“An Edge Of Ruthlessness”: Scott Walker; Uncle Scrooge’s Lackey In Wisconsin
Economically speaking, all 237 GOP presidential candidates are selling the same magic beans.
Everybody knows the script by now: Tax cuts for wealthy “job creators” bring widespread prosperity; top off Scrooge McDuck’s bullion pool, and the benefits flow outward to everybody else, the economy surges, budget deficits melt away, and the song of the turtle dove will be heard in the land.
Almost needless to say, these “supply side” miracles have never actually happened in the visible world. State budget debacles in Kansas and Louisiana only signify the latest failures of right-wing dogma. Hardly anybody peddling these magic beans actually believes in them anymore. Nevertheless, feigning belief signifies tribal loyalty to the partisan Republicans who will choose the party’s nominee.
However, with everybody in the field playing “let’s pretend,” a candidate needs another way to distinguish himself. I suspect that Scott Walker, the Republican governor of Wisconsin, may have found it.
See, Walker won’t just put money back in “hardworking taxpayers’” pockets. Like a latter-day Richard Nixon, Walker will also stick it to people he doesn’t like: lollygagging schoolteachers, feather-bedding union members, and smug, tenured college professors who think they’re smarter than everybody else. If Walker lacks charisma, there’s an edge of ruthlessness in his otherwise bland demeanor that hits GOP primary voters right where they live.
No less an authority than Uncle Scrooge himself — i.e. David Koch of Koch Industries, who with his brother Charles has pledged to spend $900 million to elect a Republican in 2016 — told the New York Observer after a closed-door gathering at Manhattan’s Empire Club that Walker will win the nomination and crush Hillary Clinton in a general election “by a major margin.”
Viewed from a distance, the determination of prosperous, well-educated Wisconsin to convert itself into an anti-union right-to-work state like Alabama or Arkansas appears mystifying. To risk the standing of the University of Wisconsin system by abolishing academic tenure, as Walker intends, is damn near incomprehensible.
Attack one of America’s great public research universities for the sake of humiliating (Democratic-leaning) professors over nickel-and-dime budgetary issues? Do Wisconsinites have the first clue how modern economies work?
Maybe not. But Walker’s supporters definitely appear to know who their enemies are, culturally speaking. Incredulity aside, it would be a mistake not to notice the craftiness with which he’s brought off the transformation. Not to mention that Walker’s won three elections since 2010 in a “blue” state that hasn’t supported a Republican presidential nominee since Ronald Reagan.
Wisconsin’s 10 electoral votes don’t mean much by themselves, but throw in Michigan and Ohio, Midwestern states also trending similarly, and you’ve definitely got something.
Act 10, the 2011 law that took away collective bargaining rights for many public employees in Wisconsin (except, at first, for police and firefighters), brought crowds of angry teachers (also mostly Democrats) to the state capitol in Madison for weeks of demonstrations. As much as MSNBC was thrilled, many Wisconsinites appear to have been irked.
In the end, the state ended up saving roughly $3 billion by shifting the funding of fringe benefits such as health insurance and pensions from employer to employee, costing the average teacher roughly 16 percent of his or her compensation. Mindful of budget shortfalls, the unions had proposed negotiations, but that wasn’t enough for Gov. Walker.
For the record, Act 10 was an almost verbatim copy of a bill promoted by the Arlington, Virginia-based American Legislative Exchange Council (ALEC), a think-tank largely funded by, you guessed it, the Brothers Koch.
Four years ago, a documentary filmmaker caught Walker on camera telling wealthy supporters that the new law was just the beginning. “The first step is, we’re going to deal with collective bargaining for all public-employee unions,” he said, “because you use divide-and-conquer.”
“If we can do it in Wisconsin, we can do it anywhere — even in our nation’s capital,” Walker wrote in his book, Unintimidated, notes Dan Kaufman in the New York Times Magazine. Elsewhere, Walker has boasted that as president, he could take on foreign policy challenges because, he’s said, “If I can take on 100,000 protesters, I can do the same across the world.”
Ridiculous, of course, but it plays.
Meanwhile, rueful trade unionists who endorsed Walker in 2010 are crying the blues, because they never imagined that having vanquished the women’s union he’d come after the ironworkers and the electricians in their pickup trucks. Divided, they’ve been conquered.
So right-to-work it is: diminished salaries, job security, pensions, health and safety regulations will inevitably follow.
More bullion for Scrooge McDuck’s pool.
So now it’s the professors’ turn. Walker, a Marquette dropout, has described his new law as “Act 10 for the university.” Tenure’s a dead letter in cases of “financial emergency… requiring program discontinuance, curtailment, modification or redirection.”
So who gets redirected first? Left-wing culture warriors or climate scientists? Hint: Scrooge is a fierce climate-change denier.
Meanwhile, Democrats underestimate Scott Walker at considerable peril.
By: Gene Lyons, The National Memo, June 17, 2015
“Inequality Is Natural”: The Big, Long, 30-Year Conservative Lie
First came Occupy Wall Street, and its pitch-perfect slogan on inequality: “We are the 99 percent.” After that movement fizzled, Thomas Piketty, the handsomely ruffled French professor, released a 685-page book explaining that we really were living in a new Gilded Age in which the wealth gap was as wide as it had ever been. Finally, in June, one of the plutocrats sitting atop the piles of money he made in the digital revolution, Nick Hanauer, wrote an article in Politico magazine—it’s the most-shared story ever on Politico’s Facebook page—warning that the pitchforks were coming, and rich people like him should advocate for a healthier middle class and a higher minimum wage.
The debate over inequality is now raging, and most Americans are unhappy about the widening divide between the haves and have-nots. Hanauer has been making the same case for years, drawing heaps of both praise and scorn. Forbes magazine has alternately called Hanauer insane and ignorant. His TED University presentation calling for a $15-minimum wage was left off the organization’s website because it was deemed too “political.” That’s nothing next to Piketty’s detractors, who at their most extreme accused him of twisting his data.
Hanauer and Piketty inspire these broadsides because they are challenging, in a far more aggressive way than plutocrats and economists usually do, the conservative economic orthodoxy that has reigned since at least the 1980s. Under Ronald Reagan, we called it trickle-down economics, the idea that the men who can afford their own private jets—they’re usually men—deserve gobs of money because they provide some special entrepreneurial or innovative talent that drives the American economy.
That’s well known. Far less often discussed is the flipside of this belief: that helping the less well off will dampen the American money-generating engine—that it will hurt growth, because the only thing that inspires the “job creators” to work so hard is the promise of insanely vast financial rewards. Poverty is a necessary evil in this worldview, and helping the less well off creates a “culture of dependency,” which discourages work. “The United States thrives because of a culture of opportunity that encourages work and disdains relying on handouts,” Matthew Spalding of The Heritage Foundation wrote in 2012, neatly summing up the conservative ethos.
Conservatives have dominated discussions of poverty for a generation with arguments like this one. It’s completely wrong. It’s more than that—it’s just a lie, concocted as cover for policies that overwhelmingly favored the rich. But it took the worst economic crisis since the Great Depression for many economists, liberal or not, to finally say publicly what many had long argued: Inequality is bad for the economy.
The latest to say so is the rating agency Standard and Poor’s, not exactly a bastion of lefty propaganda. An S&P report released August 5 says that rising inequality—gaps in both income and wealth—between the very rich and the rest of us is hurting economic growth. The agency downgraded its forecast for the economy in the coming years because of the record level of inequality and the lack of policy changes to correct for it. The report’s authors argue against the notion that caring about equality necessarily involves a trade-off with “efficiency”—that is, a well-functioning economy.
To be sure, they’re not making a case for a massive government intervention to help low-income Americans. They discuss the benefits of current policy proposals—like raising the federal minimum wage to $10.10 per hour—with the caveats that such changes could have potential negative consequences—like dampening job growth. (Most economists agree that such a small hike wouldn’t have that impact.)
At its core, though, the S&P report does argue that pulling people out of poverty and closing the gap between the 1 percent and the 99 percent will increase economic growth. The authors argue for some redistributive policies, like increased financial aid for post-secondary education. “The challenge now is to find a path toward more sustainable growth, an essential part of which, in our view, is pulling more Americans out of poverty and bolstering the purchasing power of the middle class,” the authors write. “A rising tide lifts all boats…but a lifeboat carrying a few, surrounded by many treading water, risks capsizing.”
It’s an important moment for such a debate. The Great Recession was a great equalizer, a crisis in which many in the middle class, and even upper-middle class, fell all the way to the bottom and relied on the government safety net. They learned what anyone who cared to look at the data already knew: The vast majority of people relying on government benefits are suffering a temporary setback that they will recover from, as long as they have a helping hand. The holes in the safety net also became more apparent. Even Paul Ryan, the Republican congressman from Wisconsin who has set his blue eyes on higher office, adequately diagnosed many of the problems with anti-poverty programs when he introduced a new plan last month. (Whether he would actually want to pay for the changes he calls for is debatable.)
Closing the gap by lifting low-income families out of poverty could do more to help the economy than any number of tax credits for “job creators” might, which is what Hanauer argued in Politico. And the S&P report puts more support in his corner.
On the question of what to do, there is widespread agreement on boosting educational attainment and increasing salaries at the bottom end. Policymakers have had a lot of time to think about how to help the middle class, since real wages began declining in the mid-1970s. Many of the problems of inequality have policy solutions ready to go, spelled out in a white paper stuffed in someone’s desk drawer. Why has it taken so long to think about addressing it? Was the political might of the right so overwhelming that they couldn’t speak up until people like Hanauer saw, as he warned in his essay, that the pitchforks would be coming for them?
By: Monica Potts, The Daily Beast, August 8, 2014
“Inequality Is A Drag”: There’s No Evidence That Making The Rich Richer Enriches The Nation
For more than three decades, almost everyone who matters in American politics has agreed that higher taxes on the rich and increased aid to the poor have hurt economic growth.
Liberals have generally viewed this as a trade-off worth making, arguing that it’s worth accepting some price in the form of lower G.D.P. to help fellow citizens in need. Conservatives, on the other hand, have advocated trickle-down economics, insisting that the best policy is to cut taxes on the rich, slash aid to the poor and count on a rising tide to raise all boats.
But there’s now growing evidence for a new view — namely, that the whole premise of this debate is wrong, that there isn’t actually any trade-off between equity and inefficiency. Why? It’s true that market economies need a certain amount of inequality to function. But American inequality has become so extreme that it’s inflicting a lot of economic damage. And this, in turn, implies that redistribution — that is, taxing the rich and helping the poor — may well raise, not lower, the economy’s growth rate.
You might be tempted to dismiss this notion as wishful thinking, a sort of liberal equivalent of the right-wing fantasy that cutting taxes on the rich actually increases revenue. In fact, however, there is solid evidence, coming from places like the International Monetary Fund, that high inequality is a drag on growth, and that redistribution can be good for the economy.
Earlier this week, the new view about inequality and growth got a boost from Standard & Poor’s, the rating agency, which put out a report supporting the view that high inequality is a drag on growth. The agency was summarizing other people’s work, not doing research of its own, and you don’t need to take its judgment as gospel (remember its ludicrous downgrade of United States debt). What S.& P.’s imprimatur shows, however, is just how mainstream the new view of inequality has become. There is, at this point, no reason to believe that comforting the comfortable and afflicting the afflicted is good for growth, and good reason to believe the opposite.
Specifically, if you look systematically at the international evidence on inequality, redistribution, and growth — which is what researchers at the I.M.F. did — you find that lower levels of inequality are associated with faster, not slower, growth. Furthermore, income redistribution at the levels typical of advanced countries (with the United States doing much less than average) is “robustly associated with higher and more durable growth.” That is, there’s no evidence that making the rich richer enriches the nation as a whole, but there’s strong evidence of benefits from making the poor less poor.
But how is that possible? Doesn’t taxing the rich and helping the poor reduce the incentive to make money? Well, yes, but incentives aren’t the only thing that matters for economic growth. Opportunity is also crucial. And extreme inequality deprives many people of the opportunity to fulfill their potential.
Think about it. Do talented children in low-income American families have the same chance to make use of their talent — to get the right education, to pursue the right career path — as those born higher up the ladder? Of course not. Moreover, this isn’t just unfair, it’s expensive. Extreme inequality means a waste of human resources.
And government programs that reduce inequality can make the nation as a whole richer, by reducing that waste.
Consider, for example, what we know about food stamps, perennially targeted by conservatives who claim that they reduce the incentive to work. The historical evidence does indeed suggest that making food stamps available somewhat reduces work effort, especially by single mothers. But it also suggests that Americans who had access to food stamps when they were children grew up to be healthier and more productive than those who didn’t, which means that they made a bigger economic contribution. The purpose of the food stamp program was to reduce misery, but it’s a good guess that the program was also good for American economic growth.
The same thing, I’d argue, will end up being true of Obamacare. Subsidized insurance will induce some people to reduce the number of hours they work, but it will also mean higher productivity from Americans who are finally getting the health care they need, not to mention making better use of their skills because they can change jobs without the fear of losing coverage. Over all, health reform will probably make us richer as well as more secure.
Will the new view of inequality change our political debate? It should. Being nice to the wealthy and cruel to the poor is not, it turns out, the key to economic growth. On the contrary, making our economy fairer would also make it richer. Goodbye, trickle-down; hello, trickle-up.
By: Paul Krugman, Op-Ed Columnist, The New York Times, August 7, 2014
“Inequality Perpetuates Inequality”: Conservatives Defend Inequality Out Of Self-Interest, Nothing More
Conservatives have justified inequality for decades, arguing that it is an inevitable byproduct of capitalism and broadly beneficial. This intellectual edifice has begun to collapse.
Supply-side economics rest on the assumption that the wealthy drive economic growth, and that by reducing taxes on them, we can unleash latent economic potential. In fact, however, investment is driven by demand, not supply (a point acknowledged by the relatively conservative Martin Feldstein). If there are viable investments, they will be made regardless of tax rates, and if there are no investments, cutting taxes is merely pushing on a string. Thomas Piketty and Emmanuel Saez, two top economists on inequality, find no correlation between marginal tax rates and economic growth.
Recently, two IMF papers confirmed what Keynesians like Joseph Stiglitz have long argued: Inequality reduces the incomes of the middle class, and therefore demand. This stunted demand means fewer opportunities for investment, stunting growth.
Add to this growing body of research the fact that a robust defense of inequality is increasingly difficult to muster when every other OECD country has far lower levels of inequality than the United States. Greg Mankiw’s defense of the 1 percent was widely decried, because a large swath of research shows that the rise of the 1 percent did not come from natural economic forces, but rather rent-seeking.
The evidence is clear: The economic benefits of inequality have been massively oversold. Inequality is, in fact, a detriment to growth. So why has the right not conceded the argument?
The answer is class interest.
“Class interest” does not mean that the wealthy are nefarious schemers. Instead, it means there are various cognitive biases that lead them to justify and perpetuate inequality. For instance, Kris-Stella Trump conducted experiments in which participants were asked to solve anagrams in a high inequality scenario (the winner received $9 and the loser $1) and a low inequality scenario (the winner got $6 and the loser $4). When asked what a fair distribution would look like, the high inequality group preferred an inequality of $5.54 ($7.77-$2.23) while the low inequality group preferred inequality of $2.30 ($6.15-$3.85). She concludes: “Public ideas of what constitutes fair income inequality are influenced by actual inequality.” Inequality perpetuates inequality.
Paul Piff finds that the wealthy feel more entitled to their earnings and are more likely to show personality traits typically associated with narcissism. Recent research by Andrew J. Oswald and Natavudh Powdthavee finds that lottery winners in the UK are more likely to switch their political affiliation to the right, and also more likely to believe that current distributions of wealth are fair. As people get richer, they think that tax policies favoring the rich are fair — not because of the macro-economic benefits, but because of how they benefit me.
These cognitive biases, rooted in class distinctions, have deep implications. As a young economist argued in 1846, “The ruling ideas are nothing more than the ideal expression of the dominant material relationships.” Benjamin I. Page, Larry M. Bartels, and Jason Seawright examined the policy preferences of the very wealthy and found that they generally fall in line with their class interests. The wealthy were far less likely than the general public to believe that “government must see that no one is without food, clothing, or shelter,” or that minimum wage must be “high enough so that no family with a full-time worker falls below official poverty line,” or that “the government in Washington ought to see to it that everyone who wants to work can find a job.”
This is not meant to demean the policy preferences of the wealthy — only to examine the motives. For too long, the wealthy have couched their economic ideas as being broadly good for the country, but in fact, de-unionization, capital market liberalization, and austerity benefit them while leaving the rest of us far worse off. It’s time that we were all honest about why we support the policies we support.
Now of course, not everyone who supports conservative economic policy is wealthy. Indeed, there is a large literature devoted to the question why the working class supports policies against their own interests. Engles calls this phenomenon “false consciousness,” writing to Franz Mehring, “the real motive forces impelling him remain unknown to him; otherwise it simply would not be an ideological process.” Thomas Frank proposes that working-class conservatives are swayed by social issues. Ian Haney Lopez argues that racial animus still plays a role. Rick Perlstein notes the power of identity politics. The American ethos of upward mobility certainly plays a role; truck drivers in Tallahassee vote for tax breaks on Wall Street believing that they may someday posses enough wealth that an estate tax might affect them. John Steinbeck noted the power of aspiration, writing, “Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.”
But when it comes to wealthy conservatives who favor economic policies that hurt many Americans: Bartels’ previous investigation of economic and political power finds, unsurprisingly, that those with a higher socioeconomic status have more influence on legislative outcomes. Martin Gilens, Dorian Warren, Jacob Hacker, Paul Pierson, and Kay Lehman Schlozman have all recorded similar findings. It seems obvious, but it is important to connect these dots: Not only do the wealthy have interests divorced from the broader interests of society, but they also have the political heft to turn those interests into policy.
It is considered rather gauche to discuss class today, and the inequality debate is therefore situated in a purely theoretical realm. Liberals are constantly confused and aggravated about why the preponderance of evidence that austerity doesn’t work (while stimulus does) and that inequality harms society is lost on a large portion of conservatives.
Well, let’s face it: Those who support austerity and inequality are not really about “trickle-down” economics or “efficiency and equity.” They are protecting the interests of the upper class.
As Jonathan Swift warned, “It is useless to attempt to reason a man out of a thing he was never reasoned into.”
By: Sean McElwee, The Week, March 18, 2014
“Hedging His Words”: Mitt Romney Isn’t Proposing A $5 Trillion Tax Break, It’s A $10 Trillion Tax Break
Part of Mitt Romney’s strategy in the first debate Wednesday night in Denver was to play fact-checker with false facts — also known as “lies.”
After the president said that he was proposing a $5 trillion tax break, Romney responded, “I don’t have a $5 trillion cut. I don’t have a tax cut of the scale that you’re talking about.”
He was partially correct. He isn’t proposing a $5 trillion tax break — his tax cut proposals equal more than $10 trillion over the next 10 years, according to Citizens for Tax Justice.
Romney’s new tax breaks would cost about $500 billion a year. This is on top of extending the Bush tax breaks, which would cost just over $5 trillion.
The president probably didn’t point out the full cost of the Bush tax breaks because he proposes to keep the tax breaks for the middle class at a cost of about $4 trillion. But these taxes have always been temporary and are supposed to expire. Romney is proposing making them permanent along with more cuts for a total of $10 trillion in tax breaks, as we are in the middle of a so-called debt crisis.
Romney also claimed that he is not proposing new tax breaks for the rich. “…I’m not going to reduce the share of taxes paid by high-income people. High-income people are doing just fine in this economy,” he said. “They’ll do fine whether you’re president or I am.”
Notice the key word there? “Share.”
Romney simply cannot claim that he isn’t going to reduce taxes for the richest Americans — he’s just promising that his cuts won’t benefit the rich disproportionally, just as George W. Bush falsely did in 2000.
In addition to the Bush tax breaks he promises to continue, Governor Romney wants to cut the estate tax, which only the richest Americans pay, to zero. His tax breaks will almost certainly cut the taxes the richest pay — despite his promises to remove reductions.
“An analysis by Citizens for Tax Justice found that even if millionaires were forced to give up all the tax expenditures that Romney has put on the table, his tax plan would still give a tax break of at least $250,000 on average for individuals making over $1 million,” the organization wrote in its “Debate Debrief.” “That is, he simply cannot back up his assertion that he is ‘not going to reduce the share of taxes paid by high- income people.’ And if he really is going to make up the revenues we’ll lose to his rate cuts, taxes would have to go up for other taxpayers.”
Romney has gone out his way to hide the specifics of his tax plan and is carefully hedging his words to make specious claims.
But let’s be clear about the facts. Mitt Romney is proposing a $10 trillion tax break. And he is clearly promising to cut the amount of taxes the richest Americans pay.
The fact that he has to do everything he can to hide this proves what a failure right-wing trickle-down economics have been.
By: Jason Sattler, The National Memo, October 5, 2012
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