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“Austerity’s End Strengthens U.S. Recovery”: Speechless, Republicans Fall Back To Peddling More Nonsense

For a variety of partisan and ideological reasons, the right finds it necessary to believe austerity helps the economy. Conservatives, on Capitol Hill and off, remain wedded to the idea that taking capital out of the economy and weakening demand will lead to more growth, all evidence to the contrary notwithstanding.

In an amusing twist, as the U.S. economic recovery gains strength, some on the right actually feel vindicated.

Grover Norquist would like Republicans to shut up about how bad the economy is, and instead take credit for the recovery.

The prominent anti-tax crusader hasn’t turned into a bullhorn for President Barack Obama’s economic policies; he still thinks they’re a drag on jobs and wages. But he’s also grown critical of his fellow Republicans for making poor strategic and messaging decisions on several key issues. Rather than tying the economic recovery to spending cuts ushered in by the sequester and to the continuation of 85 percent of the Bush tax cuts, he said, some in the party have insisted their own leaders fumbled those items.

It’s an interesting course correction for the right. In recent years, Republicans have said the combination of the Affordable Care Act, federal regulations, and higher taxes on the wealthy are crushing the economy. That argument obviously doesn’t make any sense in light of the strongest growth and job creation in over a decade.

So Norquist is suggesting his party flip the script: sure the economy is starting to soar, he says, but that’s only because deep spending cuts like “the sequester” gave the nation a big boost. Austerity took capital out of the system, some conservatives are now arguing, and just look at how great the results are!

It’s important to understand the degree to which Norquist has the story backwards. Recent developments haven’t bolstered conservative economic theories; they’ve done the opposite.

First, the national economy hasn’t improved as a result of spending cuts, but rather, the end of spending cuts.

For a long stretch, government spending cutbacks at all levels were a substantial drag on economic growth. Now, finally, relief is in sight. For the first time since 2011, local, state and federal governments are providing a small but significant increase to prosperity. […]

Across the nation, state and local governments, Democratic and Republican alike, are spending on projects that were stalled. Teachers, who were laid off in droves in recent years, are being hired again. Even federal spending in some sectors is on the rise.

The more the public sector starts to reinvest, as opposed to scaling back, the stronger economic growth becomes. This is the polar opposite of Republican economic theory, and yet, the laws of supply and demand don’t much care about politicians’ ideology.

Second, as Danny Vinik explained, “one of the big reasons that the economy kicked into gear in the latter half of this year is that the Murray-Ryan budget deal alleviated much of sequestration. Fiscal policy, finally, is largely not standing in the way of stronger growth.”

Paul Krugman last week seemed to anticipate Norquist’s argument, and preemptively destroyed it.

Suppose that for some reason you decided to start hitting yourself in the head, repeatedly, with a baseball bat. You’d feel pretty bad. Correspondingly, you’d probably feel a lot better if and when you finally stopped. What would that improvement in your condition tell you?

It certainly wouldn’t imply that hitting yourself in the head was a good idea. It would, however, be an indication that the pain you were experiencing wasn’t a reflection of anything fundamentally wrong with your health. Your head wasn’t hurting because you were sick; it was hurting because you kept hitting it with that baseball bat.

And now you understand the basics of what has been happening to several major economies, including the United States, over the past few years. In fact, you understand these basics better than many politicians and commentators. […]

[I]n America we haven’t had an official, declared policy of fiscal austerity – but we’ve nonetheless had plenty of austerity in practice, thanks to the federal sequester and sharp cuts by state and local governments. The good news is that we, too, seem to have stopped tightening the screws: Public spending isn’t surging, but at least it has stopped falling. And the economy is doing much better as a result.

I can appreciate the dilemma facing Norquist and his allies when it comes to explaining the sudden economic surge. Indeed, after the strongest economic growth in 11 years, Republicans greeted the news with total silence – literally.

And if I were in their shoes, I’d probably be speechless, too. But that’s no excuse for peddling nonsense – those hoping to credit austerity for a healthy recovery clearly have no idea what they’re talking about.

 

By: Steve Benen, The Maddow Blog, January 2, 2014

January 4, 2015 Posted by | Austerity, Economic Recovery, Republicans | , , , , , | Leave a comment

“The Changing Role Of Money In Politics”: An Electoral Landscape In Which Financial Balance Has Tilted Dramatically To The Ultra-Rich

The 2012 presidential election was the first to be held in the aftermath of the Supreme Court’s ruling on Citizens United. Too many of us have forgotten that the results of that election were the opposite of what the megadonors had hoped for.

Can’t buy me gov.

That line neatly sums up the dismal showing on Election Day for the fundraisers, super-PAC strategists, and big-dollar donors of the Republican Party. Outside groups spent north of $1 billion this campaign season—bankrolled mostly by a small cadre of wealthy contributors—and yet they and their funders, especially on the Republican side, were left with little to show for it when the sun rose Wednesday morning. The GOP’s flagship super-PAC, Karl Rove’s American Crossroads, had an abysmal 1 percent return on its $104 million investment. Megadonor Sheldon Adelson and his wife, Miriam, invested $57 million in 2012 races; only 42 percent of the candidates who received Adelson support won. Other big donors—say, Romney super-PAC backers—got nothing for their money.

Perhaps we forgot about all of that because the 2014 midterms turned a lot of it around (with a few exceptions, i.e., Eric Cantor).

The 100 biggest campaign donors gave $323 million in 2014 — almost as much as the $356 million given by the estimated 4.75 million people who gave $200 or less…

And the balance almost certainly would tip far in favor of the mega-donors were the analysis to include nonprofit groups that spent at least $219 million — and likely much more — but aren’t required to reveal their donors’ identities.

The numbers — gleaned from reports filed with the Federal Election Commission and the Internal Revenue Service — paint the most comprehensive picture to date of an electoral landscape in which the financial balance has tilted dramatically to the ultra-rich. They have taken advantage of a spate of recent federal court rulings, regulatory decisions and feeble or bumbling oversight to spend ever-greater sums in politics — sometimes raising questions about whether their bounty is being well spent…

Taken together, the trend lines reflect a new political reality in which a handful of superaffluent partisans can exert more sway over the campaign landscape than millions of donors of more average means.

With sweeping victories for the Republicans these megadonors financed, it appears as though that success overshadows their previous failure in 2012 to influence the election outcome.

But it does raise a couple of questions: Are megadonors more effective at influencing midterms than presidential elections? And if so, why? One possible answer to those questions comes from turning our gaze away from who gives the money in order to focus for a moment on how it is spent.

Over the last few decades, as the amount of money in politics has exploded, the vast majority of those dollars have been spent on media – particularly television advertisements. Recently we’ve been learning more about what audience those ads reach. Derek Thompson reported it this way: Half of Broadcast TV Viewers Are 54 and Older – Yikes. As Cecilia Kang pointed out, younger viewers are trending away from traditional television in favor of subscription-based channels and streaming options.

And so it should probably not come as a surprise that a midterm election focused on turning out older voters in local elections is more fertile ground for expensive television advertising.

It will be interesting to see how all this plays out in the 2016 presidential election. I would simply note that all of Karl Rove’s millions of dollars in TV advertising were no match in 2012 to a simple recording by a catering staff at Mitt Romney’s famous 47% event. In the meantime, the Democrat’s largest megadonor – George Soros – has “shifted his giving away from pure politics, preferring to fund causes devoted to building up progressive infrastructure.”

At least until the laws are changed, megadonors are legally able to use their millions of dollars in an attempt to influence elections. The question will increasingly be…what do they spend it on?

 

By: Nancy LeTourneau, Political Animal Blog, The Washington Monthly, January 3, 2015

January 4, 2015 Posted by | Campaign Financing, Elections, Mega-Donors | , , , , , , , | Leave a comment

“Making Stuff Up”: A Republican Ruse To Make Tax Cuts Look Good

As Republicans take control of Congress this month, at the top of their to-do list is changing how the government measures the impact of tax cuts on federal revenue: namely, to switch from so-called static scoring to “dynamic” scoring. While seemingly arcane, the change could have significant, negative consequences for enacting sustainable, long-term fiscal policies.

Whenever new tax legislation is proposed, the nonpartisan Congressional Budget Office “scores” it, to estimate whether the bill would raise more or less revenue than existing law would.

In preparing estimates, scorekeepers try to predict how people will respond to a new tax law. For example, if Congress contemplates raising the excise tax on cigarettes, scorekeepers consider existing trends in cigarette consumption, the likelihood that the higher taxes will induce some smokers to quit, and the prospect that higher prices will increase incentives for cigarette smuggling. There are no truly “static” revenue estimates.

These conventional estimates do not, however, include any indirect feedback effects that tax law changes might have on overall national income. In other words, they do not incorporate macroeconomic behavioral changes.

Dynamic scoring does. Proponents point out, correctly, that if a tax proposal is large enough, then those sorts of feedback effects can aim the entire economy on a slightly different path.

Such proponents argue that conventional projections are skewed against tax cuts, because they do not consider that cutting taxes could lead to higher economic output, which would make up at least some of the lost revenues. They maintain that dynamic scoring will, therefore, be both more neutral and more accurate than current methodologies.

But the reality is more complex. In order to look at the effects across the entire economy, dynamic modeling relies on many simplifying assumptions, like how well people can predict the future or how much they care about their children’s future consumption versus their own.

Economists disagree on the answers, and different models’ predicted feedback effects vary wildly, depending on the values selected for those uncertain assumptions. The resulting estimates are likely to incorporate greater uncertainty about the magnitude of any revenue-estimating errors and greater exposure to the risk of a political thumb on the scale.

Consider the nonpartisan scorekeepers’ estimates of the consequences of a tax-reform bill proposed last year by Representative Dave Camp, Republican of Michigan. Using different models and plausible inputs, the scorekeepers estimated that, under the bill, total gross domestic product might rise between 0.1 percent and 1.6 percent over the next decade — a 16-fold spread in projected outcomes. Which result should be the basis of congressional scorekeeping?

But the bigger problems lie deeper. Federal deficits are on an unsustainable path (as it happens, because of undertaxation, not excessive spending). Simply cutting taxes against the headwind of structural deficits leads to lower growth, as government borrowing soaks up an ever-increasing share of savings.

The most optimistic dynamic models get around this by assuming that the world today is in fiscal equilibrium, where the deficit does not grow continuously as a percentage of gross domestic product. But that’s not true. If you add the reality of spiraling deficits into those models, they don’t work.

To make these models work, scorekeepers must arbitrarily assume either that we tax more and spend less today than is really the case — which is what they did for the Camp bill — or assume that a tax cut today will be followed by a spending cut or tax increase tomorrow. Economists describe such a move as “making counterfactual assumptions”; the rest of us call it “making stuff up.”

In practice, these models are political statements. They show the biggest economic effects by assuming that tax cuts are financed by unspecified future spending cuts. The smaller size of government, not the tax cuts by themselves, largely drives the models’ results.

Further, the models are not a step toward more neutral revenue estimates, because they assume that, while individuals make productive investments, government does not. In reality, government spending contributes significantly to economic output. Truly dynamic modeling would weigh the forgone economic returns of government investments against the economic gains from lower taxes.

The Republicans’ interest in dynamic scoring is not the result of a million-economist march on Washington; it comes from political factions convinced that tax cuts are the panacea for all economic ills. They will use dynamic scoring to justify a tax cut that, under conventional scorekeeping, loses revenue.

When revenues do in fact decline and deficits rise, those same proponents will push for steep cuts in government insurance or investment programs, because they will claim that the models demand it. That is what lies inside the Trojan horse of dynamic scoring.

 

By: Edward D. Kleinbard, Law Professor at the University of Southern California and a former Chief of Staff of the Congressional Joint Committee on Taxation; Op-Ed Contributor, The New York Times, January 2, 2015

January 4, 2015 Posted by | Dynamic Scoring, Federal Budget, Republicans | , , , , , , , | 1 Comment

“The Strategy Of Confederate Republicans”: I’m Glad That The GOP Has Decided To Come Out Of The Closet As Openly Racist

Steve Scalise, the House Republican Whip-elect, appears to be surviving the flap over his appearance at a David Duke-organized event. It’s good to be able to welcome the New Year with a word of praise for the party I oppose. I’m glad that the GOP has decided to come out of the closet as openly racist.

The event itself has been misdescribed in the press as “white supremacist;” in fact, David Duke’s keynote speech didn’t even mention black-white issues, instead focusing on anti-Jewish themes. “Neo-Nazi” would give a much clearer picture of what EURO was really about.

Still – as even Erick Erickson has pointed out – there was never any doubt of what David Duke, the Klan Wizard, was about. He’s the kind of batsh*t-crazy racist who isn’t sure Jews are actually “white” (and, a generation or two ago, would have had the same doubts about the Irish and the Italians).

So what did Steve Scalise, aspiring Louisiana politician, have to say about David Duke?

The voters in this district are smart enough to realize that they need to get behind someone who not only believes in the issues they care about, but also can get elected. Duke has proven that he can’t get elected, and that’s the first and most important thing.

Well, that couldn’t be clearer, could it? “The first and most important thing” is to get elected. Politicians who frankly campaign on their hatred of blacks and Jews can’t get elected. So voters who “care about” hating blacks and Jews need to find politicians like Steve Scalise, who “believes in” Duke’s message but won’t say so explicitly, because such politicians can get elected.

That sums up the current strategy of the Confederate Republicans about as clearly as I’ve ever heard it summed up: seek the votes of bigots by winking at them, and by pursuing policies that are hostile to African-American interests without being explicitly racist. So it’s entirely appropriate that Scalise should have been chosen for, and remain in, the House Republican leadership.

It’s also entirely appropriate, of course, for those who don’t approve of bigotry not to be taken in. Somebody needs to explain that slowly to the ADL.

 

By: Mark Kleiman, Professor of Public Policy at The University of California Los Angeles; Ten Miles Square, The Washington Monthly, January 2, 2014

January 4, 2015 Posted by | GOP, Racism, Steve Scalise | , , , , , , , , | Leave a comment

“Questioning Our Questions”: In Faith As In Science, Finding The Right Answers Inevitably Involves Questioning Our Own Questions

It is a mark of our pluralistic moment that I learned of an old joke among rabbis from the writings of a great Christian scholar, Jaroslav Pelikan.

In his book “Jesus Through the Centuries,” Pelikan tells the story of a rabbi who is challenged by one of his pupils: “Why is it that you rabbis so often put your teaching in the form of a question?” To which the rabbi replies: “So what’s wrong with a question?”

Trying to imagine what will matter in a new year is daunting, but it takes no clairvoyance to see that in 2015, one of the struggles around the globe will be between those who acknowledge that religion is as much about questions as answers and those who have such a profound certainty about their answers that they will kill in the name of the divine.

To cast the matter this way, I know, invites dissent from both believers and nonbelievers. The believer can plausibly argue that you can be utterly certain about the truth without killing anyone. Nonbelievers might note that both halves of my formulation undercut religion. If religion is primarily about questions, what truth can it contain? And if it preaches certainty, where is the space for dissent and dialogue?

Holding on to faith’s middle ground — what my friend Arnie Eisen calls “moderate religion” — is one of the most important tasks in the world now. Eisen, chancellor of the Jewish Theological Seminary, is not referring to a faith that is weak or tepid. Rather, he thinks that all traditions need to recognize the radically new situation in which they find themselves.

“The job market is global, and so is the thought-and-values market,” Eisen said in a lecture in November in Jerusalem. “It is more difficult for ‘The People of the Book’ to sustain the belief that it is in any meaningful sense ‘The Chosen People’ — or is ‘the’ anything — because an unlimited diversity of claims is literally in our face every time we look at a screen on a laptop or smartphone.”

Admitting this does not produce all the answers, but, as the rabbi in the story might say, it does lead to the right questions.

My hunch is that Pope Francis’s understanding of Eisen’s point has much to do with his worldwide popularity. A recent Pew survey across 43 nations found Francis with a median favorable rating of 60 percent and an unfavorable rating of just 11 percent.

Political consultants would love to have access to the pope’s secret sauce. Some of the ingredients are clearly personal: Francis conveys the reflectiveness of a holy man and the compassion that most hope religious engagement encourages. But he also manages to juggle the imperative of making tough judgments, especially about injustice and poverty, with an awareness that justice without mercy and understanding (“Who am I to judge?”) lacks both humanity and the sense of a God whose most important characteristic is mercy.

By simultaneously conveying a certainty about what his faith teaches him and a confident openness to those who are seeking answers along other paths, Francis gives an intimation of what holiness needs to look like in the 21st century.

One of my favorite political acts at the end of 2014 was the Senate’s confirmation of Rabbi David Saperstein as the State Department’s ambassador-at-large for international religious freedom. I admire Saperstein for many reasons, but why I think he is perfect for his new job was illustrated during his 2004 visit to my Religion and Politics class at Georgetown University.

It was around the time that Mel Gibson’s “The Passion of the Christ” was released. Saperstein had been a sharp critic of what he (and many others) saw as anti-Semitic tropes in the movie. But several of my students had appreciated the film. Rather than launch into an attack on Gibson’s work, Saperstein invited them to have their say.

When he finally did express his view, Saperstein began with these words: “If you believe that the birth of Jesus Christ is the most important event in human history, you cannot help but be moved by this movie.” Only then did he offer his critique.

Religious freedom will thrive and religion itself will be a force for good only if religious people can convey this sort of empathetic understanding of the truths that others hold dear. In faith as in science, finding the right answers inevitably involves questioning our own questions.

 

By: E. J. Dionne, Jr., Opinion Writer, The Washington Post, December 31, 2014

January 4, 2015 Posted by | Faith, Pope Francis, Religious Liberty | , , , , , , | Leave a comment

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