“A Pledge To Ensure Failure, No Matter The Consequences”: Koch Brothers Push GOP Officials To Sign Anti-Climate Pledge
The Republican Party is certainly fond of its pledges. Grover Norquist, of course, has his infamous anti-tax pledge that has interfered with federal policymaking in recent decades, and in 2011, GOP presidential candidates were pushed to endorse an anti-gay pledge from the National Organization for Marriage.
But as it turns out, there’s another pledge that’s taken root in Republican politics that’s received far less attention. The New Yorker‘s Jane Mayer reports this week on the “No Climate Tax Pledge” pushed by Charles and David Koch.
Starting in 2008, a year after the Supreme Court ruled that the Environmental Protection Agency could regulate greenhouse gasses as a form of pollution, accelerating possible Congressional action on climate change, the Koch-funded nonprofit group, Americans for Prosperity, devised the “No Climate Tax” pledge. It has been, according to the study, a component of a remarkably successful campaign to prevent lawmakers from addressing climate change. Two successive efforts to control greenhouse-gas emissions by implementing cap-and-trade energy bills died in the Senate, the latter of which was specifically targeted by A.F.P.’s pledge.
By now, [411] current office holders nationwide have signed the pledge. Signatories include the entire Republican leadership in the House of Representatives, a third of the members of the House of Representatives as a whole, and a quarter of U.S. senators.
The pledge, uncovered as part of a two-year study by the Investigative Reporting Workshop at American University, forces policymakers to oppose any legislation relating to climate change unless it is accompanied by an equivalent amount of tax cuts.” [Updated: see below]
And what, pray tell, do tax cuts have to do with the climate crisis and effects of global warming? Nothing in particular, but the Koch brothers hope to make it impossible to pass any bills related to carbon emissions, and by demanding tax cuts, they’re effectively eliminating any credible policy options — as Mayer explained, “Since most solutions to the problem of greenhouse-gas emissions require costs to the polluters and the public, the pledge essentially commits those who sign to it to vote against nearly any meaningful bill regarding global warning, and acts as yet another roadblock to action.”
When President Obama unveiled his fairly ambitious new climate agenda last week, some hoped it would spur broader action in Washington. There’s still room for a comprehensive climate policy that may be more effective than the administration using the Clean Air Act to limit emissions, but it would require Congress to work towards a sensible, consensus remedy. Republicans don’t like the White House policy? Fine, it’s time policymakers sat down with environmentalists and industries to work on an alternative.
Of course, Congress can’t do much of anything with a radicalized House majority, and climate legislation appears completely out of the question — the Koch brothers have a pledge to ensure failure, no matter the consequences.
This is why we can’t have nice things.
* Update: The exact language of the pledge reads as follows: “I, ______________________, pledge to the taxpayers of the state of ______________— and to the American people that I will oppose any legislation relating to climate change that includes a net increase in government revenue.” The Koch-financed opponents of combating the climate crisis see this as different from Mayer’s description, though it’s worth emphasizing that since any meaningful policy would generate revenue, the pledge would effectively call for tax cuts to guarantee revenue neutrality. As for why far-right anti-climate activists would oppose new government revenue — which could ostensibly be applied to deficit reduction, which conservatives occasionally pretend to care about — your guess is as good as mine.
By: Steve Benen, The Maddow Blog, July 3, 2013
“Gotta Nuke Something”: House Republicans Eyeing New Hostage Opportunity
The House Republicans are contemplating a new budget-hostage strategy, the Washington Post reports in a story that is both highly useful and inadvertently Onion-esque. The hallmark of Onion news reporting is conveying insanity as if it were sane in a completely deadpan way. The news contained within the story is that the House GOP is thinking of tying the next increase in the debt ceiling to tax reform. Under this proposed strategy, the Post reports, “The debt limit might be raised for only a few months, with the promise of another increase when tax reform legislation passes the Senate.”
If you didn’t fall out of your chair when reading that apparently anodyne sentence, let me explain why you should have. In 2011, House Republicans undertook a novel and radically new dangerous political tactic of using the debt limit as a political bargaining chip. Before, the opposition party had treated the debt limit increase as a necessary step, though one they would posture over and use to flay the administration. (Senator Barack Obama followed this pattern.) The Republicans instead decided to actually threaten not to raise the debt ceiling unless Obama granted them policy concessions. This was extraordinarily risky. By mixing together a vote that was needed to prevent economic calamity with inherently contentious debates over the size of government, it turned routine budget disputes into a financial Cuban Missile Crisis.
The official party rationale for this extraordinary tactic was that, risky though it may be to fail to lift the debt ceiling, failing to reduce the debt was even riskier. An extreme imminent crisis justified extreme tactics. The risk of becoming Greece outweighed the risk of a debt-limit snafu (though it was not, of course, high enough to justify even a partial repeal of the Bush tax cuts).
President Obama has taken these arguments at face value, offering to meet the opposition halfway, or more than halfway, in order to strike a deal. He has publicly offered significant cuts to spending on retirement programs. But some Republicans don’t want that deal, the Post reports, because “The proposals, included in the president’s budget request, outraged seniors, and some Republicans fear that embracing them would be political suicide.”
Oh! So you threaten to melt down the world economy unless Obama agrees to cut spending on retirement programs, and then he offers to do that, and then you decide it’s too unpopular?
The decision that they no longer care about the thing they were prepared to unleash worldwide economic havoc to achieve has not caused them to abandon the debt ceiling as a hostage. (It’s the party’s Nelson Muntz–ian approach to resolving policy disagreements: “Gotta nuke something.”) If obtaining retirement cuts went from so urgent it was worth threatening to nuke the world economy over to “meh,” the next step is to figure out the next thing to nuke the world economy over. That thing, the Post reports, is tax reform.
But what is the GOP position on tax reform? It’s that tax reform must cut tax rates and not raise any revenue at all. So House Republicans are prepared to refuse to raise the debt ceiling unless Democrats agree to let them cut tax rates without increasing revenue. Their extraordinary threat, first presented as a way to force a reduction in the deficit, is now being wielded to prevent a reduction in the deficit.
By: Jonathan Chait, Daily Intelligencer, New York Magazine, April 29, 2013
“Ideas That Work For Whom?”: A Not So Subtle Regressive Message From The GOP
Every Saturday morning, President Obama releases a weekly address, issued over the air and on radio, followed by an official Republican response. Ordinarily, they’re intended to reinforce the parties’ message of the week, or push some new initiative, and they’re not especially newsworthy.
But this week’s GOP address, delivered by Kansas Gov. Sam Brownback (R), struck me as more interesting than most.
National party leaders selected Brownback so that he could tout Kansas’ new tax policies, which Republicans apparently now consider a model for the nation. The governor specifically called his tax agenda an example of “ideas that work.”
“They involve a more focused government that costs less. A taxing structure that encourages growth. An education system that produces measurable results. And a renewed focus on the incredible dignity of each and every person, no matter who they are.”
The next question, of course, is, “Ideas that work for whom?”
Brownback’s initial approach to tax reform was ludicrously regressive — sharply reducing tax rates for the wealthy, while punishing the poor. For his next phase of “tax reform,” the Kansas governor, with the help of a Kansas GOP legislature that’s been purged of moderates, intends to eliminate the state income tax altogether, while making matters even worse for families that are already struggling by raising sales taxes, eliminating the mortgage interest deduction, and scrapping tax credits for things like food and child care.
Did I mention that Brownback brought on Arthur Laffer, of all people, as a tax policy adviser? Well, he did.
Remember to keep the larger context in mind: Brownback’s agenda is awful for Kansas, but Republican Party officials at the national level chose the governor to deliver their weekly address, not just because they heartily endorse his tax policies, but because they want to see them implemented elsewhere. Indeed, with a debate over tax reform on the horizon, GOP leaders in Washington are sending a not-so-subtle signal: Brownback’s regressive vision is the kind of plan they have in mind.
By: Steve Benen, The Maddow Blog, April 8, 2013
“Greed Has Not Been So Good”: The Private Sector Does Not Produce Public Virtue
Ever since he first proposed it in the same year Thomas Jefferson declared all men to be created equal, people have been delighted and beguiled by the hidden workings of Adam Smith’s famous “invisible hand.”
For a millennia or more, humans who marveled at the orderly movements of the heavens sought to invent some system to explain and predict the comings and goings of the planets. And so, it was entirely inevitable that in the fullness of time people would seek to impose the cosmic reliability of celestial mechanics onto more terrestrial phenomenon as well, like economics.
“Let the market decide!” That has been the battle cry of free market aficionados from the day Adam Smith first suggested that private avarice might transubstantiate into public virtue right through to the unspoken suppositions buried deep within Congressman Paul Ryan’s god-awful budget that tax cuts pay for themselves and the whole point of national fiscal policy is to lift from the minds of America’s job-producing investor class the dark clouds of “uncertainty.”
But what if the laissez faire conception of the free market doesn’t hold up any better than did the Ptolemaic vision of an earth-centered solar system that very nearly got Galileo burned at the stake for contradicting?
What if private vice doesn’t produce public virtue at all, as Adam Smith surmised, but rather invites a heedless and reckless pursuit of private profit that leads inexorably to public catastrophe? That was the conclusion which the Chicago-school conservative Richard Posner reluctantly reached after sifting through the rubble following the collapse of capitalism in 2008.
In his 2009 diagnosis of the most recent financial crisis, The Failure of Capitalism, Posner concluded that the fundamental problem with free market capitalism is that behavior which is perfectly rational when pursued by individuals, and individual firms, is disastrous when that behavior is aggregated across the entire society.
The micro-economic laws of supply and demand that tell an economic participant how to use the price mechanism to maximize profits, in other words, are worse than worthless as a macro-economic guide for the national policymaker whose aim is, not profits, but the productivity and prosperity of the economy as a whole.
It makes perfect sense for the consumer to buy when the market is strong and save when it is weak, “but by doing this they make the downturn worse,” says Posner, since from the standpoint of the overall society “we want people to save when times are good and spend when times are bad.”
Likewise, it can be rational to ride one of the serial economic bubbles that have become all too commonplace since high finance replaced making things as America’s signature industry — even if you know it is a bubble — since the individual investor can never know when that bubble will burst. And until it does, says Posner, there are lots of profits to lose if one climbs off the bubble too soon.
As a former Citigroup CEO put it: “When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing you got to get up and dance. And we’re still dancing.”
Because risk and return are positively correlated, Posner says a firm that plays it safe is, paradoxically, “courting failure because investors will turn elsewhere.”
Likewise, while a “cascade” of bank failures could bring the economy to a halt, Posner says “no individual bank has an incentive to take measures to avoid such a consequence.”
That is why, he says, it may be risky to follow the herd, but it is not irrational.
Since the 2008 collapse, the media has been on high alert (unlike the government) for the scoundrels and knaves who brought our economy to grief. But in apportioning blame, Posner says “there is no need to bring cognitive quirks, emotional forces, or character flaws into the causal analysis.”
The “rational maximization” of businessmen and consumers all legally pursuing their self-interest, together and intelligently, within a framework of property and contract rights, was all it took to “set the stage for economic catastrophe.”
It’s this “rational indifference” to the consequences of one’s own business and consumption behavior — an indifference baked into the very nature of the “free” market itself — that explains why government has a duty to do more than merely prevent fraud, theft and other infringements of property and contract rights, even though this “is the only duty that libertarians believe government has,” as Posner says.
Government also has an obligation to regulate financial behavior, says Posner, for without such regulation “the rational behavior of law abiding financiers and consumers can precipitate economic disaster.”
Given the structural deficiencies of the free market and the perverse, self-destructive incentives it creates, it was probably smart for conservatives to shift the focus of their cheerleading away from capitalism’s economic performance and towards laissez faire’s imagined moral underpinnings instead — freedom, liberty, individualism and all of that. That’s because, as an economic incentive that promises broad-based prosperity, greed, it turns out, has not been so good.
By: Ted Frier, Open Salon Blog, Salon, March 21, 2013
“After The Flimflam”: Little By little, Washington’s Fog Of Fiscal Austerity Seems To Be Lifting
It has been a big week for budget documents. In fact, members of Congress have presented not one but two full-fledged, serious proposals for spending and taxes over the next decade.
Before I get to that, however, let me talk briefly about the third proposal presented this week — the one that isn’t serious, that’s essentially a cruel joke.
Way back in 2010, when everybody in Washington seemed determined to anoint Representative Paul Ryan as the ultimate Serious, Honest Conservative, I pronounced him a flimflam man. Even then, his proposals were obviously fraudulent: huge cuts in aid to the poor, but even bigger tax cuts for the rich, with all the assertions of fiscal responsibility resting on claims that he would raise trillions of dollars by closing tax loopholes (which he refused to specify) and cutting discretionary spending (in ways he refused to specify).
Since then, his budgets have gotten even flimflammier. For example, at this point, Mr. Ryan is claiming that he can slash the top tax rate from 39.6 percent to 25 percent, yet somehow raise 19.1 percent of G.D.P. in revenues — a number we haven’t come close to seeing since the dot-com bubble burst a dozen years ago.
The good news is that Mr. Ryan’s thoroughly unconvincing policy-wonk act seems, finally, to have worn out its welcome. In 2011, his budget was initially treated with worshipful respect, which faded only slightly as critics pointed out the document’s many absurdities. This time around, quite a few pundits and reporters have greeted his release with the derision it deserves.
And, with that, let’s turn to the serious proposals.
Unless you’re a very careful news reader, you’ve probably heard about only one of these proposals, the one released by Senate Democrats. And let’s be clear: By comparison with the Ryan plan, and for that matter with a lot of what passes for wisdom in our nation’s capital, this is a very reasonable plan indeed.
As many observers have pointed out, the Senate Democratic plan is conservative with a small “c”: It avoids any drastic policy changes. In particular, it steers away from draconian austerity, which is simply not needed given ultralow U.S. borrowing costs and relatively benign medium-term fiscal projections.
True, the Senate plan calls for further deficit reduction, through a mix of modest tax increases and spending cuts. (Incidentally, the tax increases still fall well short of those called for in the Bowles-Simpson plan, which Washington, for some reason, treats as something close to holy scripture.) But it avoids large short-run spending cuts, which would hobble our recovery at a time when unemployment is still disastrously high, and it even includes a modest amount of stimulus spending.
So we could definitely do worse than the Senate Democratic plan, and we probably will. It is, however, an extremely cautious proposal, one that doesn’t follow through on its own analysis. After all, if sharp spending cuts are a bad thing in a depressed economy — which they are — then the plan really should be calling for substantial though temporary spending increases. It doesn’t.
But there’s a plan that does: the proposal from the Congressional Progressive Caucus, titled “Back to Work,” which calls for substantial new spending now, temporarily widening the deficit, offset by major deficit reduction later in the next decade, largely though not entirely through higher taxes on the wealthy, corporations and pollution.
I’ve seen some people describe the caucus proposal as a “Ryan plan of the left,” but that’s unfair. There are no Ryan-style magic asterisks, trillion-dollar savings that are assumed to come from unspecified sources; this is an honest proposal. And “Back to Work” rests on solid macroeconomic analysis, not the fantasy “expansionary austerity” economics — the claim that slashing spending in a depressed economy somehow promotes job growth rather than deepening the depression — that Mr. Ryan continues to espouse despite the doctrine’s total failure in Europe.
No, the only thing the progressive caucus and Mr. Ryan share is audacity. And it’s refreshing to see someone break with the usual Washington notion that political “courage” means proposing that we hurt the poor while sparing the rich. No doubt the caucus plan is too audacious to have any chance of becoming law; but the same can be said of the Ryan plan.
So where is this all going? Realistically, we aren’t likely to get a Grand Bargain any time soon. Nonetheless, my sense is that there is some real movement here, and it’s in a direction conservatives won’t like.
As I said, Mr. Ryan’s efforts are finally starting to get the derision they deserve, while progressives seem, at long last, to be finding their voice. Little by little, Washington’s fog of fiscal flimflam seems to be lifting.
By: Paul Krugman, Op-Ed Columnist, The New York Times, March 14, 2013
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