“Behold, The ‘Laffering Laughing’ Stock”: The Remarkable Persistence Of Crackpot Economics In The GOP
The most horrifying article you can read today is not about Ayatollah Khamenei’s troubling comments on the Iran nuclear deal, it’s this piece from Jim Tankersley of The Washington Post about how all the GOP presidential candidates are lining up to receive the wisdom of Arthur Laffer as they formulate their economic plans. This is the rough equivalent of doctors seeking to lead the American College of Pediatricians competing to see which one can win the favor of Jenny McCarthy. Behold:
As the 2016 GOP primary season takes off, Laffer is more in demand than ever before, with Republican candidates embracing tax-cut-for-the-rich policies even as they bemoan economic inequality. Candidates have been meeting with him in recent weeks, and on Friday in Nashville, he says, his schedule includes Rick Perry at 10 a.m., Ben Carson at noon, Jeb Bush at 1:15 p.m. and Bobby Jindal at 5. Dinner is scheduled with Ted Cruz. He has already met at least once with Wisconsin Gov. Scott Walker. …
Some time ago, Laffer recounted, he sat down with Sen. Rand Paul of Kentucky, who was hoping the economist would bless his flat-tax plan. Laffer critiqued it instead as having too many complicated, economy-distorting features. He recalled Paul expressing disappointment he couldn’t endorse it.
After that sit-down, Paul’s advisers kept calling Laffer, he said. When Paul announced his presidential run this week, he touted a tax plan far more in line with Laffer’s vision.
Laffer’s theory is that cutting taxes for the wealthy not only brings an explosion of economic growth but pays for itself; give millionaires and billionaires a break, and the resulting economic activity will be so spectacular that more revenue will come in despite the lower rates. Laffer reduced this idea to the famous “Laffer curve,” which he supposedly sketched on a napkin in 1974 and thereby seduced generations of Republican politicians. It took the perfectly sensible idea that if all income was taxed at 100 percent then no one would have any incentive to work, and turned that into a claim that virtually any reduction in the top rate will increase revenues—and the converse as well, that increasing the top rate will always reduce revenues and stifle growth.
If that were true, then the Clinton years would have been a period of dismal economic doldrums, followed by the glorious George W. Bush boom. In fact, Laffer’s theory has been as thoroughly disproven as phrenology or the notion that the stars are pinholes in the blanket Zeus laid across the sky; Republican economist Greg Mankiw famously referred to those who believe Laffer as “charlatans and cranks.” But in a world where Mike Huckabee convinces people that the Bible contains a secret cancer cure and baseball players wear titanium necklaces in the belief that doing so will align their humours or some such nonsense, there will always be a market for crackpottery, particularly the kind that offers a justification for the thing you already want to do.
And this is why Republicans continue to seek Arthur Laffer’s wisdom and repeat the completely, thoroughly, 100 percent false claim that cutting taxes for the wealthy will always increase revenue. They want those tax cuts for ideological and moral reasons, and when someone with a claim to expertise tells them that not only is there no cost but that such cuts will actually help the little people too, well that’s just too seductive for words. When the world shows them that cutting taxes on the wealthy actually reduces revenue, it doesn’t make them revise their belief that doing so is right and just, because that belief isn’t subject to the test of evidence.
Candidates get a lot of flack for having advisers or supporters who have committed various sins, even if there was no reasonable way the candidate could have been expected to know about or approve those sins, and they won’t have any impact on what the candidate would do if elected. We’ll spend days hounding a candidate because some consultant he hired sent out some offensive tweets five years ago, or because someone who endorsed him said something outrageous at a rally. But here we have a case in which candidates are voluntarily and knowingly asking for the advice and approval of one of America’s foremost economic quacks, specifically for the purposes of formulating policy that would affect every American’s life. Is anybody going to ask them what the hell they’re doing?
By: Paul Waldman, Senior Writer, The American Prospect, April 10, 2015
“Where Government Excels”: Recognizing The Reality That There Are Some Things The Government Does Better Than The Private Sector
As Republican presidential hopefuls trot out their policy agendas — which always involve cutting taxes on the rich while slashing benefits for the poor and middle class — some real new thinking is happening on the other side of the aisle. Suddenly, it seems, many Democrats have decided to break with Beltway orthodoxy, which always calls for cuts in “entitlements.” Instead, they’re proposing that Social Security benefits actually be expanded.
This is a welcome development in two ways. First, the specific case for expanding Social Security is quite good. Second, and more fundamentally, Democrats finally seem to be standing up to antigovernment propaganda and recognizing the reality that there are some things the government does better than the private sector.
Like all advanced nations, America mainly relies on private markets and private initiatives to provide its citizens with the things they want and need, and hardly anyone in our political discourse would propose changing that. The days when it sounded like a good idea to have the government directly run large parts of the economy are long past.
Yet we also know that some things more or less must be done by government. Every economics textbooks talks about “public goods” like national defense and air traffic control that can’t be made available to anyone without being made available to everyone, and which profit-seeking firms, therefore, have no incentive to provide. But are public goods the only area where the government outperforms the private sector? By no means.
One classic example of government doing it better is health insurance. Yes, conservatives constantly agitate for more privatization — in particular, they want to convert Medicare into nothing more than vouchers for the purchase of private insurance — but all the evidence says this would move us in precisely the wrong direction. Medicare and Medicaid are substantially cheaper and more efficient than private insurance; they even involve less bureaucracy. Internationally, the American health system is unique in the extent to which it relies on the private sector, and it’s also unique in its incredible inefficiency and high costs.
And there’s another major example of government superiority: providing retirement security.
Maybe we wouldn’t need Social Security if ordinary people really were the perfectly rational, farsighted agents economists like to assume in their models (and right-wingers like to assume in their propaganda). In an idealized world, 25-year-old workers would base their decisions about how much to save on a realistic assessment of what they will need to live comfortably when they’re in their 70s. They’d also be smart and sophisticated in how they invested those savings, carefully seeking the best trade-offs between risk and return.
In the real world, however, many and arguably most working Americans are saving much too little for their retirement. They’re also investing these savings badly. For example, a recent White House report found that Americans are losing billions each year thanks to investment advisers trying to maximize their own fees rather than their clients’ welfare.
You might be tempted to say that if workers save too little and invest badly, it’s their own fault. But people have jobs and children, and they must cope with all the crises of life. It’s unfair to expect them to be expert investors, too. In any case, the economy is supposed to work for real people leading real lives; it shouldn’t be an obstacle course only a few can navigate.
And in the real world of retirement, Social Security is a shining example of a system that works. It’s simple and clean, with low operating costs and minimal bureaucracy. It provides older Americans who worked hard all their lives with a chance of living decently in retirement, without requiring that they show an inhuman ability to think decades ahead and be investment whizzes as well. The only problem is that the decline of private pensions, and their replacement with inadequate 401(k)-type plans, has left a gap that Social Security isn’t currently big enough to fill. So why not make it bigger?
Needless to say, suggestions along these lines are already provoking near-hysterical reactions, not just from the right, but from self-proclaimed centrists. As I wrote some years ago, calling for cuts to Social Security has long been seen inside the Beltway as a “badge of seriousness, a way of showing how statesmanlike and tough-minded you are.” And it’s only a decade since former President George W. Bush tried to privatize the program, with a lot of centrist support.
But true seriousness means looking at what works and what doesn’t. Privatized retirement schemes work very badly; Social Security works very well. And we should build on that success.
By: Paul Krugman, Op-Ed Columnist, The New York Times, April 10, 2015
“Let Her Socialist Freak Flag Fly?”: Why Republicans Won’t Convince The Electorate That Hillary Clinton Is A Radical
One of the persistent conservative narratives about Hillary Clinton is that her identity as a supposedly moderate Democrat is a ruse, meant to conceal her radical leftist intents. If and when she reaches her long-held goal of becoming president, the mask will be removed and the true horror of her socialist scheme will be revealed.
That is, of course, assuming we reach January 2017 with Barack Obama having failed in his own plan to turn America into a dungeon of Stalinist oppression and misery. But the idea that Clinton is, like her husband, a moderate Democrat, is something that many conservatives have trouble abiding, particularly when the prospect of her becoming president becomes more salient.
So lest Republicans become complacent about the prospects for a second Clinton presidency (a real danger, no doubt), Liz Mair argues in the Daily Beast that Republicans shouldn’t fool themselves into thinking that the former secretary of state is much like the first President Clinton:
…tying Hillary Clinton to her husband is an act of political malpractice that ignores the fact that on economic issues, she was—during his presidency, during her 2008 campaign, and still today—significantly to the left of him.
For whatever else one may say about him, Bill Clinton was and is a centrist. His presidency is remembered for the taming of the deficit, his advocacy for free trade, his signature of welfare reform, his legislation cutting the long-term capital gains tax rate, and perhaps most famously, his declaration that “the era of big government is over.”
That would not have been true if Hillary had had it her way. And if she has her way now—and if she makes it to the White House—a very un-Bill-like big government will remain in the cards for some time.
Even if her bill of particulars is pretty weak, Mair is right insofar as Hillary Clinton is running in 2016 and Bill Clinton left office in 2001. In the time since, the Democratic Party has itself moved to the left in some ways, and a party’s nominee is always going to reflect the party’s consensus (with some small variation). If Bill Clinton were running now, he wouldn’t be the same candidate he was then. It isn’t that Hillary has been waiting for two decades to let her socialist freak flag fly, as I’m sure many conservatives believe; it’s that her party has evolved, and she’s evolved along with it. For instance, to be a Democrat now means to believe in full marriage equality and to question the War on Drugs, which wasn’t true in 1992. At that time there was a comprehensive debate about the party’s ideological direction, which Bill Clinton led; now there’s a remarkable degree of ideological unity.
There are still ways in which Hillary Clinton is to the right of the median Democrat; she certainly retains more hawkish instincts in foreign affairs, and I don’t know if she has abandoned her previous support of the death penalty (though that’s something presidents don’t do anything about). However you might judge her, we sometimes forget when we try to make such an assessment that it isn’t necessary for a president to be an ideological radical for him or her to be a disaster in office. Richard Nixon was something of a moderate, but that made him no less corrupt. There are ways in which George W. Bush was less than a right-wing ideologue; that mitigates the disaster he wrought at home and abroad not at all.
The real things conservatives dislike about Hillary Clinton have little to do with ideology. They think she’s a power-hungry, dishonest, overly secretive conniver who has no scruples. Someone could be all those things, and believe almost anything about policy.
This is something both liberals and conservatives will argue about when it comes to the Republican candidates, too. I tend to think that the actual policy differences between those candidates are tiny, and it’s the attitudinal differences that are significant. If you actually went down a list of every issue you could come up with, you’d find that Jeb Bush and Ted Cruz disagree on only a couple of things, but Cruz presents himself as a proud far-right ideologue, while Bush doesn’t.
Many conservatives believe that Bush is actually some kind of liberal simply because he talks about immigrants as though they were human beings and supports Common Core (which many other Republicans used to like before they decided it’s some kind of communist indoctrination program). My guess is that Bush looked closely at Mitt Romney’s ham-handed attempts to convince primary voters that he was actually a doctrinaire right-winger (“I was a severely conservative Republican governor“) and concluded that the best course is to not fight too strongly against the notion that he’s a moderate, despite what little truth there may be to it.
In any case, this kind of ideological name-calling is a feature of nearly every presidential campaign: each candidate says, “I’m mainstream, and my opponent is a radical.” Sometimes it’s true and sometimes it isn’t, but I suspect Republicans are going to have a hard time convincing the electorate that Hillary Clinton is an ideological extremist, whatever they tell themselves.
By: Paul Waldman, Senior Writer, The American Prospect, April 7, 2015
“Rand Paul Is Already Doomed”: The Simple Reason Why He Will Never, Ever Be President
William F. Buckley Jr. once famously said that Republicans should nominate the most conservative candidate who can also win. The test has proven a surprisingly accurate predictor of the party’s presidential candidate: Mitt Romney beat the unelectable conservatives to his right; George W. Bush beat the waffling conservatives to his left.
This time around, most of the potential GOP candidates once again lack either broad electoral appeal (Ted Cruz) or the credentials to win over the conservative base (Jeb Bush, Chris Christie). One candidate, however, has the unique distinction of failing both of Buckley’s criteria: Rand Paul.
The Kentucky senator, who officially announced his presidential run on Tuesday, is perhaps alone among Republican candidates in being both insufficiently right-wing and too far outside the mainstream of American politics. Because of these twin weaknesses, Paul is spectacularly ill-suited to capture his party’s nomination.
Paul’s problems with the right are legion, but it’s his foreign policy views — from ISIS to Russia to Cuba — that most obviously separate him from conservatives. On Iran, for instance, the Republican Congress has repeatedly flayed President Obama for failing to confront the dire threat posed by the ayatollahs. But in 2007, Paul said that “…If you look at it intellectually, look at the evidence that Iran is not a threat. Iran cannot even refine their own gasoline,” according to Bloomberg News.
As his presidential campaign drew near, Paul lurched to put himself closer to the mainstream of the Republican party. But even if he now falls completely in lockstep with conservatives, it’s hard to imagine how Paul can escape the shadow of his former statements. In 2009, for instance, Paul suggested that former Vice President Dick Cheney wanted to invade Iraq to benefit his former employer, Halliburton. Then there was his policy speech on the Ukraine last year, which the National Review called “bizarre and delusional.” There’s also Paul’s flip-flopping on the legality of drone strikes.
Conservatives are clearly unconvinced by the reinvention, and Paul’s opponents are already jumping at the chance to portray him as an isolationist unconcerned about global terrorism. Sen. Lindsey Graham, a possible presidential candidate, said this week that Paul is “to the left of Barack Obama” on foreign policy. Conservative hawks have already purchased $1 million in advertising to portray Paul as dangerous on foreign policy, according to The New York Times.
Paul, of course, is not alone among GOP contenders in facing challenges winning over the right-wing. Jeb Bush, in particular, has already been criticized for his (allegedly) conciliatory views on immigration and education. Romney was able to overcome similar suspicions on the right.
The difference is that where Bush’s heresies broaden his possible base of support, Paul’s actually make him less appealing in a general election. Romney could plausibly argue that his history of working with Democrats in Massachusetts made him more likely to beat Obama. Jeb Bush can rightfully claim that a more humane immigration policy will give Republicans a better shot with Hispanic voters.
Though infuriating to conservatives, these appeals to electoral realities won valuable insider support for Romney. They’ve proven similarly effective at giving Bush the edge in the “invisible primary” with the establishment. But what comparable electoral advantage could Paul claim from his controversial heterodoxies on foreign policy? And that’s before we even mention his policy quirks outside the realm of international relations — like, for example, the strange beliefs about monetarism he inherited from his father (the economically dubious suggestion that America return to the gold standard chief among them). His more humane approach to criminal sentencing is similarly unlikely to win over conservatives.
And so, even as Paul launches his campaign in earnest, one thing is certain about the 2016 race: We don’t know who the Republicans will nominate for president. We just know it won’t be Rand Paul.
By: Jeff Stein, a recent Cornell graduate and The Editor of the Ithaca Voice; Salon, April 7, 2015
“The Latest Illustration Of Delusional Paranoia”: Dick Cheney’s Ongoing Descent Into Insanity Accidentally Clarifies Iran Debate
Every so often Dick Cheney will appear in public to vocalize his latest irritable mental gesture. Today he appeared with right-wing radio host Hugh Hewitt to assert the following: “I vacillate between the various theories I’ve heard, but you know, if you had somebody as president who wanted to take America down, who wanted to fundamentally weaken our position in the world and reduce our capacity to influence events, turn our back on our allies and encourage our adversaries, it would look exactly like what Barack Obama’s doing.”
Cheney’s regular utterances tend to meld together into an undifferentiated belligerent growl, but in this case he is (inadvertently) telling us something useful. The former vice-president is endorsing, or at least half-endorsing, the right-wing belief that to dismiss Barack Obama as a naif and a failure is far too kind. No, Obama is carrying out a secret plan to undermine American power. Versions of this theory have been fleshed out by such figures as Rush Limbaugh, Rudy Giuliani, and Dinesh D’Souza. They hold that Obama, driven by well-hidden black rage, seeks to humiliate the country that has oppressed African-Americans. This line of thought, while too deranged for Republican leaders to publicly endorse, has a great deal of influence among conservatives. Cheney’s comments serve as the latest illustration of the delusional paranoia running through even the very highest levels of the Republican Party.
Cheney’s logic also helpfully (and, again, inadvertently) illustrates the dilemma surrounding the current debate over Iran’s nuclear program. Like all Republican officeholders and some Democratic ones, Cheney thinks Obama has struck a weak deal with Iran. Unlike most of them, Cheney suspects Obama has done so not out of naïveté but out of a cunning plan to actually encourage the Iranian nuclear program.
But what if we apply Cheney’s analytic method to his own administration’s Iran policy? After all, it was under the Bush administration that the Iranian nuclear program flourished, bringing the regime from 164 to 8,000 centrifuges. Even so hawkish a failure as Lindsey Graham concedes that the previous administration utterly botched the task of preventing a nuclear Iran. (“I think the Bush administration, they were a miserable failure when it came to controlling Iran’s nuclear ambition,” Graham said.)
What’s more, the expansion of Iran’s power under Bush was not limited to the blossoming of its nuclear program. In 2003, an extremely hostile neighboring regime (that had launched a war against it two decades before) was deposed, creating a power vacuum that Iran filled. Cheney seems to have played a role there. A Cheney-style analysis of the Bush administration’s Iran policy would conclude that it was carrying out a deliberate plan to elevate Iran’s standing.
Such a conclusion would obviously be insane. But it happens to fit the facts far more tightly than the same conclusion about Obama’s Iran policy. And this, in turn, reminds us that the most plausible real-world alternative to Obama’s Iran deal is not some “better deal.” The alternative is either war or threatening war while refusing to negotiate.
It is true that the deal Obama struck is probably not going to leave the Middle East a terribly secure place. Iran will most likely test the international community’s willingness to uphold the letter of the agreement, and its willingness to reimpose sanctions if and when Iran violates its terms. History shows that containing the nuclear ambitions of a determined state is extremely hard. Obama’s approach implicitly acknowledges the limits of American leverage, trading away its maximal demand to end all Iranian nuclear work completely in return for pragmatic concessions (like the elimination of advanced centrifuges, and the establishment of a vigorous inspection regime) that at least offer a chance to contain Iran’s race to the bomb. The Bush approach claimed to deny Iran any right whatsoever to nuclear research, but its actual success at holding this line was less than nothing.
The Bush administration has been out of power long enough to allow Obama’s critics to conveniently forget how the conservative Iran strategy actually operates in practice; Cheney’s comments offer a timely reminder.
By: Jonathan Chait, Daily Intelligencer, New York Magazine, April 8, 2015
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