“The Twinkie Manifesto”: Economic Growth And Economic Justice Are Not Incompatible
The Twinkie, it turns out, was introduced way back in 1930. In our memories, however, the iconic snack will forever be identified with the 1950s, when Hostess popularized the brand by sponsoring “The Howdy Doody Show.” And the demise of Hostess has unleashed a wave of baby boomer nostalgia for a seemingly more innocent time.
Needless to say, it wasn’t really innocent. But the ’50s — the Twinkie Era — do offer lessons that remain relevant in the 21st century. Above all, the success of the postwar American economy demonstrates that, contrary to today’s conservative orthodoxy, you can have prosperity without demeaning workers and coddling the rich.
Consider the question of tax rates on the wealthy. The modern American right, and much of the alleged center, is obsessed with the notion that low tax rates at the top are essential to growth. Remember that Erskine Bowles and Alan Simpson, charged with producing a plan to curb deficits, nonetheless somehow ended up listing “lower tax rates” as a “guiding principle.”
Yet in the 1950s incomes in the top bracket faced a marginal tax rate of 91, that’s right, 91 percent, while taxes on corporate profits were twice as large, relative to national income, as in recent years. The best estimates suggest that circa 1960 the top 0.01 percent of Americans paid an effective federal tax rate of more than 70 percent, twice what they pay today.
Nor were high taxes the only burden wealthy businessmen had to bear. They also faced a labor force with a degree of bargaining power hard to imagine today. In 1955 roughly a third of American workers were union members. In the biggest companies, management and labor bargained as equals, so much so that it was common to talk about corporations serving an array of “stakeholders” as opposed to merely serving stockholders.
Squeezed between high taxes and empowered workers, executives were relatively impoverished by the standards of either earlier or later generations. In 1955 Fortune magazine published an essay, “How top executives live,” which emphasized how modest their lifestyles had become compared with days of yore. The vast mansions, armies of servants, and huge yachts of the 1920s were no more; by 1955 the typical executive, Fortune claimed, lived in a smallish suburban house, relied on part-time help and skippered his own relatively small boat.
The data confirm Fortune’s impressions. Between the 1920s and the 1950s real incomes for the richest Americans fell sharply, not just compared with the middle class but in absolute terms. According to estimates by the economists Thomas Piketty and Emmanuel Saez, in 1955 the real incomes of the top 0.01 percent of Americans were less than half what they had been in the late 1920s, and their share of total income was down by three-quarters.
Today, of course, the mansions, armies of servants and yachts are back, bigger than ever — and any hint of policies that might crimp plutocrats’ style is met with cries of “socialism.” Indeed, the whole Romney campaign was based on the premise that President Obama’s threat to modestly raise taxes on top incomes, plus his temerity in suggesting that some bankers had behaved badly, were crippling the economy. Surely, then, the far less plutocrat-friendly environment of the 1950s must have been an economic disaster, right?
Actually, some people thought so at the time. Paul Ryan and many other modern conservatives are devotees of Ayn Rand. Well, the collapsing, moocher-infested nation she portrayed in “Atlas Shrugged,” published in 1957, was basically Dwight Eisenhower’s America.
Strange to say, however, the oppressed executives Fortune portrayed in 1955 didn’t go Galt and deprive the nation of their talents. On the contrary, if Fortune is to be believed, they were working harder than ever. And the high-tax, strong-union decades after World War II were in fact marked by spectacular, widely shared economic growth: nothing before or since has matched the doubling of median family income between 1947 and 1973.
Which brings us back to the nostalgia thing.
There are, let’s face it, some people in our political life who pine for the days when minorities and women knew their place, gays stayed firmly in the closet and congressmen asked, “Are you now or have you ever been?” The rest of us, however, are very glad those days are gone. We are, morally, a much better nation than we were. Oh, and the food has improved a lot, too.
Along the way, however, we’ve forgotten something important — namely, that economic justice and economic growth aren’t incompatible. America in the 1950s made the rich pay their fair share; it gave workers the power to bargain for decent wages and benefits; yet contrary to right-wing propaganda then and now, it prospered. And we can do that again.
By: Paul Krugman, Op-Ed Columnist, The New York Times, November 19, 2012
“Forgotten History”: No, Conservatives, Benghazi Is Not Worse Than Watergate
On Friday, I got into a little Twitter tete-a-tete with Jim Treacher of the Daily Caller over this post I wrote last week, which argued that the reason conservatives are acting as though the aftermath of the events in Benghazi is the scandal of the century is that they’re frustrated that Barack Obama hasn’t had a major scandal, so they’re making as big a deal as possible out of whatever’s handy. What ensued opened my eyes to something I found surprising, though I suppose I shouldn’t have been so naïve. It turns out that many conservatives not only believe Benghazi is far, far more serious than Watergate was, they seem to have no idea what Watergate was actually about or how far-reaching it was. After the number of Treacher’s followers tweeting me with “How many people died in Watergate? Huh? Huh?” reached triple digits (each tweet no doubt considered by its author to be a snowflake of insight), I decided that since the story broke 40 years ago, we all might need a reminder of why Watergate was, in fact, a really big deal.
The first and most important thing to remember is that when we say “Watergate,” we aren’t referring only to the break-in at the Democratic Party headquarters in the Watergate hotel. The break-in was merely the event that triggered the investigations that would eventually reveal the full magnitude of Richard Nixon’s crimes and the crimes committed by many of the people who worked for him. As Jonathan Bernstein has written, for starters, imagine if Barack Obama were suspicious of some former Bush administration officials now working at the American Enterprise Institute and repeatedly ordered Rahm Emanuel to get people to break in to AEI in order to steal files that could be used to embarrass or blackmail those officials. Nixon did that (the Brookings Institution was the think tank in question). Bernstein goes on:
The president’s men, sometimes at Nixon’s instructions, sometimes with his knowledge, and sometimes perhaps without his direct instructions or knowledge but always in keeping with his general orders to his top staff, also planted spies in the camp of Democratic campaigns; broke into Democratic headquarters, photographed documents, and planted bugs; broke into the office of Daniel Ellsberg’s psychiatrist in order to learn things that could be used to destroy his image in the press; attempted to plant left-wing materials in the home of the guy who shot George Wallace; planned to (and perhaps did) selectively leak classified materials about foreign policy in order to hurt the Democrats; forged materials about foreign policy (the death of South Vietnam’s President Diem) in order to plant false stories in the press that would hurt the Democrats; wiretapped government officials; paid a private investigator to tail Ted Kennedy; performed other dirty tricks such as forged letters intended to manipulate the Democratic presidential nomination process (efforts that may indeed have been successful); and other illegal, abuse and unethical actions — this is not a comprehensive list.
Those were the original crimes. What followed was obstruction of justice as the White House, with the active leadership of the president, lied to FBI investigators and grand juries, destroyed evidence, suborned perjury by prearranging false testimony; suborned perjury by paying off witnesses and either promising or at least hinting at the promise of presidential pardons in exchange for false testimony, and using the authority of the presidency to derail and undermine FBI investigators and prosecutors. Again, the president was personally actively involved in all of those things.
The scandal also revealed so many repugnant statements and acts, some of them illegal and some of them not, that I suppose it’s hard to keep them all in your head. For instance, Judeophiles that conservatives have become, they may like to forget that the White House tapes showed Nixon to be a vicious anti-Semite (“The government is full of Jews. Second, most Jews are disloyal”) who ordered his staff to assemble lists of Jews working within the executive branch so he could identify his enemies (the aide who carried out a Jew-counting operation in the Bureau of Labor Statistics, Fred Malek, is to this day a major Republican fundraiser). Of course, there was also the “enemies list” of Nixon opponents targeted for harassment; one memo detailed “how we can use the available federal machinery to screw our political enemies.” Among the crimes planned but never executed, the most colorful has to be G. Gordon Liddy’s plan to murder columnist Jack Anderson. Liddy was convicted of conspiracy, burglary, and illegal wiretapping; today he is a popular conservative radio host. Among those who ended up going to prison for their crimes in the Watergate scandal were the attorney general, the White House chief of staff, and the president’s chief domestic policy adviser. The scandal was so damning that facing impeachment and almost certain conviction, the president of the United States resigned.
The point is “Watergate” was not just a break-in. It was a panoply of government malfeasance and outright criminality the likes of which the country had never seen before and will probably never see again.
It is true, as my conservative friends point out, that no one actually died in Watergate, while there were four deaths in Benghazi. Those deaths were a terrible tragedy. But unless some evidence emerges that President Obama or somebody else in his administration, through some act of corruption or misconduct, actually caused those deaths, the deaths don’t raise the magnitude of the “scandal” past that of other scandals that weren’t related to any deaths. For instance, 241 service members Ronald Reagan sent to Beirut were killed in the bombing of Marine barracks in October 1983, but I’ll bet that not one of my angry Twitter correspondents considers that a “Reagan administration scandal” (nor, by the way, did almost any Democrats at the time, rightly or wrongly).
For the record, I agree with Kevin Drum on this point: Let’s go ahead and investigate what happened in Benghazi. If that investigation helps us improve security for our personnel operating in dangerous places, that would be a positive outcome. But let’s be honest: Republicans aren’t worked into a lather about this because of their long-standing passionate commitment to security at our embassies and consulates. They’re hoping that if we keep digging, some kind of nefarious behavior will be discovered, and they’ll be able to use it to embarrass the administration. That’s politics, of course, so it isn’t all that surprising. But that’s all it is. And the idea that Susan Rice going on television and delivering some slightly inaccurate talking points constitutes a “cover-up” on par with the Nixon administration suborning perjury, paying hush money, and obstructing justice in a whole variety of other ways? That’s just insane.
By: Paul Waldman, Contributing Editor, The American Prospect, November 19, 2012
“It’s Galling Season Again”: The GOP’s Phony New Compassion
When someone in any social cohort decides to act like Ebenezer Scrooge, it’s easy and quite natural for everyone else to fall into the role of Bob Cratchit. This is what several Republicans are now doing in reaction to Mitt Romney’s remarks about Barack Obama and his “gifts” to his core constituencies. But Republicans allegedly competing for the loyalties of the 100 percent is a movie we’ve seen. It doesn’t work, and it doesn’t work for a straightforward reason: free-market solutions to many of the problems faced by the 47 percent simply don’t exist. The GOP has no answer to these problems, and it really doesn’t want to have any. But, boy oh boy, are we about to enter a galling period of hearing them pretend otherwise.
In fact, it’s already started. Bobby Jindal kicked this off by saying in response to Romney, “We need to continue to show how our policies help every voter out there achieve the American dream.” Marco Rubio weighed in with the reassuring news flash that, in fact, he does not think there are “millions and millions of people in this country that don’t want to work.” Fellow Floridian Rick Scott—bless him, the Rick Scott who ripped off Medicare before he became governor and has tried to block Democrats from voting since occupying the office—says Republicans have to say that “we want to take care of every citizen of our state.” Scott Walker, Haley Barbour, Michael Steele, Susanna Martinez, and others have made similar remarks. All well and good. So now, let’s match this lovely rhetoric to the Republican record of the past decade or so.
Let’s start with health care, a big problem in the lives of many 47 percenters. True, the GOP, when George W. Bush was president, passed the Medicare prescription drug-coverage bill. That was mostly a good thing, although the bill didn’t pay for the program and it created the famous doughnut hole problem that is finally being solved by Obamacare. What else beyond that? Most obviously, they opposed the subsidized coverage for millions of working poor that is at the heart of Obamacare, defenestrating their own proposal (the individual mandate) while doing so.
And how about S-CHIP, the health plan for poor children? Children! They fought it tooth and nail. It was supposedly an imposition on private insurers who were positioned to offer similar coverage. Yet of course, they did not do so. If they had, there’d have been no need for S-CHIP in the first place.
The one health care idea they’ve come up with, health savings accounts, are widely known to be riddled with problems. They work fine until people really need ongoing care, kind of like a car that gets you where you’re going on normal days but won’t start during emergencies. Yet they tend to have very high deductibles, and people can still be thrown off if they get really sick. This is the GOP’s great contribution to addressing the health needs of the working class.
What other problems do the 47 percent face? Hardship in old age surely ranks up there. It’s they, after all, who depend wholly or mostly on their Social Security checks (which average about $1,400 a month) to get by. And what did they see Republicans try to do on this front? Privatize it—a proposal so unpopular that it died with almost no support in Congress from even the GOP, and this after Bush spent weeks barnstorming for it. People clearly don’t want Social Security privatized—just as they don’t want Medicare voucherized.
What else? Paying for college? Oh, the GOP record here is particularly stellar. Republicans in Congress spent loads of political capital fighting the Democrats’ effort in 2010 to lower student-loan interest rates. The Obama student-loan reform has been widely hailed—in addition to helping students by offering lower interest rates, it actually saves taxpayers money by eliminating the middleman (private lenders). This year’s GOP platform called for undoing the reform and going back to the old system, which, wouldn’t you know it, is the position of the big banks.
Believe me, I could go on and on and on for pages. The bottom line is this. These private-sector “solutions” Jindal and others invoke to the problems faced by people of limited means already exist. They have either been implemented and been seen to fail (or at least create big new problems), or they’ve not been implemented because a wary public knows better and has risen up to say no.
Government programs were created for a reason: needs arose that the private sector wasn’t responding to. There was no profit to be made, or not enough, or too much risk to be assumed, in providing health coverage to working-class people and their children, who were more likely to have health issues and be expensive to care for; in offering student loans to people who might not be able to pay them back; et cetera. There just were not and are not practical free-market solutions to these problems. That’s why government stepped in.
If the entire Republican Party were made up of nothing but David Frums and David Brookses, maybe well-designed and good-faith market-based attempts to address some of these problems could have a chance. But the actually existing Republican Party is more accurately represented by another David—Vitter, the Louisiana senator—who dismissed S-CHIP as “Hillarycare.”
And it’s Vitter rather than the other Davids who typifies the party because that is how the party’s voting base wants it. The darkly amusing thing about all this distancing from Romney is that in truth, all he was doing was expressing the views of the overwhelming majority of the party’s conservative base, which rose up in a mighty rage in 2009 against these “moochers” and their “gifts.”
I wish Jindal and the rest of them luck, in spite of it all. If they’re sincere and serious, we’ll have a very different Republican Party five years from now from the one we’ve known. In the meantime, permit me my skepticism. They don’t have good solutions to working people’s problems because the record shows that at bottom, they don’t really want to solve them.
By: Michael Tomasky, The Daily Beast, November 18, 2012
“Blown Out Of The Water Like Naval Scrap”: Petraeus Benghazi Testimony Shreds GOP Attack On Rice
On Friday the Republican politicians who had so angrily demanded the testimony of David Petraeus about Benghazi got what they wanted—and what they deserved—when the former CIA director set forth the facts proving that their conspiracy theories and witch-hunts are dead wrong.
Appearing behind closed doors on Capitol Hill, Gen. Petraeus, recently resigned from the spy agency over his illicit affair with biographer Paula Broadwell, answered questions from legislators concerning the tragic Sept. 11 assault that left Ambassador Chris Stevens and three other diplomatic personnel dead.
When the session concluded, Petraeus was spirited away. And Senator John McCain (R-AZ), whose criticism of the Obama administration over Benghazi has verged on hysterical, emerged from the hearing room with very little to say to the reporters waiting outside.
“General Petraeus’ briefing was comprehensive. I think it was important; it added to our ability to make judgments about what was clearly a failure of intelligence, and described his actions and that of his agency and their interactions with other agencies,” said McCain, adding, “I appreciate his service and his candor” before abruptly fleeing as reporters tried to question him.
McCain’s curt statement was in sharp contrast to his voluble remarks on Thursday, when he denounced UN Ambassador Susan Rice for what he and Senator Lindsey Graham (R-SC) described as her misleading description of the attack on Sunday television shows a few days after it occurred. (It later emerged, embarrassingly, that his posturing before the cameras on Benghazi had prevented him from attending a scheduled hearing on that subject. He didn’t want to to discuss that either.)
Essentially, McCain and Graham, joined by Senator Kelly Ayotte (R-NH), accused Rice on Thursday of lying and covering up the fact that the Benghazi consulate had been attacked by terrorists affiliated with al Qaeda. They vowed to prevent her confirmation as Secretary of State, should the president nominate her to replace Hillary Rodham Clinton.
But with McCain departing so abruptly after the Petraeus hearing, it was left to others, including House Intelligence Committee chair Peter King (R-NY), Rep. Adam Schiff (D-CA), Sen. Dianne Feinstein (D-CA), and Sen. Kent Conrad (D-ND) to reveal what their Arizona colleague didn’t care to discuss. In his testimony, Petraeus blew apart the half-baked theories offered by McCain and Graham—and left them looking foolish.
On earlier occasions, King had echoed the same complaints made by McCain and Graham, but after Friday’s hearing he reluctantly admitted the truth: Petraeus had confirmed that the CIA had approved the talking points used by Rice, tentatively blaming the incident on a notorious anti-Muslim video sparking demonstrations in Cairo and elsewhere at the time. Although Petraeus said he had believed that terrorists were responsible, that suggestion was removed from the talking points in order to protect the ongoing FBI investigation into Benghazi, which Rice also mentioned.
As King explained in response to reporters’ questions, Petraeus not only confirmed that any allusion to al Qaeda had been removed from the talking points given to Rice, but that his agency had consented to that decision:
Q: Did he say why it was taken out of the talking points that [the attack] was al Qaeda affiliated?
KING: He didn’t know.
Q: He didn’t know? What do you mean he didn’t know?
KING: They were not involved—it was done, the process was completed and they said, “OK, go with those talking points.” Again, it’s interagency—I got the impression that 7, 8, 9 different agencies.
Q: Did he give you the impression that he was upset it was taken out?
KING: No.
Q: You said the CIA said “OK” to the revised report –
KING: No, well, they said in that, after it goes through the process, they OK’d it to go. Yeah, they said “Okay for it to go.”
In short, Rice was using declassified talking points, developed and approved by the intelligence community, when she discussed the Benghazi attack. So McCain’s nasty personal denunciation of her , along with most of his claims about how the White House handled Benghazi, has been blown out of the water like so much naval scrap. The Arizona senator, his colleagues, and their loud enablers on Fox News and elsewhere in the wingnut media will never apologize to Rice. But that is what they owe her.
By: Joe Conason, The National Memo, November 17, 2012
“Life, Death And Deficits”: There Is No Good Case For Denying Older Americans Access To Medicare And Social Security
America’s political landscape is infested with many zombie ideas — beliefs about policy that have been repeatedly refuted with evidence and analysis but refuse to die. The most prominent zombie is the insistence that low taxes on rich people are the key to prosperity. But there are others.
And right now the most dangerous zombie is probably the claim that rising life expectancy justifies a rise in both the Social Security retirement age and the age of eligibility for Medicare. Even some Democrats — including, according to reports, the president — have seemed susceptible to this argument. But it’s a cruel, foolish idea — cruel in the case of Social Security, foolish in the case of Medicare — and we shouldn’t let it eat our brains.
First of all, you need to understand that while life expectancy at birth has gone up a lot, that’s not relevant to this issue; what matters is life expectancy for those at or near retirement age. When, to take one example, Alan Simpson — the co-chairman of President Obama’s deficit commission — declared that Social Security was “never intended as a retirement program” because life expectancy when it was founded was only 63, he was displaying his ignorance. Even in 1940, Americans who made it to age 65 generally had many years left.
Now, life expectancy at age 65 has risen, too. But the rise has been very uneven since the 1970s, with only the relatively affluent and well-educated seeing large gains. Bear in mind, too, that the full retirement age has already gone up to 66 and is scheduled to rise to 67 under current law.
This means that any further rise in the retirement age would be a harsh blow to Americans in the bottom half of the income distribution, who aren’t living much longer, and who, in many cases, have jobs requiring physical effort that’s difficult even for healthy seniors. And these are precisely the people who depend most on Social Security.
So any rise in the Social Security retirement age would, as I said, be cruel, hurting the most vulnerable Americans. And this cruelty would be gratuitous: While the United States does have a long-run budget problem, Social Security is not a major factor in that problem.
Medicare, on the other hand, is a big budget problem. But raising the eligibility age, which means forcing seniors to seek private insurance, is no way to deal with that problem.
It’s true that thanks to Obamacare, seniors should actually be able to get insurance even without Medicare. (Although, what happens if a number of states block the expansion of Medicaid that’s a crucial piece of the program?) But let’s be clear: Government insurance via Medicare is better and more cost-effective than private insurance.
You might ask why, in that case, health reform didn’t just extend Medicare to everyone, as opposed to setting up a system that continues to rely on private insurers. The answer, of course, is political realism. Given the power of the insurance industry, the Obama administration had to keep that industry in the loop. But the fact that Medicare for all may have been politically out of reach is no reason to push millions of Americans out of a good system into a worse one.
What would happen if we raised the Medicare eligibility age? The federal government would save only a small amount of money, because younger seniors are relatively healthy and hence low-cost. Meanwhile, however, those seniors would face sharply higher out-of-pocket costs. How could this trade-off be considered good policy?
The bottom line is that raising the age of eligibility for either Social Security benefits or Medicare would be destructive, making Americans’ lives worse without contributing in any significant way to deficit reduction. Democrats, in particular, who even consider either alternative need to ask themselves what on earth they think they’re doing.
But what, ask the deficit scolds, do people like me propose doing about rising spending? The answer is to do what every other advanced country does, and make a serious effort to rein in health care costs. Give Medicare the ability to bargain over drug prices. Let the Independent Payment Advisory Board, created as part of Obamacare to help Medicare control costs, do its job instead of crying “death panels.” (And isn’t it odd that the same people who demagogue attempts to help Medicare save money are eager to throw millions of people out of the program altogether?) We know that we have a health care system with skewed incentives and bloated costs, so why don’t we try to fix it?
What we know for sure is that there is no good case for denying older Americans access to the programs they count on. This should be a red line in any budget negotiations, and we can only hope that Mr. Obama doesn’t betray his supporters by crossing it.
By: Paul Krugman, Op-Ed Columnist, The New York Times, November 15, 2012
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