Today, Speaker John Boehner (R-OH) rejected Senate Majority Leader Harry Reid’s (D-NV) plan for raising the debt limit, claiming that it was full of gimmicks. Boehner’s principle criticism was that Reid’s plan counted $1 trillion in savings from winding down the wars in Afghanistan and Iraq.
In a remarkable interview on CNBC, Majority Leader Eric Cantor admitted to Larry Kudlow that both the House Republican budget and the “Cut, Cap, and Balance” Plan — which were both supported by nearly the entire GOP caucus — also counted savings from winding down the wars:
Cantor: Speaker Boehner came out months ago and said we are not going to increase the debt ceiling unless we have comensurate or even greater cuts in spending. Now Sen. Reid’s plan doesn’t do that. What Sen. Reid’s plan says is we’re going to raise the debt ceiling $2.4 trillion and we are also going to cut spending but what he does is counts over a trillion dollars in spending that is assumed to decrease and go away anyway which is the spending associated with the wars in Iraq and Afghanistan.
Kudlow: Yes, but isn’t that in the Paul Ryan baseline also, which is the baseline for Cut, Cap and Balance.
Cantor: But, but, but… absolutely it is.
Watch it:
Kudlow started the interview by posing the following question to Cantor: “What’s so bad about the Harry Reid plan? It looks very Republican to me.”
Today, CNBC aired a segment titled “When it comes to the market, is the Tea Party good news or bad news?” Hugh Johnson of the investment firm Hugh Johnson Advisors and Andy Busch of BMO Capital Markets joined hosts Larry Kudlow, Trish Regan, and Melissa Francis to discuss Republican radical Christine O’Donnell’s Senate primary victory in Delaware.
All the guests and hosts appeared to agree that O’Donnell’s victory was a good thing for Wall Street because she supports policies favorable to the financial industry. Although both guests conceded that O’Donnell’s nomination might be bad for Wall Street because it could enable a Democrat to win the Delaware seat, there was a general consensus that the string of Tea Party victories has sent the right “message” that Americans are drifting to the far right. The talking heads rattled off a variety of Tea Party and O’Donnell positions — like extending the Bush tax cuts for millionaires and opposing regulations — that they agreed with:
REGAN: So when it comes to markets, is the Tea Party and this victory in Delaware good news or bad news?
JOHNSON: You know in a strange sort of way, I think it’s good news because it first of all indicates passion but its passion on the part of the Republican Party. The passion is, we’re kind of tired, we’re fed up with big government and raising taxes. [...]
BUSCH: Well certainly the stance by the Tea Party candidate of a capital gains elimination for two years is wonderful for the markets! I think the central point or the salient point of the victory is not that this candidate is flawed. A lot of candidates are flawed as human beings are. But the point is, there is an energized base that is pulling the conversation this stance of fiscal responsibility but also business-friendly and market-friendly policies. [...]
KUDLOW: I totally agree, and we’re looking at a configured, conservative Congress. We don’t know if Republicans can take the Senate, that’s going to be close. It looks like they’re going to take the House, big time. That’s a conservative Congress. And as Andy said, that’s going to be pro-growth, pro-business, anti-spend, anti-tax views.
Watch it:
Generally, Kudlow and his associates have been proud partisans hoping for a Democratic defeat this November. But O’Donnell’s opponent Rep. Mike Castle’s (R-DE) was one of the few members of the GOP caucus to vote for financial reform. Notably, CNBC’s Kudlow is also a Tea Party movement funder through the attack group Club for Growth.
A favorite Republican talking point lately is that the businesses are not creating jobs because they are “hamstrung by uncertainty.” According to this argument, the specter of taxes and regulation is paralyzing companies, and if only Congress would preserve the Bush tax cuts for the wealthy and promise to not produce any new regulations, a flood of business investment would ensue.
Last night on CNBC, Rep. Mike Pence (R-IN) told supply-side guru and Reagan disciple Larry Kudlow that the way to get businesses to “unleash” the nearly $2 trillion in cash and assets they’re currently sitting on is to extend the Bush tax cuts for the rich and then cut marginal income tax rates even further. “C’mon, we know what works,” Pence said:
C’mon, we know what works. Larry, you know what works better than most Americans, and that is across-the-board marginal tax relief…We’ve got to demand, whether it’s this fall, whether it’s after the election, or whether it’s in a newly minted Congress next year, we’ve got to demand that we preserve tax relief, no American sees a tax increase on January 1, and then promote across-the-board tax relief on marginal rates that’ll really unleash all that more than $2 trillion in trapped capital in this economy.
Watch it:
It seems like some variation of “c’mon!” has become the Republican leadership’s go-to argument these days, but Pence shouldn’t be so smug when it comes to the efficacy of marginal income tax cuts to spur business investment. As Michael Ettlinger and John Irons found, business investment following the Clinton-era tax increase far outstripped that following either the Bush or Reagan supply-side tax cuts:
One of the basic premises of supply-side theory is that tax cuts will produce substantial increases in business investment. This, however, has not been the case…In the two supply-side eras the average growth rate in real investment was unimpressive: It was 2.8 percent in the seven-year period beginning in 1981 and 2.7 percent in the period beginning in 2001. In the period with higher taxes beginning in 1993, the growth rate was 10.2 percent. In the parallel portions of the business cycles following the tax changes of 1981, 1993, and 2001, investment grew faster under the 1993 tax regime than under either supply-side regime. The average rate of growth was 10.5 percent post-1993, 1.4 percent post-1981, and 6.1 percent post-2001.
“The failure of investment to respond to supply-side tax cuts greatly undermines the central premise of the theory underlying the policy,” Ettlinger and Irons wrote.
What is actually holding businesses back, as Paul Krugman wrote, is that there is not enough demand for their products, due to high unemployment and hour and wage cuts. “After all, why should businesses expand their production capacity when they’re not selling enough to use the capacity they already have?” Krugman wrote.
Pence, of course, doesn’t have the strongestgrasp ondata, so it’s not surprising that he buys the supply-side voodoo. But the situation is, in fact, the opposite of what Pence and Kudlow frame as common knowledge.
Since the passage of the Affordable Care Act, Wall Street reform has “vaulted to the top” of President Obama’s agenda. Standing in the way, however, is the U.S. Chamber of Commerce, which has spent $3 million on an advertising campaign opposing an independent consumer protection agency and has pledged to spend $100 million to “defend the free market system.”
Yesterday, Deputy Treasury Secretary Neal Wolin ventured into the lion’s den to deliver a tough message. Speaking to the Chamber of Commerce, Wolin ripped the business lobbying group for launching a “lavish, aggressive and misleading campaign” against the consumer protection agency. Wolin proceeded to document instance after instance of the Chamber’s lies. (Read the speech here.)
Bruce Josten, executive vice president of the Chamber, later issued a statement accusing Wolin of “political grandstanding and distortion of facts.” But the Chamber is on the defensive, losing allies on the right. Last night, CNBC host Larry Kudlow, a prominent conservative proponent of trickle-down economics and a loverof all thingsRonald Reagan, sided with the Obama administration in its attacks on the Chamber:
KUDLOW: I want to say the Chamber of Commerce is a very negative force on this. Absolutely negative and absolutely wrong in my humble opinion. … Listen, number one, you heard Barney Frank. This was a nice turn of the phrase. Their bill, he says, is death panels for too big to fail big banks. I rather like that. I have supported the Dodd approach. I know the language may not be 100%, but the language looks pretty tight to me. The end of too big to fail bailout nation.
Watch it:
Even some Senate Republicans are giving indications that they want to peel off from their pack and work with Democrats to end big bank bailouts. Sens. Judd Gregg (R-NH) and Bob Corker (R-TN) said they expect Wall Street reform to pass this year. “I don’t think people realize that this is an issue that almost every American wants to see passed,” Corker said, arguing that the GOP made a “strategic error” by refusing to work in a bipartisan manner on the bill.
“There are Republicans I serve with in the Senate who frankly don’t want to ‘just say no‘ policy when it comes to major legislative initiatives,” Sen. Chris Dodd (D-CT) said yesterday. “And they would like to be part of this debate and offer constructive ideas to this proposal.” Sen. Richard Shelby (R-AL) has made clear, however, that it would fine with him if financial reform didn’t pass this year.
This morning, climate activists claiming to represent the U.S. Chamber of Commerce announced the organization was now supporting the Kerry-Boxer Clean Energy Jobs Act, reversing its years of opposition to any climate bill before Congress. “We believe strong climate legislation is the best way to ensure American innovation, create jobs, make sure the U.S. and the world are on track to reduce global carbon emissions,” the spoof statement, sent to reporters and presented at a press conference at the National Press Club in Washington, D.C. read. After Reuters bit on the story, despite the announcement’s implausibility, CNBC and Fox Business Network ran “breaking news” segments promoting the false tale of the Chamber’s redemption. Both networks noted the companies who have abandoned the chamber over its clean energy opposition, including Exelon, PNM Resources, PG&E, and Apple. When CNBC ran a retraction, right-wing anchor Larry Kudlow opined:
Is there any involvement of the White House whatsoever?
Mother Jones and Talking Points Memo report that the spoof was conducted by the Yes Men and the Avaaz Climate Action Factory, a youth activist organization.
It should be noted that FBN’s Brian Sullivan immediately corrected his initial report, when a call to the Chamber for more comment elicited a denial “that they are changing their position on climate change legislation.”
Appearing on General Electric’s conservative-skewing business network, CBNC, Sen. Jim Inhofe (R-OK) argued that carbon dioxide, the primary greenhouse gas, is not a “real pollutant.” In an interview with right-wing economist Larry Kudlow on Thursday, Inhofe repeated lies about the cost of climate legislation. Kudlow, praising Inhofe for telling Americans about this “very scary story,” attacked the prospect of global warming regulation as a “backdoor energy tax” that “can drive stocks into the ground.” Inhofe claimed that President Obama wants to “intimidate Congress” into passing “$300 to $400 billion a year” in taxes, so that the American people will blame Congress instead of him:
The reason why I don’t think they’ll try to do that through regulation is because certainly this president, President Obama knows that once the American people find out that they’re going to pay about $2,000 a year in taxes for something that doesn’t do anything, there’s going to be an outrage. And they want to be able to say, “Oh, no, that was Congress that did it.” My feeling is they’re using this for intimidation purposes and they’re going to try to intimidate Congress to do this.
Watch it:
CNBC’s promotion of right-wing fantasies originating from polluter-funded think tanks and conservative bloggers is nothing new. Energy and media multinational General Electric is often portrayed as a climate-friendly corporation which influences American politics to the left, primarily because of the presence of Rachel Maddow, Ed Schultz, and Keith Olbermann on MSNBC’s afternoon programming. On Fox News, Glenn Beck rants that GE is going to get “all kinds of contracts from the government on green energy” because it is “in bed with Obama.” The Competitive Enterprise Institute’s Steve Milloy claims the new Kerry-Boxer clean-energy jobs act is larded with “payoffs to GE.” Bill O’Reilly claims GE “is also pushing for the proposed cap-and-trade program” and “using its power and the airwaves to influence politics” so that it can “reap billions of dollars if the Feds OK the carbon deal.”
Not only does GE attack climate action through its CNBC network, it also supports several national lobbying campaigns against clean-energy legislation, through its membership in the American Coalition for Clean Coal Electricity (GE Energy), the American Petroleum Institute (GE Oil & Gas), and the National Association of Manufacturers (GE Enterprise Solutions). Unlike GE, companies such as Duke Energy have abandoned NAM and ACCCE for their retrograde position on climate change.
Today, Speaker John Boehner (R-OH) rejected Senate Majority Leader Harry Reid’s (D-NV) plan for raising the debt limit, claiming that it was full of gimmicks. Boehner’s principle criticism was that Reid’s plan counted $1 trillion in savings from winding down the wars in Afghanistan and Iraq.
