fact out of the editorial and found a way to write around it. I strongly suspect this is the work of Journal economic editorial writer Stephen Moore, a writer whose work is the subject of a longtime morbid fascination of mine, especially his trademark habit of producing facts or pseudo-facts that utterly refute his point while presenting them as though they confirm it." Sounds kinda like, bob, doesn't it? The fact is that this sort of thing is endemic on the right because of the inconvenient truth that economic history refutes all of its claims. Without any evidence to support you, what's a poor supply-side wannabe economist to do? Why, take the facts or pseudo-facts that refute your point and claim that they confirm it, that's what. Bob might have tried to find evidence supporting his claim about capital gains rates. Instead, he just declared that the statistical evidence offered by Burham in Forbes to refute his claim shows the opposite of what it shows. Saves time and effort, that's for sure.
- roidubouloi
January 23, 2013 at 1:13am
And the crooksandliars article linked by Curran shows federal revenues to be at an historic low, less than 15% of GDP, a rate not seen in more than half a century showing that bob's claim that there is nowhere to go on taxes is also empirically incorrect. What is the case is that taxes on the top 10% would have to rise significantly to restore revenues to previous levels because that is now where half of GDP goes, the top 10%. As Willy Sutton taught us, you have to get the money from where the money is at. As the right considers higher taxes on the wealthiest, even higher than the recently increased rates, to be some sort of sin against God, they just assume their impossibility. Not impossible, inevitable.
- roidubouloi
January 23, 2013 at 1:22am
"we'll have to agree to disagree" If, as you suggest, higher rates mean less work, we would expect a drop in rates to mean more work, which did not happen with the Bush Tax Cuts. The optimal rate under the Laffer Curve does not come from Krugman, (if you think that point is critical to the economic analysis). You can google it or see the viewpoint of economists here: http://voices.washingtonpost.com/ezra-klein/2010/08/where_does_the_laffer_curve_be.html
- Nusholtz
January 23, 2013 at 9:43am
Also, per the Goolsbee article linked by Curran, the current iteration of the theory that higher marginal rates produce little revenue or even reduce tax revenues leans heavily on the notion that the wealthy shift their income into untaxed or tax-favored classifications, not that they reduce the income they generate. Even if that were the case, such untaxed or tax-favored classifications don't exist as a matter of natural law. They exist because rich people had them put into the tax code. They can be removed. Of course, there is always the option of the rich committing tax fraud. That would explain why Republican administrations are always so anxious to reduce the funds available for tax enforcement or to have the IRS chase small fry while leaving the tax gluttons alone.
- roidubouloi
January 23, 2013 at 11:55am
Roid's last point about the artificiality of tax-exempt categories (and low IRS funds for enforcement of the existing tax code) is actually very important.
- Curran1
January 23, 2013 at 2:19pm
OK, back at it. I apologize, it's been awhile since I read TNR and I didn't realize it turned so far left. Let me posit a few questions (and please refrain from calling me names -- I can take it, seriously, but it makes you sound dumb). In the state of California (our largest state) the top marginal rate on ordinary income is 55% when you add federal, state income taxes, plus payroll and deduction/ exemption phase outs (called PEP and PEESE). What rate do you think it should be? Same issue as to capital gains in California, which is now taxed at 34% when you add federal, state income taxes plus the Obamacare hike. What rate do you think it should be? Just answers these questions -- put it out there. Listen, you guys have been yelling "tax the rich" so long you don't know what to do when the rates go up. Dog catching car. Now what? Krugman really is an idiot. He thinks the only thing wrong with the Western European welfare state is that it doesn't have enough inflation. Sure, Paul. Raising the price of food will suddenly create jobs. All it will do is help people on entitlements that are indexed for inflation at the expense of those that work whose wages are not. I'm still getting my arms around that the base of the Democratic party really thinks like that these days. Give me some time; I'll get there.
- bob1239
January 23, 2013 at 3:03pm
Yeah, you work on that, bob. In the meantime, you can continue to amuse us with such observations as, "Krugman really is an idiot." He also happens to be correct that higher inflation, in the 5% range, would be a very good way to get back to full employment. It has two positive effects: First, it encourages people not to keep cash balances as their value is eroding. The way they get rid of cash balances is to spend them now rather than wait until later. The increased spending appears as increased demand that in turn increases investment to meet the demand. The result is higher employment. The second possibly more important effect is that the value of existing debts erodes, both private household debt and the public debt. This also frees up money for spending and brings total debt into a sustainable ratio with GDP. You seem to think that when prices go up, wages and benefits don't, but they do, which is why it is the holders of debt who resist inflation. It isn't because bondholders are dying to protect the laboring class from loss of purchasing power, of that you can be sure, because if the purchasing power of labor did decrease with inflation, by definition the purchasing power of the investor class would be going up. Can't be both ways, bob. Of course, the holders of debt don't like inflation, and they tend to be far more conservative than the rest of the country. They don't care about keeping the economy sluggish while paying off the debts created in the asset bubble so long as they can keep collecting them without loss of value. All very nice, and one might make a moral or political argument on their behalf if one had the wit to do so, but your economics are unmoored from anything and everything. Saying that Krugman is an idiot isn't an argument. To paraphrase a famous visitor from another universe, "Krugman can take it, seriously, but it makes you sound dumb." Taxes need to be high-enough to balance budgets in a full-employment economy. At the federal level, we could have a balanced budget if we had zero income taxes on income up to $100,000 and a 50% rate above that, provided all income gets taxed. A super-bracket of 65% would be good for income above $5 million. In that event, we might not even need to fuss with payroll taxes, but, as far as they go, we should "flatten the rate and broaden the base," applying the same initial bracket to all income up to $100,000. Right now that is approximately 15%, the combined payroll tax rate. But, if we did broaden the base to include all income, we could probably lower the rate to 10%. So, we can fund entitlements (if we can get medical costs under control in general) and the rest of the federal government with roughly a 10% bracket up to $100,000, a 50% bracket above that up to $5 million, and a 65% bracket above that, eliminating the explicit payroll tax completely. Better still would be to replace the 10% bracket with carbon taxes. That would give everyone their first $100,000 of gross income untaxed.
- roidubouloi
January 24, 2013 at 12:15pm