Out Of The Shadows: Bush And Cheney Remind Us How We Got Into This Mess
Thank you, George W. Bush and Dick Cheney, for emerging from your secure, undisclosed locations to remind us how we got into this mess: It didn’t happen by accident.
The important thing isn’t what Bush says in his interview with National Geographic or what scores Cheney tries to settle in his memoir. What matters is that as they return to the public eye, they highlight their record of wrongheaded policy choices that helped bring the nation to a sour, penurious state.
Questions about whether President Obama has been combative enough in dealing with the Republican opposition — or sufficiently ambitious in framing his progressive agenda — seem trivial when viewed in this larger context. Obama is tackling enormous problems that took many years to create. His presidential style is important insofar as it boosts or lessens his effectiveness, but its importance pales beside the generally righteous substance of what he’s trying to accomplish.
It was the Bush administration, you will recall, that sent the national debt into the stratosphere and choked off federal revenue to the point of asphyxiation. Bush and Cheney decided to fight two wars without even accounting — let alone paying — for them. Rather than raise taxes to cover the cost of military campaigns in Afghanistan and Iraq, Bush opted to maintain unreasonable and unnecessary tax cuts.
So far, the wars and the tax cuts have cost the Treasury between $4 trillion and $5 trillion. If Bush had just left income tax rates alone, nobody except Ron Paul would be talking about the debt.
My aim isn’t to attack Bush but to attack his philosophy. When he was campaigning for the White House in 2000, the government was anticipating a projected surplus of roughly $6 trillion over the following decade. Bush said repeatedly that he thought this was too much and wanted to bring the surplus down — hence, in 2001, the first of his two big tax cuts.
Bush was hewing to what had already become Republican dogma and by now has become something akin to scripture: Taxes must always be cut because government must always be starved.
The party ascribes this golden rule to Ronald Reagan — conveniently forgetting that Reagan, in his eight years as president, raised taxes 11 times. Reagan may have believed in small government, but he did believe in government itself. Today’s Republicans have perverted Reagan’s philosophy into a kind of anti-government nihilism — an irresponsible, almost childish insistence that the basic laws of arithmetic can be suspended at their will.
The Bush administration also pushed forward Reagan’s policy of deregulation — ignoring, for example, critics who said the ballooning market in mortgage-backed securities needed more oversight. When the 2008 financial crisis hit, Bush did regain his faith in government long enough to throw together the $800 billion TARP bailout for the banks. But he failed to use the leverage of an aid package to exact reforms that would ensure that the financial system served the economy, rather than the other way around.
Faced with similar circumstances, would today’s Republican leadership react at all? Or is it the party’s view that the proper role of government would be to stand aside and watch the world’s financial system crash and burn?
This is a serious question. Just a few weeks ago, the Republican majority in the House threatened to force the United States government to default on its debt obligations — a previously unthinkable act of brinkmanship. Everything is thinkable now.
The Bush administration took Reagan’s tax-cutting, government-starving philosophy much too far. Today’s Republican Party takes it well beyond, into a rigid absolutism that would be comical if it were not so consequential.
We face devastating unemployment. Many conservative economists have joined the chorus calling for more short-term spending by the federal government as a way to boost growth. But the radical Republicans don’t pay attention to conservative economists anymore. The Republicans’ idea of a cure for cancer would be to cut spending and cut taxes.
Perhaps they’re just cynically trying to keep the economy in the doldrums through next year to hurt Obama’s chances of reelection. I worry that their fanaticism is sincere — that one of our major parties has gone completely off the rails. If so, things will get worse before they get better.
Having Bush and Cheney reappear is a reminder to step back and look at what Obama is up against. You might want to cut him a little slack.
Morally Inept: The New GOP Resentment Of The Poor
In a decade of frenzied tax-cutting for the rich, the Republican Party just happened to lower tax rates for the poor, as well. Now several of the party’s most prominent presidential candidates and lawmakers want to correct that oversight and raise taxes on the poor and the working class, while protecting the rich, of course.
These Republican leaders, who think nothing of widening tax loopholes for corporations and multimillion-dollar estates, are offended by the idea that people making less than $40,000 might benefit from the progressive tax code. They are infuriated by the earned income tax credit (the pride of Ronald Reagan), which has become the biggest and most effective antipoverty program by giving working families thousands of dollars a year in tax refunds. They scoff at continuing President Obama’s payroll tax cut, which is tilted toward low- and middle-income workers and expires in December.
Until fairly recently, Republicans, at least, have been fairly consistent in their position that tax cuts should benefit everyone. Though the Bush tax cuts were primarily for the rich, they did lower rates for almost all taxpayers, providing a veneer of egalitarianism. Then the recession pushed down incomes severely, many below the minimum income tax level, and the stimulus act lowered that level further with new tax cuts. The number of families not paying income tax has risen from about 30 percent before the recession to about half, and, suddenly, Republicans have a new tool to stoke class resentment.
Representative Michele Bachmann noted recently that 47 percent of Americans do not pay federal income tax; all of them, she said, should pay something because they benefit from parks, roads and national security. (Interesting that she acknowledged government has a purpose.) Gov. Rick Perry, in the announcement of his candidacy, said he was dismayed at the “injustice” that nearly half of Americans do not pay income tax. Jon Huntsman Jr., up to now the most reasonable in the Republican presidential field, said not enough Americans pay tax.
Representative Eric Cantor, the House majority leader, and several senators have made similar arguments, variations of the idea expressed earlier by Senator Dan Coats of Indiana that “everyone needs to have some skin in the game.”
This is factually wrong, economically wrong and morally wrong. First, the facts: a vast majority of Americans have skin in the tax game. Even if they earn too little to qualify for the income tax, they pay payroll taxes (which Republicans want to raise), gasoline excise taxes and state and local taxes. Only 14 percent of households pay neither income nor payroll taxes, according to the Tax Policy Center at the Brookings Institution. The poorest fifth paid an average of 16.3 percent of income in taxes in 2010.
Economically, reducing the earned income tax credit and the child tax credit — which would be required if everyone paid income taxes — makes no sense at a time of high unemployment. The credits, which only go to working people, have always been a strong incentive to work, as even some conservative economists say, and have increased the labor force while reducing the welfare rolls.
The moral argument would have been obvious before this polarized year. Nearly 90 percent of the families that paid no income tax make less than $40,000, most much less. The real problem is that so many Americans are struggling on such a small income, not whether they pay taxes. The two tax credits lifted 7.2 million people out of poverty in 2009, including four million children. At a time when high-income households are paying their lowest share of federal taxes in decades, when corporations frequently avoid paying any tax, it is clear who should bear a larger burden and who should not.
By: Editorial, The New York Times, August 30, 2011
Religion, Patriotism And Freedom: Ayn Rand Vs. America
Ayn Rand has a large and growing influence on American politics. Speaking at an event in her honor, Congressman Paul Ryan said, “The reason I got involved in public service, by and large, if I had to credit one thinker, one person, it would be Ayn Rand.”
A few weeks ago, Maureen Fiedler, the producer of the weekly radio show, Interfaith Voices, asked me to participate in a debate with Onkar Ghate, a senior fellow at the Ayn Rand Institute. I eagerly accepted. I wanted to hear how a follower of Rand would defend proposals to cut Medicare, Medicaid, and food stamps while exempting the wealthy from paying their fair share.
In one sense there was agreement. Maureen, a Sister of Loretto, argued that Republican budget proposals turned their back on Christ’s admonition to care for “the least among us,” the hungry, the sick, the homeless. Ghate did not dispute that. Rand, he said, was an atheist who did not believe in government efforts to help those in need.
Ghate countered Sister Maureen’s religious position with a moral argument. He maintained that redistribution of wealth was unfair to the rich and weakened the ambition of the rest. I wasn’t surprised by this position, since I’d heard it repeatedly during the fight on welfare reform.
What I did find startling was Ghate’s insistence that just as there should be a separation of church and state, so there should be a separation of economics and state. That notion really got me thinking.
I’ve always understood that one’s loyalty to God should take precedence over one’s patriotic duty. Churches are exempt from taxation, and conscientious objectors aren’t required to serve in war. Our high regard for the First Amendment shows the preeminence of faith in the American consciousness.
But to place economics on the same level as religious freedom seemed to me almost blasphemous. Are we really to believe that the freedom to make money should stand on the same level of religious liberty? Are the words of Milton Friedman equal to the Sermon on the Mount? I don’t think so. But maybe in the eyes of Ayn Rand and Paul Ryan, they are.
Ayn Rand’s biography goes a long way toward explaining her animus to government. Her first-hand experience of communism showed her how the state can crush people, kill dissent, and exile lovers of freedom to the gulag. Horrified by what government power could do, she was determined to shrink it to the point of impotence.
America was the perfect place for Rand’s single-minded celebration of the individual. After all, this was the nation that inspired intrepid emigrants to leave behind country, family, and friends with little more than the shirt on their back to make a new life. Here they wouldn’t be judged by what they were before or who their parents were but by what they could made of themselves.
America was a beacon of freedom from its earliest days. But the freedom to earn one’s living is not the same as the freedom to emasculate government. It’s a mistake to enshrine individual liberty without acknowledging the role that a good government plays in preserving and promoting it. Look at places like Haiti, Somalia, and the Congo to see what happens when governments aren’t around much.
When government is marginalized, it’s not just individual freedom that suffers; the economy suffers too. A vibrant capitalism requires a legal system: contracts must be honored, fraud punished. Markets have to work, and for that we need a strong infrastructure of roads, rail, energy, and water and sewage systems.
Good government sets us free to spend our days in fruitful endeavors, not evasive action motivated by fear and distrust. Government regulations reassure us that speeding drivers will be arrested, that the financial products we buy won’t cheat us, and that it will be safer to put our money in banks than under our pillows. If we can’t trust our food to be healthy, our drugs to be safe, or our planes to fly without crashing, we’ll waste a lot of productive time.
During the debate, I also raised the point that the separation of economics and state implies that businesses and the people who run them are under no obligation to be patriotic.
In the 19th century, the Rockefellers, Carnegies, Fricks, and J.P. Morgans wanted America to do well because their own fortunes were tied to American prosperity. They made America a great economic power by creating jobs and technological advances right here at home. They knew that their own fortunes were bound up with the well-being of their fellow Americans.
In Ayn Rand’s America, the first obligation of CEOs is to their shareholders, not to citizens. Their business is global, not local. Why should they care if they send jobs overseas? Why should they be concerned if American kids can’t do math or write a sentence? They’ll just outsource the work. Why should they worry that the next generation of Americans is going to have a tough time? Their own kids will do just fine. And in the meantime, they’re doing just fine themselves.
Andy Grove, the former CEO of Intel, sees a problem with this view. He writes, “You could say, as many do, that shipping jobs overseas is no big deal because the high-value work–and much of the profits–remain in the U.S. That may well be so. But what kind of a society are we going to have if it consists of highly paid people doing high-value-added work–and masses of unemployed?”
Don Peck makes a similar point in his new book, Pinched, and in an Atlantic cover story. “Arguably,” he writes, “the most important economic trend in the United States over the past couple of generations has been the ever more distinct sorting of Americans into winners and losers, and the slow hollowing-out of the middle class.”
Besides this economic problem, I also see a moral issue with Ayn Rand’s insistence that all of us, CEOs included, should be totally free of the ties that bind. I especially disagree when it comes to CEOs. As I wrote here a few months ago, the wealthy have a special responsibility. Much will be asked of those to whom much has been given. Participating in government and civic life, serving in war, helping the less fortunate, and–yes–paying a fair share of taxes are inescapable responsibilities for all Americans, especially for those who have realized the American dream that inspires us all.
I doubt there was anything I could have said in the debate that would have induced Onkar Ghate to view the meaning of freedom in a different light. I suppose he might say the same of me. Still, I can’t see how one can be free in a vacuum. Freedom takes work, by each of us, and by our government, to create the place where each of us can prosper. The freedom to sleep under a bridge is no freedom at all. We can only be free when we work together for the well-being of all Americans–including the least among us.
By: Kathleen Kennedy Townsend, The Atlantic, August 23, 2011
Karl Rove: Setting The Bar For “Success” Too Low
Karl Rove’s new Wall Street Journal column is all about House Speaker John Boehner’s (R-Ohio) “surprising success” so far in 2011. As Rove sees it, Boehner has had a “remarkable run” by having “out-maneuvered” President Obama repeatedly.
Mr. Boehner may not be an inspiring orator, but he has moved the country and Congress in his direction. He has succeeded in large part because he had a more modest view of the post than his recent predecessors. […]
So Washington’s agenda this fall will reflect the priorities not of the glitzy Mr. Obama but of the modest, well-grounded Mr. Boehner.
Rove’s larger point seems to be that Boehner — or at least Boehner’s caucus — is largely dictating the agenda in Washington, and there’s obviously some truth to that. By refusing to compromise, adopting an unyielding right-wing agenda, and normalizing extortion politics, House Republicans have had considerable success, at least insofar as they’re dictating terms and fighting debates on their turf.
But Rove’s column comes across as kind of silly if one stops to think about the larger context.
For all of Rove’s gushing about the Speaker’s “surprising success,” Boehner’s tenure has been a seven-month-long fiasco. The Speaker has routinely struggled to keep his caucus in line behind his leadership, for example, and has found in many key instances that House Republicans simply don’t care what Boehner thinks. Whereas the Speaker traditionally is one of Washington’s most powerful players, Boehner is arguably the weakest Speaker we’ve seen in many decades — he’s not leading an unruly caucus; his unruly caucus is leading him.
Indeed, Rove seems especially impressed that Boehner has blocked White House attempts at additional revenue. What Rove neglects to mention is that Boehner was fully prepared to make an agreement with Obama for additional revenue, only to find that the Speaker’s caucus would forcefully reject the compromise.
What’s more, looking back at Boehner’s “successes,” it’s hard not to notice that Congress hasn’t passed any meaningful legislation at all this year — and in all likelihood, the Speaker will help oversee a Congress in which nothing of significance passes at all.
What have we seen from Boehner’s chamber since January? Five resignations, zero jobs bills, two near-shutdowns, no major legislative accomplishments, and the first-ever downgrade of U.S. debt, attributed almost entirely to the antics of Boehner’s Republican caucus.
Also note, thanks to Boehner’s sterling work, Congress now has its lowest approval rating in three decades, and Boehner’s personal approval ratings are spiraling in the wrong direction.
If Rove finds this impressive, I’m afraid he’s set the bar for “success” much too low.
By: Steve Benen, Contributing Writer, Washington Monthly Political Animal, August 25, 2011
Grover Norquist, The GOP, And The Payroll Tax Cut
For the last day or so, a few of us have been trying to get Grover Norquist’s group to say whether GOP opposition to extending the payroll tax cut — which Obama wants — constitutes a “tax increase” and a violation of Norquist’s infamous anti-tax pledge.
Norquist’s spokesman is now clarifying that the group isn’t yet willing to say.
Norquist’s pledge not to raise taxes has been signed by virtually every Republican in Congress, and Norquist has clearly stated that the failure to extend the Bush tax cuts would constitute a “tax increase.” The question now is this: With Republicans now opposing an extension of the payroll tax cut, which impacts workers but not employers, will Norquist’s group also declare the GOP opposition tantamount to a tax increase that violates the pledge?
John Kartch, a spokesman for Americans for Tax Reform, tells me that “one would have to see the final legislation” before making the call one way or the other, in order to determine ”what is the net effect on total taxes.”
The problem here, though, is that this doesn’t deal with the possibility of the payroll tax cut simply expiring through Congress doing nothing. If Congress doesn’t extend the payroll tax cut, as Republicans want, it will simply expire on January 1st.
So it’s fair to ask whether Norquist’s group — which wields great influence over Republicans in Congress — thinks that Republicans who favor doing nothing and letting the payroll tax cut expire are hiking taxes and violating the group’s pledge. And for now, the group isn’t prepared to say.
By: Greg Sargent, The Washington Post Plum Line, August 23, 2011
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