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
The White Working Class: The Most Pessimistic Group In America
Almost no one noticed, but around George W. Bush’s reelection in 2004, the nation crossed a demographic milestone.
From Revolutionary days through 2004, a majority of Americans fit two criteria. They were white. And they concluded their education before obtaining a four-year college degree. In the American mosaic, that vast white working class was the largest piece, from the yeoman farmer to the welder on the assembly line. Even as late as the 1990 census, whites without a college degree represented more than three-fifths of adults.
But as the country grew more diverse and better educated, the white working-class share of the adult population slipped to just under 50 percent in the Census Bureau’s 2005 American Community Survey. That number has since fallen below 48 percent.
The demographic eclipse of the white working class is likely an irreversible trend as the United States reconfigures itself yet again as a “world nation” reinvigorated by rising education levels and kaleidoscopic diversity. That emerging America will create opportunities (such as the links that our new immigrants will provide to emerging markets around the globe) and face challenges (including improving high school and college graduation rates for the minority young people who will provide tomorrow’s workforce).
Still, amid all of this change, whites without a four-year college degree remain the largest demographic bloc in the workforce. College-educated whites make up about one-fifth of the adult population, while minorities account for a little under one-third. The picture is changing, but whites who have not completed college remain the backbone of many, if not most, communities and workplaces across the country.
They are also, polls consistently tell us, the most pessimistic and alienated group in American society.
The latest measure of this discontent came in a thoughtful national survey on economic opportunity released last week by the Pew Charitable Trusts’ Economic Mobility Project. If numbers could scream, they would probably sound like the poll’s results among working-class whites.
One question asked respondents whether they expected to be better off economically in 10 years than they are today. Two-thirds of blacks and Hispanics said yes, as did 55 percent of college-educated whites; just 44 percent of noncollege whites agreed. Asked if they were better off than their parents were at the same age, about three-fifths of college-educated whites, African-Americans, and Hispanics said they were. But blue-collar whites divided narrowly, with 52 percent saying yes and a head-turning 43 percent saying no. (The survey, conducted from March 24 through 29, surveyed 2,000 adults and has a margin of error of ±3.4 percent.)
What makes these results especially striking is that minorities were as likely as blue-collar whites to report that they have been hurt by the recession. The actual unemployment rate is considerably higher among blacks and Hispanics than among blue-collar whites, much less college-educated whites.
Yet, minorities were more optimistic about the next generation than either group of whites, the survey found. In the most telling result, 63 percent of African-Americans and 54 percent of Hispanics said they expected their children to exceed their standard of living. Even college-educated whites are less optimistic (only about two-fifths agree). But the noncollege whites are the gloomiest: Just one-third of them think their kids will live better than they do; an equal number think their children won’t even match their living standard. No other group is nearly that negative.
This worry is hardly irrational. As Massachusetts Institute of Technology economists Frank Levy and Tom Kochan report in a new paper, the average high-school-educated, middle-aged man earns almost 10 percent less than his counterpart did in 1980. Minorities haven’t been exempt from that trend: In fact, high-school-educated minority men have experienced even slower wage growth than their white counterparts over the past two decades, calculates Larry Mishel, president of the liberal Economic Policy Institute.
But for minorities, that squeeze has been partially offset by the sense that possibilities closed to their parents are becoming available to them as discrimination wanes. “The distinction is, these blue-collar whites see opportunities for people like them shrinking, whereas the African-Americans [and Hispanics] feel there are a set of long-term opportunities that are opening to them that were previously closed on the basis of race or ethnicity,” said Mark Mellman, a Democratic pollster who helped conduct the Pew survey.
By contrast, although it is difficult to precisely quantify, the sense of being eclipsed demographically is almost certainly compounding the white working class’s fear of losing ground economically. That huge bloc of Americans increasingly feels itself left behind–and lacks faith that either government or business cares much about its plight. Under these pressures, noncollege whites are now experiencing rates of out-of-wedlock birth and single parenthood approaching the levels that triggered worries about the black family a generation ago. Alarm bells should be ringing now about the social and economic trends in the battered white working class and the piercing cry of distress rising from this latest survey.
By: Ronald Brownstein, Political Director, The Atlantic, May 27, 2011
The GOP’s Apology Primary: Love Means Always Having To Say You’re Sorry
In the 2012 Republican presidential race, love apparently means always having to say you’re sorry.
On an array of issues, the field of GOP contenders is facing enormous pressure from an ascendant conservative base to renounce earlier positions that challenged orthodoxy on the right. Their response to those demands could cast a big shadow over not only next year’s Republican primary but also the general-election contest against President Obama.
The emergence of these pressures testifies to a decisive shift in the GOP’s balance of power. The ideas now drawing the most fire from conservative activists–including support for a cap-and-trade system to limit greenhouse-gas emissions, a mandate on individuals to purchase health insurance, and a pathway to citizenship for illegal immigrants–all flowered in Republican circles during the middle years of George W. Bush’s presidency, especially among governors.
In different ways, each of these proposals embodied the common belief that Republicans had to broaden their message beyond a conventional conservative argument focused almost exclusively on reducing government spending, taxes, and regulation. Intellectually, these initiatives reflected an impulse to redefine conservatism in ways that accepted a role for government in empowering individuals or promoting market-based solutions. Politically, they reflected the belief that to build a lasting majority, Republicans needed to attract more minority voters, especially Hispanics, and to loosen the Democratic hold on blue states by reclaiming more suburban independents.
At varying points, this tendency operated under different names, including “compassionate conservatism” and “national greatness conservatism.” But the shared belief “was the sense that the Republican Party, in order to revitalize itself, needed to … show that it had modernized,” said Pete Wehner, who directed the Office of Strategic Initiatives in Bush’s White House.
Behind that conviction, Bush and the Republican-controlled Congress in 2003 created an entitlement by establishing the Medicare prescription drug benefit. In 2006, with Bush’s support, 23 GOP senators voted with 39 Democrats to provide a pathway to citizenship for illegal immigrants.
In the states, this instinct produced health care reform proposals from Govs. Mitt Romney in Massachusetts and Arnold Schwarzenegger in California that centered on an individual mandate, as well as initiatives from many GOP governors to promote alternative energy and to impose mandatory limits on the carbon emissions linked to global climate change. Republican governors played driving roles in creating regional multistate alliances to limit carbon emissions in the Midwest (Tim Pawlenty in Minnesota); the Northeast (George Pataki in New York); and the West (Jon Huntsman in Utah and Schwarzenegger). Huntsman joined then-Gov. Janet Napolitano of Arizona in 2006 to produce a bipartisan Western governors’ plan that favored legalization over deportation for illegal immigrants.
Many hard-core conservatives always bristled at these initiatives. But in those years, they lacked the leverage to entirely suppress them. Now, though, the party’s most conservative elements have clearly regained the upper hand. The tipping point was the election of Barack Obama and his pursuit of an agenda that significantly expanded Washington’s reach across many fronts. His initiatives produced a powerful back-to-basics reaction among Republicans.
The result has been to revert the party’s message toward one focused almost solely on shrinking government. “Obama, by the way he governed, shifted the debate into a much more traditional Democratic-Republican divide over the role of government,” notes Wehner, now a senior fellow at the conservative Ethics and Public Policy Center. “That’s pushed to the side or capsized these other issues.”
That dynamic has left the 2012 GOP contenders facing multiplying demands to abandon and apologize for positions they took in what now looks like a brief period of Republican glasnost.
Pawlenty has already apologized for imposing carbon limits in Minnesota but hasn’t yet renounced his parallel support for requiring utilities to generate more of their power from renewable sources, which some conservatives have also demanded. Huntsman, as he considers the race, has abandoned his previous climate policies but not yet walked back his tilt toward legalization for illegal immigrants. Romney renounced his favorable comments about legalizing undocumented immigrants (as well as his earlier backing of abortion rights) during his 2008 run, but he drew a surprisingly firm line this month by reaffirming his support for his health insurance mandate in Massachusetts. Newt Gingrich, who has faced similar complaints about his earlier support for an individual mandate and efforts to control carbon emissions, hasn’t fully tossed aside either.
These maelstroms leave the candidates without many good options. To dig in behind earlier positions promises unending collisions with conservatives (as Romney has now done on health care). But abandoning too many positions under pressure could open the eventual nominee to effective attacks from Democrats. “If these candidates are now sliding back on things they once believed, it raises questions about whether they can be a strong leader,” says Bill Burton, the former deputy White House press secretary who is heading an independent Democratic campaign effort for 2012. If voters agree, the 2012 Republicans may feel sorry later for saying sorry so often now.
By: Ronald Brownstein, Political Director, Atlantic Media, The Atlantic, May 20, 2011
“Republican Virtues”: I Don’t Think So
I’ve been mulling over a column by David Brooks on “The Politics of Solipsism” for the past couple of weeks. What he wrote is nervy to say the least. He argues that America has lost the republican virtues on which it was founded, namely, the curbing of self-centeredness in the interest of the public good. I too am a fan of Cicero, but Brooks fails in one of the primary republican virtues by not forthrightly acknowledging that Republicans, the adherents of Ayn Rand, are the ones who have most blatantly deserted these same virtues. Self interest has center stage on their platform.
Brooks praises Truman and Eisenhower, but he fails to mention that it was President Kennedy who repeatedly challenged Americans and asked them to sacrifice. He urged us to go to the moon because it was tough, not because it was easy. And when my father, Robert Kennedy, was running for president and medical students asked him who would pay for more health care for the poor, he quickly answered, “You will.”
Contrary to the Republican philosophy, summed up by Ronald Reagan, that government is the problem, John and Robert Kennedy considered politics an honorable profession and affirmed that government was the place where we “make our most solemn common decisions.”
Both my uncle and my father knew that America is at its best when its citizens are willing to give up something for others. That was the spirit in which they committed themselves to public service. Ultimately they both gave their lives in the service of their country.
Like my father and my uncle, I believe that serving the public good is the essential republican virtue. In fact I led the effort to make Maryland the first and still only state in the country where community service is a condition of high school graduation. I did this because I believe that virtue comes from habits developed, not sermons given. Aristotle said, “we become house builders by building houses, we become harp players by playing the harp, we grow to be just by doing just actions.”
Republican governors are making their mark attacking public servants. They’re laying off citizens who exemplify republican virtues like teaching in inner city schools, fighting drug cartels, and rushing into burning buildings. Why? So that those who make outrageous salaries can pay lower taxes.
Brooks says that Republicans want growth, but I see no evidence that they want growth for anyone but the most well off. Where is the commitment to education, to infrastructure, to science?
Brooks commends Paul Ryan for sending the message that “politics can no longer be about satisfying voters’ immediate needs.” And yet Ryan would give the rich even more of a tax break at a time when our taxes are the lowest in three decades.
George Washington, whom Brooks also praises, would be surprised that the rich are being asked to shoulder less of a burden. He supported excise taxes that would fall disproportionately on the wealthy. When he went to war, he brought his wife, Martha, to share the hard, cold winter of Valley Forge along with him.
The wealthy have a special responsibility. From those who have been given much, much will be asked. In a true republic, people of wealth and privilege are first in line to serve in government, go to war, contribute to the honor and glory of their country. They set the nation’s values. If what they value is money, money, money, then the country will follow.
After 9/11, George Bush asked us to shop. At just the moment when he could have called us to a cause greater than ourselves, he (apparently on the advice of Karl Rove) urged us to step up for new TVs and designer bags rather than for the public good.
So if Brooks really wants to put an end to the politics of solipsism, he must take on the Republican party itself, which has done so little to cultivate the virtues of service, sacrifice, and commitment to country.
Please don’t lecture us about solipsism and republican virtues when it’s Republicans who are the ones who have made such a virtue of self interest.
By: Kathleen Kennedy Townsend, The Atlantic, May 22, 2011
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