Yearly Archives: 2010

Haley Barbour’s Ridiculous Story

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Eugene Robinson latest column is Haley Barbour’s Ridiculous Story.

Mississippi Gov. Haley Barbour, who may seek the Republican nomination for president, is trying to sell the biggest load of revisionist nonsense about race, politics and the South that I’ve ever heard. Ever.

He has the gall to try to portray Southern Republicans as having been enlightened supporters of the civil rights movement all along. I can’t decide whether this exercise in rewriting history should be described as cynical or sinister. Whichever it is, the record has to be set straight.

In a recent interview with Human Events, a conservative magazine and website, Barbour gave his version of how the South, once a Democratic stronghold, became a Republican bastion. The 62-year-old Barbour claimed that it was “my generation” that led the switch: “my generation, who went to integrated schools. I went to integrated college—never thought twice about it.”

The “old Democrats” fought integration tooth and nail, Barbour said, but “by my time, people realized that was the past, it was indefensible, it wasn’t gonna be that way anymore. And so the people who really changed the South from Democrat to Republican was a different generation from those who fought integration.”

Not a word of this is true. [Emphasis added by me.]

I know a few people who are old enough to know better, but who would probably fall for Barbour’s story.  Then we have the people who are too young to know better.

I am one who is old enough to know better.  I appreciate Eugene Robinson’s laying out the time line to make it perfectly clear what a load of bull Barbour’s claims are. Without this reminder even I might be tempted to give Barbour credit for one or two words of truth in his perverted story.

If the mainstream media actually start selling this revisionism, then you know the world has gone mad.  Faux Noise doesn’t count because you know this propaganda is right up their alley.

Orszag–Extend Bush Tax Cuts for Two Years 1

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In the New York Times on 7 September 2010, Peter Orszag writes, One Nation, Two Deficits, in which he argues to continue the Bush tax cuts for two years but end them for good in 2013.

In the face of the dueling [jobs and budget] deficits, the best approach is a compromise: extend the tax cuts for two years and then end them altogether. Ideally only the middle-class tax cuts would be continued for now. Getting a deal in Congress, though, may require keeping the high-income tax cuts, too. And that would still be worth it.

Why does this combination make sense? The answer is that over the medium term, the tax cuts are simply not affordable. Yet no one wants to make an already stagnating jobs market worse over the next year or two, which is exactly what would happen if the cuts expire as planned. (…)

Despite a dire fiscal outlook, many progressives want to make the tax cuts permanent for all but the very highest earners. Many conservatives are even worse: they’d make the tax cuts permanent for the likes of Warren Buffett, even though he’d prefer they didn’t. Making all the tax cuts permanent would expand the deficit by more than $3 trillion over the next decade.

Both approaches lock us into a budget scenario out of which there are few politically plausible routes of escape. Although hardly anyone wants to admit it, we’re not going to solve our budget problem over the next decade unless revenue is part of the equation.

Let’s look at the facts. The projected deficit for 2015 is 4 percent to 5 percent of G.D.P., depending on whose assumptions you use. A sustainable level is more like 3 percent or lower. So we need deficit reduction of 1 percent to 2 percent of G.D.P., or about $200 billion to $400 billion a year by 2015. (…)

How much savings is plausible on the spending side? Medicare, Medicaid and Social Security will account for almost half of spending by 2015. Even if we reform Social Security, which we should, any plausible plan would phase in benefit changes to avoid harming current beneficiaries — and so would generate little savings over the next five years. The health reform act included substantial savings in Medicare and Medicaid, so there aren’t further big reductions available there in our time frame.

The other half of the budget is mostly net interest (which is not negotiable unless we renege on our debt) and discretionary spending. Discretionary spending is split roughly equally between defense and non-defense spending. The defense component already assumes a phase-down in both Iraq and Afghanistan; saving an additional 5 percent of the Pentagon’s base budget would be a substantial accomplishment and would yield about 0.2 percent of G.D.P. Cutting 5 percent out of non-defense discretionary spending, a stretch politically, would save about as much.

It would be tough, then, to squeeze more than a half percent of G.D.P. from spending by 2015. Additional revenue — in the range of 0.5 to 1.5 percent of the economy — will therefore be necessary to reduce the deficit to sustainable levels.

How would we do this?

One possibility would be to establish a new source of revenue, perhaps through revenue-increasing tax reform, and possibly including a modest value-added tax (that is, a V.A.T. of 5 percent to 6 percent). This approach has many potential benefits, including the opportunity to improve our tax code by cutting back on loopholes and shifting toward a consumption-based tax system. It is also politically impossible, at least in the era of the 60-vote Senate. Those who fear a V.A.T. have little reason to worry — the votes aren’t there.

The beauty of extending the tax cuts for only two years is that canceling them doesn’t require an affirmative vote. It happens by default, so Congressional deadlock works in its favor. And it would essentially solve our medium-term deficit problem, reducing the deficit by $200 billion to $350 billion a year from 2015 to 2020. (…)

Finally, a key part of this deal is actually ending the tax cuts in 2013 — and that will surely require a presidential veto on any bills to extend them after that.

-RichardH

President Promotes New Stimulus Plan & Takes on GOP

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The President’s Labor Day speech in Milwaukee is mow on C-SPAN.

The C-SPAN web site describes the speech wiht the following words:

Pres. Obama announced a new plan for improving the nation’s infrastructure and creating jobs during his appearance at the annual Laborfest event in Milwaukee. The initiative would spend $50 billion over the next six years, to repair 150,000 miles of highways and to build a smart air traffic control system, among other transportation-related projects.

You can read the written version of the President’s prepared remarks on the Whitehouse web site.

If anybody can turn things around by the November elections, this is the President who can.  We can help.  Yes we can.

1938 in 2010

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Paul Krugman’s column in today’s The New York Times is titled 1938 in 2010. He compares that time, 5 years into Roosevelt’s administration, to the current time, 2 years into the Obama administration.

Now, we weren’t supposed to find ourselves replaying the late 1930s. President Obama’s economists promised not to repeat the mistakes of 1937, when F.D.R. pulled back fiscal stimulus too soon. But by making his program too small and too short-lived, Mr. Obama did just that: the stimulus raised growth while it lasted, but it made only a small dent in unemployment — and now it’s fading out.

Obama’s mistake was thinking that if the stimulus proved to be too small, he could always ask for more.  Politics being what it is he should have asked for a stimulus that was so big, it had a safety margin in it.  Later, if the whole stimulus package was not needed, he could have stopped the parts that hadn’t been spent yet.

Comparing attitudes of the public now and then, Krugman says:

The story of 1937, of F.D.R.’s disastrous decision to heed those who said that it was time to slash the deficit, is well known. What’s less well known is the extent to which the public drew the wrong conclusions from the recession that followed: far from calling for a resumption of New Deal programs, voters lost faith in fiscal expansion.

I just got into a discussion on a purportedly progressive web site where people were wishing that Obama could be more like FDR. This is not what they had in mind, of course. I guess it really is true that those who don’t study history are doomed to repeat it.

Read the comment posted on truthdig.com by cruxpuppy to see how people pine for a history about FDR that never was.  I tried to straighten him out with a comment that pointed to the Krugman piece. On Fenruary 08, 2014 I disabled the two previous links because of a warning I received about them.

How to End the Great Recession

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Robert B. Reich has written a column How to End the Great Recession that should send the Republicans right over the edge.

In a way, this justifies the need to redeploy the money from the Bush tax cuts for the wealthy into more productive stimulus of the economy.

However, it will have the Republicans saying, “See, we told you they all had an evil motive.”

Policies that generate more widely shared prosperity lead to stronger and more sustainable economic growth — and that’s good for everyone. The rich are better off with a smaller percentage of a fast-growing economy than a larger share of an economy that’s barely moving. That’s the Labor Day lesson we learned decades ago; until we remember it again, we’ll be stuck in the Great Recession.

The evil side of redistribution of wealth rears its ugly head.  You see, good redistribution of wealth only goes one way according to Republicans.  It only goes from the poor to the rich.

What about the not so rich members of the Republican Tea Party?  They have hopes of being rich someday, so they don’t want to go back to the days of equitable distribution.  Based on their hope for the future, they are willing to give up their rewards in the present.  Sounds almost religious, doesn’t it?

Letting The Bush Tax Cuts For The Rich Expire

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Do tax cuts for the wealthy stimulate the economy?  Sure they do, but not as effectively as direct investment in research and development, education and retraining workers, and infrastructure repair and replacement.

The plan is not just to eliminate the Bush tax cuts for the wealthy, but it is to replace them with something more effective.  In other words, redeploy the Bush tax cuts to something more effective.  What Democrat would be afraid to support such a plan?

As long as the Democrats allow the Republicans to cast the debate as to whether or not tax cuts for the wealthy stimulate the economy, then the Democrats are on the losing side of the debate.

The real debate is whether or not we can find a better stimulus than the tax cuts to the wealthy.  The Democrats have a plan, but the Republicans do not.

Don’t dismiss retraining because you think all the good jobs are outsourced already.  Even the PBS Nightly Business Report had a feature on how a business wanted to expand but they could not find qualified operators for their new robotics production equipment.  They said that their staff was too small to spare anybody to train a new employee.  What a terrific case for the need for government funded training.

2010/09/05 Update

The Dems find themselves in a bind.  They decry the effect on the long term debt of the Bush Tax cuts for the wealthy.  I guess the redeployment of this part of the tax cut can only be able cover the next few years.  Then the stimulus will end and the out lying years we will use the funds to cut the deficit.  The message gets more complicated.

Solution to Obama Disappointment

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In response to E.J. Dionne, Jr. piece What’s on Obama’s Next Page?, there were various comments adding to the carping about the Obama Presidency.

I explained to the complainers how to solve their problems.

You know how to solve your disappointment with Obama?  Put the Republicans back in office.

They will repeal the health reform act as they have promised.  There won’t be any more stimulus packages from Republicans.  We know they prefer bank bailouts.  The TARP was Bush’s answer to the financial crisis.

Tax cuts for the middle class, sure after they give some more tax cuts for the wealthy.

Repairing crumbling bridges and roads? Naw, that would hinder private enterprise.

Research using embryonic stem cells?  No way.  We’d rather throw away those frozen embryos than discover a cure for Parkinson’s disease.

Increase the number of bank examiners and go after fraudulent bank executives?  What a waste of money.  We know how successful Reagan was in preventing the S&L disaster by refusing to let examiners examine the insolvent S&Ls;.  He cut the examiners budgets and refused to pay them decently or give them computers.  Now that’s the way a Republican carries out his executive responsibilities.

If you don’t like the intelligence reports that had doubts about whether Saddam Hussein had WMDs, then form your own defense intelligence agency to tell you what you already know for sure is the real truth.

While we’re at it, let’s get rid of the Arab speaking intelligence officers.  They might be able to understand what the terrorists are saying, but we can’t have gay people in the military.  It ruins unit cohesion.

These are all policies your friendly Republicans have brought to you.  They will be glad to bring them back.

But wait! There is even more.  This time it will be the Republican Tea Party.  If you thought the old Republicans were extreme, you ain’t seen nothing yet.

Keynesian Economics Works in the United States, Too

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Almost in answer to my previous rhetorical question Does Keynesian Economics Work In China But Not The USA, Paul Krugman’s column, The Real Story, uses the recent history of our economy to show that it works here too.

He shows that the so called experts who predicted dire consequences from a too large stimulus package were completely wrong.  The actual experts who predicted dire consequences from too small a stimulus were right.

If repeating the same action and expecting different results is called insanity, what we would we call it when the Republicans want to do the opposite action, but expect the same results?

Do we think the behavior of the economy is completely unaffected by government action, and just because one set of experts were right the last time, then they won’t be right the next time?  Apparently the Republicans don’t think the economy is unaffected by government action or they wouldn’t be so adamant in their obstruction.

Do progressives believe that because Obama was only able to get a small stimulus package through that we ought to now turn control back to the Republicans who wanted no stimulus?

I am having a real problem making sense out of either side that seems to blame Obama as the cause of our problems and not the potential solution.