Author: lemkin

Fallows on the GOP and Taxes

James Fallows weighs in on the GOP finally finding a tax hike they love, the elimination of the Obama-initiated payroll tax “holiday” that would affect every employed individual in the country:

I had thought that Republican absolutism about taxes, while harmful to the country and out of sync with even the party’s own Reaganesque past, at least had the zealot’s virtue of consistency. Now we see that it can be set aside when it applies to poorer people, and when setting it aside would put maximum drag on the economy as a whole. So this means that its real guiding principle is… ??? You tell me.

You answered your own question, James. The increase would not impact the core constituency of the GOP, the top 2% of all earners. Most of their income isn’t touched by payroll tax rates anyway. Likewise, dumping this temporary and stimulatory tax break on January 1, 2012 puts “maximum drag on the economy as a whole.” The GOP sees that as a feature of this stance, not some arbitrary outcome. That such a position comes from the unitary “we pledge allegiance to no tax hikes of any kind, ever” club is also unsurprising. They only expressed interest in extending the Bush tax cuts if and when said extensions protected the cuts for the wealthiest 2%, who had already benefited asymmetrically from said imminently expiring tax policies.

The GOP has been working with single-minded focus towards the worst possible policy outcome(s) for more years than Obama has been in office. They dislike government. They want it to fail, and barring that outcome at best appear grossly ineffectual. Holding a lesser fraction of the total DC power structure only makes it easier to sand the gears and mutter “wha happened?” to an all too pliant media, the most popular outlet of which is firmly in their corner. The GOP machine is most certainly not going to stop now, especially not when they can needlessly prolong the economic suffering of millions of Americans for years in exchange for some short-term political gains and do that in a way that minimally impacts their core constituency: the top 2%. This is who they are.

Fallows on the GOP and Taxes

…first a Keynesian observes that fiscal stimulus can increase growth in a depressed economy. Second, as an attempted reductio, a conservative says “if that was true, then you could increase growth by breaking a bunch of windows.” Third, the Keynesian accurately points out that you could, in fact, increase growth by breaking windows. Fourth, the conservative accuses Keynesians of wanting to break windows or believing that window-breaking increases wealth. But nobody ever said that! The point is that we have very good reasons to think smashing windows would be a bad idea—there’s more to life than full employment—and that’s why Keynesians generally want to boost employment by having people do something useful like renovate schools or repair bridges.

Matt Yglesias, leaving out the next line in the exchange; the one where the conservative screams “that’s socialism,” makes a lot of unfounded claims about runaway spending, and then says government initiated stimulus has never worked, and most especially never worked in the guise of the colossal stimulatory effect of government spending to fight WWII. That recovery was the either “power of the markets” or “the markets anticipating Reagan and ‘morning in America.’” As usual.

This is true: It is not clear how George Pataki would win over Republican voters with his pro-choice views or record of tax and spending increases. Or his lack of a national political network. Or his lack of charisma. (He once pointed out to Maureen Dowd that he prefers his soda flat.)

Apart from that I don’t see how this can fail.

David Weigel ponders Patakimentum.
America is not ready for a President who prefers flat soda. Ten years, maybe; 2012, no way.
Source: Slate

Finally, it is not clear why it views the fact that the [proposed EU financial transaction] tax will make it more difficult to construct trading algorithms as an unintended consequence. These algorithms may provide large profits to the people who develop them, but the benefits to the economy and society are likely to be near zero. If a transactions tax discourages skilled mathematicians and computer programmers from developing complex formulas for financial arbitrage and instead has them work in a productive area of the economy, then the tax will have been a great success.

Dean Baker nails it. The very existence of this sort of trading apparatus, which benefits only the company deploying it, relies entirely on what should be privileged knowledge (e.g. foreknowledge of trade patterns about to happen that can only be extracted and acted upon through either initiating the trade itself or privileged placement of what amounts to a compute cluster on a particular routing switch (or both)), and is the sort of thing used by Goldman et al. to, you know, screw their own customers by trading against their interests and/or simply profiting off what amounts to insider information, is as anti-market, anti-competitive, and the very essence of what all our anti-collusion, anti-insider trading, anti-trust, and anti-monopoly laws are intended to control. And these types of transactions do nothing for the broader economy beyond radically enriching a handful of folks who can only spend so much. And we’re a country with a giant aggregate demand problem. So there’s that.
But may the Flying Spaghetti Monster help anyone who tries to regulate this practice in any way, much less apply a nominal cost to such actions. This, along with rampant and abusive naked shorting, is the true scandal of Wall Street. (By the by: naked shorting is already illegal, but is basically never even investigated, much less litigated. In light of recent events, this should be the basis of a scandal…but that would require a functioning media. Look over there! A missing white woman!)
And, so far as I can tell, exactly zero is being done about any of it. And nothing will be done until after the next financial collapse. And it will only happen then if the collapse is sufficiently devastating that the entire structure of Wall Street finance is utterly laid waste (thus ending their political influence in the aftermath). Sounds like a time.
Source: cepr.net

GOP Loves Tax Hikes

Marginal Revolution’s Alex Tabarrok:

If Republicans have their way, taxes will increase next year by $120 billion. Republicans in favor of tax increases? Sadly, yes.

The post goes on to lay out its theories on the GOP loving only tax cuts for the rich and so forth. But I think this is wrong.

The House GOP is against this particular tax cut continuing solely because Obama wants it to continue. Any policy underlying that singular issue is beside the point. “Obama’s for it” is reason enough for them to oppose anything to the bitter end.

A simple experiment would clear this up for the broader electorate. Obama should choose two or three of the most dearly held GOP beliefs and take them up. Argue for their immediate passage. But he should be sure to stand clear of the microphone, as there will be a stampede of Tea Klanners vying to be the first to refudiate lower capital gains taxes, or an end to the “death” tax, or massive corporate welfare giveaways to our Galtian Overlords.
We’ve said it before, and Serious People tend to think it’s some kind of a joke when you point it out to them, but if he wants to succeed on the policy front Obama needs to come out against wind power, trains, lower taxes, and single payer health care. It’s the only way those issues will ever get any traction from either party.

Try it and see. It’s the awful truth of today’s politics and sadly how things “work.”

GOP Loves Tax Hikes

Diamond Rick Perry

Gail Mitchell: You said Social Security was unconstitutional.
Rick Perry: Social Security’s going to be there for those folks [currently receiving it]
Gail Mitchell: But you said Social Security is unconstitutional
Rick Perry: I don’t think I — I’m sorry, you must have… [and then stuffs his mouth full of popover]
Gail Mitchell: ???
Rick Perry: I’ve got a big mouthful […] I’m sorry, sweetheart
Lemkin: The old stuff-your-mouth-full dodge. This guy has a bright future in politics. That and this Gail Mitchell is tougher than any journalist on the bus.

Chait’s Venetian Blind Alley

Jon Chait unleashes the snark over a suggestion that we have a seperate Super Committee tasked only with “[encouraging] the new supercommittee to ‘go big, or go home.’”

What if we determined the membership of the meta-committee via some non-political selection method – perhaps through the creation of a new group containing, Republicans and Democrats, dedicated to finding the right mix of politicians of both parties, who would be tasked with coming up with a bipartisan plan to lobby the bipartisan supercommission to come up with a bipartisan plan to reduce the deficit?

Actually, the loyal Lemkin reader will realize we covered this one, er, one year ago:

Thirty electors were chosen by lot, and then a second lottery reduced them to nine, who nominated forty candidates in all, each of whom had to be approved by at least seven electors in order to pass to the next stage. The forty were pruned by lot to twelve, who nominated a total of twenty-five, who needed at least nine nominations each. The twenty-five were culled to nine, who picked an electoral college of forty-five, each with at least seven nominations. The forty-five became eleven, who chose a final college of forty-one. Each member proposed one candidate, all of whom were discussed and, if necessary, examined in person, whereupon each elector cast a vote for every candidate of whom he approved. The candidate with the most approvals was the winner, provided he had been endorsed by at least twenty-five of the forty-one.

Rick Perry’s an idiot, and I don’t think anyone would disagree with that

Bruce Bartlett, former H.W. Bush Treasury official and Reagan adviser, minces words when asked his thoughts on Rick Perry. More evidence of Turd Blossom’s tentacles? Or just the party apparatus trying to help Perry out by appearing to denigrate his intellect while hedging bets against his inevitable defeat in a national election?
I’d say: A little from column A, a little from column B.