In a moment of sanity, George HW Bush once called Ronald Reagan’s proposal for tax cuts “voodoo economics.” The idea was that tax cuts for the wealthy would somehow “trickle down” to the rest of us and grow the economy. Bush eventually had to embrace the idea as Reagan’s vice president, but later as president himself, he paid the price when he had to abandon his “no new taxes” pledge because the tax cuts accomplished nothing more than to blow up the federal budget deficit.
Along came President Clinton, who raised taxes on the wealthy (something that seems to have been forgotten in this presidential primary) and we witnessed the first budget surplus in generations. Next came George W. Bush, who cut taxes with the same result – a huge budget deficit compounded by wars and the Great Recession. At that point we were treated to the “wisdom” of VP Dick Cheney who quipped that “deficits don’t matter.” Of course that only lasted until Barack Obama became president and all of a sudden it became a national crisis. Eventually President Obama raised taxes on the wealthy once again, and cut the deficit by two thirds.
At some point, one has to wonder how long Republicans can continue their love affair with trickle-down economics. And yet all three presidential candidates continue to espouse the idea that tax cuts for the wealthy will make the economy grow.
The failure of trickle-down has been demonstrated in states as well as at the national level. We’ve all watched as the Republican governors of Kansas, Louisiana and Wisconsin failed to grow their economies by providing massive tax cuts to the wealthy. The most extreme case for years now has been Gov. Brownback in Kansas.
Brownback took office on a pledge to make Kansas friendlier to business and successfully sought to cut the top personal income tax rate by 29 percent and exempt more than 330,000 farmers and business owners from income taxes. The moves were popular in a Legislature where the GOP holds three-quarters of the seats.
Rather than grow the economy, that resulted in things like the following:
Last month, Brownback ordered $17 million in immediate reductions to universities and earlier this month delayed $93 million in contributions to pensions for school teachers and community college employees. The state has also siphoned off more than $750 million from highway projects to other parts of the budget over the past two years.
With the 2016 election on the horizon and the state budget still in crisis, it looks like some Republicans may be questioning their commitment to voodoo economics.
Now many of the same Republicans who helped pass Brownback’s plan are in open revolt, refusing to help the governor cut spending so he can avoid rolling back any of his signature tax measures.
If Brownback won’t reconsider any of the tax cuts, they say, he will have to figure out for himself how to balance the budget in the face of disappointing revenue.
“Let him own it,” Republican Rep. Mark Hutton said. “It’s his policy that put us there.”
While Rep. Hutton’s remarks won’t win him a “profile in courage” award, the Republican proposal at this point – which Brownback rejected – is to repeal the personal income tax break for farmers and business owners to raise an additional $200 million to $250 million a year.
George HW Bush knew that trickle-down was just another name for voodoo economics. Now it sounds like a few Republicans in Kansas are figuring that out. But I don’t hold out a lot of hope that this kind of awareness will be contagious in the GOP. After all, acquaintance with facts and reality is clearly not their strong suit these days.
By: Nancy LeTourneau, Political Animal Blog, The Washington Monthly, April 19, 2016
“Real Incremental Progress Is Happening In Blue States”: State Legislatures,The Primary Vehicles For Real Progressive Action
It’s often easy to become discouraged at the state of national politics. Given Republican control of the House, there’s very little chance of either Clinton’s or Sanders’ policy priorities going anywhere. But that doesn’t mean that progress isn’t happening in blue states around the country.
Consider again the example of California, where rules finally went into effect allowing women to get birth control without a prescription:
Women in California of any age can now obtain birth control without a doctor’s prescription from any pharmacy in the state. Under the new rules finally in effect, any woman merely has to fill out a questionnaire at the pharmacy to get access to a variety of contraceptive measures, according to KABC. Though the new rules were technically passed by the state legislature in 2013, the law was tied up in regulatory discussions until Friday. Under the law, any woman can get self-administered hormonal birth control.
California is not the first to put this into place; Washington and Oregon already have similar laws.
This also, of course, comes on the heels of $15 minimum wages being passed in California and New York as well. California alone has a wide bevy of new progressive laws ranging from automatic voter registration to air quality standards, wage theft, sexual consent and much else. Blue states continue to be the successful laboratories of democracy where Republicans in Congress are failing to act, even as the red state economic model is being proven a failure in places like Kansas and Louisiana.
Until the 2020 census makes it easier to change control of Congress, it will remain the case that state legislatures are the primary vehicles for real progressive action. One can only hope that those seeking a political revolution will remain engaged regardless of the result of the Democratic primary, and get involved in making their states as progressive as possible until the demographic tide makes a national change in direction inevitable.
By: David Atkins, Political Animal Blog, The Washington Monthly, April 10, 2016
Remember Paul Ryan? The speaker of the House used to be a media darling, lionized as the epitome of the Serious, Honest Conservative — never mind those of us who actually looked at the numbers in his budgets and concluded that he was a con man. These days, of course, he is overshadowed by the looming Trumpocalypse.
But while Donald Trump could win the White House — or lose so badly that even our rotten-borough system of congressional districts, which heavily favors the G.O.P., delivers the House to the Democrats — the odds are that come January, Hillary Clinton will be president, and Mr. Ryan still speaker. So I was interested to read what Mr. Ryan said in a recent interview with John Harwood. What has he learned from recent events?
And the answer is, nothing.
Like just about everyone in the Republican establishment, Mr. Ryan is in denial about the roots of Trumpism, about the extent to which the party deliberately cultivated anger and racial backlash, only to lose control of the monster it created. But what I found especially striking were his comments on tax policy. I know, boring — but indulge me here. There’s a larger moral.
You might think that Republican thought leaders would be engaged in some soul-searching about their party’s obsession with cutting taxes on the wealthy. Why do candidates who inveigh against the evils of budget deficits and federal debt feel obliged to propose huge high-end tax cuts — much bigger than those of George W. Bush — that would eliminate trillions in revenue?
And economics aside, why such a commitment to a policy that has never had much support even from the party’s own base, and appears even more politically suspect in the face of a populist uprising?
But here’s what Mr. Ryan said about all those tax cuts for the top 1 percent: “I do not like the idea of buying into these distributional tables. What you’re talking about is what we call static distribution. It’s a ridiculous notion.”
Aha. The income mobility zombie strikes again.
Ever since income inequality began its sharp rise in the 1980s, one favorite conservative excuse has been that it doesn’t mean anything, because economic positions change all the time. People who are rich this year might not be rich next year, so the gap between the rich and the rest doesn’t matter, right?
Well, it’s true that people move up and down the economic ladder, and apologists for inequality love to cite statistics showing that many people who are in the top 1 percent in any given year are out of that category the next year.
But a closer look at the data shows that there is less to this observation than it seems. These days, it takes an income of around $400,000 a year to put you in the top 1 percent, and most of the fluctuation in incomes we see involves people going from, say, $350,000 to $450,000 or vice versa. As one comprehensive survey put it, “The majority of economic mobility occurs over fairly small spans of the distribution.” Average incomes over multiple years are almost as unequally distributed as incomes in any given year, which means that tax cuts that mainly benefit the rich are indeed targeted at a small group of people, not the public at large.
And here’s the thing: This isn’t a new observation. As it happens, I personally took on the very same argument Mr. Ryan is making — and showed that it was wrong — almost 25 years ago. Yet the man widely considered the G.O.P.’s intellectual leader is still making the same old claims.
O.K., maybe I’m just indulging a pet peeve by focusing on this particular subject. Yet the persistence of the income mobility zombie, like the tax-cuts-mean-growth zombie (which should have been killed, once and for all, by the debacles in Kansas and Louisiana), is part of a pattern.
Appalled Republicans may rail against Donald Trump’s arrogant ignorance. But how different, really, are the party’s mainstream leaders? Their blinkered view of the world has the veneer of respectability, may go along with an appearance of thoughtfulness, but in reality it’s just as impervious to evidence — maybe even more so, because it has the power of groupthink behind it.
This is why you shouldn’t grieve over Marco Rubio’s epic political failure. Had Mr. Rubio succeeded, he would simply have encouraged his party to believe that all it needs is a cosmetic makeover — a fresher, younger face to sell the same old defunct orthodoxy. Oh, and a last-minute turn to someone like John Kasich would, in its own way, have similar implications.
What we’re getting instead is at least the possibility of a cleansing shock — of a period in the political wilderness that will finally force the Republican establishment to rethink its premises. That’s a good thing — or it would be, if it didn’t also come with the risk of President Trump.
By: Paul Krugman, Op-Ed Columnist, The New York Times, March 21, 2016
“The Time-Loop Party”: The ‘Foxification’ Of The GOP, Saying And Doing The Same Things Over And Over And Over Again
By now everyone who follows politics knows about Marco Rubio’s software-glitch performance in Saturday’s Republican debate. (I’d say broken-record performance, but that would be showing my age.) Not only did he respond to a challenge from Chris Christie about his lack of achievements by repeating, verbatim, the same line from his stump speech he had used a moment earlier; when Mr. Christie mocked his canned delivery, he repeated the same line yet again.
In other news, last week — on Groundhog Day, to be precise — Republicans in the House of Representatives cast what everyone knew was a purely symbolic, substance-free vote to repeal Obamacare. It was the 63rd time they’ve done so.
These are related stories.
Mr. Rubio’s inability to do anything besides repeat canned talking points was startling. Worse, it was funny, which means that it has gone viral. And it reinforced the narrative that he is nothing but an empty suit. But really, isn’t everyone in his party doing pretty much the same thing, if not so conspicuously?
The truth is that the whole G.O.P. seems stuck in a time loop, saying and doing the same things over and over. And unlike Bill Murray’s character in the movie “Groundhog Day,” Republicans show no sign of learning anything from experience.
Think about the doctrines every Republican politician now needs to endorse, on pain of excommunication.
First, there’s the ritual denunciation of Obamacare as a terrible, very bad, no good, job-killing law. Did I mention that it kills jobs? Strange to say, this line hasn’t changed at all despite the fact that we’ve gained 5.7 million private-sector jobs since January 2014, which is when the Affordable Care Act went into full effect.
Then there’s the assertion that taxing the rich has terrible effects on economic growth, and conversely that tax cuts at the top can be counted on to produce an economic miracle.
This doctrine was tested more than two decades ago, when Bill Clinton raised tax rates on high incomes; Republicans predicted disaster, but what we got was the economy’s best run since the 1960s. It was tested again when George W. Bush cut taxes on the wealthy; Republicans predicted a “Bush boom,” but actually got a lackluster expansion followed by the worst slump since the Great Depression. And it got tested a third time after President Obama won re-election, and tax rates at the top went up substantially; since then we’ve gained eight million private-sector jobs.
Oh, and there’s also the spectacular failure of the Kansas experiment, where huge tax cuts have created a budget crisis without delivering any hint of the promised economic miracle.
But Republican faith in tax cuts as a universal economic elixir has, if anything, grown stronger, with Mr. Rubio, in particular, going even further than the other candidates by promising to eliminate all taxes on capital gains.
Meanwhile, on foreign policy the required G.O.P. position has become one of utter confidence in the effectiveness of military force. How did that work in Iraq? Never mind: The only reason anybody in the world fails to do exactly what America wants must be because our leadership is lily-livered if not treasonous. And diplomacy, no matter how successful, is denounced as appeasement.
Not incidentally, the shared Republican stance on foreign policy is basically the same view Richard Hofstadter famously described in his essay “The Paranoid Style in American Politics”: Whenever America fails to impose its will on the rest of the world, it must be because it has been betrayed. The John Birch Society has won the war for the party’s soul.
But don’t all politicians spout canned answers that bear little relationship to reality? No.
Like her or not, Hillary Clinton is a genuine policy wonk, who can think on her feet and clearly knows what she is talking about on many issues. Bernie Sanders is much more of a one-note candidate, but at least his signature issue — rising inequality and the effects of money on politics — reflects real concerns. When you revisit Democratic debates after what went down Saturday, it doesn’t feel as if you’re watching a different party, it feels as if you’ve entered a different intellectual and moral universe.
So how did this happen to the G.O.P.? In a direct sense, I suspect that it has a lot to do with Foxification, the way Republican primary voters live in a media bubble into which awkward facts can’t penetrate. But there must be deeper causes behind the creation of that bubble.
Whatever the ultimate reason, however, the point is that while Mr. Rubio did indeed make a fool of himself on Saturday, he wasn’t the only person on that stage spouting canned talking points that are divorced from reality. They all were, even if the other candidates managed to avoid repeating themselves word for word.
By: Paul Krugman, Op-Ed Columnist, The New York Times, February 8, 2016
So Donald Trump has unveiled his tax plan. It would, it turns out, lavish huge cuts on the wealthy while blowing up the deficit.
This is in contrast to Jeb Bush’s plan, which would lavish huge cuts on the wealthy while blowing up the deficit, and Marco Rubio’s plan, which would lavish huge cuts on the wealthy while blowing up the deficit.
For what it’s worth, it looks as if Trump’s plan would make an even bigger hole in the budget than Jeb’s. Jeb justifies his plan by claiming that it would double America’s rate of growth; The Donald, ahem, trumps this by claiming that he would triple the rate of growth. But really, why sweat the details? It’s all voodoo. The interesting question is why every Republican candidate feels compelled to go down this path.
You might think that there was a defensible economic case for the obsession with cutting taxes on the rich. That is, you might think that if you’d spent the past 20 years in a cave (or a conservative think tank). Otherwise, you’d be aware that tax-cut enthusiasts have a remarkable track record: They’ve been wrong about everything, year after year.
Some readers may remember the forecasts of economic doom back in 1993, when Bill Clinton raised the top tax rate. What happened instead was a sustained boom, surpassing the Reagan years by every measure.
Undaunted, the same people predicted great things as a result of George W. Bush’s tax cuts. What happened instead was a sluggish recovery followed by a catastrophic economic crash.
Most recently, the usual suspects once again predicted doom in 2013, when taxes on the 1 percent rose sharply due to the expiration of some of the Bush tax cuts and new taxes that help pay for health reform. What happened instead was job growth at rates not seen since the 1990s.
Then there’s the recent state-level evidence. Kansas slashed taxes, in what its right-wing governor described as a “real live experiment” in economic policy; the state’s growth has lagged ever since. California moved in the opposite direction, raising taxes; it has recently led the nation in job growth.
True, you can find self-proclaimed economic experts claiming to find overall evidence that low tax rates spur economic growth, but such experts invariably turn out to be on the payroll of right-wing pressure groups (and have an interesting habit of getting their numbers wrong). Independent studies of the correlation between tax rates and economic growth, for example by the Congressional Research Service, consistently find no relationship at all. There is no serious economic case for the tax-cut obsession.
Still, tax cuts are politically popular, right? Actually, no, at least when it comes to tax cuts for the wealthy. According to Gallup, only 13 percent of Americans believe that upper-income individuals pay too much in taxes, while 61 percent believe that they pay too little. Even among self-identified Republicans, those who say that the rich should pay more outnumber those who say they should pay less by two to one.
Well, consider the trajectory of Marco Rubio, who may at this point be the most likely Republican nominee. Last year he supported a tax-cut plan devised by Senator Mike Lee that purported to be aimed at the poor and the middle class. In reality, its benefits were strongly tilted toward high incomes — but it still drew harsh criticism from the right for giving too much to ordinary families while not cutting taxes on top incomes enough.
So Mr. Rubio came back with a plan that eliminated taxes on dividends, capital gains, and inherited wealth, providing a huge windfall to the very wealthy. And suddenly he was gaining a lot of buzz among Republican donors. The new plan would add trillions to the deficit, which conservatives claim to care about, but never mind.
In other words, it’s straightforward and quite stark: Republicans support big tax cuts for the wealthy because that’s what wealthy donors want. No doubt most of those donors have managed to convince themselves that what’s good for them is good for America. But at root it’s about rich people supporting politicians who will make them richer. Everything else is just rationalization.
Of course, once the Republicans settle on a nominee, an army of hired guns will be mobilized to obscure this stark truth. We’ll see claims that it’s really a middle-class tax cut, that it will too do great things for economic growth, and look over there — emails! And given the conventions of he-said-she-said journalism, this campaign of obfuscation may work.
But never forget that what it’s really about is top-down class warfare. That may sound simplistic, but it’s the way the world works.
By: Paul Krugman, Op-Ed Columnist, The New York Times, October 2, 2015