Not so long road to GOP authoritarianism

By Frank Moraes 

Last week, Robert Reich wrote an article trying to explain, Why Republicans are Disciplined and Democrats Aren't. Basically he argued that this is because of the kind of people who are attracted to the two parties. Republicans tend to lean toward authoritarianism, and thus it isn't surprising that their politicians would be good at delivering the same brainless talking points over and over and over again. I don't think there is much question of this. When I was a libertarian, I hated the Republican Party and still had a certain fondness for the Democrats for exactly this reason. (Sadly for the movement, most people are exactly the opposite, which ought to tell you all you need to know about libertarianism as a practical matter.)

What confuses me is that according to Reich, it ever was so. He quotes Will Rogers saying, "I'm not a member of any organized political party. I'm a Democrat." He likely said that before the first World War. But I'm not sure it means what Reich claims. After all, people normally make that kind of joke about whatever organization they are associated with. But I do think the joke works because Democrats have long recognized themselves in it and Republicans have felt superior for that reason. But is that image correct?

In many ways, the Republican Party has always been conservative. When the party started in the 1850s, it had a very compelling slogan, "free labor, free land, free men." The "free land" part of that referred to the fact that plantation owners tended to own all the good farm land in an area. As a result of this, free (white) farmers were kept down because the system was proto-feudal. But it's clear that the slogan is laser focused on slavery. The first and third phrases are about slavery and the second is about slave holders. The truth is that from the beginning, the Republican Party was very much pro-business, although it is certainly true that business then was quite different from now.

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Robert Reich whistling in hell

By Frank Moraes 

I really value optimistic people. But I don't pay much attention to them. Two of my favorite political writers are Dean Baker and Eric Alterman, or as I think of them, the Depressing Duo. Or "Pessimistic Pair" if you prefer. Alterman perpetually looks like his first girlfriend just dumped him. Baker has transcended that and is on to that period when you are sarcastic about everything. But I read them because (1) they are brilliant and (2) they are right to be depressed. But sometimes, rarely, an optimist is right. So you have to pay attention.

There is an old Far Side cartoon I remember. It takes place in hell. Everyone is working very hard. There are all miserable. Except for one guy. He is pushing an over-filled wheelbarrow and whistling a happy tune. Two demons overlook the scene and one says, "I don't think we're getting through to that guy." That's how I'm feeling about Robert Reich today.

He posted an article that seems pretty compelling even if it seems on the far side of Pollyanna, "TARP is Over, But the Bailouts Will Continue Until the Big Banks are Broken Up -- And Washington Knows It." He notes that the chairman of the House Financial Services Committee, Jeb Hensarling -- a Republican, of course -- wants to break up the banks. And so does the Dallas Fed. So he argues that all we need is one more big bank loss and we will get a better banking system.

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Republican foolishness on "fiscal cliff" negotiations

By Frank Moraes

I tend to think that Republicans are more evil than stupid. But sometimes I wonder. For example: Republican operatives have leaked Obama's initial offer to deal with the "austerity bomb" (which is a much more accurate term than "fiscal cliff"). That's fine, but their reason for doing it is foolish. They think they can attack the president as not taking the negotiations seriously. No one other than Fox News is going to accept that narrative.

Instead, most people are reacting like Ezra Klein, who wrote, " Obama to GOP: I'm Done Negotiating With Myself." In fact, Klein even says that he agrees that the offer isn't serious. But I don't see this at all. Thus far, the only thing the GOP has said is that they wouldn't accept increases in tax rates at all. And this is coming from the party that has no real leverage. If no deal is reached, taxes go up by $500 billion dollars per year -- most of that on high income earners.

Not all liberals are happy. Robert Reich thinks that Obama has already given away too much. He thinks there should have been no signaling of a willingness to raise the top tax bracket to some level less than the Clinton rate and that cuts to Medicare should have been completely off the table. I agree with him on the first point. On the second, the administration claims that these savings will not come from reduced benefits, so I will go along with them.

Overall, I'm pleased that the offer looks as good as it does. (Even Digby seems moderately pleased, and these days that's saying something!) As may others, I am glad to see that that the president is not pre-negotiating.

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The debt ceiling deal -- who won and who lost?

By Richard K. Barry 

Two people I tend to consult to get a read on current economic policy struggles in Washington are Paul Krugman and Robert Reich. Not that anyone is ever right about everything, and maybe it's simply true that these two support my understanding of the world and I find that they usually make sense.

Whatever the case, they provided some pretty depressing commentary today on the deal Obama struck to raise the debt ceiling.

Here's Reich:

Anyone who characterizes the deal between the President, Democratic and Republican leaders as a victory for the American people over partisanship understands neither economics or politics.

The deal does not raise taxes on America's wealthy and most fortunate -- who are now taking home a larger share of total wealth, and whose tax rates are already lower than they have been in eighty years. Yet it puts the nation's most important safety nets and public investments on the chopping block.

It also hobbles the capacity of the government to respond to the jobs and growth crisis. Added to the cuts already underway by state and local governments, the deal's spending cuts increase the odds of a double-dip recession. And the deal strengthens the hand of the political right. 

And from Krugman in a piece entitled "The President Surrenders":

For the deal itself, given the available information, is a disaster, and not just for President Obama and his party. It will damage an already depressed economy; it will probably make America’s long-run deficit problem worse, not better; and most important, by demonstrating that raw extortion works and carries no political cost, it will take America a long way down the road to banana-republic status.

Start with the economics. We currently have a deeply depressed economy. We will almost certainly continue to have a depressed economy all through next year. And we will probably have a depressed economy through 2013 as well, if not beyond.

The worst thing you can do in these circumstances is slash government spending, since that will depress the economy even further. Pay no attention to those who invoke the confidence fairy, claiming that tough action on the budget will reassure businesses and consumers, leading them to spend more. It doesn’t work that way, a fact confirmed by many studies of the historical record.

The bottom line is that there are two ways to win in politics. The first is to actually win the election and implement your policies. The second is to lose the election but, somehow, through power politics, political extortion, or appeal to aspects of the winners ideological predisposition that he may share with you, get the winner to do what you would have done had you won.

However it happened, does anyone doubt that, at least this week, the Republicans are controlling the terms of the debate in Washington and that it will be difficult to imagine how Democrats reassert control?

The "deal" means that we will continue to talk about what and how much to cut, which will benefit the richest among us, instead of what and where to invest, which would benefit the vast majority of us, especially those in need of gainful employment.

Not the finest day for America, as far as I can tell.

(Cross-posted at Lippmann's Ghost.)

Things Republicans say about job creation that aren't true

By R.K. Barry 

Yesterday I wrote that no matter how tired progressives get saying the same things over and over again, no matter how tired they get refuting the lies of Republicans, they should carry on and fight the good fight because many people, who perhaps don't always pay enough attention, need to hear the the truth as often as possible.

Recently I have become a big fan of former Labor Secretary Robert Reich, who has a teaching gig at UC Berkeley these days and also blogs on political and economic issues. I find Reich the consummate teacher in the way he lays out his arguments and exposes nonsense for what it is.

One of the greater challenges in politics, I find, is that economic theory is so hard for most people to understand, and some theories that seem to make sense are flat out wrong, things like, if we just slash taxes on corporations, that will necessarily create more jobs. Yeah, well, not so much. Not if there isn't enough demand out there because people don't have sufficient income to buy stuff. Anyway, I'll let the good professor explain.

Here are a few untruths Republicans like to trot out, with rejoinders supplied by Professor Reich:

• "Cutting taxes on the rich creates jobs." Nope. Trickle-down economics has been tried for thirty years and hasn't worked. After George W. Bush cut taxes on the rich, far fewer jobs were created than after Bill Clinton raised them in the 1990s.

• "Cutting corporate income taxes creates jobs." Baloney. American corporations don't need tax cuts. They're sitting on over $1.5 trillion of cash right now. They won't invest it in additional capacity or jobs because they don't see enough customers out there with enough money in their pockets to buy what the additional capacity would produce.

• "Cuts in wages and benefits create jobs." Congressional Republicans and their state counterparts repeat this lie incessantly. It also lies behind corporate America's incessant demand for wage and benefit concessions – and corporate and state battles against unions. But it's dead wrong. Meager wages and benefits are reducing the spending power of tens of millions of American workers, which is prolonging the jobs recession.

• "Regulations kill job." Congressional Republicans are using this whopper to justify their attempts to defund regulatory agencies. Regulations whose costs to business exceed their benefits to the public are unwarranted, of course, but reasonable regulation is necessary to avoid everything from nuclear meltdowns to oil spills to mine disasters to food contamination – all of which we've sadly witnessed. Here again, we're hearing little from the President or Democratic leaders.

If cutting taxes on rich people, cutting corporate income taxes, cutting wages and benefits, and deregulation don't create jobs, then a lot of middle class people are probably going to be voting against their own best interests come 2012 and in the interests of others who don't really need the help. Just sayin'.

(Cross-posted at Lippmann's Ghost.)

Taxing the super rich like it's 1959

By R.K. Barry

Robert Reich, who was Secretary of Labour in the Clinton Administration from 1993 to 1997, has a very interesting blog on the current state of affairs that contains any number of useful observations. 

I recently came across one of his posts, which laid out some rather compelling facts about the grossly uneven distribution of wealth in America and how it is that we have come to be in a situation where we can't pay for the things that any civilized society really should be able to fund.

No great surprise, but nearly everyone in America has bought into the idea that we need to radically reduce expenditures rather than give any thought at all to increasing revenues through taxation, specifically by taxing those who can most afford it – the super rich.

We have heard this before, but the numbers, as I say, are compelling.

I do recommend that you read Reich's post in its entirety, but here are a few interesting bits:

Today's typical 30-year old male (if he has a job) is earning the same as a 30-year old male earned three decades ago, adjusted for inflation.

The bottom 90 percent of Americans now earn, on average, only about $280 more per year than they did 30 years ago. That's less than a 1 percent gain over more than a third of a century. Families are doing somewhat better but that's only because so many families have to rely on two incomes.

This may not sound catastrophic, but, and here's the rub, the American economy is more than twice as large now as it was thirty years ago. So, Reich asks, where does all the money go? And the obvious answer is: to the top:

The richest 1 percent's share of national wealth has doubled – from around 9 percent in 1977 to over 20 percent now. The richest one-tenth of 1 percent's share has tripled. The 150,000 households that comprise the top one-tenth of 1 percent now earn as much as the bottom 120 million put together.

In so many ways, I have to say that I don't care what one's politics are. This is just wrong. 

But you might think that with the economy growing so rapidly over the past 30 years, those benefiting the most would be called upon to kick in a bit more. You would be wrong. The power of the super rich has been such that they have been able to make just the opposite happen:

From the 1940s until 1980, the tax rate on the highest earners in America was 70 percent or higher. In the 1950s, it was 91 percent.

Under Ronald Reagan the top rate dropped to 28 percent. Under Bill Clinton it rose to 39 percent and then under George W. Bush dropped to 36 percent (which is, of course, where the Republicans want to keep it).

Reich goes on to talk about big slashes to estate taxes and capital gains taxes, but you get the picture.

To add insult to injury, Reich makes the point that even before the current economic downturn the middle class's share of the nation's total income had shrunk while their tax burden had grown as they paid bigger chunks of their income in payroll taxes, sales taxes, and property taxes than they did before.

A lot of right wingers want to talk about common sense. Well, it makes no sense to me that public services and programs that the middle class and poorer Americans count on are poised to get the axe while this gross, and relatively new, uneven distribution of wealth in America does incredible damage to the fabric of the country.

The obvious point that Reich makes is that we need to hike taxes on the super rich -- not that this is going to happen any time soon.

No, we are going to continue to vilify public sector employers and big government in general. We are going to let big money buy all the means of mass communication and politicians it needs to convince everyone that what we really need is smaller government, which is just another way of saying that people, a growing number of people, will simply have to do without what they need to live a decent life.

A more equitable scheme of taxation would go a long way to solving the problems we are told can only be solved by massive cuts, but that would simply seem to make too much sense.

I'll give Professor Reich the last word:

Do this and we can afford to do what we need to do as a nation. Do this and you prevent setting the middle class against itself. Do this and you restore some balance to a distribution of income and wealth that's now dangerously out of whack.

Amen.

(Cross-posted at Lippmann's Ghost.)

A tale of two tax cuts

By Michael J.W. Stickings

With Republicans poised to retake control of the House and possibly the Senate, if not likely the latter, it can hardly be said that this is the best of times. And with a Democratic president who has alienated much of his liberal-progressive base, failing to govern up not just to the overly lofty expectations of his most enthusiastic, and enthusiastically deluded, supporters but even to the reasonable expectations of those of us who at least thought that he would stand up for basic liberal principles and advance a solidly liberal reform agenda, it feels even worse.

It is frustrating that Obama has been so inconsistent, consistent only in being overly cautious and overly friendly to a Republican Party that is obstructionist and trying to bring him down, often through a nefarious smear campaign that has sought to destroy him. It is frustrating that he can do the right thing and then the wrong thing, say the right thing and then the wrong thing, in rapid succession. To wit:

Obama has admirably come out against "any compromise that would extend the Bush-era tax cuts for the wealthy beyond this year," as the Times is reporting. Those tax cuts are not just unfair but also deeply irresponsible, not least in a time of fiscal difficulty.

And yet, as Robert Reich notes, Obama will "reportedly will propose two big corporate tax cuts this week," as if to counter his responsibility over the Bush tax cuts for the wealthy with yet more irresponsibility.

On the face of it, it would seem to make perfect political sense. Whatever his personal views, and whatever the views of his fellow Democrats struggling for re-election in November, Obama knows that the Bush tax cuts are deeply unpopular and that he can present himself, and his party, as populist at a time when angry, anti-establishmentarian populism would seem to go a long way. And with the corporate tax cuts, which are too technical to arouse much popular interest, let along outrage, he can present himself, and his party, as pro-business and presumably pro-growth at a time when the economy is struggling, there is widespread distrust of government, and government's ability to turn the economy around (even if it was the stimulus that pulled the country back from the brink and made the current recovery, however fragile, possible), thereby appealing to independents, conservative (Blue Dog) Democrats, and moderate Republicans who aren't comfortable with the direction their party has taken and who would vote Democratic but who have been scared off by the Republican propaganda about how Obama is a socialist.

So, yes, I get it. But do the corporate tax cuts make sense? Are they worth it -- not in political terms but in terms of long-term economic health, as well as in terms of jobs? No, says Reich:

Obama's proposed corporate tax cuts (1) won’t generate more jobs because they don't put any cash in worker’s pockets (as would, for example, exempting the first $20,000 of income from the payroll tax and making up the difference by applying the payroll tax to incomes over $250,000); (2) will subsidize companies to cut even more jobs; and (3) will cost $130 billion -- money that could better be spent helping states and locales avoid laying off thousands of teachers, fire fighters, and police.

Reich is politically savvy, though, and also gets what's going on:

So why is Obama proposing them? To put Republicans in a bind. If they refuse to go along he can justifiably say they have no agenda other than obstruction. After all, the only thing they've been arguing for is lower taxes. On the other hand, if Republicans agree to support these corporate tax cuts, Obama can claim a legislative victory that will help Democrats neutralize their opponents in the upcoming elections.

The proposals also make it harder for Republicans to argue the Bush income tax cuts should be extended for the richest 3 percent of taxpayers because small businesses need it. Obama's corporate tax cuts would appear to do the trick.

The White House probably figures even if Republicans agree to the proposed tax cuts, nothing will come of it. Congress will be in session for only about two weeks between now and the midterm elections so it’s doubtful these proposals would be enacted in any event.

But this cynical exercise could backfire if Republicans call Obama's bluff and demand the corporate tax cuts be put on a fast track and get signed into legislation before the midterms.

More troubling, Obama's whopping proposed corporate tax cuts help legitimize the supply-side dogma that the economy's biggest obstacle to growth is the cost of capital, rather than the plight of ordinary working people.

Reich's analysis, it seems to me, is right on the mark. In a way, this is typical of Obama. He is simultaneously too calculating and too cautious for his own good. Why not just make the populist and economically sensible argument against both the Bush tax cuts and against irresponsible corporate tax cuts generally? Why not stick to the basic liberal principle of fairness, or even to the supposed conservative principle of fiscal responsibility (a principle that many liberals endorse and that many conservatives, including Bush, ignore)? Why not stand with the people at a time of economic crisis, at a time when so many people have lost their jobs and can't put food on their table, instead of sucking up to an oligarchic establishment that hardly needs any help?

It's possible, of course, that Obama actually thinks he's doing the right thing. It's more likely, though, that he's just too political, that he filters everything, with Rahm Emanuel's help, through a political filter that slashes any and all sense of social and economic justice, or even policy consistency. The result is that he just seems weak and opportunistic, whether it's on health-care reform, the Afghan War, immigration, the Park51 community center, or any other issue, including tax cuts.

Which is not to say that Obama shouldn't think politically or make decisions without taking politics, including his own and Democrats' electoral well-being, into consideration, because, of course, the democratic reality is that you can't get anything done if you're never elected or if you get voted out of office. But enough is enough, and it's time, long past time, for this president, who remains fairly popular, to be not a pollster but a leader, to be attuned to what is politically expedient, sure, but more importantly to be willing to do what is right -- and actually to do what is right -- whatever the short-term implications of the moment.

Democrats, and especially the Democratic base, would respond to such leadership, based on those principles they hold dear and that supposedly Obama does too, by closing the enthusiasm gap and boosting their party's fortunes in November, but I suspect that many others would be appreciative as well, finally finding in Obama, still less than two years into his presidency, the voice of hope and bringer of change from whom so much seemed possible when he was elected to the White House.

Quotes of the Day: Paul Krugman and Robert Reich

By Michael J.W. Stickings

Krugman, today on This Week:

The argument against the public option is sheer nonsense, we know that, it's nothing except the insurance lobby.

Reich, at his blog on Friday:

Why has it come down to these six? Who anointed them? Apparently, the White House. At least that's what I'm repeatedly being told by sources both on the Hill and in the Administration.

They're both right, of course, and Reich asks the key question: Why are six "centrist" senators -- the Gang of Six on the Finance Committee, three from each party -- essentially being allowed to determine the fate of health-care reform, and hence the future of health care for all Americans?

And what makes it worse is that the senior Republican, Charles Grassley, isn't even negotiating in good faith. He has no interest in meaningful reform, remains a partisan before all else, and has been one of the loudest purveyors of the "death panel" lie.

Here's some common sense from Reich:

I really don't get it. We have a Democratic president in the White House. Democrats control sixty votes in the Senate, enough to overcome a filibuster. It is possible to pass health care legislation through the Senate with 51 votes (that's what George W. Bush did with his tax cut plan). Democrats control the House. The Speaker of the House, Nancy Pelosi, is a tough lady. She has said there will be no health care reform bill without a public option.

So why does the fate of health care rest in Grassley's hands?

It's not even as if the gang represents America. The three Dems on the gang are from Montana, New Mexico, and North Dakota -- states that together account for just over 1 percent of Americans. The three Republicans are from Maine, Wyoming, and Iowa, which together account for 1.6 percent of the American population.

That's right, millions and millions and millions of Americans either don't have health insurance or have inadequate coverage and these six senators, including three gullible Democrats, are telling them their situation won't improve, that they will defeat any effort to extend coverage through a "public option."

This is American "democracy," I suppose, which has never been majoritarian, but it's nonetheless disgusting.

I expect such ideological obstructionism from Republicans. As for the Democrats -- including those in the White House (if in fact they're seriously going along with the Gang of Six) -- they should be ashamed of themselves.

Why the right is to blame for the Dow's decline

By Michael J.W. Stickings

Predictably, the right has been blaming the decline of the Dow, as well as of the markets generally, on Obama and his supposedly "socialist" policies.

As usual, the right is dumbfoundingly wrong. Here's Robert Reich at Salon:

The argument that Obama is somehow responsible for the collapse of Wall Street is absurd. First, every major policy that led to this collapse occurred under George W.'s watch (or, more accurately, his failure to watch). The housing and financial bubbles were created under Bush and exploded under Bush. The stock market began to collapse under Bush.

Second, it's inevitable that stocks, led by the bloated financial sector, would lose their remaining hot air as the new administration begins "stress-testing" the big banks, many of which are technically insolvent. After all, their share prices were built on a tissue of lies and dreams. Other sectors whose values were similarly distorted and distended by years of financial deception and regulatory disregard, such as housing and insurance, will also have to return to the real world before they can recover. Which could mean more stock losses.

Finally, none of the financial wizards who are now charging Obama with leading America into the abyss have offered an alternative plan for getting us out of the mess that, not incidentally, many of these same wizards happily led us into. For years, the Wall Street Journal editorial page and the financial gurus of cable news cheered as Wall Street leveraged its way into oblivion.

Exactly.

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If you haven't seen it already, make sure to watch Jon Stewart's awesome takedown of CNBC from the other night. Creature posted it here.