An occasional blog about populist politics and popular music, not necessarily at the same time.
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Friday, September 24, 2021
Speaking of Which
I wasn't planning on posting anything this week, but I tweeted after reading the Dougherty article below, and felt like I should expand on that a bit more.
I don't want to get into the weeds over Biden's approval poll dip, or into its associated (all too predictable) politics, but I was rather taken aback by a piece of email I got from something calling itself National Democratic Training Committee. Omitting the poll solicitation and the garish background colors, it looked rather like this:
I realize all they're really doing is phishing for donations for their organization (National Democratic Training Committee), which may (or may not) be worthy, but this level of hysteria is totally uncalled for, and counterproductive. Impeachment is a press release, not a practical threat. (Marjorie Taylor Greene filed impeachment articles the day after Biden was inaugurated. Four more Republicans filed articles last week, trying to make political hay out of Afghanistan. Two Texas Republicans added their articles over border policy. Also: Greene's impeachment rant goes off the rails.)
Impeachment cannot possibly proceed, let alone succeed, without significant Democratic defections. Even if the House acted, the Senate would fail to convict, the process would be viewed as purely political, and consequences would be few and far between. Assuming Biden's health holds up, his presidency is secure through 2024, and the only real threat is if Democrats lose Congress in 2022 (which is something that happened to the last two Democratic presidents). But that's still more than a year away, and unless you're running for office then, there's very little you can do about it now, so please chill, and save your energy for when it's needed. Above all, don't panic and back down. Republicans are unhinged, and their devotion to fringe insanity will ultimately undermine them. Don't help them by going insane yourself.
On my Facebook feed, a right-wing relative forwarded this meme:
My first thought was to respond, "so you're working for the KGB now?" Her personal posts are harmless enough, but in spurts as much as 10-20 times a day she forwards right-wing troll memes, many designed to inculcate fear, others aimed to flatter totems of the right, and all massively mendacious and mean. I've replied to a few, like the one that tried to illustrate the evils of socialism by offering Facebook as an example (as I pointed out, "I think the word you're looking for is capitalism"). But I may have learned something from this one: namely, that the reason Russia's trolls favor the Republicans has less to do with currying favor with their fellow oligarchs than because they've both embraced the same model of psychological manipulation.
Further down, my relative forwarded another meme, which shows a donkey in a chemical protection suit, carrying a tank marked "Center for Democrat Control" and spraying "FEAR" all over. I didn't recognize the donkey at first, so my initial reading was that "FEAR" was being used to control Democrats. No Democrat would label it that; not that they would use "Center for Democratic Control" either, as democracies are opposed to control, but using "Democrat" as an adjective breaks the association of the Party with democracy -- something at least until recently that Republicans had to give lip service to. The donkey spoils the malaproprism, but it underscores how Republicans' worst fears are that Democrats will act just like they do.
It seems like Republicans are flipping on a lot of rhetoric these days, whatever it takes to make their side sound plausible. The big recent one is how vaccine refusal rests simply on "free choice" -- something they deny in their efforts to criminalize abortion.
Another meme: "Right now, TODAY . . . We have the very government our Founding Fathers warned us about." Only thing I can think of there -- at least it's one that was widely discussed at the time -- is the peril of having a standing army.
Carter Dougherty: Senate Democrats Have a Big New Corporate Tax Idea: Democrats want to pass a fairly major public works bill -- top line is advertised as $3.5 trillion over 10 years, which works out to a measly $350 billion/year, well less than half of what the Defense Department costs, but for things that are actually useful and valuable. (For more context, see: Peter Coy: It's Not Really a '$3.5 Trillion' Bill; also: Eric Levitz: $3.5 Trillion Is Not a Lot of Money; and Michael Tomasky: How the Media's Framing of the Budget Debate Favor the Right.) But to get it through the Senate reconciliation process (i.e., around the filibuster), they have to offset that cost with revenue increases. Reversing Trump's corporate income tax giveaway is an obvious candidate, but swing voter Joe Manchin has been balking at anything over 25% (up from 21%, or down from 35%, depending on your perspective). So Bernie Sanders has proposed a compromise, which "would impose a surcharge on corporate income tax if the company paid its CEO 50 times more than what its median employee earns." Dougherty applauds this as "a wildly popular idea just waiting for them." Sounds like a real dumb idea to me. Sure, CEO compensation is ridiculous, but there are more straightforward ways to deal with it: income tax, and you can also limit the deductibility of the corporate expense (since executive bonuses are basically profit-sharing, why not tax them twice, first as profits, then as income?). To raise any significant revenues, the surtax would have to be steep, which puts a lot of emphasis on the pivot point: why 50 times? Doesn't that suggest that CEO pay 40-49 times is OK? You don't have to go back very far to find years when that ratio was not just exceptional but unheard of. This also raises questions about what is CEO compensation (base salary, obviously, but CEOs also routinely get "performance" bonus, stock options, and all sorts of non-salary perks, treated variously). And why just CEOs? Aren't their also issues with COOs, CFOs, CTOs, board members, and others? The whole proposal is simply perverse.
All the more so because there is a simple alternative, one so obvious I'm shocked no one seems to be discussing it: make corporate income tax progressive. It should be easy to pick out brackets and a range of tax rates -- say, from 21% (or less) to 35% (or more). Given the concentration of profits in large companies, one could even lower the tax rate for a majority of corporations while increasing total revenue. Seems like that would be good political messaging. One might object that a progressive profits tax would discriminate against companies that are simply large and/or successful (have high profit margins). That sounds to me like a feature. High profit margins are almost always due to monopoly effects. It's very difficult to break up or even regulate monopolies, especially in marginal cases. Taxing them will make them more tolerable. And if the prospect of higher taxes leads some corporations to spin off parts to tax them separately, that too sounds like a benefit.
There are cases where flat taxes are appropriate, but income/profit taxes aren't one. It's OK to have flat taxes on consumption (sales and excise taxes), because that saves having to identify and qualify the spenders. But income/profit taxes are always identified, and the level is an intrinsic part of what's being taxed. Elsewhere I've proposed a scheme where unearned income (interest, dividends, capital gains, gifts, inheritance, prizes) should be taxed at a rate which is progressive over the lifetime sum (see: here and here and here and here). Admittedly, it's fun to tinker with tax schemes, but the real questions are harder, as they turn on what income and what can be deducted. The big problem with corporate income/profit taxes is that many corporations are able to avoid/evade them -- in which case the marginal rate may be moot. On the other hand, it's just those questions that are least transparent and most subject to interest group lobbying. It's very hard to develop a fair tax system when every political office is up for auction, as is the case now.
[PS: A related story: House Bill Would Blow Up the Massive IRAs of the Superwealthy: The rationale behind IRAs is to allow people to postpone paying tax on retirement savings until they need them, at which point their incomes will probably come down, so they'll save a bit when they have to pay tax on their withdrawals. However, Peter Thiel (to take just one example) has used this loophole to shelter $5 billion. The proposal is to limit tax-sheltered savings to $20 million, which is still pretty generous.]
Anne Kim: A Case for a Smaller Reconciliation Bill: Of all the sources I read regularly, Washington Monthly has been consistently defending the more conservative Democrats in their efforts to go slow and small (if they have to go at all). I don't particularly agree with them, but I'm not especially bothered as well. I'd like to pocket a few real (even if ultimately inadequate) gains as soon as possible, like the "bipartisan" infrastructure bill and the whittled-down Manchin-approved fragment of the $3.5 trillion reconstruction package. Pass those and you can go into 2022 with a message that you've already produced important, tangible gains -- things that were never even attempted when Trump was president -- and all you need to do more is get more Democrats elected. As this piece advises: "Take a longer view, with a strategy and tactics geared toward building a sustainable governing majority." On the other hand, while I can see the centrists' impulse to take things gradually, they need to decide which side they're on, and act accordingly. As Benjamin Franklin put it, "we must, indeed, all hang together or, most assuredly, we shall all hang separately."
PS: Seth Myers recently pointed out that Democrats in Congress are divided into three groups: progressives, moderates, and "Republicans" -- cue picture of Manchin (Follow the Money Into Joe Manchin's Pockets) and Sinema (Kyrsten Sinema Is Corporate Lobbies' Million-Dollar Woman). By the way, Steve M. has a theory about conservative/corrupt Democrats like Manchin and Sinema: No, Mr. Bond, They Expect the Democratic Party to Die:
By the way, I noticed that the former right-wing of the Democratic Senate, Claire McCaskill and Heidi Heitkamp, have been in the news recently, appearing as paid corporate lobbyists against the Biden bill, so the notion that Manchin and Sinema will, in cue course, dutifully lose their seats and wind up making more money lobbying, isn't at all far-fetched.
For more on this, see Krugman, below.
Ezra Klein: The Economic Mistake the Left Is Finally Confronting: Interesting article, although the title doesn't do it any favors. The "Left" is Biden's economic team, and the "Economic Mistake" is, well, what? Arthur Laffer-style "supply side" gimmickry? Opposition to same? Does it matter? The point is that they're looking not only at increasing demand (by government spending, plus putting more money into the hands of workers and the poor) but also at supply-side bottlenecks, hoping to limit friction that could produce inflation. Of course, one big item there (infrastructure) works both ways, which is why investments in infrastructure and education have such big returns. Klein cites two papers, one on the problem: Cost Disease Socialism (an even worse title) from the "center-right" Niskanen Center; and one on the solution: An Antidote for Inflationary Pressure by Biden advisers Jared Bernstein and Ernie Tedeschi. I'd add a few more points. Antitrust enforcement would help eliminate supply bottlenecks, by encouraging more companies to exist and add capacity. Eliminating patents and limiting other forms of "intellectual property" would prevent many monopolies from forming. And while government can encourage private companies to form and invest by guaranteeing future purchases, it could be more efficient to directly fund new ventures.
Paul Krugman: Are Centrists in the Thrall of Right-Wing Propaganda? Republicans are predictably acting out as nihilists, but:
Well, right-wing propaganda for sure, which includes the occasional nod to economists like Hayek and Friedman, although these days they rarely bother with rationalizations for their political preferences when shouting them louder will do. Keynes, who like Krugman held his occupation in exceptionally high regard, famously derided political opponents as "slaves of some defunct economist," but the less-quoted continuation is more true today: "Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back." Or for every stupid idea in circulation today, you can find some past "thinker" who articulated it first. (Sure, this is just a variation on one of my old aperçus: that every bad idea in Western thought can be traced back to some Greek.)
It's mind-boggling to recall this now, but back in the 1990s Reagan Republicans were widely regarded not just as crafty politicians but as serious thinkers. Not that the "Laffer curve" survived much more than the few months when it was useful for selling the Reagan tax cuts, but the idea was propagated so widely that some Democrats started buying into it, which is how we got Clinton and Obama -- Democrats who raked in huge donations on the promise that they could do more for the wealthy than even the Republicans could. That idea lost its lustre during the Obama years, and especially with Hillary Clinton's loss to Trump. But it's recent enough that it's no surprise that there are still Democrats trying to make the "Reagan Era" Clinton-Obama model working -- the one they've been fairly successful at for their own political careers. Besides, nothing has been done to reform the system that allows the rich to dominate elections and smother elected officials with lobby interests.
Indeed, the real surprise is that Biden, who followed the Reagan Era's zeitgeist as uncritically as anyone, and who was the overwhelming choice of the Clinton-Obama legacy minders in 2020 (at least once every other right-center candidate had been eliminated), should have broken the mold as definitively as he has. I attribute that to two things: one is that politics has ceased to be simply a vehicle for office-seekers to advance their careers on -- voters have started to demand services and representation, which means that Democrats have to consider more than their donors; and the other is that most serious thinking about practical solutions to increasingly dire real problems is concentrated on the left these days.