“He’ll Magically Make Us All Filthy Rich”: Donald Trump Is Selling American Workers A Scam
Some of our wisest political observers informed us that Brexit would be great news for Donald Trump, because it shows (somehow) that there may be more support here than expected for his nationalist message of restoring American greatness through restrictionist immigration policies and turning the clock back on globalization.
So it’s a bit surprising to see that a new Bloomberg/Morning Consult poll shows that Brexit will not influence the votes of a majority of Americans, and if anything, may benefit Hillary Clinton marginally more than Trump:
A majority of U.S. voters — 57 percent — say they don’t expect the U.K. verdict will influence their vote in the presidential election. For the roughly quarter who say it will, almost half say it will make them more likely to support Democrat Hillary Clinton, while 35 percent say Republican Donald Trump.
This is only one poll, so don’t place too much stock in it, but I wanted to highlight it to make a broader point: There is simply no reason to assume that the debate over globalization, which Trump joined with a big speech on trade yesterday, will automatically play in the Donald’s favor. Indeed, Trump is running a massive scam on American workers on many fronts, and the contrast between his positions and those of Hillary Clinton on trade and other economic matters may prove more important in the end than his blustery rhetoric.
Neil Irwin has a good piece this morning on Trump’s big trade speech, in which he pledged to rip up our trade deals with his large and powerful hands and to bring manufacturing roaring back. As Irwin notes, Trump is right to highlight the very real possibility that trade deals have badly harmed American workers, and that elites have in many respects let those workers down. (Bernie Sanders, too, is rightly calling on Democrats to fully reckon with this phenomenon.) But as Irwin also notes, Trump is selling American workers a highly simplistic, anachronistic tale that doesn’t level with them about the likelihood of reversing trends in globalization and automation that are partly responsible for workers’ current plight.
I would add an important point: Clinton is offering these workers substantially more than Trump is. Clinton has also pledged to renegotiate trade deals and to oppose the Trans-Pacific Partnership. Whether or not you see that as opportunistic, Clinton has also outlined detailed plans for programs that would try to use tax credits and federal spending to make American workers and businesses more competitive in the global economy. I am not aware of any detailed plans from Trump to do this. Trump’s message is that through his manly prowess, he will kick the asses of other countries and parasitic illegal immigrants and make us all insanely rich again, not that he sees a specific, programmatic role for the federal government in boosting wages, promoting domestic manufacturing, and helping displaced workers.
While it’s true that Trump has promised to spend on infrastructure at home, Trump’s tax plan — which confers an enormous windfall on the rich — would result in a nearly $10 trillion decline in revenues over the next decade. In practice this likely means that, unlike Clinton, he would not try to get Congress to spend substantially on helping American workers. While Clinton has vowed to invest money in helping displaced coal miners, and to invest in clean energy, Trump vaguely promises to put all those coal miners back to work again, which isn’t going to happen. Meanwhile, Clinton supports raising the federal minimum wage to at least $12 per hour. But while Trump has vaguely said workers need higher wages, he has come out for eliminating the federal minimum. Again, all he’s really saying is that he’ll magically make us all so filthy rich that we won’t have to worry ourselves with difficult policy choices. The vow that mass deportations will make the American workforce great again is also a straight-up scam.
The choice is not necessarily between Trumpian turn-back-the-clock proctectionism and throw-workers-to-the-wolves free trade. Clinton is offering up detailed plans for spending and tax credits and economic regulations that would help workers amid large economic trends she believes can’t be reversed. There is no reason to presume that Trump’s simplistic tale will carry the day politically.
By: Greg Sargent, The Plum Line Blog, The Washington Post, June 29, 2016
“On Invincible Ignorance”: The G.O.P.’s Intellectual Leader Is Still Making The Same Old Claims
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
“Completely Ridiculous Fear-Mongering”: Stop With The Zombie Lies: No, Social Security Is Not ‘Going Broke’
Even though last night’s Republican debate featured precious little discussion of the size of the candidates’ hands, there was plenty to be disappointed and angered by. The moment that perturbed me the most was when CNN’s Dana Bash, who ought to know better, said that “Social Security is projected to run out of money within 20 years.”
The discussion about America’s most successful and beloved social program had some interesting implications for the general election. But before we get to that, I need to say this slowly and clearly, so there’s no misunderstanding:
Social Security is not going to “run out of money.”
The idea that the program is going to “run out of money” or is “going broke” is a zombie lie, one that deserves to have its head lopped off with a quick slice of Michonne’s katana.
We’re going to have to get a little wonky for a bit, but I’ll try to make this as painless as possible. The short version: under the worst-case scenario, meaning that a poor economy in coming years deprives the system of money and no changes to the program’s financing are made, then Social Security recipients will find themselves getting smaller checks than they ought to. And that would be a bad thing — if you rely on Social Security as your main or only source of income, it would be terrible to get only 77 percent of what you should (I’ll reveal why I’m using that number in a moment).
But if the program were only able to deliver 77 percent of its benefits, it would not be “broke” or have “run out of money.” When the entitlement doomsayers use those words, they want everyone to believe that the program will be, well, broke, which would mean it would be able to pay nothing to the recipients. And that’s a lie.
Let’s remind ourselves how this program works. Workers pay Social Security taxes, which are then distributed to today’s recipients as benefits. But when the taxes (and the interest the program earns on the bonds it holds) exceed the benefits, what’s left over goes into a trust fund, commonly known as the “Social Security surplus.” According to the latest report from the Social Security Trustees, in 2014 the program took in $769 billion and paid out $714 billion. The extra $55 billion went into the trust fund, which at the end of that year contained $2.729 trillion.
We’re going to need the trust fund, because the very large Baby Boom generation has just started to retire, meaning more people are going to be drawing benefits. The Trustees’ projections say that starting in 2020, the program will take in less than it’s paying out, and the trust fund will be exhausted in 2035.
Now this is important: the whole point of the trust fund is to be there when that year’s taxes aren’t enough to pay that year’s benefits. When we take money out of the trust fund, it isn’t some kind of crisis, it’s the system working as it was intended.
But won’t the system be “broke” in 2035? No. Under these projections, in 2035 we’d only be paying out to recipients what we take in through taxes. At that point, recipients would get paid only 77 percent of their promised benefits.
As I said, this would be a very bad thing. But is it going to happen? It’s important to remember that the trustees make projections, so there’s a good deal of uncertainty around the numbers. It all depends on what kinds of assumptions you make about the future, particularly on what you think the economy will look like. If the economy is stronger, that means more tax revenue coming in, and the program can pay more benefits; if the economy is weaker, the program has more challenges.
Because of that uncertainty, the Trustees actually make three sets of projections, what they call high-cost, low-cost, and intermediate. It’s the intermediate one that everyone reports, and that’s where the date of 2035 and the figure of 77 percent of benefits come from. Without going too deeply into it, everything depends on how optimistic or pessimistic you want to be about America’s economic future, in terms of things like economic growth, productivity growth, and unemployment. Many people argue that the Trustees are unduly pessimistic about the future, and the most realistic projection is not the intermediate one but the one they call low-cost. And under that projection, the surplus never runs out, and we have plenty of funds to pay all benefits essentially forever, or at least for the next 75 years, which is how far out they attempt to project.
We aren’t going to settle that right now, but there’s an important piece of this to understand, which is that here in Washington, the opinion of Very Serious People is that Social Security is headed for disaster (along with Medicare, which is its own story), and the only thing to do is to either make people wait longer until they retire or cut their benefits. Indeed, proclaiming that you want to do one of those two things (or both) is in some circles how you demonstrate that you’re Very Serious about this issue. There is an entire mini-industry of think-tanks and advocates devoted to convincing lawmakers and the public that entitlements are a disaster in the making, so we need to cut them.
But there are other ways you could solve the problem, if it indeed turns out to be a problem. You could increase the cap on Social Security taxes — right now you only pay them on the first $118,500 of your income, which means that someone earning below that pays 6.2 percent of their income in Social Security taxes, while a hedge fund manager making $11.8 million pays only .062 percent of his income. You could also increase the tax itself, say by a tenth of a percent per year over ten years, which people would find imperceptible. In other words, you could maintain (or even increase) benefits by bringing in more money.
In last night’s debate, Marco Rubio said: “Social Security will go bankrupt and it will bankrupt the country with it.” This is the kind of completely ridiculous fear-mongering that gets you rounds of applause from those who want to cut the program. He then explained that he wants to raise the retirement age from 66 to 70 and reduce benefits (but of course, he says these things will happen in the future and not affect current retirees, who vote in such high numbers and are rather protective of their benefits). Ted Cruz said that he wants to slow the rate of growth in benefits (they’re adjusted for the cost of living) and convert some part of them to stock market accounts. But it’s what Donald Trump said that’s genuinely interesting:
“The Democrats are doing nothing with Social Security. They’re leaving it the way it is. In fact, they want to increase it. They want to actually give more. And that’s what we’re up against. And whether we like it or not, that is what we’re up against.
“I will do everything within my power not to touch Social Security, to leave it the way it is; to make this country rich again; to bring back our jobs; to get rid of deficits; to get rid of waste, fraud and abuse, which is rampant in this country, rampant, totally rampant. And it’s my absolute intention to leave Social Security the way it is. Not increase the age and to leave it as is.
“You have 22 years, you have a long time to go. It’s not long in terms of what we’re talking about, but it’s still a long time to go, and I want to leave Social Security as is, I want to make our country rich again so we can afford it.”
Strip away all the Trumpian bluster, and what you have is 1) a pledge not to cut benefits or raise the retirement age; and 2) the assurance that the program’s cost will be covered because the economy will perform well. Trump sounds an awful lot like…a liberal!
When Trump says, “that’s what we’re up against,” he seems to be saying that because the Democrats want to increase benefits, they’ll be able to present themselves as the program’s protectors and criticize Republicans for trying to undermine it (unless he’s the nominee). And about that, he’s right. Democrats will do that, because that’s what they almost always do. It’s usually an effective attack, both because Americans love Social Security, and because it’s true.
So how does Trump compare to the Democrats, and what is the debate on this issue in the general election going to look like? Bernie Sanders’ position is that benefits should be expanded, particularly since so many Americans lack retirement savings. He has proposed keeping the cap, but having the tax kick in again above $250,000, essentially inserting a “doughnut hole” in the tax; he has also suggested applying the tax to wealthy households’ investment income, and not just wages as it is now. Hillary Clinton has a similar, though less detailed, position: she rules out increasing the retirement age or cutting benefits, and wants to raise the cap to some unspecified level in order to increase some benefits.
Trump has broken with Republican orthodoxy in a few areas where Republican orthodoxy is deeply unpopular, and this is one of them. He probably has the political calculation right: it will be hard for Clinton or Sanders to go after him on Social Security when he’s pledging to protect it without any changes. They’re not going to move to his right on the issue, and while they’ve staked out a position somewhat to his left, he’ll be offering much the same result, without having to pay for it. A tax increase, he’ll say, won’t be necessary because when I’m president gold will practically fall from the sky.
Is that going to work? Frankly, I suspect it will, at least in taking Social Security off the table as an issue of contention between the two party nominees. But don’t worry — the Democrats will have plenty of other things to criticize him for.
By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line Blog, The Washington Post, March 11, 2016
“The Worst Has Yet To Come”: Scrambling To Clean Up A Failed Republican Governor’s Mess
In November, Louisiana’s John Bel Edwards received some great news: by a wide margin, the Democrat had been elected governor. At the same time, however, he also received some rather dreadful news: Edwards was now the governor of Louisiana, responsible for cleaning up a catastrophic mess left by Republican Bobby Jindal.
As the New York Times reported yesterday, Pelican State policymakers – a Democratic governor’s office working with a Republican-led legislature – are moving forward with a plan to undo some of what Jindal did, at least temporarily.
Facing the threat of layoffs, cancellation of university classes and a suspension of health care services, state lawmakers avoided more than $900 million in budget cuts by passing a package of tax increases and spending reductions Wednesday in the closing moments of a special session.
But large shortfalls still plague the state and will continue to play out as a regular session convenes on Monday.
The package includes restructuring the state sales tax – removing exemptions and increasing it a penny – but at Republicans’ insistence, the increases are temporary. The New York Times article added that the new agreement also includes “higher taxes on cigarettes, alcohol, car rentals, cellphones, landlines and short-term rooms booked through websites.” Policymakers also “rolled back a tax credit enjoyed by the insurance industry, and they approved a framework for collecting sales taxes from online retailers.”
Despite this, the package didn’t close all of the state’s massive budget shortfall, and more cuts are on the way.
Bobby Jindal’s failures were just that bad. The Washington Post added last week:
Already, the state of Louisiana had gutted university spending and depleted its rainy-day funds. It had cut 30,000 employees and furloughed others. It had slashed the number of child services staffers, including those devoted to foster family recruitment, and young abuse victims for the first time were spending nights at government offices.
And then, the state’s new governor, John Bel Edwards (D), came on TV and said the worst was yet to come.
The source of the crisis is hardly a mystery. As the Post reported, experts have found that Louisiana’s structural budget deficit “emerged and then grew under former governor Bobby Jindal, who, during his eight years in office, reduced the state’s revenue by offering tax breaks to the middle class and wealthy. He also created new subsidies aimed at luring and keeping businesses. Those policies, state data show, didn’t deliver the desired economic growth.”
In other words, a right-wing governor, working with a Republican legislature, tried to implement a conservative governing agenda. The result is a disaster Louisiana is going to struggle for years to clean up.
If you missed Rachel’s segment last week on states damaged by Republican governance, it’s worth revisiting – especially for its focus on Louisiana.
By: Steve Benen, The Maddow Blog, March 11, 2016
“Health Reform Realities”: A Simple, Straightforward Single-Payer System Just Isn’t Going To Happen
Health reform is the signature achievement of the Obama presidency. It was the biggest expansion of the social safety net since Medicare was established in the 1960s. It more or less achieves a goal — access to health insurance for all Americans — that progressives have been trying to reach for three generations. And it is already producing dramatic results, with the percentage of uninsured Americans falling to record lows.
Obamacare is, however, what engineers would call a kludge: a somewhat awkward, clumsy device with lots of moving parts. This makes it more expensive than it should be, and will probably always cause a significant number of people to fall through the cracks.
The question for progressives — a question that is now central to the Democratic primary — is whether these failings mean that they should re-litigate their own biggest political success in almost half a century, and try for something better.
My answer, as you might guess, is that they shouldn’t, that they should seek incremental change on health care (Bring back the public option!) and focus their main efforts on other issues — that is, that Bernie Sanders is wrong about this and Hillary Clinton is right. But the main point is that we should think clearly about why health reform looks the way it does.
If we could start from scratch, many, perhaps most, health economists would recommend single-payer, a Medicare-type program covering everyone. But single-payer wasn’t a politically feasible goal in America, for three big reasons that aren’t going away.
First, like it or not, incumbent players have a lot of power. Private insurers played a major part in killing health reform in the early 1990s, so this time around reformers went for a system that preserved their role and gave them plenty of new business.
Second, single-payer would require a lot of additional tax revenue — and we would be talking about taxes on the middle class, not just the wealthy. It’s true that higher taxes would be offset by a sharp reduction or even elimination of private insurance premiums, but it would be difficult to make that case to the broad public, especially given the chorus of misinformation you know would dominate the airwaves.
Finally, and I suspect most important, switching to single-payer would impose a lot of disruption on tens of millions of families who currently have good coverage through their employers. You might say that they would end up just as well off, and it might well be true for most people — although not those with especially good policies. But getting voters to believe that would be a very steep climb.
What this means, as the health policy expert Harold Pollack points out, is that a simple, straightforward single-payer system just isn’t going to happen. Even if you imagine a political earthquake that eliminated the power of the insurance industry and objections to higher taxes, you’d still have to protect the interests of workers with better-than-average coverage, so that in practice single-payer, American style, would be almost as kludgy as Obamacare.
Which brings me to the Affordable Care Act, which was designed to bypass these obstacles. It was careful to preserve and even enlarge the role of private insurers. Its measures to cover the uninsured rely on a combination of regulation and subsidies, rather than simply on an expansion of government programs, so that the on-budget cost is limited — and can, in fact, be covered without raising middle-class taxes. Perhaps most crucially, it leaves employer-based insurance intact, so that the great majority of Americans have experienced no disruption, in fact no change in their health-care experience.
Even so, achieving this reform was a close-run thing: Democrats barely got it through during the brief period when they controlled Congress. Is there any realistic prospect that a drastic overhaul could be enacted any time soon — say, in the next eight years? No.
You might say that it’s still worth trying. But politics, like life, involves trade-offs.
There are many items on the progressive agenda, ranging from an effective climate change policy, to making college affordable for all, to restoring some of the lost bargaining power of workers. Making progress on any of these items is going to be a hard slog, even if Democrats hold the White House and, less likely, retake the Senate. Indeed, room for maneuver will be limited even if a post-Trump Republican Party moves away from the scorched-earth opposition it offered President Obama.
So progressives must set some priorities. And it’s really hard to see, given this picture, why it makes any sense to spend political capital on a quixotic attempt at a do-over, not of a political failure, but of health reform — their biggest victory in many years.
By: Paul Krugman, Op-Ed Columnist, The New York Times, January 18, 2016
Share This Blog
mykeystrokes.com- “The Unrelenting Hostility Of Washington’s Courtier Press”: The Media’s Crusade Of Scandals Against Hillary Clinton July 28, 2016
- “Endorsing This Philistine”: The Christian Right Has Surrendered To Trump July 24, 2016
- “Cop Killers Serve No Cause”: It’s Getting To The Point Where No Lives Matter July 24, 2016
mykeystrokes.com 