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Economy

Republicans’ Economic Solutions Pamphlet Doesn’t Actually Contain Any Solutions

By Guest Blogger on Aug 10, 2010 at 5:45 pm

Although the House held a one-day session today in order to pass a bill giving $26 billion in badly-needed aid to states, members will be heading right back to their districts to continue talking to voters during the August congressional recess. Last week, as an aid to its conference, the Republican leadership released a 15-page document of advice and talking points to be used over the break.

The document — entitled “Tread Boldly” — decries Washington’s “reckless spending binge” and claims to have answers for issues like high unemployment and rising federal debt. In fact, the tag line of the pamphlet is “solutions, hard work, and no regrets.”

However, the proposed “solutions” are nothing but platitudes. In a front page article in today’s San Francisco Chronicle, Carolyn Lochhead slams the GOP’s deficit reducing ideas, as they wouldn’t actually do anything to reduce the deficit:

Among the ideas for reducing the nation’s $13 trillion debt (mislabeled “deficit” in the pamphlet) is a call to “eliminate unnecessary and duplicative federal programs,” a well-worn bullet point that fails to name any such program. Others, such as canceling what’s left of the bank rescue and President Obama’s stimulus in addition to freezing federal hiring, are slightly more specific but yield sums nowhere near what’s necessary to tame the rising debt.

The document calls for extending $3.1 trillion in expiring Bush administration tax cuts, the vast majority of which Obama and Democratic leaders wholeheartedly embrace, except for the tax cuts for high earners. Defense spending, which has more than doubled since 2001, dwarfing every other budget category, goes unmentioned. The most telling omission is Medicare, the jet engine of U.S. deficits.

Conservative economist and National Review contributor Veronique de Rugy added that “Republicans don’t have a plan” to cut spending. In fact, they don’t have any kind of plan to reduce deficits at all. Rep. Eric Cantor (R-VA), the House Minority Whip, made that perfectly clear last week when he admitted that extending the Bush tax cuts for the wealthy would “dig the hole deeper” on the deficit, but supported them anyway.

In fact, just last Friday, Cantor was given multiple chances but couldn’t name a single specific spending cut he would recommend. Before that, MSNBC’s Mike Barnacle begged Rep. John Shadegg (R-AZ) to “start with just one program you’d cut” to reduce the deficit, but Shadegg couldn’t name one.

If Cantor, Shadegg, and the rest of the House Republicans need some ideas for responsible cuts and revenue boosters, we have them right here. But don’t expect an actual GOP agenda to emerge anytime soon – they wouldn’t want to scoop themselves.

– Charlie Eisenhood

Politics

Rand Paul Denies ‘Kidnapping’ Anyone, But Won’t Deny He Forced A Woman To Bow To Aqua Buddha

By Amanda Terkel on Aug 10, 2010 at 5:45 pm

Yesterday, GQ published a story about Kentucky Senate candidate Rand Paul’s (R) college years at Baylor, which included this now-infamous story that happened in the early 80s:

According to this woman, who requested anonymity because of her current job as a clinical psychologist, “He and Randy came to my house, they knocked on my door, and then they blindfolded me, tied me up, and put me in their car. They took me to their apartment and tried to force me to take bong hits. They’d been smoking pot.” After the woman refused to smoke with them, Paul and his friend put her back in their car and drove to the countryside outside of Waco, where they stopped near a creek. “They told me their god was ‘Aqua Buddha’ and that I needed to bow down and worship him,” the woman recalls. “They blindfolded me and made me bow down to ‘Aqua Buddha’ in the creek. I had to say, ‘I worship you Aqua Buddha, I worship you.’ At Baylor, there were people actively going around trying to save you and we had to go to chapel, so worshiping idols was a big no-no.”

Nearly 30 years later, the woman — now a clinical psychologist — is still trying to make sense of that afternoon. “They never hurt me, they never did anything wrong, but the whole thing was kind of sadistic. They were messing with my mind. It was some kind of joke.”

In his first national interview since the story came out, Paul went on Neil Cavuto’s Fox News show this afternoon, where he was questioned about the incident. Paul repeatedly denied “kidnapping” anyone (even though the GQ article never actually uses that word) and said he was “never involved with forcibly drugging people.” However, when Cavuto asked him about making someone bow down to Aqua Buddha, Paul became visibly uncomfortable and avoided answering the question:

CAVUTO: What do you make of this story? [...]

PAUL: No, I never was involved in kidnapping. No, I was never involved with forcibly drugging people. [...]

CAVUTO: So, they’re characterizing it as a kidnapping type of deal. It might have just been just playful fun? Is that what you’re saying? You might have had incidents like this, but it wasn’t deliberate kidnapping?

PAUL: Well, I — I think I would remember if I kidnapped something — kidnapped someone — and I don’t remember, and I absolutely deny kidnapping anyone ever.

CAVUTO: Apparently she said, they blindfolded me and made me bow down to Aqua Buddha. That might have been just a college prank, but you don’t even remember that, right?

PAUL: Well, I’m not really going to try to go back 27 years and remember everything that happened in college.

Watch it:

Yglesias

Elite Isolation

By Matthew Yglesias on Aug 10, 2010 at 5:31 pm

It seems to me that this chart is the key to understanding today’s political economy:

unemployed

Virtually every single member of congress, every senator, every Capitol Hill staffer, every White House advisor, every Fed governor, and every major political reporter is a college graduate. What’s more, we have a large amount of social segregation in the United States—college graduates tend to socialize with each other. And among college graduates, there simply isn’t an economic crisis in the United States. This is not the best of times, but it’s perfectly rational in gradland to be balancing concern about the labor market situation with dozens of other concerns. If you did anything, you’d probably step in to prevent teacher layoffs, which is a clear and present danger to a large bloc of college graduates. But beyond that, no need to panic.

Politics

New York City Transit Authority Gives The Green Light To Anti-Islam Ads Graphically Depicting 9/11 Attacks

By George Zornick on Aug 10, 2010 at 5:00 pm

Self-described “anti-jihadist” and conservative blogger Pamela Geller has purchased advertising space on New York City buses for an ad that graphically depicts a plane about to crash into the World Trade Center. Geller is leading a crusade against the Ground Zero mosque, calling it “insensitive to the families and to America that was attacked on 9/11.” The ad campaign features a phony sketch of the planned Ground Zero mosque, which appears to be as big as the Twin Towers and is labeled the “WTC Mega Mosque.”

New York’s Metropolitan Transportation Authority initially rejected the ad, telling Geller that images of the September 11 attacks were not allowed, according to her account of their conversations. Geller re-submitted the ad without any smoke near the towers, and a plane flying in the distance, not approaching the towers. When that was also rejected, Geller filed a lawsuit over the denial.

Today, the MTA changed its position and accepted the most graphic version of the advertisement. Kevin Ortiz, an MTA spokesman, issued a brief statement Monday:

While the MTA does not endorse the views expressed in this or other ads that appear on the transit system, the advertisement purchased by a group opposing a planned mosque near the World Trade Center was accepted today after its review under MTA’s advertising guidelines and governing legal standards.

The MTA’s reversal is curious, considering that earlier this year it rejected advertisements from the Working Families Party that criticized Mayor Michael Bloomberg and cuts to New York bus and subway service. The ads resembled MTA posters, but substituted acronyms like “WTF” instead of subway lines.


At the time, the MTA said the ads implied obscene language, and that ads that were “offensive, improper or in bad taste” could not be run. Apparently images of the Twin Towers being destroyed are not considered improper.

Climate Progress

10 indicators of a human fingerprint on climate change

By Climate Guest Blogger on Aug 10, 2010 at 4:58 pm

10 Indicators of a Human Fingerprint on Climate Change

This post by physicist John Cook was first published in Skeptical Science.

The NOAA State of the Climate 2009 report is an excellent summary of the many lines of evidence that global warming is happening. Acknowledging the fact that the planet is warming leads to the all important question:  What’s causing global warming? To answer this, here is a summary of the empirical evidence that answer this question. Many different observations find a distinct human fingerprint on climate change:

To get a closer look, click on the pic above to get a high-rez 1024×768 version (you’re all welcome to use this graphic in your Powerpoint presentations). Or to dig even deeper, here’s more info on each indicator (including links to the original data or peer-reviewed research):
Read more

Yglesias

In the Long Run, There Is No Curve

By Matthew Yglesias on Aug 10, 2010 at 4:44 pm

curve 1

Dylan Matthews did an interesting survey yesterday, asking various figures what they think the revenue-maximizing tax rate is. The liberals generally look at the research and conclude that the Laffer Curve Inflection Point is in the 60-70% range, while the conservatives duck and cover. But it’s Greg Mankiw who, I think, makes the most important point, to wit: “the short-run answer and the long-run answer are quite different . . . the long-run answer is actually more important for policy purposes than the short-run answer.”

To perhaps put this in a more pointed way, over the long-run the revenue-maximizing tax rate and the growth-maximizing tax rate should be identical. Guinea and Portugal both have about 10 million people, but the government of Portugal has dramatically more revenue simply because Portugal is so much richer. And that’s how it works in general over the long-term. Government revenue will increase rapidly if the economy grows rapidly and not otherwise. The question is whether short-term revenue is valuable because it’s funding important growth-enhancing public services, or whether short-term revenue is harmful because it’s funding waste and bloat.

Meanwhile, the growth implications of tax system design—how do you raise your revenue, not just how much revenue do you raise—are much more important than the political debate commonly recognizes.

Economy

Fiorina Hides Behind Farmers To Push Billions In Tax Cuts For Multi-Millionaires

By Pat Garofalo on Aug 10, 2010 at 4:40 pm

Last month, Republican Senate candidate Carly Fiorina (R) said, “let me propose something that may seem crazy to you: you don’t need to pay for tax cuts. They pay for themselves, if they are targeted, because they create jobs.” That is, in fact, crazy, but it’s not the only tax bamboozling that Fiorina is trying to pull.

Last week, Fiorina made a two campaign stops — one at Grimmway Farms in Arvin, CA, and another at the Tri-Boro Fruit Company — where she fearmongered about the currently expired estate tax while “flanked by supportive local farmers.” “If we do nothing the death tax will go from 0 percent today to 55 percent on January first,” said Fiorina who favors a full estate tax repeal.

One of the farmers with whom Fiorina appeared is evidently worried that “his children would one day have to sell off property that’s been in the family for generations” were the estate tax to be reinstated. Not knowing anything about that particular farm, it’s hard to say what its potential estate tax liability might be, but the fact is that exceedingly few farmers in the country ever have to pay the estate tax. Fiorina is hiding behind them in order to push a tax cuts that will overwhelmingly benefit the already ultra-wealthy.

President Obama has proposed reinstating the estate tax at the 2009 level of 45 percent with a $3.5 million exemption (so $3.5 million can be handed on entirely tax free). According to estimates by the Tax Policy Center only about 110 small businesses or family farms in the entire country could conceivably be affected by the estate tax at that level. And “virtually none” would have to go through the doomsday scenario of selling off parts of the farm itself in order to pay:

A Congressional Budget Office study found that all but a handful of the farm estates that would owe any tax under the 2009 parameters would have sufficient liquid assets on hand (such as bank accounts, stocks, and bonds) to pay the tax without having to touch the farm or business. And those very few small business and farm estates that might conceivably face a liquidity problem would have other options — such as spreading their payments over a 14-year period — that would allow them to pay the tax without selling off any of the business or farm assets.

In fact, in 2001, when the estate tax was much higher than it was for the rest of the last decade, the American Farm Bureau “could not cite a single example of a farm lost because of estate taxes.” Iowa State University Economist Neil Harl “said he had searched far and wide but had never found a case in which a farm was lost because of estate taxes.” “It’s a myth,” he said.

Currently, almost two-thirds of estate tax revenue comes from estates worth more than $20 million. In addition to benefiting only the super-wealthy, repealing the estate tax entirely would cost $784 billion over ten years.

Politics

Fox analyst slams Republicans for forgetting their ‘oath to uphold the Constitution.’

By Zaid Jilani on Aug 10, 2010 at 4:20 pm

Today, Fox News analyst Judge Andrew Napolitano slammed Republicans trying to change the 14th amendment to end birthright citizenship. When asked about the effort to change the amendment, Napolitano derided it as “nothing but political chatter.” He then went on to castigate the Republicans who are advocating for ending birthright citizenship, saying, “These people took an oath to uphold the Constitution whether they agree with it or not! All of it not part of it!”:

NAPOLITANO: The law has been upheld uniformly since 1868 and without exception. And we start with a couple of basics. The Congress cannot change the constitution of the 14th amendment on its own. It takes 2/3 of each house of Congress and 3/4 of the states to change the amendment. […] so this is nothing but political chatter by those who are concerned understandably by problems at the border. [...] I can’t imagine that there’d be a consensus to change the 14th amendment. [...]

HEMMER: But if the [Birthright Citizenship Act] were carried out, you had 100 co-sponsors about a year ago, it would require at least one parent to be a US citizen for a baby to become an american citizen at birth. If you were to enact the BCA as some refer to it, is that a way to get around the 14th amendment, and get done what people like John Cornyn, and John Kyl and John Mccain, and we heard John Boehner are trying to do.

NAPOLITANO: No! That would not be a a way around it. There is no way to get around the 14th amendment. These people took an oath to uphold the Constitution whether they agree with it or not! All of it not part of it! The Supreme Court has said you cannot take privileges or benefits away from a child because of a crime committed by the parent. Therefore everybody born here is an American citizen, no matter what their parents’ status was at their birth.

Watch it:

Not all Republicans have endorsed the extreme cause of altering the 14th amendment. Cesar Conda, who was a domestic policy adviser to former Vice President Dick Cheney, called the drive to change the amendment “offensive.” “The 14th Amendment is a great legacy of the Republican party. It is a shame and an embarrassment that the GOP now wants to amend it for starkly political reasons,” former Bush media advisor Mark McKinnon told the press.

Yglesias

Ideological Positioning of Recalculation

By Matthew Yglesias on Aug 10, 2010 at 3:57 pm

Vienna, Austria

Vienna, Austria

Something I ponder every once in a while is the strange ideological positioning of “real business cycle” or “recalculation” or “structural” or “Austrian” analyses of the current recession, or recessions more generally. These notions are usually put forward by people on the right, very strict libertarians most typically. And the idea of how the proposition fits together with the larger ideology is that the structural analysis serves as a bullwark against government intervention to stabilize the economy.

This all seems to me to suffer from a paucity of ideological imagination. The problem, as Jim Henley points out, is that the “Recalculation Story,” if true, implies radical underlying flaws in the capitalist economic model that call not for small-bore government intervention but for wholesale rethinking of the way the economy functions. I others would look at this differently if they, like me, had been raised in a family that contained various Marxists. From inside a “left” point of view, real business cycle theory is a radical theory that rears its head in any downturn as evidence of the systemic crises of capitalism and perhaps the need for revolutionary change. New Keynesian insistence that timely public policy can, if implemented correctly, stabilize the situation is a very status quo pro-market point of view. The point of the New Keynesian analysis is that mass unemployment, where it exists, reflects a failure of the political system—exactly the kind of thing a libertarian should expect will happen now and again—rather than a failure of market exchange.

John Maynard Keynes understood himself to be a liberal trying to preserve a free enterprise system threatened by communists and fascists. Milton Friedman, I think, also understood that the grinding misery of the Great Depression only led to unhealthy politics and was an advocate of bank bailouts, helicopter drops, and all the rest to prevent disaster.

In 2010, of course, we’re not going to go communist. Which is nice. But if you tell people that high unemployment is going to exist for a long long time, and there’s nothing the government can or will do about it, then of course people are going to support policies that make the economy less flexible and less open to imports and foreigners. If laid-off workers can’t find new jobs, then protecting incumbent sites of employment from competition becomes priority number one.

It’s true that if you adopt this view you do need to give up some libertarian purism. If periodic state intervention is required for the purposes of macroeconomic stabilization then you legitimize state intervention to, for example, help poor people. But the battle for that kind of purism is lost anyway. What you gain by embracing stabilization policy and treating the political problems of how to do it effectively as a problem to be solved rather than a reason not to try is an account of why it is that 9.5 percent unemployment doesn’t discredit the underlying principles of a market economy.

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