Tax the rich!

This American Prospect essay by Nick Hanauer makes a very compelling case for why increasing taxes on the rich, and then investing the money in programs that benefit poor and middle class is the key to economic growth.  He also argues that embracing this message is good politics for the Democrats. You should read it:

Democrats can’t just run against the Trump/Ryan tax cuts; they need to run for substantially raising taxes on me and my wealthy friends

That’s why if Democrats want to take back Congress—and hold it—they must do more than just attack trickle-down economics; they need to replace it with an alternative theory of economic growth that places the American people back at the center of the American economy. Democrats can’t just run against the Trump/Ryan tax cuts; they need to run for substantially raising taxes on me and my wealthy friends—not on the grounds that it’s more fair (or because of “The Deficit!”), but on the sound, if radical-sounding, economic principle that taxing the rich is the only plan that would increase investment, boost productivity, grow the economy, and create more and better jobs…

As a venture capitalist and serial entrepreneur who’s made a personal fortune founding or funding more than 30 companies, I can tell you firsthand that this classic trickle-down narrative represents more than just a fundamental misunderstanding of how market capitalism works; it is in fact a con job and a threat—an intimidation tactic posing as a theory of growth. The con works like this: If we can get you to believe these three things—that if you raise taxes on the rich, we’ll refuse to invest; that if you regulate corporations, they’ll be less competitive; and that if you raise the minimum wage, we’ll hire fewer workers—then you will accede, to some degree or another, to a 1 percent–enriching trickle-down agenda of tax cuts for the wealthy, deregulation of the powerful, and wage suppression for everyone else. Yet despite these claims, what you’ll never get from trickle-down is faster growth and better jobs. Because economic growth doesn’t come from making the rich richer; it comes from making the middle class and working people generally stronger.

To be clear: There is simply no empirical evidence or plausible economic mechanism to support the claim that cutting top tax rates spurs economic growth. Zero. Zilch. Nada. [emphases mine] When President Bill Clinton hiked taxes, the economy boomed. When President George W. Bush slashed taxes, the economy ultimately collapsed. It wasn’t until after most of the Bush tax cuts expired during the Obama administration that the post–Great Recession recovery started to pick up steam—an ongoing recovery that, as uneven as it has been, has grown into one of the longest economic expansions in U.S. history…

In fact, the real economy is immensely more complex than the “Supply and Demand” fairy tale they teach you in Econ 101, for while tax rates don’t have zero effect, there is nothing magical about them. For decades, Republicans and some Democrats have taken it as an article of faith that, fairness issues aside, cutting taxes increases growth while raising taxes impedes it. But as we have just documented, there is absolutely no correlation. So, given the anecdotal and empirical evidence, how do Republicans justify their relentless trickle-down agenda?…

The problem isn’t that corporations and investors don’t have enough after-tax cash; it’s that they’re not productively spending or investing the cash they already have. And it’s a problem greatly amplified by the dramatic rise of income and wealth inequality in recent decades…

Raise taxes on the rich, and almost anything the federal government does with the revenue will pump more money through the economy than what the wealthy are doing with their hoarded cash today. Tax the rich to put money back in the hands of the American people through middle-class tax cuts, and corporations will expand production and payrolls to meet the resulting spike in consumer demand. Tax the rich to invest in roads, transit, bridges, health care, schools, and basic research, and we will create millions of good-paying jobs while building the physical and human infrastructure on which our collective prosperity relies…

What our economy needs now is to get those trillions of dollars of hoarded cash off the sidelines, and back into the hands of working- and middle-class Americans—not because it is fair, but because it is pro-growth. Tell that story. Run on it. Believe it. Give voters a choice between an economic narrative that lionizes the rich as “job creators” or a middle-outward narrative that rightly celebrates the American people as the primary cause and source of growth, and most voters will choose the story that places them back at the center of the American economy.

Plenty more good stuff in there.

I think most all of Hanauer’s analysis is spot-on.  I think what prevents Democrats from fully embracing this is a fear that they will lose too many wealthy donors (ugggh, campaign finance reform, please!).  That said, there’s plenty of wealthy Democrats already who understand that there’s far more to politics and government than their personal tax rates (all the wealthy people who feel otherwise are already Republican) and the modest changes that would actually happen would be very unlikely to change their party support.  Let’s go for it, Democrats.

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Quick hits (part II)

Somehow I lost a whole bunch of saved quick hits.  Whoops!  Abbreviated very NYT-heavy version.

1) Great NYT magazine story on when the crazy politics of wolves in America meets the politics of academia.

2) How medical advances in abortion and contraception means even over-turning Roe v. Wade would not have as much impact as it would’ve had in the past:

Even then, a full-fledged return to an era of back-alley, coat-hanger abortions seems improbable. In the decades since Roe was decided, a burst of scientific innovation has produced more effective, simpler and safer ways to prevent pregnancies and to stop them after conception — advances that have contributed to an abortion rate that has already plunged by half since the 1980s.

3) Neymar as the jumping-off point for the complicated politics of race in Brazil:

When audiences tune in to watch Brazil play, they are treated to a rich spectrum of skin tones flashing vibrantly across the screen. The racial makeup of the Brazilian squad, in fact, generally reflects the demographics of the country. According to 2017 data released by the census department, 47 percent of Brazilians identify as mixed-race, while another 8 percent identify as black. One third of marriages happen across racial boundaries. Such numbers confirm the common belief held by Brazilians, and the millions of international travelers who visited last year, that the country is a racially fluid society.

Unlike the national team, however, the upper echelons of most professions in Brazil — be it medicine, media, business, entertainment or government — are occupied by whites. The nation’s raw demographic data paints an accurate portrait of a diverse people; yet it also adds patina to the old myth, promoted for generations by the government and first intellectualized by sociologists nearly a century ago, that Brazil is a democracia racial, or “racial democracy.”

Because Brazil never had an apartheid system like South Africa, or a ban on mixed-race marriages like America, went the argument, a spirit of warm relations blossomed across racial divides.

Never mind that Brazil was the last country in the Americas to abolish slavery in 1888; or that after abolition, the ruling class mounted a campaign to whiten the majority-black population, by fully subsidizing the immigration of over four million white Europeans, giving them free land, and compelling Brazilians to take up with them.

4) It’s bad enough that the US Military is apparently ramping up efforts to keep immigrants out, but the utter lack of due process and transparency in the process is truly appalling.

“There’s no explanation for this except xenophobia,” said Margaret D. Stock, a retired Army Reserve lieutenant colonel and immigration lawyer who helped create the program. [emphasis mine] Known as the Military Accessions Vital to the National Interest or Mavni, the program, created during the George W. Bush administration, allows legal, nonpermanent resident immigrants to join the military and get fast track citizenship.

More than 10,000 troops have joined the military through the program — almost all of them in the Army. At its start, the Army touted its foreign recruits, holding naturalization ceremonies with top brass in places like Times Square. But in recent years the Defense Department has tightened regulations, and thousands have been caught up in extra layers of security vetting. Increased scrutiny for the program began in the last months of the Obama administration over national security concerns.

To screen out possible terrorist or espionage threats, the military requires extensive background checks that have grown more complex in the last two years. The C.I.A. and F.B.I. do background checks, and screenings include criminal history and credit, a review of at least a decade of finances, an exhaustive questionnaire and numerous lengthy interviews. Relatives, employers and neighbors are also interviewed.

5) So clear the Trump administration is proving horribly incompetent and callous in their efforts to reunite immigrant families.  Whereas the travel ban was “malevolence tempered by incompetence” this is malevolence exacerbated by incompetence.  Jonathan Blitzer:

But the government also needs information that Hernández doesn’t have: an address, a full criminal background check on every other adult who might live in the same household as her child, and proof of income. Having just left federal prison, Hernández is effectively homeless. She told me, “Once I realized what was happening, I said, ‘Oh my God, what am I going to do?’ ”

The Trump Administration ended the zero-tolerance policy without a plan for reuniting the children it has taken from their parents (more than twenty-five hundred in the past year) with their families. In late June, the Office of Refugee Resettlement, the division of the Department of Health and Human Services that is in charge of the separated children, had two thousand and fifty-three kids in its custody. The Department is no longer disclosing how many children it is holding, but immigration lawyers at the border say that many parents still don’t know where their children are. Last week, a federal judge in San Diego issued an injunction ordering the Trump Administration to reunite the separated families within the next month. Given the government’s disorganization, it’s impossible to see how the judge’s deadline can be met.

6) Love this take on Jim Jordan:

In every way, Jordan’s conduct violates the standards he applies to Comey, Mueller, Rosenstein, and Sessions. He ducked responsibility for offenses that occurred when he was, in effect, the deputy director of the OSU wrestling program. He claims to have known nothing about Strauss’ locker-room behavior, even though Strauss’ locker was next to his. And for months, despite explicit reports from Strauss’ victims, Jordan has kept silent, asking them not to involve him in the story.

A merciful judge might rationalize Jordan’s behavior. Such a judge might speculate that Jordan didn’t understand the seriousness of what Strauss was doing, that Jordan didn’t think of it as abuse, that he forgot the details, or that his reasons for asking to be left out of the story are understandable. But Jordan has never shown that kind of mercy. He insists that such a person should be prosecuted, charged, or forced from office. That is the justice he must now face.

7) Ed Yong on the history of domesticated dogs in the Americas, “The Original American Dogs Are Gone: The closest living relative of the precolonial canines isn’t even a dog. It’s a contagious cancer.”

8) David Roberts’ excellent take on parenting:

This isn’t to say parents and parenting aren’t important. Parents supply the genes, except in cases of adoption (or remarriage). They control, at least to some extent, the peers and environments to which children are exposed. And of course they crucially affect a child’s quality of life at home, which, as I will argue shortly, is not some minor detail.

But it’s safe to say that your kids’ long-term fate will not be meaningfully affected by the speed and timing of potty training, the brand of educational videos you purchase, or the precise tone of voice in which you discipline. A large proportion of the Parenting Industrial Complex isn’t about kids — it’s about generating content for nervous parents who feel like they should be doing something.

Another way of putting this same point is that an enormous amount of a child’s fate is determined by luck, by accidents of birth, socioeconomics, and geography…

If the David Brookses of the world were honest, their parenting advice would begin: Have a healthy kid, live in an affluent area (with low crime and good schools), be from a socially privileged demographic, and make a decent amount of money. From there on, it’s pretty much coasting. [emphasis mine]

9) Krugman on the non-radicalism of the Democratic left:

Alexandria Ocasio-Cortez’s upset primary victory has produced a huge amount of punditry about the supposed radicalization of the Democratic party, how it’s going to hurt the party because her positions won’t sell in the Midwest (and how well would Steve King’s positions sell in the Bronx?), etc., etc.. But I haven’t seen much about the substance of the policies she advocates, which on economics are mainly Medicare for All and a federal job guarantee.

So here’s what you should know: the policy ideas are definitely bold, and you can make some substantive arguments against them. But they aren’t crazy. By contrast, the ideas of Tea Party Republicans are crazy; in fact, Ocasio-Cortez’s policy positions are a lot more sensible than those of the Republican mainstream, let alone the GOP’s more radical members.

Since Ocasio-Cortez is being compared to Dave Brat, who unseated Eric Cantor, consider this: Brat favors a constitutional amendment forcing a balanced budget every year, which 96 percent of economists think is a really bad idea. Also, by the way, remember that Republicans won big in the midterms that followed Cantor’s demise.

So, about Ocasio-Cortez’s positions: Medicare for all is a deliberately ambiguous phrase, but in practice probably wouldn’t mean pushing everyone into a single-payer system. Instead, it would mean allowing individuals and employers to buy into Medicare – basically a big public option. That’s really not radical at all…

The point, in any case, is that while a jobs guarantee is probably further than most Democrats, even in the progressive wing, are willing to go, it’s a response to real problems, and it’s not at all a crazy idea.

So next time you hear someone on the right talk about the “loony left,” or some centrist pundit pretend that people like Ms. Ocasio-Cortez are the left equivalent of the Tea Party, ignore them. Radical Democrats are actually pretty reasonable.

10) In a similar vein, Kevin Drum argues, “we are all Social Democrats now”

It’s funny. I guess what really gets me is that we already have a perfectly good term to describe people like Ocasio-Cortez (and Bernie Sanders): social democrat. That’s basically the European left, which is why Ocasio-Cortez’s platform would sound pretty ordinary if she were running for office in Sweden or Germany. It’s what I call myself if I’m talking to someone who understands what it means. But the fact that it’s foreign makes it taboo in America. Instead we make up a new term and then struggle to define exactly what it means.

But the truth is that American liberals aren’t becoming either socialists or Bernie-bots. American liberalism is simply moving once again in the direction of Europe. This is something that conservatives have been accusing us of for decades, mostly because it’s true. Our progress in that direction is slow and halting, and sometimes it just stops dead for a while, but American liberals have always admired the social democratic model of Europe. Maybe sometime soon it will become acceptable to just say so.

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