White House strenuously denies NYT report that it is considering getting aggressive about winning the midterm elections.
Ezra Klein: The difference between the parties
Drum: A Simple Look At Income InequalityThe fight over 1099 reform is one of the best case studies of the differences between Republicans and Democrats that we've seen this year.
Quick background: 1099 reform deals with a tax change in the health-care bill. The provision seeks to recoup taxes that small businesses should currently be paying but aren't. The problem is that the mechanism would mean a lot of paperwork. Enough, actually, that it's probably worth scrapping it. But that means you need to make up $17 billion.
Republicans wanted to do that by cutting public-health subsidies for the poor. Democrats said no. Democrats wanted to do it by cutting subsidies for oil and gas companies. Republicans said no. Democrats came up with another way to do it, this time by closing a tax loophole that allows hedge-fund managers to be taxed at a much lower rate than people in other professions. Republicans don't like this, either.
I really don't understand the vision of the economy, or of need in general, where it makes more sense to cut public-health spending than treat the income of hedge-fund managers like the income of, say, small-business owners. Is there some reason we want lots more people to enter the hedge-fund industry? Or that government should be directly subsidizing oil and gas production? I can at least understand the rationale for public-health programs. That sort of collective action is something you need government to organize. The presence of generous financial incentives for entering the hedge fund industry really isn't.
Will Wilkinson is unimpressed with Tim Noah's recent series on growing income inequality. He cites several recent pieces of research to suggest that, in fact, inequality hasn't been growing as fast as we think:
Robert Gordon, an economist from Northwestern University....reports that improved use of income datasets "shows that there was no increase of inequality after 1993 in the bottom 99 percent of the population, and can be entirely explained by the behavior of income in the top 1 percent."....Christian Broda and John Romalis find that "the relative prices of low-quality products that are consumed disproportionately by low-income consumers have been falling over this period. This fact implies that measured against the prices of products that poorer consumers actually buy, their 'real' incomes have been rising steadily."....Using an updated price index, Christian Broda, Ephraim Leibtag, and David Weinstein find that the real wages at the 10th percentile increased by 30 percent from 1979 to 2005.
There's long been a cottage industry in efforts to show that income inequality isn't as bad as the raw numbers say it is. Until recently, the most popular tactic was to insist that we should look at consumption instead of income. This was mostly just an attempt at misdirection, but in any case the great credit bubble and bust has made it plain that a lot of recent middle class consumption was fueled by refi and charge card binges that ended disastrously. If anything, this strengthens the case of those who say that income matters after all, so we don't hear this argument much anymore.
But there are plenty of others. We're measuring inflation wrong. Cheap plasma TVs and Chicken McNuggets have made the life of the poor better than you'd think by just looking at their earnings. The whole thing is just a statistical artifact of the 1986 tax reform bill. The composition of households has changed, so household income goes farther than it used to. Income distribution looks better if you count government transfers. Etc. etc. etc.
There are bits and pieces of truth to some of these things, but for the most part they don't really address income inequality at all. They just move the spotlight to something else. Are households smaller than before? Yes, which is why I usually prefer to look at
statistics for individuals. Have consumption patterns changed? Maybe so, and taking that into account in an effort to get a handle on the actual lived experience of the poor/working/middle classes is an interesting exercise. Is CPI the right inflation measure? I prefer it, but it's an arguable point.
But regardless of the answers to all these questions, there's still the raw fact that the flow of money in America has changed dramatically over the past few decades. That's why one of my favorite charts is the one on the right. It's updated from the older version that I posted a couple of days ago, and the data comes from an annual CBO report that shows the share of total earnings going to various income levels.
It's not perfect, but it's pretty good. Since it shows income shares, inflation measures don't matter. It doesn't try to measure consumption, it just measures who the money is going to. It includes pensions and government transfers. It accounts for reporting changes due to the 1986 tax reform bill. And it uses tax data to get a cleaner look at the top of the income distribution.
(Drawbacks: It doesn't include healthcare benefits, which would change the shape of the curves slightly. And it uses households as its unit of account. That's not the way I like to look at things, but it's pretty standard in the field.)
If you look at the raw CBO figures, they show that a full tenth of the national income has shifted since 1979 to the top 1% of the country. The bottom quintiles have each given up a bit more than two percentage points each, and that adds up to 10% of all earnings. That 10% has flowed almost entirely to the very tippy top of the income ladder.
Is the middle class worse off because of this? Of course they are. Income matters even if plasma TVs are cheaper than they used to be or if CPI mismeasures middle class consumption or if average households now contain 2.6 members instead of 2.7. If this massive income shift hadn't happened, middle class earnings would be higher, they'd be able to buy more stuff, and they probably wouldn't be in debt as much. And the top 1% wouldn't have quite so much idle cash lying around to do stupid things with.
This income shift is real. We can debate its effects all day long, but it's real. The super rich have a much bigger piece of the pie than they used to, and that means a smaller piece of the pie for all the rest of us. You can decide for yourself if you think this is something we should just shrug our shoulders about and accept.
There was an interesting item in The Hill last night noting that White House officials, most notably President Obama and Vice President Biden, are "concerned that liberals disappointed with Obama's policies might stay home this November," and are taking steps they hope will prevent a disaster.Adding Elizabeth Warren to the president's team might help, and it probably wasn't a coincidence that when Biden raised his profile, he was sure to spend quite a bit of time with Rachel Maddow. Indeed, during the interview, he specifically told "our progressive base... you should not stay home." The V.P. added, "You better get energized, because the consequences are serious for the outcome of the things we care most about."
The next question, then, is how to get the left energized before the well-documented enthusiasm gap moves Congress sharply to the far-right. In the midst of a campaign, there are generally two choices, energize the base by: (a) pointing to a record of accomplishment or (b) pointing out the radical qualities of the other side. Republicans are excelling exclusively on the latter; for Dems it's more complicated.
The majority party shouldn't have too much trouble reminding the Democratic rank-and-file about the threat posed by radicalized Republicans -- by nominating so many hysterical extremists, the GOP has made that task easier. Besides, as we continue to struggle with crises left over from the Bush/Cheney era, the stench of Republican failure is still very much in the air.
But what about the record of the last 20 months? I've long believed, and continue to believe, that there's a chasm between perceptions and reality when it comes to the White House's policy accomplishments. Ezra Klein had an item the other day that rang true to me, and I hope he won't mind if I quote it at length.
The White House held a conference call today for Elizabeth Warren and various bloggers and writers. Most of it was what you'd expect, but Warren did mention that Rep. Barney Frank once told her that getting a Consumer Financial Protection Bureau was a "pipe dream."
I think some people will see that as a mark against Frank, but he was right, at least judging by Washington's record over the previous 20 or 30 years. In fact, a lot of the Obama administration's accomplishments were pipe dreams.
A near-universal health-care system? Why would Obama and the Democrats succeed when Truman, Nixon, Carter, and Clinton had all failed, and politicians as adept as FDR and LBJ refused to even make the attempt? They've seen the numbers, right? The health-care industry is bigger now, and richer, and there are no more liberal Republicans. There's no way.
A $787 billion stimulus? Yes, it was too small. But everything Washington does is always too small. And within the confines of that stimulus, the Obama administration and the Democrats in Congress managed to make a host of long-term investments that would've been considered huge accomplishments in any other context, but are largely unknown inside this one. Huge investments in green energy, in health information technology, in high-speed rail, in universal broadband, in medical research, in infrastructure. The Making Work Pay tax cut. The Race to the Top education reform program. No recent president has invested in the country on anything like that level.
If voters who backed Obama two years ago are prepared to make an evaluation based on accomplishments, and decide whether to vote in 2010 accordingly, the White House has a compelling case to make, the popularity of these successes notwithstanding.
As unsatisfying as it seems to grade on a curve, it's worth noting that while Obama took office with sky-high expectations, he was also against the backdrop of a country that was practically in free fall. Arguably no president in American history started his first day with a list like this: the Great Recession, two deadly wars, a jobs crisis, a massive deficit and budget mess, crushing debt, a health care system in shambles, a climate crisis, an ineffective energy policy, an equally ineffective immigration policy, a housing crisis, the U.S. auto industry on the verge of collapse, a mess at Gitmo, a severely tarnished global reputation, an executive branch damaged by corruption, incompetence, and mismanagement, and an angry, deeply divided electorate.
The president was told to clean all of this up, quickly, without the benefit of a minority party willing to play a constructive role. And just to make things really interesting, Obama was also told that for the first time in the history of the United States, every initiative he came up with would need mandatory supermajorities just to pass the Senate.
And despite all of this, what have seen? The Affordable Care Act, the Recovery Act, Wall Street reform, student loan reform, Lily Ledbetter Fair Pay Act, new regulation of the credit card industry, new regulation of the tobacco industry, a national service bill, expanded stem-cell research, nuclear arms deal with Russia, a new global nonproliferation initiative, the Hate Crimes Prevention Act, and the most sweeping land-protection act in 15 years.
But what about the unpopularity of the Democratic successes? Why are Democrats understandably reluctant to run on the most successful two years of policymaking in decades?
The White House's message machine has often fallen far short of late, but part of me thinks the pitch at this point should go something like this: we were moving in the wrong direction, but we've made some unpopular moves to get back on track.
It's like a recovery from a serious illness -- you feel miserable, the medicine tastes awful, and the shots hurt. You're left frustrated, weak, and maybe even embarrassed. The physical therapy and recovery process takes too long and leaves you wondering if it's even worth it.
But it is. Recovery happens. It wasn't pleasant, and the illness wasn't your fault, but you make progress and you get better, even if there are times when that seems that's unlikely.
Getting back on your feet and thriving again may seem like a "pipe dream," but once the toughest moves are behind you, real progress lies ahead -- that is, unless you decide to go back to the quacks who got you sick in the first place.
John Cole: Where Have They Been
If this is true, this is just gross political incompetence at the White House political division:
President Obama’s political advisers, looking for ways to help Democrats and alter the course of the midterm elections in the final weeks, are considering a range of ideas, including national advertisements, to cast the Republican Party as all but taken over by Tea Party extremists, people involved in the discussion said.White House and Congressional Democratic strategists are trying to energize dispirited Democratic voters over the coming six weeks, in hopes of limiting the party’s losses and keeping control of the House and Senate. The strategists see openings to exploit after a string of Tea Party successes split Republicans in a number of states, culminating last week with developments that scrambled Senate races in Delaware and Alaska.
“We need to get out the message that it’s now really dangerous to re-empower the Republican Party,” said one Democratic strategist who has spoken with White House advisers but requested anonymity to discuss private strategy talks.
Apparently, the only places left on earth where they do not realize that the tea party is a GOP operation are Fox News and the White House.
Krugman: The Angry Rich
Anger is sweeping America. True, this white-hot rage is a minority phenomenon, not something that characterizes most of our fellow citizens. But the angry minority is angry indeed, consisting of people who feel that things to which they are entitled are being taken away. And they’re out for revenge.
No, I’m not talking about the Tea Partiers. I’m talking about the rich.
These are terrible times for many people in this country. Poverty, especially acute poverty, has soared in the economic slump; millions of people have lost their homes. Young people can’t find jobs; laid-off 50-somethings fear that they’ll never work again.
Yet if you want to find real political rage — the kind of rage that makes people compare President Obama to Hitler, or accuse him of treason — you won’t find it among these suffering Americans. You’ll find it instead among the very privileged, people who don’t have to worry about losing their jobs, their homes, or their health insurance, but who are outraged, outraged, at the thought of paying modestly higher taxes.
The rage of the rich has been building ever since Mr. Obama took office. At first, however, it was largely confined to Wall Street. Thus when New York magazine published an article titled “The Wail Of the 1%,” it was talking about financial wheeler-dealers whose firms had been bailed out with taxpayer funds, but were furious at suggestions that the price of these bailouts should include temporary limits on bonuses. When the billionaire Stephen Schwarzman compared an Obama proposal to the Nazi invasion of Poland, the proposal in question would have closed a tax loophole that specifically benefits fund managers like him.
Now, however, as decision time looms for the fate of the Bush tax cuts — will top tax rates go back to Clinton-era levels? — the rage of the rich has broadened, and also in some ways changed its character.
For one thing, craziness has gone mainstream. It’s one thing when a billionaire rants at a dinner event. It’s another when Forbes magazine runs a cover story alleging that the president of the United States is deliberately trying to bring America down as part of his Kenyan, “anticolonialist” agenda, that “the U.S. is being ruled according to the dreams of a Luo tribesman of the 1950s.” When it comes to defending the interests of the rich, it seems, the normal rules of civilized (and rational) discourse no longer apply.
At the same time, self-pity among the privileged has become acceptable, even fashionable.
Tax-cut advocates used to pretend that they were mainly concerned about helping typical American families. Even tax breaks for the rich were justified in terms of trickle-down economics, the claim that lower taxes at the top would make the economy stronger for everyone.
These days, however, tax-cutters are hardly even trying to make the trickle-down case. Yes, Republicans are pushing the line that raising taxes at the top would hurt small businesses, but their hearts don’t really seem in it. Instead, it has become common to hear vehement denials that people making $400,000 or $500,000 a year are rich. I mean, look at the expenses of people in that income class — the property taxes they have to pay on their expensive houses, the cost of sending their kids to elite private schools, and so on. Why, they can barely make ends meet.
And among the undeniably rich, a belligerent sense of entitlement has taken hold: it’s their money, and they have the right to keep it. “Taxes are what we pay for civilized society,” said Oliver Wendell Holmes — but that was a long time ago.
The spectacle of high-income Americans, the world’s luckiest people, wallowing in self-pity and self-righteousness would be funny, except for one thing: they may well get their way. Never mind the $700 billion price tag for extending the high-end tax breaks: virtually all Republicans and some Democrats are rushing to the aid of the oppressed affluent.
You see, the rich are different from you and me: they have more influence. It’s partly a matter of campaign contributions, but it’s also a matter of social pressure, since politicians spend a lot of time hanging out with the wealthy. So when the rich face the prospect of paying an extra 3 or 4 percent of their income in taxes, politicians feel their pain — feel it much more acutely, it’s clear, than they feel the pain of families who are losing their jobs, their houses, and their hopes.
And when the tax fight is over, one way or another, you can be sure that the people currently defending the incomes of the elite will go back to demanding cuts in Social Security and aid to the unemployed. America must make hard choices, they’ll say; we all have to be willing to make sacrifices.
But when they say “we,” they mean “you.” Sacrifice is for the little people.
John Cole: Poor Little Rich Boys
This piece, titled “The Rage of the Privileged Class,” is guaranteed to give your blood pressure a good bump:
As the hue and cry to return the money grew, the traders had thought that Liddy would stand up for them. The ruddy-faced, 63-year-old former Allstate CEO, who had been installed by Treasury Secretary Hank Paulson in September, was, if not exactly one of them, at least someone who understood the rules of the game as it had been played—and who understood what they were entitled to under those rules, even if those rules were unspoken. In AIG’s glory years, executives like Joseph Cassano, the former head of financial products, took home more than $300 million. That was the kind of money you couldn’t talk about.But as Andrew Cuomo stoked public outrage by threatening to release the names of the bonus recipients, it became clear that the game was changing. When AIG employees had arrived at their desks that morning, they found a memo from Liddy asking them to return 50 percent of the money. The number infuriated many of the traders. Why 50 percent? It seemed to be picked out of a hat. The money had been promised, was the feeling. A sacred principle was at stake, along with, not incidentally, their millions.
We’re talking about people at a company which, without considerable taxpayer largesse, would cease to exist. They would be getting nothing. They would not even have jobs. But the idea of giving back just half their “bonuses” when their company was a stinking shitpile costing hundreds of billions of taxpayer dollars- that was just too much for them. There was a “sacred” principle at stake. It gets worse:
“No offense to Middle America, but if someone went to Columbia or Wharton, [even if] their company is a fumbling, mismanaged bank, why should they all of a sudden be paid the same as the guy down the block who delivers restaurant supplies for Sysco out of a huge, shiny truck?” e-mails an irate Citigroup executive to a colleague.“I’m not giving to charity this year!” one hedge-fund analyst shouts into the phone, when I ask about Obama’s planned tax increases. “When people ask me for money, I tell them, ‘If you want me to give you money, send a letter to my senator asking for my taxes to be lowered.’ I feel so much less generous right now. If I have to adopt twenty poor families, I want a thank-you note and an update on their lives. At least Sally Struthers gives you an update.”
Ladies and Gentlemen, there you have it- Freedom Fonzarelli’s “producers.”
Benen: GINGRICH DEMANDS LEGISLATION TO ADDRESS IMAGINARY THREAT
Remember, as far as the media establishment goes, disgraced former House Speaker Newt Gingrich (R-Ga.) is a "visionary" worthy of respect, despite his frequent slips into madness.
[P]erhaps the former House Speaker's loudest applause [at the Values Voter Summit] came when he weighed in on the controversial Islamic center and Mosque proposed to be built near Ground Zero, declaring, "We as Americans don't have to tolerate people who are supportive of violence against us, building something at the site of the violence."
"This is not about religious liberty, if they want to build that mosque in the South Bronx, frankly they need the jobs," he continued. "But I am totally opposed to any effort to impose Sharia on the United States, and we should have a federal law that says under no circumstance, in any jurisdiction in the United States, will Sharia be used in any court to apply to any judgment made about American law."
Note the classic non-sequitur -- converting a clothing store into a community center, in Newt's twisted mind, is part of an effort to impose Sharia on the United States. At least, that is, what he wants his easily-confused audience to believe.
But I'm especially impressed with the legislation Gingrich wants to see. To hear him tell it, we need a law to prevent U.S. courts from basing rulings on Sharia. Are there any U.S. courts doing this? Well, no. Have there ever been any U.S. courts doing this? Nope, not one. Is there any evidence at all to suggest U.S. courts might ever do this? Not even a little. This is the talking point of fringe, unhinged radicals.
But Gingrich wants a law anyway. I was disappointed he didn't also call for a federal law that says, under no circumstances, will Bigfoot be allowed to run for Congress. Also, unicorns must not be permitted to roam the streets, and flying saucers must not land within 100 yards of a school. We must think of the children, you know.
The disgraced former Speaker added that the Democrats' "secular socialist machine" is comparable to "radical Islamists," and that Health and Human Services Secretary Kathleen Sebelius relies on "the spirit of Soviet tyranny."
Major media outlets, however, have no qualms about considering Gingrich a credible, mainstream figure.
- TPM Reader NR ... adds:
I know it's obscure and hidden in the voluminous federal law and Supreme Court Decisions so possibly Newt would have missed it, but there is already fairly well established federal law making it illegal to impose Sharia law on the United States. After an exhaustive search, I found this:"Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances."
Benen: NOT READY FOR PRIME TIME -- OR SUNDAY MORNING
In May, right-wing ophthalmologist Rand Paul, shortly after winning Kentucky's Republican Senate primary, agreed to appear on "Meet the Press." Upon realizing the candidate might be asked to explain his extremist ideology, the Rand campaign quickly walked away from the commitment.
Four months later, right-wing activist Christine O'Donnell, shortly after winning Delaware's Republican Senate primary, agreed to appear on "Face the Nation" and "Fox News Sunday." And wouldn't you know it, after realizing O'Donnell may be asked about her witchcraft-dabbling, gay-hating, anti-masturbation-crusading, delusion-sharing background, the Republican nominee discovered she has other plans tomorrow.
Yes, just one day before her scheduled appearances, O'Donnell backed out.
Campaign spokeswoman Diana Banister cited scheduling conflicts and said O'Donnell needed to return to Delaware for commitments to church events and afternoon picnic with Republicans in a key county where she has solid backing.
"Tomorrow the priorities are back in Delaware," Banister said. "Those are people who supported her, who were very helpful to her in the campaign, and she feels obligated to be there and thank them."
The campaign spokesperson added, "We felt really bad."
Of course.
It's one thing to duck "Face the Nation"; Bob Schieffer leans to the right, but he's a media professional who would have asked real questions. But O'Donnell also bailed on Fox News, suggesting either she, her team, the National Republican Senatorial Committee, or some combination of the three aren't even confident in her ability to handle questions from a Republican cable network.
Noting recent examples -- Palin, Angle, et al -- David Kurtz added, "It's become a staple of the tea party candidacy. You make a big splash onto the national stage then quickly retreat from any press scrutiny because you are so unprepared and ill-equipped for the rigors of the job that tough questions will expose you as the charlatan you are."
It's worth noting that Chris Coons, the sane candidate who's on track to defeat Christine O'Donnell, hasn't been invited onto any of the Sunday shows, even after her cancellations. Imagine that.
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