Immigration Reform & Conservative Hypocricy (posted by DT)

The Wingnuts who have taken over the Republican party are really in the ascendency in Arizona I guess, where they've passed a law that requires police to enforce federal immigration laws and allows them to demand identification from anyone they have "reasonable suspicion" to believe is an illegal alien.

So what's hypocritical? Well, all I hear from the far Right is how government under the Democrats is anti-freedom. They want to do things like mandate health insurance and transfer money through the tax system, which makes America less free.

So here it is now: do these same people support this law in Arizona? Now we're talking about people being stopped on the street because they look Mexican and presumably being hauled off to the station if they can't prove their legal status. So I guess authoritarian government power has virtually no limits when it comes to people with dark skin, while increasing taxes on "real Americans" is a horrible usurpation of freedom.

Sickening. I'm in on the Arizona boycott. Too bad, I always wanted to check it out down there...

Wingnut lies (posted by DT)

Sorry to my legion of fans to go so long without posting. It's tough to drag myself away from the NHL and NBA playoffs- good stuff!

Anyway, in my latest email correspondence with some new-found Right Wingnut friends, I've been particularly struck by the power of the Right wing noise machine. It blows my mind how the Right can, through sheer repetition in their closed system, create a reality in the Common Wisdom that is the exact opposite of the truth

For example, there's financial reform. We have Democratic senators working on a bill to regulate Wall Street. Republican politicians are criticizing this as a "permanent bailout of Wall Street". Now this is so beyond the pale that I have to believe it won't work and will be abandoned, but I've learned that almost anything is possible. These guys are masters at what they do. Our current system is set for automatic bailouts of the financial industry in times of crisis, as happened in 2008. The proposed legislation offers an orderly way to prop up and then break up failing financial companies. It is opposed by Wall Street, which would of course love to continue the current system in which they make piles of money in good times gambling with excessive leverage, and then gets the rest of us to pay for the bailout when it hits the fan. It's a win-win! I think it's pretty clear which party is more in line with Wall Street thinking, but their rhetoric is that Democrats are bailing them out.

Maybe we're not stupid enough to buy it this time. Sometimes I think that the Right has become so good at this ("Obama is a fascist!" "The deficit is the Democrats' fault!"), that they sit around in a smoke filled room drinking scotch and saying "hey, check this out, I think we can make America believe that Democrats are the party of Wall Street!" "No way, that's going too far!" "What the F---, let's try it and see!".

Goldman Sachs (posted by DT)

I'm not in the financial services field and don't pretend to understand things too well there, but I'll admit to lots of populist-style rage at the Wall Street Masters of the Universe who had so much to do with the most recent financial crisis. So naturally I was thrilled to see the SEC pursuing civil charges against Goldman Sachs for defrauding investors by betting heavily against securities that they were themselves marketing to investors. I'd get lots of pleasure in seeing someone go to jail too, though I'm not at all sure anyone did anything criminal in all this.

Still, what boggles my mind in reading stuff about Goldman Sachs (this here is my favorite, long but really readable and anger-producing: http://www.rollingstone.com/politics/news/;kw=[3351,11459];jsessionid=2049A274F095F3011DE8362091478785), is that anyone still invests with these guys. Is Goldman really the only game in town? Why would anyone in their right mind enter into business with a company that has a long and storied history of ripping people off and taking all their money?

My Big Business-favoring conservative friends are always waxing on about how the smart guys in the financial industry have produced so much great innovation that benefits us all. I should mention that I buy this argument in the abstract: capitalism requires greedy people to innovate and increase efficiency, which should lift all the boats with its rising tide. But in practice in the 2000s it's pretty clear to me that all the innovation on Wall Street has produced is enormous profits for a small group and absolutely nothing for the rest of us.

Anyway, my prescription is this: I think everyone should stop doing business with Goldman Sachs and drive them into bankruptcy. Not because they're immoral, greedy, or evil exactly- this isn't really a moral crusade- rather because doing business with them isn't very healthy for their partners.

Historical Tax Rates (posted by DT)

I was at a social work symposium the other day and heard a talk by Mimi Abromovitz, a well known social work professor at Hunter College in New York. Her talk focused on something I hadn't though much about, federal taxing and spending over time in the US. So much of the debate we hear now is about how the government "keeps taking more and more of my money", but there's little perspective anywhere regarding whether or not that's actually true.

I tried to keep up with Dr. Abromovitz's sources, but I'm not very good at refined searches on wonkish tax policy websites so I'm having trouble digging them up. But a little of what I jotted down:

• The percentage of revenue collected by the federal government compared to GDP has declined significantly since 1945. Of course it was very high then due to WW II, but the percentage has continued to fall consistently since then.
• Federal spending was 21% of GDP in 1976, and now it's 15%
• AFDC/TANF (commonly referred to as "welfare") was paid to more than 10 million recipients in the 1980s and 1990s. In 2009 4 million people received it. As a percentage of the US population, 5% were receiving these benefits 30 years ago, and now it's 1.5%.

Now there are a few ways to look at this data, but here's one way for those Americans who constantly carp about how the government is taking all their money and giving it to lazy, shiftless, poor people: You've already gotten what you want. The Feds are doing way less redistribution of income to the poor than it used to. So why are you angrier than ever?

On a related note, from the Tax Policy Center:

In 2007, federal, state and local taxes claimed about $3.8 trillion, or 27
percent of U.S. gross domestic product. That's nearly $13,000 for every
American. Two-thirds of tax revenues went to the federal government.
It may sound like a lot, but other developed countries collect even more. In
2006, taxes in 30 of the world's richest countries averaged 36 percent of GDP; only
Mexico, Turkey, South Korea and Japan had tax rates lower than ours. And
taxes in many European countries exceeded 40 percent of GDP because these
nations offer more extensive government services than the United States
does. Americans do pay far more in individual income taxes than residents of
other wealthy nations. Nearly 37 percent of U.S. tax revenue came from
personal income taxes in 2006, about 10 percentage points more, on average,
than in other industrialized countries. But we pay much less in sales taxes;
17 percent of 2006 U.S. tax receipts were from taxes on goods and services,
or about half the 32 percent average for rich countries.

Bottom line: We may hate our taxes, but we pay far less than people in other wealthy countries

Guantanamo & Our (lack of) Shame (posted by DT)

One of the arguments I hear most from people when I try to convince them that it's bad that the US has tortured people during the recent War on Terror is "hey, these guys are terrorists, who cares what happens to them!" Well, maybe not...
http://www.timesonline.co.uk/tol/news/world/us_and_americas/article7092435.ece

George W. Bush, Dick Cheney and Donald Rumsfeld covered up that hundreds of
innocent men were sent to the Guantánamo Bay prison camp because they feared
that releasing them would harm the push for war in Iraq and the broader War on
Terror, according to a new document obtained by The Times.
The accusations
were made by Lawrence Wilkerson, a top aide to Colin Powell, the former
Republican Secretary of State, in a signed declaration to support a lawsuit
filed by a Guantánamo detainee. It is the first time that such allegations have
been made by a senior member of the Bush Administration.
Colonel Wilkerson,
who was General Powell’s chief of staff when he ran the State Department, was
most critical of Mr Cheney and Mr Rumsfeld. He claimed that the former
Vice-President and Defence Secretary knew that the majority of the initial 742
detainees sent to Guantánamo in 2002 were innocent but believed that it was
“politically impossible to release them”.

Now let's make it clear what our country has done: we have tortured and killed and incarcerated for years a significant number of people who were completely innocent. How can that be justified in the name of national security? Because we were attacked, does that give us the right to torture anyone who may possibly be a Bad Guy, even if we don't have any evidence?

Sickening.

Banking Reform (posted by DT)

Well, I find myself still sporting a hangover from the Health Care Reform battle. Now that it's over and we're all just waiting to see whether the US health care system falls apart or not, we have to move on to other things.

The Next Big Thing in Washington is going to be banking regulation. I (and I'm sure lots of Americans) have a lot to learn about the system of banking regs at this time, and what's needed- I don't really get the ins and outs of it at this point.

So here's what is clear to me even if details aren't: some sort of big change is needed. I know, it's not exactly an earth-shattering statement. But keep in mind that there has thus far been no systemic change whatsoever in the rules that govern the financial industry. A year ago everyone agreed that the system had let us down due to "too big to fail" banks, excessive leveraging of risky investments, conflicts of interest by ratings agencies, the Moral Hazard problem, and a culture on Wall Street that encouraged short-term gain at the expense of long-term stability. But now that we're a bit removed from the crisis I hear Wall Street corporations and their congressional allies complain that regulations on the table will stifle innovation and weigh the industry down with excessive bureaucracy.

But I haven't seen a conservative solution to the problem proposed by the industry. What's their solution? They're essentially saying "the system has now corrected itself, no need to worry", which means to me "nothing has changed, and when this happens again you're going to have to pony up a bailout again".

So I hope Democrats fight hard for serious reform, and if it stifles some innovation on Wall Street but also forestalls the next enormous failure, I can live with that.

Military Coverups (posted by DT)

Now don't get me wrong here; this is not a post to beat up on the military or on soldiers. But this video (which is not for the faint of heart):
http://maddowblog.msnbc.msn.com/_news/2010/04/05/4117730-wikileaks-posts-combat-video-from-iraq-showing-civilian-casualties

...is really disturbing. In it, US soldiers in Baghdad in 2007 engage and kill a bunch of Iraqis who were apparently not a threat and were not even Bad Guys, including shooting up the van of Good Samaritans that tried to help the wounded.

Now it's impossible for me to fully understand the pressures faced by American soldiers occupying a foreign land with hostile people hiding everywhere. I can understand how some guys get jumpy and shoot first, asking questions later. I'm not looking to skewer these soldiers.

But what about their commanders who covered up these killings? It was pretty clear in the aftermath of this incident that a horrible mistake was made and innocent people were killed (there were two children in the van badly injured- they were being brought to school by their father). But the military claimed that all the dead were insurgents, except for two Reuters photographers. Look at the video- it's pretty obvious that's not the case.

I guess what this reminds me about most of all is that we shouldn't take military accounts of war actions at face value without independent confirmation. Top military brass have been lying in the US and everywhere else since the beginning of time, and they're not going to stop now.

And where's the media? We've barely heard a whisper about this in the mainstream press- this is a big story!

Email Throwdown! (posted by DT)

I thought I would share with you my loyal readers one of the lengthy email chains that we have been involved in. What follows is an edited and hopefully readable version of an exchange about the general issue of fairness and tax policies. I've taken out names to protect the politically innocent:

From JB:
The general question I have is, where is it written that life is supposed to be fair? Actually, life not being fair is what motivates a lot of people to success....and it builds character too. Secondly, if fairness is something that we should strive to achieve for all, why is it fair that those in the higher brackets are paying 60% oftheir money in taxes, and the government wants them to pay even more? Why is it fair that living in the northeast in order to afford a house and a family, and live like people in the rest of the country, you needto make 75%-100% more? Why is it fair that my buddy in Texas lives in a house just like mine and it cost him 1/3 the price of mine, but my taxes are higher because i make more? Meanwhile he probably can buy much more with the money he makes in Texas? When you start playing the "fair" card, it is a very slippery and dangerous slope - none of it is fact based, it is purely emotional andby definition will create inequities for someone else.

My Response:
I think that it would be nice if life were always fair, though of course impossible. I believe that when government can make life more fair (by, to take an uncontroversial example, enforcing laws against robbing and killing people) it should consider doing so. Some unfairness can't be solved by government (like, for example, gov'tcan't stop a child from being born with cerebral palsy), but can be ameliorated (gov't could make sure that that child's family can still afford health care). I think people's motivation is DECREASED by unfairness- if I know that because my parents can't afford college and because there's no financial aid, I have virtually no chance of going to college, I may not bother studying hard, accepting my fate as a low-wage worker. I'd be much more motivated to improve my situation if I felt like I had a fair chance to succeed. As for the tax issue, the more people make the more they should pay in taxes. It doesn't seem like our progressive tax system has stopped high wage-earners from working lately. As for the problem of your house being worth less than your buddy inTexas, that's one of the fairness issues the gov't should not try tosolve. You're welcome to move to Texas if you want, so it's really not unfair at all. That's not quite the same as the parent whose kid has cerebral palsy- can't exactly give him back.

JB respondes:
I am not sure if you have ready any Thomas Sowell - an African American who grew up in Harlem, pennyless, but went to MIT and has become a brilliant economist. He talks a lot about the same general principles that [another correspondent] touched on, how people need to be motivated to improve their own situation. Too much of our society is inherently lazy and does not produce for the greater good. This government is continuing to move in the direction of enabling this behavior, making indiviuals reliant on handouts, rather than motivating. Now, from the perspective on the top of the food chain: as the government continues to take and redistribute, those who create the jobs become less motivated to continue to do so, as they see less and less return on their own invested capital. By de-incentivizing these individuals, it has a spiraling effect on the whole system. With less motivation on the top of the food chain, there is fewer trickle down effect and everyone loses. Since we can both agree that life unto itself is not fair, the governments role is not and should never be to determine winners and losers i.e. fairness. When you take away more money from the top, and give it to the poor, that is exactly what the government IS doing, it is choosing to whom it wants to be fair, and to whom it wants to be unfair. Your thought is, why shouldnt the government be able to make things more fair for some. My question is why should the government be allowed to make things unfair for others. Everything has a cost to society, there are no free lunches.

Me again:
I find your position a maximalist one, that's all. As I see it, gov't can't do everything, but it also can do SOMETHING. The current conservative argument is that gov't can't do a damn thing and shouldn't even try (except use its military to kill lots of foreigners of course). I agree with you that taxes and redistribution can get too high and lead to the things you fear- a sinking economy that helps nobody. I just don't think that's a big danger with current tax rates, or even with Clinton-era tax rates. The economy was running pretty well during most of the '90s, with higher taxes than in the 2000s. I just don't see evidence that going back to those tax rates would be harmful. I'm not arguing that we should go back to 1970s tax rates, which I believe included a 91% marginal rate at the top- that's too high. My position on taxes isn't really radical based on recent US history. What's radical is the current Republican fixation on tax cuts ad infinitum. It is completely impossible to solve the deficit problem without revenue hikes; so when I hear absolute refusal to raise any tax rates, I can only conclude that you're not really serious about the deficit.

JB:
The one piece that you are missing from the Clinton era (I actually really like Bill Clinton) is the growth of the economy. The taxes issue is a much bigger drag on the economy now, since we are not seeing the economic growth, growth in worker productivity, wage growth that we saw in the 90's. Couple that with the reset of the Bush era tax cuts (that not enough people are talking about) and we are all really about to feel this pinch on our wallets. So, its not the tax rates that are the problem in a vaccum, it is the tax rates combined with the spending increases on top of more taxes yet to come with the absence of economic growth that does not provide a lot of optimism for the future.

Me:
To me the key point here about the Clinton years is that, as you say, tax rates "in a vacuum" aren't the only thing that matters. I agree with you. But I don't hear anything else coming from the Right except talk about tax cuts. The '90s certainly showed that the economy can grow with tax rates higher than we have now. The 2000s certainly showed that tax cuts alone don't necessarily produce growth (we had the lowest taxes since I don't know when, and we had the first presidency ever during which the economy didn't grow at all from 2001-2009).So I think we've dispensed with the argument that tax cuts are what the economy needs. Now the argument we're left with for tax cuts is: "it's my money, the government shouldn't be taking it", i.e. the moral one. Certainly that's the one stressed by [another correspondent], and it's a legitimate point of view. But let's face it, tax cuts have not correlated with economic growth over the last 20 years. We have to keep the deficit argument and the tax rate argument separate, which seems hard to do in this debate. HCR does not increase the deficit- why? Because it raises some taxes to pay for itself. And moderate tax hikes don't appear to wreck the economy- the argument against them is just the moral one. Now the moral argument for less taxes is fine, but it's of course impervious to data so I don't know that we can have a very illuminating debate about it.

Outlook for midterm elections (posted by DT)

Sorry I haven't posted in a while; I've been engaged in an extensive off-line email debate with a true Right-wing nut case, and frankly it's exhausting. I'll try to put a post together with that material when I get the chance.

But here's a quick hitter: it's generally accepted that the Democrats are going to lose a lot of seats in November, and possibly even lose control of the House. I'm surprised at how much this is accepted by my favorite bloggers on the Left, and I guess that's where the data leads.

Now it's almost always the case that the party in control of the Presidency loses seats at the midterm election. This year one would expect that even more, because the Democrats are basically at the high-water mark; they won everything in 2008, including lots of seats in traditional Republican areas, which can't all be kept now. Meanwhile there's just nothing left to take- Republicans after 2008 were basically left with mostly just their "rump" areas, none of which are going Democrat any time soon.

Still, I don't think pessimism is in order here. We'll lose seats, for reasons stated above, but if the economy is improved by November and if liberals can win some rhetorical battles around the good things in the Health Care law, I'd like to think the damage won't be catastrophic.

I'm probably overly optimistic, but that's how I feel today.