Memo To Rep Eric Cantor: Blame Is A Tricky Thing
In April, House Democrats “celebrated” the 100th day of the new Republican rule in the chamber. Most notably, Dems emphasized the fact that the GOP, despite a year of campaign promises, haven’t even considered any jobs bills, with Republicans instead preferring to waste time on pointless gamesmanship and culture war crusades.
As if to say, “Oh yeah?” House Majority Leader Eric Cantor (R-Va.) turned to Twitter to respond to the Democratic argument:
And here we are six weeks later.
Cantor said that “everything seems to be going in the wrong direction,” but denied that Republicans deserve a share of the blame for the stagnant economic recovery.
Well, Eric, blame is a tricky thing, isn’t it?
Even in April, Cantor’s argument was foolish. Indeed, by Cantor’s reasoning, job growth should be impossible. How can all of these jobs be created in the midst of Obama-induced uncertainty? And with crushing tax rates so high? And a massive debt? And with pesky regulations stifling the engines of ingenuity?
We were apparently supposed to believe that Republicans’ mere presence in the House of Representatives is enough to overcome these burdensome hurdles.
That is, until the jobs picture deteriorates, at which point, Republicans bear no responsibility whatsoever.
Heads Cantor wins; tails Dems lose.
By: Steve Benen, Contributing Writer, Washington Monthly-Political Animal, June 6, 2011
Why I Support “The Ronald Reagan Tax Reform Act of 2011”
Ten years ago today, the wealthiest Americans caught a multi-billion dollar break from their benefactor, then-president George W. Bush. In the decade since, through two wars, natural disasters, a plummeting economy and a soaring debt, the wealthiest Americans have gotten to keep those Bush tax cuts. Happy birthday, everybody!
As the Republican Party now lines itself up behind Rep. Paul Ryan on his mission to cut the resulting deficit on the backs of working people and the elderly, I find myself surprisingly and strangely nostalgic for another GOP hero, whose legacy, at least when it comes to taxes, has become woefully misunderstood. Can it be that I find myself nostalgic for Ronald Reagan?!
Of course, I’m not alone in my nostalgia. I’m joined by the entire Republican leadership in this, but I think our reasons may be quite a bit different. In the spirit of unity, I’d like to suggest to Republicans in Congress that they look closely at the record of their favorite 20th century hero and adopt yet another policy named after the Gipper. I’m no fan of much of President Reagan’s legacy, but in a new spirit of bipartisanship, and historical accuracy, I’d like to present Republicans in Congress with an idea: the Ronald Reagan Tax Reform Act of 2011.
A key element of the Reagan lore believed by today’s GOP is that Reagan’s embrace of “trickle-down economics” is what caused any and all economic growth since the 1980s. In fact, after Reagan implemented his initial tax-slashing plan in 1981, the federal budget deficit started to rapidly balloon. Reagan and his economic advisers were forced to scramble and raised corporate taxes to calm the deficit expansion and stop the economy from spiraling downward. Between 1982 and 1984, Reagan implemented four tax hikes. In 1986, his Tax Reform Act imposed the largest corporate tax increase in U.S. history. The GDP growth and higher tax revenues enjoyed in the later years of the Reagan presidency were in part because of his willingness to compromise on his early supply-side idolatry.
The corporate tax increases that Reagan implemented — under the more palatable guise of “tax reform” — bear another lesson for Republicans. The vast majority of the current Republican Congress has signed on to a pledge peddled by anti-tax purist Grover Norquist, which beholds them to not raise any income taxes by any amount under any circumstances, or to bring in new revenue by closing loopholes. This pledge, which Rep. Ryan’s budget loyally adheres to, in effect freezes tax policy in time — preserving not only Bush’s massive and supposedly temporary tax cuts for the wealthiest Americans, but also a vast mishmash of tax breaks and loopholes for specific industries won by well-funded lobbyists.
The problem has become so great that many giant American corporations have become so adept at exploiting loopholes in the tax code that they paid no federal income taxes at all last year — if Republicans in Congress follow their pledge to Norquist, they won’t be able to close a single one of the loopholes that are allowing corporations to avoid paying their fair share.
Even Reagan recognized the difference between just plain raising taxes and simplifying the tax code to cut out loopholes that subsidize corporations. In 1984, he arranged to bring in $50 billion over three years, mainly by closing these loopholes. His 1986 reform act not only included $120 billion in tax hikes for corporations over five years, it also closed $300 billion worth of corporate loopholes.
These kinds of tax simplification solutions are available for Congress if they want them. As I wrote in April, nixing Bush’s tax cut’s for the wealthiest Americans would help the country cut roughly $65 billion off the deficit in this year alone. Closing loopholes that allow corporations to shelter their income in foreign banks would bring in $6.9 billion. Eliminating the massive tax breaks now enjoyed by oil and gas companies would yield $2.6 billion to help pay the nation’s bills.
But before Republicans in Congress change their math, they have to change their rhetoric — and embrace the reality of the economic situation they face and the one that they’d like to think they’re copying. In 1986, during the signing ceremony for the Tax Reform Act, Reagan explained that “vanishing loopholes and a minimum tax will mean that everybody and every corporation pay their fair share.”
It’s time for the GOP to take a page from their hero’s playbook. If they do so, they might be able to find some allies that they never thought possible. It’s time for “everybody and every corporation to pay their fair share.” We can all get along. Sign me up for “The Reagan Tax Reform Act of 2011.”
By: Michael B. Keegan, President, People For The American Way, Published in Huffington Post Politics, June 7, 2011
Bush Tax Cuts Turn 10: Wall Street Celebrates, Americans Suffer
Break out the bubbly, because there will be celebrations today on Wall Street and in corporate boardrooms and mansions all across America. Why? Because today is the 10th anniversary of the big Bush tax breaks for bankers and billionaires and the businesses that bankroll their big-budget campaigns.
Today is an opportunity to ponder these questions: If the Bush tax cuts are so great, why has the economy been so bad since they became law 10 years ago? And how about this brain teaser: If the GOP theology of cutting taxes for the rich brings in more revenue, why is Democratic President Bill Clinton the only president in the last generation to leave a surplus behind for the next president?
In 1980, President George H.W. Bush called it voodoo economics. Bush 41 conveniently changed his position when he became Ronald Reagan’s running mate that year. But the first President Bush was right the first time. The idea that tax revenues will go up when you cut taxes has cast an evil spell over the U.S. economy going all the way back to Ronald Reagan. In 1981, the new GOP math became 1 + 1 = 3. With this kind of fuzzy math, it’s no wonder that President Reagan left behind a massive budget deficit.
George W. Bush may have had George H.W. Bush for a father, but Ronald Reagan was his role model. The latest incarnation of voodoo economics was the creation of the second President Bush. The tax cuts for bankers and billionaires that became law in 2001 quickly turned the Clinton surplus into the Bush budget deficit as big as Donald Trump’s ego. Voodoo is what Republicans do so well.
But Bush 43 did not stop there in handing out goodies to Wall Street. In 2008, the president asked his Treasury Secretary, Henry Paulson, the former CEO of Goldman Sachs, to bail out Goldman Sachs and other Wall Street investment firms to the tune of three quarters of a trillion dollars. Of course, President Bush never even considered an attempt to rescue the millions of working Americans who first lost their jobs and then their homes because of malfeasance on Wall Street.
Last month, the Center for Budget Priorities released a study that demonstrated that the two biggest reasons for the current budget deficit were the Bush tax cuts and the wars in Afghanistan and Iraq. So what do the Republicans do? Do they vote to cut Pentagon spending or end dole welfare for wealthy Americans? Of course they don’t. They gut Medicare. Genius!
Yesterday, Frank Patitucci, CEO and Chairman of NuCompass Mobility Service, called on Republican Speaker John Boehner to increase taxes on Americans making more than $1 million a year. Patitucci explained his position by saying businesses need a strong middle class to prosper.
But I don’t want to be a party pooper or rain on Wall Street’s parade, so party hardy, guys. Don’t scrimp on the Dom Perignon and the caviar. Santa Claus comes only once a year. Let’s worry about the GOP cuts in healthcare for seniors and nutrition programs for women and their infant children another day.
By: Brad Bannon, U. S. News and World Report, June 7, 2011
Loose Lips: Romney Miscasts Economy In GOP Debut
In rhetorical excesses marking his entry in the presidential campaign, Mitt Romney said the economy worsened under President Barack Obama, when it actually improved, and criticized the president for issuing apologies to the world that were never made.
A look at some of the statements by Romney on Thursday in announcing his bid for the Republican nomination and how they compare with the facts:
ROMNEY: “When he took office, the economy was in recession. He made it worse. And he made it last longer.”
THE FACTS: The gross domestic product, the prime measure of economic strength, shrank by a severe 6.8 percent annual rate before Obama became president. The declines eased after he took office and economic growth, however modest, resumed. The recession officially ended six months into his presidency. Unemployment, however, has worsened under Obama, going from 7.8 percent in January 2009 to 9.1 percent last month. It hit 10.1 percent in October 2009.
A case can be made for and against the idea that Obama’s policies made the economy worse than it needed to be and that the recession lasted longer than it might have under another president. Such arguments are at the core of political debate. But Obama did not, as Romney alleged, make the economy worse than it was when he took office.
ROMNEY: “A few months into office, he traveled around the globe to apologize for America.”
THE FACTS: Obama has not apologized for America. What he has done, in travels early in his presidency and since, is to make clear his belief that the U.S. is not beyond reproach. He has told foreigners that the U.S. at times acted “contrary to our traditions and ideals” in its treatment of terrorist suspects, that “America has too often been selective in its promotion of democracy,” that the U.S. “certainly shares blame” for international economic turmoil and has sometimes shown arrogance toward allies. Obama, whose criticisms of America’s past were typically balanced by praise, was in most cases taking issue with policies or the record of the previous administration, not an unusual approach for a new president — or a presidential candidate. Romney’s actual point seems to be that Obama has been too critical of his country.
But there has been no formal — or informal — apology. No saying “sorry” on behalf of America.
ROMNEY: “Three years later, foreclosures are still at record levels. Three years later the prices of homes continue to fall.”
THE FACTS: Although foreclosures remain high, the number of U.S. homes that were repossessed by lenders fell in April, compared with March and a year ago, according to the foreclosure listing service RealtyTrac Inc. Romney’s claim about home prices, though, is supported by the Standard & Poor’s/Case-Shiller 20-city monthly index. It found home prices in big metro areas have sunk to their lowest since 2002. Since the bubble burst in 2006, prices have fallen more than they did during the Great Depression.
ROMNEY: “Instead of encouraging entrepreneurs and employers, he raises their taxes, piles on record-breaking mounds of regulation and bureaucracy and gives more power to union bosses.”
THE FACTS: Romney ignores ambitious tax-cutting pushed by Obama. The stimulus plan early in his presidency cut taxes broadly for the middle class and business. He more recently won a one-year tax cut for 2011 that reduced most workers’ Social Security payroll taxes by nearly a third. He also campaigned in support of extending the Bush-era tax cuts for all except the wealthy, whose taxes he wanted to raise. In office, he accepted a deal from Republicans extending the tax cuts for all. As for tax increases, Obama won congressional approval to raise them on tobacco and tanning salons. The penalty for those who don’t buy health insurance, once coverage is mandatory, is a form of taxation. Several large tax increases in the health care law have not yet taken effect.
ROMNEY: “The expectation was that we’d have to raise taxes but I refused. I ordered a review of all state spending, made tough choices and balanced the budget without raising taxes.”
THE FACTS: Romney largely held the line on tax increases when he was Massachusetts governor but that’s only part of the revenue story. The state raised business taxes by $140 million in one year with measures branded “loophole closings,” the vast majority recommended by Romney. Moreover, the Republican governor and Democratic lawmakers raised hundreds of millions of dollars from higher fees and fines, taxation by another name. Romney himself proposed creating 33 new fees and increasing 57 others — enough to raise $59 million. Anti-tax groups were split on his performance. The Club for Growth called the fee increases and business taxes troubling. Citizens for Limited Taxation praised him for being steadfast in supporting an income tax rollback.
By: Calvin Woodward and Jim Kuhnhenn, Associated Press, Yahoo News, June 3, 2011
The Limits Of Free-Market Capitalism
Until a few years ago, my spiritual devotions were limited to the free market and the music of Patsy Cline. I’m sorry to say it’s just me and Patsy now.
Karl Marx may have been wrong where it really mattered—communism, to paraphrase Churchill, is government “of the duds, by the duds, and for the duds”—but he was spot on about the pitfalls of capitalism, particularly when it came to the entrenchment of social classes, the fetish of consumption, the frequency of recession, and the concentration of industry. Yet, like trained seals, we continue to leap through the flaming rings of a system that is contemptuous of the public good while rewarding those who feed off “free” markets and the politicians who rig them. Nearly three years after the global economy almost collapsed under the weight of a corrupt and inbred financial order, Washington is still mired between the false choice of the state or private enterprise as the proper steward of the general welfare.
It should be clear to anyone who has lost a cell phone signal in our nation’s capital or been denied health coverage because of a pre-existing ailment that capitalism’s endgame is not freedom of choice and efficiency, but oligarchy. Many of America’s top industries—agriculture, airlines, media, medical care, banking, defense, auto production, telecommunications—are controlled by a handful of corporations who fix prices like cartels. As Marx predicted, the natural inclination of players in a market-driven economy is not to compete but to collude.
Reporting in Asia and the Middle East for many years, I prayed to the same kitchen gods of untrammeled commerce that now bewitch the Republican Party faithful and the neoliberals who inhabit the Obama White House. In Asia more than a decade ago, I covered the liquidation of state assets as prescribed by the International Monetary Fund, perhaps the largest-ever transfer of wealth from public to private hands, as if it were a new religion that would transform economies from the Korean peninsula to the Indian subcontinent. Laissez-faireism, I wrote, would liberate consumers and domesticate once overweening state-owned enterprises.
In fact, privatization merely shifted economic control from corrupt apparatchiks to their allies in business, a transaction lubricated with kick-backs and sweetheart deals. That’s what happened in the Middle East, and it became the spore that engendered the Arab uprising.
The corruption of capitalism in America is all the more appalling for its legality. With the economy still struggling to recover from a housing crisis fomented largely by Wall Street’s craving for mortgage-backed securities, prosecution of those responsible has been confined to a single lawsuit filed by the Securities Exchange Commission against a lone financier. The system is still lousy with loopholes, and the Republican Party, which demographically as well as ideologically is becoming a gated community for white, southern males, is calling for more deregulation, not less.
Which brings us to the central failure of American capitalism: the excoriation of the state.
So deep is the mythology of the free market that we ignore the consequences of starving our schools, libraries, public media, and roads and railways. We expect our teachers to assume the burdens of parenthood and then blame them for failing education. We lament our dependence on foreign oil and the aviation cartels, but we refuse to underwrite a passenger-rail equivalent of the interstate highway system. We disparage the coarse reductionism of corporate-owned news outlets while neglecting public broadcasting, an isolated archipelago of smart, responsible journalism.
Our hostility to the public sector—fountainhead of the Hoover Dam, Mount Rushmore, the Golden Gate Bridge, the Los Angeles Coliseum, our national parks, and countless other public utilities and services in addition to the federal highway system—is inversely proportional to our reverence for private consumption. As the economist John Kenneth Galbraith wrote in his 1958 book The Affluent Society, “Vacuum cleaners to ensure clean houses are praiseworthy and essential in our standard of living. Street cleaners to ensure clean streets are an unfortunate expense. Partly as a result, our houses are generally clean and our streets are generally filthy.” Galbraith also noted the uniquely American conceit of sanctioning debt when households and private investors hold it but condemning it when governments do.
Should the feds nationalize banks and appropriate soy fields? Certainly not. At its essence, there is probably no more efficient way of establishing the price of a particular good or service than market economics. Not all transactions are so simple, however, and there are some services—healthcare, for example, or transportation—that often fare better more as public goods than as private commodities. In order to save American capitalism, we must appreciate its limits even as we struggle to harness its power.
By: Stephen Glain, U. S. News and World Report, June 2, 2011
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