A couple follow-ups on my unkind review of Mitch Daniels' stimulus plan. First, Daniels clarifies, in an interview with Ezra Klein, that he only proposes to suspend the employee share of the payroll tax, rather than the whole thing as he originally suggested. This makes his arithmetic less wildly implausible than his original proposal, while still pretty wildly implausible. Next, National Review fiscal blogger Kevin Williamson weighs in with a slew of over-the-top insults aimed at yours truly.
National Review's Kevin Williamson scoffs at Robert Rubin's deficit-cutting credentials: Who would you trust to get the budget balanced? Robert Rubin? I’ll bet on Rick Rubin first. Huh. There are a lot of valid criticisms of Rubin, ranging from his business dealings to his solicitude for the financial elite vis a vis the country as a whole. But suggesting that his preferred policy mix is incapable of producing a balanced budget seems like an odd line of attack:
The concept of a press corps that strives for objectivity and hews to rigorous standards of conduct is a product of the Progressive Era. Unsurprisingly, especially in an era when large segments of the conservative movement have come to regard the Progressive Era as the root of all evil, not everybody agrees with this ideal. This is one of the dynamics that's emerged from the latest Breitbart scandal. You have figures like Rush Limbaugh rallying around Breitbart.
Kevin Williamson says that Andrew Breitbart has higher standards than the mainstream media: Dan Rather, to this day, has not owned up to basing a story on forged documents. So far as I can tell, Andrew Breitbart is still operating at a higher editorial standard than the producers of Dateline or the CBS Evening News did on those occasions. I do not see a lot of opportunity for self-congratulation in this episode for the mainstream media. Breitbart's 37-word correction is 37 words more than Dan Rather has offered in honest assessment of his story's shortcomings.
The fiscal policy terrain is shifting radically—and rapidly. Europe’s response to the Greek crisis combines debt and enforced austerity. In the UK, the official Conservative/Liberal Democrat coalition agreement states that “deficit reduction and continuing to ensure economic recovery is the most urgent issue facing Britain” and commits to a “significantly accelerated reduction in the structural deficit over the course of a Parliament” (that is, between now and 2015).
I've been lamenting that the conservative fixation with tax cuts has created a situation where conservatives can't even advance their own ideological interests. To sum up the discussion to date: National Review's Kevin Williamson wrote an article decrying the "magical thinking" of supply-side economics.
Last week, in the course of lauding Kevin Williamson's National Review article that shockingly attacked the supply-side theology, I mentioned that the conservative movement's quasi-religious fidelity to tax cuts made it unable to advance even its own ideological self-interest. The upcoming fiscal summit is a good example. The basic shape of the deal is that, in order to bring revenues into line with spending, Democrats will accept some spending cuts and Republicans will accept some tax hikes. By reducing spending, this will decrease the size of government.
Yesterday Chuck Grassley threw cold water on the idea of a bank tax to repay the financial bailout. His logic was, on its face, puzzling: "Any money raised from the TARP tax would have to be used to pay down the deficit. If a TARP tax is imposed and the money is simply spent, that doesn't repay taxpayers one cent for TARP losses. It's just more tax-and-spend big government, while taxpayers foot the bill for Washington's out-of-control spending." Ezra Klein puzzles over what Grassley was saying. Let me translate.