The Titanic sails at dawn - politics, economics & culture
What are the four primary characteristics most associated with those Americans sympathetic to the Tea Party?
"Authoritarianism, ontological insecurity (fear of change), libertarianism and nativism."
So says one of the many findings in a study presented to the American Sociological Association on Monday.
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| "I think clearly the evidence...uh, well..." |
President Obama’s plan to give a major economic speech after Labor Day means that, finally, Washington is going to have a serious conversation about creating jobs. And it can't come a moment too soon…
Of course, whether that conversation on jobs leads to action on jobs is more a question of politics than policy. Republicans want no part of anything with Obama’s name on it and, until that changes, very little can pass Congress.
Still, the best policy conversations start with what we should do, not with what we can (or can’t) do...
The notion that low capital gains tax rates are a good thing because they promote investment, lead to job creation, encourage people to sell assets without fear of tax consequences and actually raise total tax revenue is so entrenched in both parties that the idea of equalizing capital gains and ordinary income rates is barely mentioned or, when it is, is quickly denounced. It’s become a third rail of tax policy and electoral politics. “It’s now so woven into standard thinking that it’s become a cultural norm,” a prominent hedge fund official told me this week...
It does seem intuitive that lower taxes and thus potentially greater rewards would encourage risk-taking and investment, and surely at some rate high taxes can discourage any endeavor. But even some hedge fund and private equity officials concede that the argument for lower capital gains rates rests more on faith than science. “I’ve seen study after study that says lower capital gains rates have no impact on behavior,” the hedge fund official told me.
Watching the world slide slowly back into recession without a fight, even though we know perfectly well how to prevent it, is just depressing beyond words.
Our descendents will view the grasping politicians and cowardly bankers responsible for this about as uncomprehendingly as we now view the world leaders who cavalierly allowed World War I to unfold even though they could have stopped it at any time.
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| "Congress won't work for the people!" |
Sometimes they become battles over the cultural and social anxieties that ordinary Americans suffer. Other times they are showdowns about middle-class anxieties when the free market fails. Normally, in the former sort of election, Republicans win. In the latter, Democrats do — as we saw in 2008, when the tide turned after John McCain said “the fundamentals of the economy are strong.
The President is sounding like a fighter these days. He even says he’ll be proposing a jobs bill in September – and if Republicans don’t go along he’ll fight for it through Election Day (or beyond)...
REPRESENTATIVE Michele Bachmann, a candidate for the Republican presidential nomination, is getting a lot of flack for this statement:
"The day that the president became president gasoline was $1.79 a gallon. Look at what it is today," she says on tape at an event in Greenville, S.C., as chronicled by Politico. "Under President Bachmann, you will see gasoline come down below $2 a gallon again. That will happen."How on earth could she accomplish this, the critics ask. Where will she find the new supply? But supply is only one half of the equation. Petrol plunged from above $4 a gallon in July of 2008 to below $2 a gallon in January of 2009 thanks to the impact of economic collapse on oil demand. Ms Bachmann, meanwhile, was a strong opponent of an increase in the debt ceiling. Failure to raise the debt ceiling would have produced an immediate cut in government spending of 44%, leading to a larger output decline than was observed in 2008. Personally, I have total confidence that Ms Bachmann can bring back cheap petroleum, one way or another.
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| Milton Friedman can kiss gun-totin' Guv's butt! |
What potential policy maneuver is a major presidential candidate calling "almost treasonous"? Is it a) going to war without explicit authorization from Congress, b) doing nothing about the 15 million unemployed even as their temporary joblessness hardens into a structural disadvantage, or c) purchasing long-term Treasury debt in order to push interest rates down?
Visit msnbc.com for breaking news, world news, and news about the economy
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| Can't Democrats get out in front of this guy? |
There’s an article in today’s NYT on the economic debate within the White House. The print version—not the online one—contains this quote from an admin official:
“It would be political folly to make the argument that government spending equals jobs.”
While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.
(F)iscal stimulus can help a depressed economy recover — an idea supported by new studies of the 2009 stimulus package. Additional short-run tax cuts or increases in government investment would help deal with our unemployment crisis.
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| The Good Old Days! |
In a column in The Financial Times this week, Ken Rogoff, the Harvard economist, suggested central bankers consider “the option of trying to achieve some modest deleveraging through moderate inflation of, say, 4 to 6 percent for several years.”
Mr. Rogoff conceded that “any inflation above 2 percent may seem anathema to those who still remember the anti-inflation wars of the 1970s and 1980s.”...
