Tax Cut Follies

Jonathan Chait on the politics surrounding the upcoming debate over the expiring Bush tax cuts.

Now, here's the underlying dynamic. Raising taxes on the middle class is unpopular. But raising taxes on the rich is wildly popular. The truth is that neither party cares very much about the portion of the Bush tax cuts that benefit the middle class. Republicans just threw that in to sell the upper-bracket tax cuts, which is what they care about. Democrats might prefer a more progressive tax code with lower middle-class taxes, but most of them would rather have the revenue instead. But Democrats promised not to raise taxes on people earning less than $250,000 a year -- a promise they felt they had to make in order to win. And they can't break that promise without suffering political consequences.
 
Republicans, on the other hand, don't want to pass an extension of the middle-class Bush tax cuts without the upper-bracket tax cuts. That would leave the federal tax code more progressive than it was under Bill Clinton -- you'd have a combination of Clinton-era tax rates on the rich and Bush-era tax rates on the middle class. Conservatives have been fretting about such a result for more than a year, warning ominously about a country in which half the population pays no income tax. (They'd still pay other taxes, but the central Republican goal is to minimize the progressivity of the tax code.)

So we're down to a game of chicken. Here's why the Democrats hold the whip hand. They can pass an extension of the middle-class Bush tax cuts through the House. If Republicans let the bill pass, then they've lost their leverage to extend the unpopular Bush upper-income tax cuts. If they filibuster it, then Democrats can blame them for raising taxes on middle-class Americans. It would let Democrats out of their pledge. (Hey, they tried to keep the middle-class tax cuts.) Then nothing would pass, and we'd instantly revert to Clinton-era rates across the board.

Afghanistain After the Leaks

Sully on the WikiLeaks Afghanistan document dump.

What do we really learn from the WikiLeaks monster-doc-dump? I think the actual answer is: not much that we didn't already know. But it's extremely depressing - and rivetingly explicit - confirmation of what anyone with eyes and ears could have told you for years. We already know the following:

The notion that a professional military and especially police force can be constructed and trained by the West to advance the interests of a "national government" in Kabul within any time frame short of a few decades of colonialism is a fantasy.

We are fighting a war as much against the intelligence services of Pakistan as we are the Taliban. They are a seamless part of the same whole, and until Pakistan is transformed (about as likely as Afghanistan), we will be fighting with two hands tied behind our backs.

This is the Taliban's country. Fighting them on their own ground, when they can appear in disguise, can terrify residents by night if not by day, and fight and then melt away into the netherworld of mountains and valleys is all but impossible. And as the occupation fails to secure popular support (and after ten years and a deeply corrupt government in Kabul, who can blame the Afghans?), the counter-insurgency model becomes even less plausible than it was before.

The enormous cost in lives and money is in no way proportionate to the eradication of around 500 Qaeda leaders, including bin Laden, who are effectively being protected by a foreign government, Pakistan, we aid with a $1 billion a year.

His conclusion is simple.

When one weighs the extra terror risk from remaining in Afghanistan, the absurdity of our chief alleged ally actually backing the enemy, the impossibility of an effective counter-insurgency when the government itself is corrupt and part of the problem, the brutality of the enemy in intimidating the populace in ways no civilized occupying force can counter, the passage of ten years in which any real chance at success was squandered ... the logic for withdrawal to the more minimalist strategy originally favored by Obama after the election and championed by Biden thereafter seems overwhelming.
 
When will the president have the balls to say so?

The Stimulus Failure

Ezra explains what went wrong with the stimulus.

The original stimulus package should've been bigger. Rep. David Obey, chairman of the House Appropriations Committee, says the Treasury Department originally asked for $1.4 trillion. Sen. Kent Conrad, chairman of the Senate Budget Committee, wanted $1.2 trillion. What we got was a shade under $800 billion, and something more like $700 billion when you took out the AMT patch that was jammed into the package. So we knew it was too small then, and the recession it was designed to fight turned out to be larger than we'd predicted. In the end, we took a soapbox racer to a go-kart track and then realized we were competing against actual cars.

This was a mistake, of course. But the mistake may not just have been the size of the stimulus package. I wonder if it wasn't fed by a belief that there'd be other chances. If all we needed was the $700 billion package, then great. But if unemployment remained high and the recovery had trouble taking hold, surely there would be the votes for further stimulus and relief spending. No one in the political system could possibly look at 10 percent unemployment and walk away from it, right?

Wrong. Ten percent unemployment and a terrible recession ended up discrediting the people trying to do more for the economy, as their previous intervention was deemed a failure. That, in turn, empowered the people attempting to do less for the economy. So rather than a modestly sized stimulus leaving the door open for more stimulus if needed, its modest size was used to discredit the idea of more stimulus when it became needed.

The Lunatics Taking Over the Asylum

Jonathan Chait on the takeover of the GOP by its radical fringe.

One interesting sidelight of the current election cycle is that there are several races in which the Republican establishment has either lost control of the race or lost any sense of its own partisan self-interest. The Nevada Senate race is a prime example. Harry Reid, once a dead man walking, is now sitting on a nice lead because Republicans nominated a lunatic to oppose him. "A total f*** up by the state and national Republicans to allow Angle to get nominated," a source notes to Ben Smith.

But of course there are numerous such fuckups. In Kentucky, Republicans turned a rock-solid safe seat into a toss up by nominating ultra-radical Rand Paul over party hack Trey Grayson. In Pennsylvania, they turned a relatively safe seat in Arlen Specter, who had been almost completely housebroken by the right since 2004, into another toss-up. (More importantly, they drove Specter from the party and made him the 60th Senate seat, allowing the passage of health care reform.) And in Florida, they turned another safe hold into a toss-up by challenging, and driving from the party, Charlie Crist.

Florida is actually the closest thing to a rational move for the right. First, I think Crist's current lead is far from safe, because the Democratic vote is likely to consolidate above its current abysmal level and that will come out of Crist's hide. Second, Crist is a genuine moderate, so there really was a more reasonable risk-reward calculation for conservatives looking to gain a more ideologically reliable Senator at the risk of losing the seat altogether. There's at least a strong chance that the Rubio challenge will burn them.

This is four Senate seats put at serious risk by running right-wing primary challenges, plus one enormous liberal domestic policy accomplishment. In all these instances, conservatives either celebrated the right-wing primary challenge or, at the very least, quietly accepted it. There was very little pushback at the time from the party establishment, other than a feeble effort in Kentucky. I have seen no recriminations whatsoever in hindsight. And yet it seems perfectly clear that the effect of these challenges has been a disaster from the conservative perspective.  You don't have to love Sue Lowden to understand that a 90% chance of Lowden winning is better than a 20% chance of Sharron Angle winning. Nor is there any recognition on the right that conservatives paved the way for health care reform by driving Specter out. In conservative lore, the Pat Toomey primary challenge remains a glorious triumph, when in fact it's a disaster of historic proportions.

Obviously the conservative movement is intoxicated with hubris right now. Part of this hubris is their belief that the American people are truly and deeply on their side and that the last two elections were either a fluke or the product of a GOP that was too centrist. It's a tactical radicalism, a belief that ideological purity carries no electoral cost whatsoever. Right-wing tactical radicalism has an old pedigree, and of course there is an equivalent (though less influential) tactical radicalism on the left-wing of the Democratic Party. Tactical radicalism is not the same thing as ideological radicalism. Tactical radicals are a subset of ideological radicals; some ideological radicals have clear-eyed of the pragmatic steps needed to advance their goals incrementally.

In the past, the Republican Party has always managed to hold in check the tactical radicalism of its base. It's starting to run wild. In past elections, I would have totally discounted the possibility that the party might nominate a figure like Sarah Palin, because the party establishment has always been strong enough to push aside candidates who were not strong electoral vehicles for conservatism. I'm no longer sure they have that power anymore.

It's possible that the GOP wave will be strong enough in 2010 to push most or even all these weak candidates into office. If that doesn't happen, I wonder if we'll start to see some recriminations. If it does, tactical radicals will be even more emboldened, and I don't see what could stop Sarah Palin from taking the 2012 nomination if she wants it.

Deficit Posers

Matt does not understand why anyone takes Republican protestations about deficit reduction seriously.

It’s genuinely hard for me to know what would persuade people that I’m correct about this, but to recap the key points:

1) There have been two presidents who were members of the modern conservative movement, Ronald Reagan and George W Bush, and they both presided over massive increases in both present and projected deficits.

2) The major deficit reduction packages of the modern era, in 1990 and 1993, were both uniformly opposed by the conservative movement.

3) When the deficit was temporarily eliminated in the late-1990s, the mainstream conservative view was that this showed that the deficit was too low and needed to be increased via large tax cuts.

4) Senator Mitch McConnell says it’s a uniform view in his caucus that tax cuts needn’t be offset by other changes in spending.
 
5) The deficit reduction commission is having trouble because they think conservative politicians won’t vote for any form of tax increase.

In sum, there are zero historical examples of conservatives mobilizing to make the deficit smaller. What is true is that most conservatives oppose increases in non-military spending when those increases are proposed by Democratic presidents. A minority of conservatives are more consistent opponents of increases in non-military spending. But the key element of conservative fiscal policy is that tax revenue as a percent of GDP should be made as low as possible. This isn’t a goal they pursue that stands in some kind of balance with concern about the deficit, it’s the only goal they pursue. You can like that or not, but every single journalist who writes articles about the deficit debate that doesn’t highlight the conservative movement’s deep, decades-long hostility to deficit reduction is being grossly irresponsible.

Those Nutty Neocons

 Sully lambastes the neocons once again.

It tells you something about the laws of unintended consequences (something missing from the neocon handbook) that the man they championed as Iraq's "democratic" leader, Nouri al-Maliki, recently went to Beirut to pay his respects to a Hezbollah mullah regarded as a terrorist by the neocon chorus. It also tells you something that the neocon attempt to impose crippling sanctions on Iran is now being undermined by ... large amounts of oil supplies getting to Iran by road via Iraqi Kurdistan.
 
What has neoconservatism achieved? In Afghanistan, the best possible option is a country dominated by an increasingly Islamist and nuclear-armed Pakistan. In Iraq, the best possible option is a country dominated by Shiites far more aligned with Iran than many Sunni Arab states. And so the upshot of the Bush-Cheney years is an empowerment of both Iran and Pakistan, the two Muslim countries either with or close to nuclear capacity.

That is the end result of a policy designed above all to prevent WMDs getting into the hands of terrorists. I mean: you couldn't make this up.
 
And still they want more war. In fact, they are now angling for American support for Sunni Arab states (and Israel) to launch a war against the Shiite power of Iran. Not content with enmeshing the US in two intractable wars, they actually want America to take sides in the ancient intra-Muslim feud between Shiite and Sunni. Yes, that sounds like something brilliant doesn't it? No unintended consequences could come from diving into that briar patch.
 
And, remember, nothing in the neoconservative mind exists that can actually take account of flaws in their own thinking. Because neoconservatism is a doctrine, and a doctrine cannot have flaws, just as neocon columnist can never make errors, or account for them.

Rove to the Rescue

Steve Benen reacts to Karl Rove's op-ed in the Wall Street Journal that urges Republicans to run in the fall on protecting the Bush tax cuts as the way to generate economic growth.

That's right -- Karl Rove's "jobs and prosperity" agenda encourages Republicans to, quite literally, support the Bush/Cheney "jobs and prosperity" agenda from the last decade.

There was no indication that Rove was kidding, or that his column was published as some kind of satire.

Look, I realize that Rove isn't the sharpest crayon in the box, but his advice to the GOP is so ridiculous on its face, I'm hard pressed to imagine why the Wall Street Journal published it. His argument is that the Bush/Cheney policies that already failed spectacularly might work if we just try them again.

How would Rove suggest paying for these tax cuts? The same way Rove dealt with this when he ran the White House: by not paying for them at all. The tax cuts that didn't create jobs and didn't generate economic growth did leave us with massive budget deficits, but that doesn't stop ol' Karl from insisting that the already-failed policies will this time make reducing deficits -- the deficits Rove left for Democrats to clean up -- "more manageable."

Republicans will win, Rove concludes, if they just tell voters we should go back to the policies we already know don't work. Bush failed miserably, but if we just give his painful failures one more try, everything will work out fine.

Honestly, maybe Karl Rove is just some kind of performance artist, hoping to make Republican pundits look foolish. It would make more sense than Rove actually believing this nonsense.

John Boehner's America

Brooklynbadboy has a marvelous post on Daily Kos commenting on John Boehner's lament that "They are snuffing out the America I grew up in."

I don't know the America John Boehner grew up in.

I don't know what it's like for a high school graduate to be able to get a union job at a factory and earn enough money to support a wife and kids. I don't know what it's like to be born at a hospital and have my parents rejoice at my birth rather than cower in fear of the bill. I don't know what it's like to have food, clothing and housing expenses constitute reasonable percentage of household income.

I don't know what it's like to grow up as child without fear of gangs, crooked police, and a proliferation of guns and ammo. I don't know what it's like to get a job as a paperboy or delivery boy because those jobs are done by adults. I don't know what it's like to come home to momma or poppa every day because one wage earner can support a family. I don't know what it's like to attend well-financed public schools with well-paid teachers that are the envy of the world. I certainly don't know what it's like to attend an inexpensive private school like John Boehner did because today only the wealthy can afford private school.

I don't know what it's like to have shop class in high school or apprentice programs to learn a trade. I don't know what it's like to be able to simply pick a college, write them a letter, and then attend. One has to hire a consultant these days and I couldn't afford that. I don't know what it's like to have no worries about my parents mortgaging their home to finance my education. I don't know what it's like to get through college without amassing a mountain of debt and ruined credit. I don't know what it's like to have multiple job prospects upon graduation.

I don't know what it's like to look forward to 30 years at one company. I don't even know what it's like to have one profession! I can't even begin to fathom what it must have been like to have an inexpensive, reliable vehicle to go from place to place. Good roads to go from place to place. Inexpensive gas to get from place to place. Public transportation that didn't take 15 percent of a paycheck. I don't know what it's like never having to choose between food and gas to get to work every day.

I don't know what it's like to go to a bank and be offered one type of 30-year fixed rate mortgage. I don't know what it's like not to have to worry about bank fees that cost more than small household appliances. Usury laws. Boy, those must have been nice! There were all those heavy regulations on banks that were in place since the 1930's. John Boehner didn't have to worry about financial crashes during his first 37 years of life because there weren't any. Since deregulation began in 1982, I've had three.

I don't know what it's like to live under a government that looked out for ordinary people. Never have. I don't know what it's like to have a government that did great things like build national highway systems or explore the heavens. Or alleviate poverty in city centers and far-away mountains. I don't know what it's like to never have to worry about the national debt. That's because in John Boehner's America rich people paid taxes. I bet it was really awesome to live in an America that was a net exporter rather than importer. A nation that was a creditor and not a debtor. A nation where the brightest minds and best salaries went into science and  engineering rather than banking and advertising.

I don't know what it's like to know there is a pension waiting for me when I retire. I've got to risk it on the stock market or else I'm surely screwed, assuming I'll have any money to save. Maybe if I can overcome 29.9 percent credit card rates, disappearing private sector unions, $100,000 student loans, 15-year adjustable-rate-mortgages, kids at underfunded, inadequate public schools, health insurance that costs more than food, the saving up of the 401(k) and then cashing in of the 401(k) and then saving up of the 401(k) again, maybe I'll just barely have some inkling of the America John Boehner grew up in.

I do know what it's like to have very low taxes. Hooray.

John Boehner grew up in an America ruled by FDR's Democratic majority. I grew up in an America ruled by Ronald Reagan's Republican majority. The America he grew up is already "snuffed out." I doubt he will ever realize that it was people like him who did the snuffing.