Andrew thinks there is a "knock out" blow, here, to "K-thug".
I could write a long set of reasons why, in addition to the stuff Krugman-sensei has already written on "jump starting" as a silly metaphor. I could laugh that the second Bush-43 tax cuts were designed to "jump start" his election, in all likelihood, because they already had fed their base quite well at the expense of the public weal, by that time.
But, what Andrew displays is not unique to him. It is the triumph of hope over reason.
The Japanese kept "jump starting" throughout the entire 90s. Recovery was always just one year away, when the "adjustments" would be complete. They are now the Italy of the East.
But, hey, tax cuts for everyone! Yahoo! There will be growth in the spring! Warning: UI extension ends in 13 months (someone elephant looking was reading the research...).
Friday, December 10, 2010
Andrew Sullivan smokes the dope on "jump start the economy"
More Money for the Big Banks?
Americans have paid down $40 billion in credit card debt in 2010, through October, the latest figures available. We'll probably end the year around $45 billion or so.
So, taken together, we're talking less than $75 billion in "stimulus". That's not going to be enough to bring down the employment rate to exciting levels or to induce companies to go on an extraordinary equipment buying spree, accelerated depreciation notwithstanding.
Indeed, the immediate purpose of accelerated depreciation - a favorite of the standard IMF-type packages, too - is to make the cash needed to buy something less. But companies are once-in-a-liftetime flush with cash, right now, so that's not the problem, is it?
Joe Manchin's Epic Fail
The freshman Senator, Joe Manchin, needs a footnote in history.
In one of his first significant votes in the Senate, he voted down the Defense Authorization Bill yesterday.
In doing so, he voted against
-His President
-His Vice President
-His entire party in the Senate - every single one of them
-The military brass, especially including the SecDef, the JC Chairman and Vice-Chairman.
-A clear majority of the nation and a clear majority of the troops on active duty
He did not abstain. He voted "nay", although his vote alone would not have been success or failure (that belongs to the GOP, who have abused the Senate rules, roundly).
It's clear the Senate chambers cannot contain Joe Manchin's ego and self-importance.
"Payroll Tax Holiday"
OH, HAPPY! HAPPY! JOY! JOY! A HOLIDAY FOR ME AND YOU!
Can you believe the euphemism embodied in the phrase being circulated?
It's like saying, "Oh, aren't you all interested in a defecation Holiday!" Buy yourself puppies!
Taking a phrase from Geraldine Ferraro, "let me just say":
Let me just say, you don't pay your social security taxes, you probably won't get all those benefits you thought you were going to get.
Anyone else not want to jump into that sidewalk chalk-painting?
Obama is King
I can't believe the drone from the beltway insiders that Senator Obama is untouchable: can't be primaried and can't be challenged.
And I don't even 'blame Obama', at least to this degree: he did what every beltway insider probably recommended and what every President since Carter has done, including Jed Bartlett: punt.
And so what about that?
Well, it's doubly frustrating, because the Democrats have been working right along (pay-go, etc.) to the point where they had a growing tracking record in support of a "brand" that they were far more credible than the GOP, including on punts and on 'interventions' (GM bailout, Mexico bailout, etc.).
I know Larry Summers probably thinks of it as just laying down a bunt, but I know a punt when I see one.
Thursday, December 9, 2010
Quote of the Day
"We're wondering when Obama will change his registration. Apparently, it is easier to serve the American public and to bear the weight of governance, if you adopt GOP positions, wholesale."
By the way, $3.5 million exemption from the estate tax?
Do the math on the astounding rise in that level since Bush started in on that in 2000, when it was $675,000. I'd bet it has gone up faster than inflation or wage growth by an order of magnitude.
I calculate an 18% compound annual rate of increase in the exemption.
Instead, why don't we just index the year-to-year exemption to the GDP growth rate, so we don't end up with another tax-law-farce-in-law?
If we took an annual growth rate in the range of 4% to 7%, then we'd get an exemption level between $1,000,000 and $1,300,000.
What was lost in the Obama-Summers-Geithner-Biden rush compromise
If we can't make sacrifices during hard times, make the hard choices, when there is urgency (clear impetus) and the tradeoffs are in high relief, when are we going to make them?
During good times?
Obama gave away his and his political party's credibility to face off against the GOP.
Therefore, the debate will shift to who in the Republican party can take up the "true" mantle of responsibility. And it doesn't even have to be true. It just has to be perceived to be authentic. Perhaps some governor who has a track-record cutting, cutting, cutting.
That person, if they emerge, will beat Obama and win the Presidency.
Lost in Washington
I can't help but think that Barack Obama is lost in Washington.
Yesterday, he said that the Republicans are going to have to make a case over the next two years why tax cuts over $250K weren't an ill-advised addition to the deficit.
Really?
I think that it is equally likely that the pressure is going to be on you, Mr. President, about the status of your own "permanent" middle class tax cut.
And, what's more, you are going to bring the house down on that yourself, through your own debt commission...
Last, you, Mr. President, are going to be the first Democrat who cuts social security program. First, with your willingness to accept a bogus stimulus by putting a "holiday" on the revenue stream dedicated to social security. Then, by forcing Americans to work longer and get less.
Wednesday, December 8, 2010
The Negotiator
Uh, not for nothing, but shouldn't fear tactics have been used, against, uh, Republicans, for threatening to 'take hostages'? Or, even those six Senate Democrats who held out?
Not to defend a bogus and forced compromise?
Just sayin'. Is there an officer on deck?
The Estate Tax Goes Up in 2011
GOP has a losing hand on that. (So do various Senate Democrats...)
Meanwhile:
"Payroll Taxes"
It's telling that some people are using the language "payroll tax", instead of the more descriptive "social security taxes", which amount to nothing more, economically, than a forced savings program, really. Certainly not "big government".
They don't want to actually reveal they just agreed in principle that it is now okay to ruin the actuarial balance of the program, in favor of alleged cyclical stimulus. (There is no guarantee that the vast majority of the money won't be going to help people pay down debt or to help their landlords pay down debt).
I mean, for years, it has been okay to recklessly spend the temporary social security surpluses. Now, it's actually okay to just ignore that there is meant to be a dedicated stream of income at all.
Quote of the Day III
David Axlerod: "Some men see things the way they are and say, 'Word'. That's me."
Who's in charge around here?
What Obama's piqued-ness at his press conference reveals - and a press conference is hardly the first, best way to make yourself look "Presidential", to assert 'The Presidential Voice' - is that they think they've done an exceptional job running the government.
In some ways they have. They've been very good on appointments, with little scandal, but also at the cost of time. They've done an exceptional amount, while also running two hot war zones, something truly great.
But, the truth is that a generic Democratic candidate would have enjoyed large majorities in the House and Senate in 2008. Therefore, things like healthcare reform may not be so much attributable to the unique skills of Obama. Hillary or even Biden probably could have gotten the same.
What he was elected to do qua Obama was to bring a refreshing responsibility to governance, in a clear departure, a clean break from the ways of Bush-43, to offer audacity of perspective and to continue to inspire people to a new way forward.
Have they delivered on that? Is that too much to ask, even during hard times?
Quote for the Day II
DRINKING THE TEA
"Democratic donors must be wondering what are the other issues with 80% public support on which they intend to 'compromise' in 2011 and 2012. Social security? Medicare? Food stamps? Disability? Certainly some must be wondering what kind of harbinger that is for tighter issues, like immigration reform."
Quote of the Day
"As regards the Obama self-compromise on fiscal matters, four short years since the Democrats took over the House, ending the contract on America, and we are all GOP again.
And, there is more of that, on the way."
If insanity is the definition of doing the same thing over again and expecting that it will be okay this time, we're insane all over again, as of yesterday.
After all, isn't it true that Obama-Geithner did the Washington insider thing on taxes: punt?
Obama-Geithner to Sanctimonious Left: Okay to Raid Social Security Trust Fund
Thought for the day is that we have moved, in the space of just 10 years, from a Democratic Presidential candidate who wanted to put social security into a "lock box" to an actual Democratic President and his Treasury Secretary who are willing actually to raid the same social security funds for "stimulus".
There are other choices. With the multiplier on tax cuts probably zero, because consumers are paying down debt as fast as they can, almost all of the other choices look better.
And, given choices, I don't think the public would like to be told that they have to work longer, now, too, because of Wall Street's malfeasance, while we pass out an incredibly generous estate tax and tax cuts for the highest earners.
No one actually put the question to them that way. What we heard, after the midterms, is that "Obama didn't get the message". What? That we have to raid social security, in order to have economic stimulus? Pft.
And, it's even worse, because Obama-Geithner have opened up a serious rift with the Democratic caucus on the Hill, right at the time when he arguably needs solidarity, as the GOP tries to buy-off and pick-off Senators to get their agenda items done in the next two years.
Why Team Obama Weren't Ready from Day One
THEY HAD THE LEVERAGE THEY NEEDED
Ezra Klein explains how the GOP had the correct assessment, while blowing smoke about "uncertainty" at everyone (perhaps especially Tim Geithner, who I judge to be susceptible to these things, ever since his bizarrely conciliatory comments at his confirmation hearings).
By far the thing they were most concerned about was the estate tax. (Once you realize this, you understand that the President had significant leverage over both the GOP and his own party, even going into the next session).
Without having any sources or knowing anything about the behind the scenes, I would have agreed with this assessment, a priori:
It was the estate tax, in this telling, that secured Republican support for, among other things, the two-year extension of the refundable tax credits and the payroll tax cut. Republicans believe that the two-year extension of the estate tax at Lincoln-Kyl levels will turn into a permanent extension of the estate tax at Lincoln-Kyl levels. So they attached much more importance to it than the price tag might suggest.
And it went beyond the estate tax: Conservatives saw the extension of the tax cuts as an important pivot point in American politics -- full stop.
So, they had the leverage they needed, with the estate tax and the alternative minimum tax.