August 15, 2011

On July 16, I indulged in a little sarcasm on the notion that President Obama is a liberal, and at other times I have described his political orientation as unsettled but moving rightward. There are those on the left who believe, like those on the right, that they know just where he stands, but describe that position quite differently: to those liberals he’s a conservative now, was a conservative before the debt crisis, and perhaps has been a conservative from the beginning. I came across two columns a few days ago making that argument. On first reading, the claim seemed excessive, but now I’m not so sure; as I’ve looked back over my own comments, I see that I’ve been describing more or less the same situation, although sometimes attributing Mr. Obama’s decisions more to weakness than to intent. Has he always been a conservative in liberal’s clothing? What difference does it make? As to the first question, here is a summary of the argument:

“Obama is one of America's strongest presidents ever and is achieving exactly what he wants. . . . On health care, for instance, Obama passed a Heritage Foundation-inspired bailout of the private health insurance industry, all [sic ] while undermining other more-progressive proposals.” I don’t know whether Obama’s health care plan was in any sense borrowed from the Heritage Foundation, but certainly Heritage now opposes and derides it.⁶⁸ However, it may be that any conservative idea is so tainted if embraced by a Democrat that it must be denounced; right-wing opposition to “Obamacare” is violent even though it resembles the Massachusetts plan enacted under Governor Romney, and Romney’s conservative credentials are suspect because of the resemblance. The structure of the Obama plan was not truly liberal, being based on insurance rather than on Medicare (which has made it Constitutionally vulnerable), and he did not fight for the public option, but bringing up health care at all was a risky stance, especially given the Clinton experience. I would be inclined to catagorize his intent as progressive, and his performance somewhere between pragmatic and ineffective.

“On foreign policy, he escalated old wars and initiated new ones.” Obama escalated the war in Afghanistan, backed into a quasi-war in Lybia and continued warlike actions elsewhere; certainly there has been no significant change from Bush policies, other than moving the focus from Iraq to Afghanistan. “On civil liberties, he not only continued the Patriot Act and indefinite detention of terrorism suspects but also claimed the right to assassinate American citizens without charge.” On the first issue, it’s fair to say that he has been a conservative from the outset. He pledged to close Guantanamo, which seemed to imply a termination of indefinite detention, but neither has happened. I don’t know whether he entertained the third view at the outset, but it is incredible coming from anyone at any time, and his use of drone attacks and the bin Laden assassination show that there is little he has considered out of bounds.

“On financial issues, he fought off every serious proposal to re-regulate banks following the economic meltdown; he preserved ongoing bank bailouts; and he resisted pressure to prosecute Wall Street thieves.” The first claim is exaggerated; the Dodd-Frank Act (notably the creation of the Consumer Financial Protection Bureau) and the Credit Card Accountability Act are examples of progress, although failure to appoint Elizabeth Warren is an example of timidity. The bank bailout program seemed to me at the time to reflect dubious priorities and possibly be ineffective, but it has turned out better that it might have. Bankers have not been held to account, and that policy was clear from the outset; Mr. Obama’s choice of advisors was baffling and disappointing, weakening any move toward re-regulation, and certainly showing no intention to require accountability.

“On fiscal matters, after extending the Bush tax cuts at a time of massive deficits, he has used the debt ceiling negotiations to set the stage for potentially massive cuts to Social Security and Medicare — cuts that would be far bigger than any of his proposed revenue increases.” The extension of the tax cuts in December certainly was a conservative result but, given the circumstances, it doesn’t, at least standing alone, demonstrate that he planned to do so from the beginning. He has stated many times that he wants those cuts to expire. The year-end deal strikes me as a pragmatic, if weak, move. He did hold out for unemployment benefits then.

His attitude toward Social Security is more confused than conspiratorial; I’ve discussed that in more detail below. He has, like many others, including the media, muddled the issue by sometimes treating Social Security as a general-fund expenditure. However, his position during the debt crisis does seem to show that he now is prepared to cut benefits. His Secretary of Defense, not content with denouncing cuts in his budget, recommended cutting entitlements rather than “national security.”

The best example of Obama’s present conservatism is found in the debt-ceiling “debate.” The White House proposals, its formulas for a Grand Bargain, were heavily weighted from the outset toward spending cuts, although Mr. Obama gave lip service to tax increases. In any case, contemplating cuts in the midst of what realistically still is a recession was an abandonment of liberal principle.

To here, the quotes have been from a column by David Sirota of August 5, carried in The Seattle Times .⁶⁹ The other principal source is a series of columns by Glenn Greenwald on Salon which have argued consistently that Obama has been a conservative from the beginning. Greenwald cites a number of sources, which in turn cite others. I won’t try to trace each line, but will describe those that seem most pertinent.

The argument is summarized in Greenwald’s column of August 1,⁷⁰ where he states, “The evidence is overwhelming that Obama has long wanted exactly what he got: these severe domestic budget cuts and even ones well beyond these, including Social Security and Medicare, which he is likely to get with the Super-Committee created by this [debt-limit] bill . . . .” What is that evidence?

On April 13, Greenwald said, “In December, President Obama signed legislation to extend hundreds of billions of dollars in Bush tax cuts, benefitting the wealthiest Americans. Last week, Obama agreed to billions of dollars in cuts that will impose the greatest burden on the poorest Americans.” As all of that happened relatively recently, it doesn’t prove that he has “long wanted” that result, although each added example tends to suggest that. Greenwald continued, “Tax cuts for the rich -- budget cuts for the poor -- ‘reform’ of the Democratic Party's signature safety net programs -- a continuation of Bush/Cheney Terrorism policies and a new Middle East war launched without Congressional approval. That's quite a legacy combination for a Democratic President.” It is indeed, although we need to look at the “reform” to see whether it is as much a rightward policy as Greenwald suspects.

He cited, directly or indirectly, several columns and articles for the proposition that Obama, since before inauguration, has contemplated cuts in Social Security, Medicare and Medicaid, based in part on his comments about an “entitlement crisis.” One such comment supposedly was made in January, 2009, but the references to it aren’t sourced, and I can’t find it. One reference acknowledged that Obama’s views, as to Social Security, had been different earlier: “[D]uring the campaign, Obama suggested the relatively modest step of increasing Social Security’s revenues by raising the cap on Social Security taxes, which would make the income [sic] tax system more progressive and bring more money into the program,” and stated that “Medicare’s problems are bound up in the broader woes of the American health care system.” ⁷¹

Obama has, at times, loosely referred to a Social Security crisis, once in an interview on November 8, 2007,⁷² but stated that there is no crisis in October, 2007,⁷³ in August, 2010,⁷⁴ and in April, 2011.⁷⁵ On Meet the Press on November 11, 2007, Senator Obama waffled a bit on what to do about Social Security, but preferred lifting the contribution cap to cutting benefits or raising the retirement age.⁷⁶ In an interview by The Washington Post in January, 2009, he was reported as saying “the nation's long-term economic recovery cannot be attained unless the government finally gets control over its most costly entitlement programs” but quoted as follows: "Social Security we can solve. The big problem is Medicare, which is unsustainable. . . . We can't solve Medicare in isolation from the broader problems of the health-care system."⁷⁷ In his speech on April 13, 2011 he derided the Ryan plan to gut Medicare; he didn’t offer an alternative plan, but he may think that the health care bill will solve that problem. He was muddled about Social Security.

His comments on Social Security over time seem to me to reflect the right instincts, confusion (cutting payroll taxes hardly is a way to improve Social Security funding), some rhetorical inconsistency (or political opportunism), indecisiveness and lack of will, not a reactionary stance. He treats Medicare’s funding problems at least in part as bound up with health care reform. Where he stands on Medicaid is a mystery to me.

There is evidence that the grand-bargain notion came into office with Mr. Obama, although not quite in its recent form. E.J. Dionne wrote this in January, 2009: “To listen to Obama and his budget director Peter Orszag is to hear a tale of long-term fiscal woe. The government may have to spend and cut taxes in a big way now, but in the long run, the federal budget is unsustainable.” There is nothing notably conservative about that statement. Consistent with the formula, there was significant spending early, on stimulus. “There will be signs of [sacrifice] in Obama's first budget, in his efforts to contain health-care costs and, down the road, in his call for entitlement reform and limits on carbon emissions.” The containment of health care costs supposedly was incorporated into the reform act. If right-wing rage is any measure, it and the attempt to cap carbon emissions were very liberal programs. Realistically, they were compromises, avoiding direct government control.

Dionne continued: “His camp is selling the idea that if he wants authority for new initiatives and new spending, Obama will have to prove his willingness to cut some programs and reform others.” That and the vague comment about entitlement reform state the conservative theme. “The ‘grand bargain’ they are talking about. . .involves expansive government where necessary, balanced by tough management, unpopular cuts -- and, yes, eventually some tax increases. Everyone, they say, will have to give up something.” Somewhere along the line expansive, or even very active, government was dropped from the agenda, but the desire to compromise endured.

An interview in Time with Lawrence Summers, also in January, 2009, may shed some light, although in places it isn’t clear whether Summers or Time is speaking. “Summers' immediate task is to convince skeptical Senators that shelling out nearly $1 trillion over two years isn't another exercise in traditional pork-barrel spending but a vital step needed to save jobs and invest in the future.” That certainly sounds progressive. “Summers argues that . . . not only will most of the money go to reviving the economy in the next 18 months, but much of it will also go to projects that could save money over the long term, such as weatherizing 75% of federal buildings and computerizing medical records. ‘The bill does a good job of marrying the twin imperatives of putting people back to work and doing the work that needs to be done,’ he says.”

Then comes the conservative part: “[P]erhaps as early as March, they'll launch their biggest lift with the beginnings of a plan to reform Social Security and Medicare, the two entitlement programs that, even before the economy collapsed, were threatening the Treasury with bankruptcy.” Did Summers say that Social Security threatened bankruptcy? I doubt it. “When Obama unveils his annual budget in late February or March, Summers promises that the President ‘is going to describe the kinds of approaches he wants to take to the entitlement problems that have been ignored for a long time.’ Some options might include delaying retirement, stretching benefits and lifting the cap on taxable earnings.” Whose options were those? Not necessarily Summers’ or Obama’s: “Could one of these prevail? ‘Remains to be seen,’ Summers says.”

As to when Obama’s conservatism set in, there is an alternative theory, that it is a reaction to the 2010 election results: “It all goes back to the ‘shellacking’ Obama took in the 2010 elections. The President’s political advisers studied the numbers and concluded that the voters wanted the government to spend less.”⁷⁸ However, that doesn’t track: while those results may have pushed him rightward, he had stated in December, 2009 that the theme for 2010 would be deficit reduction, a notably conservative position in the face of chronic unemployment. Therefore, we must conclude that he had adopted a conservative budget position by the end of 2009.

Granting that some of his policies have been conservative from the beginning and even assuming that some that have emerged later were foreordained, does that make him a “conservative?” There are some contrary indications, in addition to those mentioned. A few days ago, new, ambitious fuel efficiency standards were announced for trucks and buses, joining new standards for cars. The Bush ban on stem cell research was lifted. Appointments to the Supreme Court certainly are to the left of Bush’s.

Greenwald offered two more general comments. Obama’s approach is “just a re-branded re-tread of Clintonian triangulation and the same ‘centrist’, scorn-the-base playbook Democratic politicians had used for decades.” In other word, Democrats, as demonstrated by the Carter and Clinton (the era of big government is over) administrations, have become more conservative, so why should we be surprised that Obama didn’t turn out to be a liberal? “Whether in economic policy, national security, civil liberties, or the permanent consortium of corporate power that runs Washington, Obama, above all else, is content to be (one could even say eager to be) guardian of the status quo. And the forces of the status quo want tax cuts for the rich, serious cuts in government spending that don't benefit them (social programs and progressive regulatory schemes), and entitlement ‘reform’ -- so that's what Obama will do.” That suggests that he is a centrist with no convictions.

My impression is a little different, although the result may be the same in terms of predicting behavior. Obama’s views and actions are inconsistent ideologically with each other, which may simply mean that he is a moderate, i.e., someone with a mixture of liberal and conservative views; the conservative side probably is due in part to the rightward drift of the Democratic party, and partly to the deficit. However, his views also have been inconsistent over time. Like any politician, he bases decisions in part on political calculation, and his political calculations often are cautious and defensive, which isn’t surprising: though he hardly qualifies as a strong liberal, right-wing hysterics label him a communist. He hasn’t articulated a vision for his presidency, has no real set of priorities, and, rather than acting, asks us to be patient and wait for better times to come. All of this, especially the caution, may have something to do with his race; the racial slurs, the birther nonsense and the hysteria on the right certainly underscore the difficulty inherent in being the first black president.

In a way it doesn’t matter when he moved to the right, as he’s clearly a conservative now on many issues. However, it poses this conundrum for Democratic voters and strategists: if the more pointed criticisms are valid, if, as Sirota put it, he is a strong president but “dissembling [and] conniving,” if he’s a closet conservative, he should have a challenge from the left in the primaries. But that would help the Republicans and do we want a president who’s even further to the right? The solution: support for (or at least no opposition to) his reelection, and concentration on electing a Democratic House. Enthusiastic support for Obama would tie any liberal in logical knots, but throwing out the House Republicans is intellectually and morally a no-brainer.

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68. http://www.heritage.org/research/projects/the-case-against-obamacare; http://www.heritage.org/research/reports/2011/07/health-care-reform-in-maine-reversing-obamacare-lite
69. It isn’t available on the Times web site;
see http://www.creators.com/liberal/david-sirota/the-bizarro-fdr.html  .
70. http://www.salon.com/news/opinion/glenn_greenwald/?page=3 : “The myth of Obama’s ‘blunders’ and ‘weakness’.”
71. http://www.politico.com/news/stories/0209/18636.html
72. http://www.msnbc.msn.com/id/21693036/
73. http://www.ourfuture.org/fact-sheets-briefs/2011010212/barack-obama-s-statements-social-security  
74. Ibid.
75. http://thehill.com/blogs/blog-briefing-room/news/155773-white-house-social-security-not-currently-in-crisis
76. http://www.msnbc.msn.com/id/21738432/ns/meet_the_press/t/meet-press-transcript-nov/
77. http://www.washingtonpost.com/wp-dyn/content/article/2009/01/15/AR2009011504114.html
78. “What Were They Thinking?” by Elizabeth Drew, The New York Review of Books, August 18, 2011

August 9, 2011

It’s no wonder that we misunderstand economic issues. They are complicated and theoretical, and at times seem divorced from ordinary experience. Worst, economics seems to be half politics, which guarantees disagreement among the experts. For most of us, some considerable guidance is required, and that, unfortunately, is just what is lacking in media reports and many editorial columns, which, in addition to reflecting the political orientation of the authors, betray more than a little ignorance. A case in point is today’s Seattle Times house column.

It began with an inaccurate comment on stimulus: “Following the Bush bailouts, the Obama administration has responded to the recession with even larger doses of borrowing and spending. . . . This was the stimulus that did not stimulate. There has been almost no recovery. That may be because the medicine wasn't strong enough, or that it wasn't much of a stimulant.” There was stimulus and there has been recovery, although certainly not enough. At least the writer(s) recognized the possibility that the stimulus was too small or was misdirected, or was of the wrong sort. The conclusion might be to do it again and do it right, but no: “Greater and greater doses are simply unaffordable.” We can’t afford to do it right; the deficit is the most important issue. Even if the latter is true, don’t we want to take the action which will reduce the deficit in the long run? No; only the short term matters: “All the countries in trouble have to cut back.” Austerity is the only course, even though experience shows that it is the wrong course. No surprise there: “[W]hat experience and history teach is this - that peoples and governments never have learned anything from history, or acted on principles deduced from it.” ⁶⁷

The Times cited as authority an unreliable source, Standard and Poors, which has lowered its rating of U.S. bonds. “The reason for the downgrade, S&P said, was that the debt-ceiling deal ‘falls short.’ . . . Stabilizing the debt requires deeper cuts ‘in the growth of public spending, especially in entitlements,’ S&P said, plus the expiration of the Bush tax cuts or equivalent increase in taxes.” Why would anyone would rely on S&P’s opinions? It rated Enron bonds as investment grade until four days before Enron declared bankruptcy. It didn’t downgrade government bonds when the Bush administration ran huge deficits — and guaranteed more in the future — by cutting taxes and waging unnecessary wars. Any agency truly concerned about fiscal responsibility or, as it now claims, about governmental competence, would have denounced that pair of policies. Instead, it busied itself giving high ratings to toxic mortgage packages, thereby helping cause the bubble-collapse-recession sequence which further worsened the deficit it now worries about. To top it off, S&P mangled the numbers in its bond rating analysis but plunged ahead with its downgrade as if getting the math right was of no importance.

Stuck with its source, the Times reluctantly supported the tax-increase part of the formula, sort of: “We concur, in part, on targeted tax increases.” That must have hurt.

Ironically, the editorial ended by describing the situation accurately: “All of which means less medicine from Washington, D.C. There may be some little stimulants made to look like big ones, but essentially the patient is on its own. That is why the market plunged.” Does that suggest that austerity is the wrong plan, that abandonment by the government is the wrong policy? Alas, the Times was unable to follow its observation to its logical conclusion. Voters trying to understand economic issues also are on their own.

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67. G.W.F. Hegel, Philosophy of History, Introduction, II, 2

August 4, 2011

It would be pleasant and rewarding to spend my declining years in some creative activity, such as painting or sketching, composing or playing, writing poetry or novels but, alas, such pursuits require talent and I have none, so I watch the culture and its organizational aspect, politics, become increasingly debased and occupy my time by commenting on that pathetic trend.

When Barack Obama was elected, I thought I might have to change title of my blog, or at least modify my explanation of it. However, the fog enveloping Washington, D.C. is heavier than ever.

At least, during the Bush years, the orientation of the administration was obvious. Now its political position is a mystery, but its drift (and I use the word advisedly) is rightward. To add to the muddle, Mr. Obama is denounced by conservatives as a liberal, if not a socialist or worse. This is ludicrous, but repetition of nonsense is effective in creating fog, in confusing voters. George Will joined the bandwagon this week: in 2012, he said, Obama “cannot run from his liberalism.” It’s ironic that, years ago, Will derided conservative campaigning as being limited to shouting “Eek! a liberal!” Now he’s doing it. Back then, at least, liberalism hadn’t yet been driven from the field, so there was something to fear. Will’s comment about Mr. Obama is just tea-party nonsense.

In a more rational world the media would help dispel the fog; news reports would concentrate on substance. Instead, TV news and, to a lesser extent, newspapers and their web sites, give us trivia. I don’t know how many times I have seen or heard a breathless report of the doings of some celebrity I have never heard of and wouldn’t care about if I had. When something of importance is reported, the account often has little relationship to facts. Consider an article on the Washington Post web site on the debt-limit deal, captioned, “The moderate middle wins the day.” This is a strange way to describe an overwhelming conservative victory, but the reporters saw it this way: “For weeks, the debt-ceiling debate has been defined by a clash of the extremes; tea party conservatives seeking to dramatically reshape government and committed liberals afraid that doing so would squeeze the poor and the working class.” Nonsense: liberal policies never were part of the mix; the debate was between the right and far right. We have here another example of the media’s aiding Republicans by pretending that liberals are a force, that in this case they are equally at fault for the delay and turmoil.

A few years ago, someone in the Bush White House bragged that “when we act, we create our own reality. . . .'' ⁶⁶ He contrasted and dismissed ''the reality-based community,'' which he defined as people who ''believe that solutions emerge from [a] judicious study of discernible reality.'' Unfortunately, his boast was justified. Conservatives no longer are part of the reality-based community and the media are following them into fantasy land.

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66. Ron Suskind, "Without a Doubt," The New York Times Magazine 10/17/04; http://www.nytimes.com/2004/10/17/magazine/17BUSH.html?_r=1&oref=slogin

July 29, 2011

On Wednesday I saw two more indicators of how little people on the right comprehend about the debt-ceiling debate or about economics in general.

Donald Trump was quoted on the Post-Intelligencer web site (alas, it no longer is a real newspaper) on the debt crisis: “When it comes time to default, [people are] not going to remember any of the Republicans’ names. They are going to remember in history books one name, and that’s Obama. They’re not going to be talking about Boehner or anybody else . . . ” So, the prime consideration is that, when our economy collapses, that non-citizen socialist will be responsible. Actually, according to news reports, the GOP will get the larger share of the blame, but the Donald pronounced: “I don’t care about the polls.” He knows better.

What about the disaster to the economy if there is a default? Well, gosh, why worry about stuff like public welfare, the stability of the country or paying our bills? Only one thing matters: “The fact is, unless the Republicans get 100 percent of what they want, and that may include getting rid of Obamacare, which is a total disaster, then they should not make a deal other than a minor extension that would take you before you [sic] the election which would ensure Obama doesn’t get elected, which would be a great thing.”⁶⁵ Never mind that the strategy risks disaster; defeating Obama is the only issue. Trump probably never was a serious candidate for the Republican nomination, but his views hardly are unrepresentative of that Party.

The other illustration came via television. At the gym where I work out (too infrequently), there are monitors showing various programs, silently. I had the misfortune to be facing one tuned to CNBC and Lawrence Kudlow. The lack of sound spared me his comments, but at one point the screen showed this legend: “Free-market capitalism is the best road to prosperity.” If Kudlow or his producer are determined to display that bit of propaganda, including the euphemism “free market,” they should be required to read on air Naomi Klein’s book The Shock Doctrine, which details just how that theory has worked out in practice in Asia, South America, Poland, Russia and occupied Iraq. It is a depressing account which should convince any thinking person that it not only is bad economics but is too often is associated with authoritarianism, quite the opposite of the libertarian promises of its advocates.

65. http://blog.seattlepi.com/seattlepolitics/2011/07/26/gop-reject-debt-deal-to-sabotage-obama-trump/

July 23, 2011

Politics, according to Bismark, is the art of the possible. If only we were so civilized. John Kenneth Galbraith revised the maxim: “Politics is not the art of the possible. It consists in choosing between the disastrous and the unpalatable.” That is where the debt-limit debate stands, between the disaster of default and budget proposals from each side which the other can’t swallow. There is no reason why this should be so; the limit should have been raised without fuss, without posturing, without playing chicken and without vast programs of debt reduction.

Even supposing that this is the proper time to debate the budget, President Obama has moved so far to the right that, if his offer had been accepted, the result would seem, to anyone asleep for the past two and one-half years, as if a Republican president were in office. Conservative commentators cannot believe that the Republican negotiators did not agree to the administration’s proposal and declare victory.

However, a budget victory, even the adoption of a conservative program, is not enough now. The demands of the House Republicans are so extreme that they no longer fall within the realm of rational politics, to say nothing of rational economics. Their demands are driven by a desire to dismantle the federal government. They may imagine themselves in Boston in 1773, throwing tea into the harbor, protesting unfair taxation. However, their true place is 1788, where they join the anti-federalists in arguing against the Constitution and against the creation not only of a national government but of a nation.

July 22, 2011

I haven’t thought of the space program as one of our priority undertakings, but its ending serves as a metaphor of the decline of the United States: a public undertaking privatized, the abandonment of exploration and cutting-edge science, something we no longer can afford because we refuse to pay taxes, an acknowledgment of weakness and failure, dependance on the Russians.

In describing our present situation, one doesn’t have to search far to find metaphors, similes or other descriptive lines to borrow. A book on my to-read-someday list, primarily due to its provocative title, is Why Is There No Labor Party in the United States? We might ask instead: why is there no Democratic Party (or democratic party) in the United States? The presence of three Dinos, one of them the Assistant Senate Majority Leader, in the Gang of Six illustrates the disappearance of such a party, capitalized or not. Consider the Gang’s proposal, as set out in an Associated Press article in Thursday’s Seattle Times :

The plan would simplify the tax code by reducing the number of tax brackets from six to three, lowering the top rate from 35 percent to between 23 percent and 29 percent. That could [!] provide a windfall for wealthy taxpayers. . . . To help pay for lower rates, the plan would reduce popular tax breaks for mortgage interest, health insurance, charitable giving and retirement savings.. . . .

The alternative minimum tax, which was enacted in 1969 to make sure that high-income families pay at least some income tax, would be repealed. . . .

The Gang of Six plan is silent about taxes on capital gains and dividends . . . . The current top rate on capital gains and dividends is 15 percent, well below the top rate for ordinary income.

The plan would lower the corporate income tax rate from 35 percent to between 23 percent and 29 percent . . . .

Under current law, the U.S. taxes overseas profits of American corporations but only after they return those profits to the U.S. The proposal calls for a territorial tax system, which would tax only profits made in the U.S. . . .

Once again we will shift the tax burden downward. Another large chunk of national wealth will go to the rich and to corporations.

Even without this contribution by the Gang, our policies made little sense. We cut taxes to lower the deficit, impose austerity during a recession, ignore global warming, and wage unnecessary wars that cannot be won and which we cannot afford. Here’s another apt description of the current state of politics: “The world has gone mad today, and good's bad today, and black's white today, and day's night today . . . .” Cole Porter didn’t know when he had it good.

Although The Times did readers a service by publishing the outline of the plot of the Gang of Six, it hasn’t been as helpful on its editorial pages. Letters to the editor have been a better source of intelligent comment lately than Times columns or house editorials.

At the end of June, a Times editorial inveighed against a $20-per-year tax on auto licence tabs to be used to fund transit. The argument was the usual we’re-taxed-to death stuff, as if the editors and publisher were a) going to notice $20 or b) were truly concerned about the tax burden on ordinary folk. (This is, remember, the paper controlled by the Blethen family, which has campaigned for years in favor of tax breaks for the wealthy). A letter which, to their credit, they published, set them straight: “This tax of $1.67 per month is very reasonable for the benefits we get in return: more public transit and less traffic congestion. . . .” The writer quoted Justice Oliver Wendell Holmes, Jr. (“Taxes are the price we pay to live in a civilized society”) and added a succinct statement of political philosophy: “As people become less willing to pay for services, our society becomes less civil. We become more selfish and less of a community.”

In early July, an editorial in the Times blamed the increase in tuition at the University of Washington on the failure of the legislature to provide adequate funding. A letter pointed out the Times’ inconsistency: “The editorial blaming the Legislature for tuition increases . . . is laudable . . . . But your constant and often strident opposition to any new taxes makes me wonder where you think the legislature will get the money . . . .”

On July 19, Bruce Ramsey, the resident libertarian on the Times’ editorial staff, wrote a column on Social Security. As a preliminary matter, let’s consider the position of an editorial columnist or other writer of political opinion. In a column on Liberty Unbound,⁶² Ramsey criticized a column by Michael Gerson, who in turn had criticized libertarian hero Ron Paul. However, Ramsey made this concession: “Libertarians can rail against Gerson as biased, which of course he is. He is an opinion columnist. Bias is part of his job description.” The same is true of Ramsey and of my modest attempts at commentary, but bias is one thing; getting the facts straight is another. Ramsey doesn’t.

He began his column this way: “Back in May I wrote a column on Social Security. I argued that the system was coming up short, that there is no money in the "trust fund," and that some Americans will have to pay more in taxes or get less in benefits. It is a matter of arithmetic, but some readers loudly denied it. . . .” If by “no money in the trust fund,” he means no cash lying in a drawer, I suppose that he is correct, but I also assume that he is a bit more sophisticated than that. The trust fund consists of U.S. government bonds, which have been the safest investment in the world. If Mr. Ramsey had a private trust fund consisting of such bonds, he would not consider himself broke. Actually, he acknowledged that in his May column: “If you or I had the bonds, we would be trillionaires.” Why the different standard for Social Security?

His answer: “ But Social Security is the government — and an organization's IOUs are not an asset to itself.” The issue is not whether the bonds are a “government” asset; they are an asset of a trust fund. Like any other government bond, they are backed by the full faith and credit of the United States. To believe that the government would default on the bonds requires believing that it would default on the bonds in private portfolios and the bonds issued to cover loans by China. Is the U.S. about to default on those?

Leaving aside questions of law and policy, what of the common conservative argument that the government should behave like individuals? By that standard, the government should honor its debt and pay the SS bonds as they fall due. Indeed, it does just that, many times per year. The problem, or opportunity, depending on one’s agenda, is that, up until now, the SS fund ran a surplus, so that redemption of bonds was exceeded by new purchases. The Ramsey theory, beloved of all conservatives, is that the government will cease redeeming bonds now that redemption represents a net outward flow from the general fund.

Until very recently, no one in his right mind would have believed that this could happen, that the United States government would default on its bonds. Our national credit would collapse and our national standing, power and way of life with it. The capture of the House by ignorant reactionaries has made this a possibility, as the debt-ceiling standoff demonstrates. If default occurred, Ramsey’s wish-cum-prediction of trust fund insolvency might come true, though of course he does not acknowledge that self-destructive irrationality would be required to make it happen.

If the debt ceiling were not raised, and default occurred, the American and international economies would collapse, so some face-saving deal is inevitable. If default is not the answer to cheating the trust fund, then we move to the fallback argument along the lines suggested by Ramsey: pretend that the bonds are worthless, so that payment may be ignored or held hostage to a reduction in benefits, or to a rise in the retirement age, or to some other preliminary stage to the ultimate goal of scrapping the system.

The cause of the risk of default, both general and regarding Social Security, is obvious: a refusal to raise taxes on the rich. In any circumstance this would be a position of dubious fiscal and ethical merit; here it is simply immoral. According to Ramsey, those who want the bonds to be redeemed also want to avoid being taxed to accomplish that. Here’s his argument, referring to a letter-writer who demanded that the loans be paid:

[W]hat he was really saying was, "Make someone else pay." That is not a respectable answer. Not for a system built under the assumption that "we're all in it together." It is, however, a sentiment you hear all the time with Social Security and other big budget issues. Whether it's ending the $106,800 cap on Social Security wages, reversing the Bush tax cuts for the top bracket only, or imposing a Washington state income tax for the top 3 percent of earners only, tax proposals often seem to exempt the group making them. Make someone else pay.

Pity the wealthy: we’re all out to get them. I’d be interested to hear Ramsey’s rationale for the cap on SS wages, or the justification for the tax cuts for the wealthy, let alone their perpetuation. (His rationale for opposing the state income tax came down to its “soaking the rich”). Ordinary folk have paid the payroll tax based on the assumption — indeed the promise — that they were funding Social Security. That tax was raised in the 1980s for the express purpose of building up the fund for the wave of retirements now beginning.⁶³ The surplus was borrowed, as provided by law but, because it has been used irresponsibly, redeeming the bonds is more difficult than it should have been. In addition to war, the chief culprit has been tax cuts, overwhelmingly favoring the wealthy. Therefore, leaving aside war, ordinary people have paid regressive payroll taxes so that the wealthy could have income and estate tax cuts; in effect, we’ve lent them, as well as the government, billions. Mr. Ramsey thinks the wealthy should not be required to repay that loan. At least he’s consistent: repayment of debts is optional.

Taxing the wealthy heavily, in addition to making fiscal sense — raising needed revenue — makes moral and cultural sense. Consider, for example, Theodore Roosevelt’s view:

At many stages in the advance of humanity, this conflict between the men who possess more than they have earned and the men who have earned more than they possess is the central condition of progress. In our day it appears as the struggle of freemen to gain and hold the right of self-government as against the special interests, who twist the methods of free government into machinery for defeating the popular will.

Preventing huge discrepancies in wealth is not based on envy or a desire to avoid obligations, or class warfare, but on the health of society: “At every stage, and under all circumstances, the essence of the struggle is to equalize opportunity, destroy privilege, and give to the life and citizenship of every individual the highest possible value both to himself and to the commonwealth.” TR’s solution: “a graduated income tax on big fortunes,” and “a graduated inheritance tax on big fortunes, properly safeguarded against evasion, and increasing rapidly in amount with the size of the estate.”⁶⁴

However, such thoughts are so Twentieth-Century. The Times rounded out the picture Thursday by endorsing the Gang’s plan.

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62. A libertarian journal, formerly known as Liberty magazine

63. Another of those perceptive letters pointed out that Ramsey is inconsistent as to the relationship of payroll taxes to benefits (do they contribute to the payors’ future benefits of merely pay benefits for those already retired?)

64. New Nationalism speech, August 31, 1910. http://www.teachingamericanhistory.org/library/ index.asp?document=501

July 16, 2011

There is a story going round that a Democratic administration took office in early 2009. It must be a myth; consider:

• the appointment of a conservative economic team;
• the absence of a jobs program in the face of high and persistent unemployment;
• a plan to drastically cut spending during a long recession;
• extension of the Bush tax cuts;
• acceptance of the notion that Social Security is part of the deficit problem;
• turning our longest war into a seemingly permanent one, ignoring the human and financial cost;
• abandonment of a promise to close Guantánamo, and resumption of military trials;
• bombing Libya and claiming exemption from the War Powers Act;
• continued invocation of the state-secrets defense.

The latest sign is the claim by the new Secretary of Defense that we invaded Iraq because of 9-11, to defeat al-Qaeda.