John Boehner has a choice: he can lead the Republicans, or he can save the country. He can’t do both.
The vote on the recent budget deal showed that compromises won’t get votes from tea party Republicans. Fifty-nine Republicans voted no on the agreement, and Boehner had to team up with Democrats to get something passed. Pundits are discussing whether Boehner will move right to get a unified Republican caucus. He’ll have to if a unified Republican caucus is his goal.
But Boehner’s goal should not be keeping his party together; it should be fixing the country. Instead, of moving right to pass “Republican” bills that will get vetoed by the President, what he should do is move left and pass meaningful reform with strong bipartisan support. Boehner can team regular (non-tea party) Republicans with conservative Democrats to come up with a common sense approach to solving our fiscal problems. America is a centrist country and Boehner has a chance to create a centrist solution.
The reality is that everybody knows the logical way to solve our debt problem. We need cuts in all spending: discretionary, military and entitlements, coupled with revenue increases. The debt is too big for either spending cuts or tax increases alone to solve the problem. We also need to control health care costs, which are driving Medicare and Medicaid to such extreme levels.
So stop jerking around with politics and start solving the problem. Boehner can lead the charge, and be a hero, if he is willing to walk away from his extreme fringe. He just needs to be less of a Republican and more of an American.
By the way, there is a similar situation in the Senate, with Tom Coburn in the bipartisan gang of six fighting with legendary douchebag Grover Norquist over tax increases.
Grover Norquist: Pompous Douche
Yves Smith on the macro effects of oversized Wall Street pay.
I normally don’t love Paul Krugman, despite his Nobel Prize, since he is too strident and preachy and predictable, but this take on what really separates Right from Left in America is pretty interesting.
John Mearsheimer on American foreign policy and realpolitik.
John Cassidy on whether Wall Street adds value to society. Hint: it doesn’t. This is from the New Yorker, so it won’t be available online forever.
Law professor David Beatty compares American constitutional jurisprudence to how they do it in other countries. I’m no expert, but I found it fascinating.
Posted in Business, Politics, Pop culture, Trends
Tagged ayn rand, bonuses, Business, economics, goldman sachs, GOP, greed, Politics, republicans, Trends, wall street
Here is a new article with data showing a direct correlation between how GOP leaning a state is and how much federal money it sucks down. This follows up on my posts on this very topic.
The bipartisan deficit panel has come out with its first set of recommendations, and everyone is hopping mad. Lefties say the cuts in spending are unacceptable, and conservatives are adamant that tax revenues never go up again. Good! I have no opinion about the specific recommendations made by the panel chairmen, but I know that if both sides are pissed off then the panel must be doing something right.
Listen people…this deficit is serious business. It will bite us in the ass if we don’t fix it, and fixing it is going to require some pain on everyone’s part. We’ve been living for too long with this fantasy that government could increase spending while cutting taxes. Now the party is over, and the hung over cleanup has to begin. Headaches? Nausea? Yes, exactly.
So liberals, accept the fact that spending will be cut, and not just military spending. I hate it too, but Social Security has to be on the table. Increasing the retirement age by two years over the next 65 years? That’s really not so bad. Tying other benefits to inflation? Also not unreasonable. We need a safety net, of course, but we need to be smart about it.
And conservatives, you too are in for some pain. Face facts: spending cuts alone won’t balance the budget. We need to increase taxes. You like to claim that any tax increase will kill the economy, but the facts don’t bear that out. This chart shows that in Germany tax revenues are 40% of GDP, far more than America’s 28%. And yet Germany’s economy is doing fine, kicking our ass in exports, despite having to absorb East Germany. This chart shows that marginal tax rates for individuals are lower than ever. In fact, during America’s economic heyday, in the 50s and 60s, top marginal rates were in the 70%-90% range, far higher than today’s 35%, and yet there was still plenty of investment, of people working hard, of entrepreneurs starting businesses. All the arguments the right uses against raising taxes are belied by that glorious period of American business. Speaking of that great Happy Days era, the chart below shows that the share of taxes paid by the wealthiest citizens back then was significantly higher than it is now. Again, showing that higher taxes do not necessarily stifle economic growth.
There will be plenty of unpleasantness to go around; Democrats and Republicans will each get their share. Our legislators need to get off their high horses, stay away from the cameras and microphones and acknowledge that their pet causes are secondary to the national cause. But as either Mark Shields or David Brooks (I still can’t tell their voices apart on radio) said on the PBS NewsHour, our politicians won’t make this happen until the public forces them to. Our culture needs to accept the need for hard choices, and then push our politicians to make them.
Posted in Business, Politics
Tagged bailout, Business, congress, economics, GOP, greed, Politics, republicans, taxes, tea party
Yesterday I posted about how Alaska politicians talk a big game about wanting the federal government to leave them alone, but in reality they suck down more federal money than any other state. Having just spent a week in Alaska, I brought some photographic evidence of our biggest state’s big appetite for taxpayer money.
Here is the beginning of a beautifully built and maintained trail at the Mendenhall Glacier outside Juneau. You can see that construction of the trail, which must have employed several people to cut brush and grade the path, was paid for by the federal stimulus package. As for the big Bob Marley joint depicted on the sign….it’s unclear if federal dollars paid for that.
Trail paid for by US taxpayers
In Gustavus, a small town which is the gateway to Glacier Bay, a brand new $20 million dock is being built with federal stimulus dollars. I spoke with the owner of my hotel and with the pilot of my whale watching boat, and both said that the dock was completely unnecessary. But it was employing a whole bunch of skilled laborers, so many that they had to come in from Juneau, since Gustavus didn’t have that many construction workers.
The new dock at Gustavus
Here is a photo of all the pickups and SUVs owned by the people working on the dock. Again, these are local workers being paid with US taxpayer dollars.
Construction worker trucks
I have no problem with stimulus dollars paying people to build paths and docks; that is how a government stimulus package works. The government injects money into the system to boost employment and spending. My problem is with a state that talks about how it doesn’t believe in the stimulus or in federal help at all while it continues to take as much federal money as it can.
Posted in Business, Politics, Uncategorized
Tagged alaska, Business, GOP, Politics, Sarah Palin, stimulus package, taxation, tea party, Ted Stevens
Regular Thoughtbasket readers know how I mock the Laffer Curve, a flawed theory that tax-cutting fiends use in order to claim that reducing marginal tax rates will actually increase government revenue as it unleashes a flood of investment and entrepreneurship. See my mockery here and here, for example.
So of course I was heartened to see Michael Kinsley at The Atlantic take up the cause. Enjoy his mockery here.
I had pretty much forgotten about Sarah Palin, or started to ignore the news items about her, and I had assumed that maybe she was holed up learning about policy or facts. But then Slate runs an article trying to analyze how she might come up with some of the wacky stuff she says. I read a quote like the one below, and it’s hard to see the issue as one of policy differences:
“Oil and coal? Of course, it’s a fungible commodity and they don’t flag, you know, the molecules, where it’s going and where it’s not. … So, I believe that what Congress is going to do, also, is not to allow the export bans to such a degree that it’s Americans that get stuck to holding the bag without the energy source that is produced here, pumped here.”
I’m sorry, but regardless of where you are on the political spectrum, that makes no sense. Take Newt Gingrich: he is deeply conservative and I deeply disagree with him, but that guy could talk for a week straight and he would never say anything as idiotic as the Palin quote above. I want to be generous and assume that Palin isn’t stupid; that she just uses folksy idioms and is slightly misinformed. But I read what she says, I hear about the “refudiates” and that generosity is hard to find. Can someone help me solve this conundrum?
E.J. Dionne recently wrote a piece about the open Supreme Court seat covering some of the same issues of Republican vs. Democratic messaging that I covered here and here. And a few weeks ago he wrote another article even more explicitly criticizing Democrats for continually losing the war of messages. Why are Democrats so terrible at this game? How is it possible for Frank Luntz to single-handedly kick Democratic ass time and again? I’d be willing to bet that the majority of folks at ad agencies are Democrats….so get them on the team.
You might think, and certainly we would all like to think, that policies and results are more important than messaging. Oh, how sweetly naive! If you lose the messaging battle, you never get to implement the policy and see the results. Messaging is how you get the support of the public, and since most people have very little time and/or attention for politics, your message has to be short and sweet.
Since Democrats can’t seem to get it together to develop appropriate messaging, I thought that I would take a crack at some of the key issues of the day. I don’t claim genius for any of these efforts – I’m a blogger, not a fighter – but maybe they will spark a little conversation and get some more talented folks to chip in.
Judges respecting individual rights
- Judicial activism
- Non-elected officials creating laws
- Understanding the meaning of the Constitution
- Following in the Founding Fathers’ footsteps
- Looking at the spirit of the law if the language is unclear
- Monarchy prevention policy
- Asset transfer payment
- Government control
- Business killer
- Job destroyer
- Public safety measure
- Children’s health initiative
Aid to Poor
- Promoting dependency
- Safety net
- Short-term help for the most vulnerable citizens
- Promoting American capitalism
Questioning Security Policies
- Keeping America safe
- Developing the best security system in the world
- Preventing the deaths of innocent citizens
- Enabling taxpayer bailouts
- Stopping taxpayer bailouts
Raising Tax Rates
- Destroying individual initiative
Reaching Out to Non-allied States
Cap & Trade
- Continuing the American melting pot tradition
Nuclear Arms Treaties
- Weakening America’s defense
- Making America safer by reducing nuclear proliferation
Following up on last week’s post regarding the new opening on the Supreme Court, Dahlia Lithwick at Slate wrote a piece more up to her normal standards, discussing how a court that “shows restraint” essentially just perpetuates the political power dynamic currently in force, enabling tyranny of the majority, which is exactly what the founding fathers wanted the judicial branch to be a bulwark against.
Lithwick’s article draws heavily on this awesome NY Times op-ed by Geoffrey Stone, a law professor at University of Chicago. His money quote is here:
Although the framers thought democracy to be the best system of government, they recognized that it was imperfect. One flaw that troubled them was the risk that prejudice or intolerance on the part of the majority might threaten the liberties of a minority. As James Madison observed, in a democratic society “the real power lies in the majority of the community, and the invasion of private rights is chiefly to be apprehended … from acts in which the government is the mere instrument of the major number of the constituents.” It was therefore essential, Madison concluded, for judges, whose life tenure insulates them from the demands of the majority, to serve as the guardians of our liberties and as “an impenetrable bulwark” against every encroachment upon our most cherished freedoms.
Lithwick also refers to this Huffington Post piece discussing how the Democrats have greatly improved their messaging on this matter, linking economic populism with the role of the Court, as in this quote by Vermont senator and Judiciary Committee chairman Pat Leahy:
“Congress has passed laws to protect Americans in these areas, but in many cases, the Supreme Court has ignored the intent of Congress in passing these measures, oftentimes turning these laws on their heads, and making them protections for big business rather than for ordinary citizens.”
Posted in Philosophy, Politics, Trends, Uncategorized
Tagged activist judges, democrats, GOP, john paul stevens, Politics, republicans, scotus, supreme court
With tax day taking place last week, I’ve been thinking about the impact of taxes on the economy, and in particular about the conservative talking point that lowering taxes on small businesses will unleash growth and create jobs.
This is related to, but different than, another classic conservative point: that lower income tax rates will create more tax revenue. Regular readers know well my disdain for this theory (the Laffer Curve), which has never been supported by any research. Read my posts here and here to see more of my laughing at Laffer.
In the case of small business taxes, I decided to build a little model and see what impact reduced taxes would have. You can see the results below:
Reduced taxes on small business
In this case, we have the same small business generating $1,000,000 in annual revenues and $250,000 in annual pre-tax income. Right now, at a 40% tax rate, this business delivers $150,000 to its owner. If taxes were cut in half, to 20%, the business owner would make $200,000 instead. Now, our business owner might be forward thinking, looking to invest in his business, and use the extra $50k to hire a new worker. But more likely, he is going to use that extra $50k to put an addition on his house, or buy a new car, or pay his kid’s college tuition. In short, tons of small business owners are not going to use their tax break to hire people and expand, but rather to buy stuff.