History

 I wrote this on my Face Book page 6 years ago.

I see two great, overarching themes to all of human history.

1) War

2) The desire of a small privileged elite minority to dominate and exploit the rest of us.

These two phenomena rise from the same root: greed.

War is always and everywhere about one of two things -

1) Somebody trying to take somebody else's stuff - wealth, land, natural resources, strategic locations, a population to be exploited.

2) The oppressed trying to exact revenge or take back what they thought was once theirs.

Nationalism and religion get the masses fired up and willing to go to war, but they are never the root cause.

Wealth and power are fungible. Money gives one the power to dominate. And with both wealth and power there is always the desire for more, and no amount is never enough.

Greed might not be the root of ALL evil, but it is the root of the greatest and most consistent evils in human history.

Unhealthy Inequality

This is from 7 1/2 years ago.

Imagine how much worse things are now.

A Historical Look at Electoral Maps

When I was a kid, "The Solid South" used to mean that the southern states from Texas through The Carolinas could be counted on to support the Democratic presidential candidate.  This had been true since 1880, and was a manifestation of southern resentment against Republican northern profiteers, known as carpet baggers, who had gotten fat on the post war reconstruction.

This all changed in the 1960's, after LBJ signed the Civil Rights Act of 1964 and the Voting Rights Act of 1965 into law.   He said at the time that the Democrats had lost the south for a generation. What a failure of imagination!  Here we are, more than 50 years later, and the South is still lost, and probably will remain so for a few more decades.

Heres' s a link to historical electoral maps.

In 1964, the effect was immediate.  For the first time in history, the Republicans took LA, MS, AL, GA and SC, while suffering an epic national loss of of 486 to 52 electoral votes.  As an aside, it's also notable that in the first half of this century, the Democratic party was a welcome home to southern racists.  After 1964, they ran to the Rethugs, who welcomed them with open arms, as evidenced by the Nixon-Reagan southern strategy.

The south revealed its other characteristic factor in the '64 election - voting for its native son.  The Dems carried Texas in '64, and again in '68, when LBJ decided not to run again, and Humphrey stepped up to get stomped by the vile Richard Nixon.  Despite the even worse George Wallace draining off 5 southern states and their 46 electoral votes, Nixon beat Humphrey by 110.

The only anomaly occurred in 1976, when Democrat Jimmy Carter of Georgia swept the south and beat Michigan's Jerry Ford by 57 EV.  The south gave the presidency to its native son. Except for the first two elections of the 2000's that were stolen by GWB, that was the closest EV margin since 1884.

In '92 and '96 Clinton won his home state of AR, along with a couple other southern states each time, beating his rivals by sizable EV margins.

Florida has gone blue in the last two elections, but the rest of the south remained solidly behind McCain and Romney.

What will happen now?  The black guy has been replaced by a woman who has been vilified by the right wing for 25 years.  More recently, the Rethug controlled congress has wasted huge quantities of both time and money chasing bogus scandals to further discredit her.

HRC is very unlikely to win any southern state beside FLA, which has a large contingent of displaced northerners.

It's up to the rest of the country to keep the dumb con man, who has deep and serious emotional problems, and might actually be insane, out of the White House.

What a god damned night mare.

In Which Trump Proves My Fallibility

A few months back I predicted that by September Donald Trump would be the Herman Cain of the current Rethug presidential field - a quirky, mildly offensive, moderately amusing performance artist whose star quickly rises, then goes poof in the middle of the night. Well, we’re only 1/3 of the way through August and I have to admit I got this wrong. And not by a near miss, either. My prediction was the the very antithesis, the exact polar opposite of correct.

Draft dodger Trump broke St Ronnie’s 11th commandment by speaking ill of a fellow Rethug, and in the process dissed the military service and PoW status of one who in conservatard circles is considered to be a war hero. And his poll numbers went up.

Trump has made a series of blatantly stupid and gratuitously hateful statements that are either racist or misogynist. And each time his pole numbers went up.

Now, he has taken on Fox news - that bastion of right wing punditry and thought control - and Fox backed down.

Let me make this crystal clear: Trump feuded with the official propaganda arm of the Rethug party, and won!

Presumably it was H. L. Menken who said, ”"No one in this world, so far as I know - and I have searched the record for years, and employed agents to help me - has ever lost money by underestimating the intelligence of the great masses of the plain people.”

Well it wasn’t my money on the line, but I certainly failed to underestimate the intelligence - or perhaps gullibility, or maybe the amorphous bitterness and self-defeating, wrong-headed bigotry and hatred of America’s plain citizens, those simple people of the earth, the common clay of the right wing - you know: morons.

___________________

h/t to SEK, who said:

"Now that Donald Trump and Roger Ailes have reconciled after a brutal 96-hour-long estrangement in which both sides said many things they lack the moral capacity to regret, the GOP presidential hopeful was free to appear on 'Fox & Friends' this morning to complain about, among other things, ISIS’s superior Internet connections."

Notes:

Menken

Draft dodger

Morons

Republicans: All Wrong, All the Time, Pt. 12 - Taxes and Revenues

While mucking around in the archives, I somehow made this old post from 2/25/10 inaccessible.

So, I'm reposting it now, because it has important information.

________________________________________


 The liars at the Heritage Foundation will tell you that lowering taxes increases federal Revenues.

A New York Times article, Deficit Spending Can Help Republicans, by Daniel Altman, shows that old, wrong assumptions die hard. The article reports that:

"From the beginning of 2001 through the third quarter of 2002, the federal government leapt from a surplus (including Social Security) amounting to 2.3 percent of gross domestic product to a deficit of the same size. By itself, the current deficit is not terribly threatening. Indeed, running a modest deficit during an economic downturn can be useful, as long as the policies behind the deficit — lower taxes and higher spending — benefit consumers and businesses."

The article then claims that the 1980s Reagan tax cuts failed to increase tax revenues;

"The White House says lower tax rates will lead consumers to work more and businesses to expand, resulting in higher tax revenues and eventually closing the budget gap. That notion, chided as "voodoo economics" by critics, turned out to be false when it was last in vogue, during the 1980's."

However, the numbers, crunched by Heritage's Brian Riedl, show otherwise (see chart below). In 1980, the last year before the tax cuts, tax revenues were $956 billion (in constant 1996 dollars).
Revenues exceeded that 1980 level in eight of the next 10 years. Annual revenues over the next decade averaged $102 billion above their 1980 level (in constant 1996 dollars).

They even offer this chart as proof!  (Click the link, expressed in constant 1996 dollars.)  But the real Voodoo is in achieving an actual reduction in revenues, as they did according to the Heritage Foundation figures in 1982 and (quire dramatically) 1983, in the context of an economy that has achieved 3.7% annual growth for 200 years!

And that is key.  Every year the population grows.  Almost every year the economy grows.  There is inflation in the background, most of the time.  In fact, the compounded annual growth rate of federal tax revenues from 1970 through 2008 was just slightly over 7%.   (Current dollars, not inflation adjusted.)

Here is reality, presented in non-inflation adjusted dollars   Data from the Congressional Budget Office.

Actual revenues are shown on the broken red and blue line, with segments color-coded to indicate the party of the White House occupant.  The purple curved line is the 7% growth line, starting in 1970.   The pink line is the best-fitting straight line.  Each President's term has also been overlayed with a best fitting straight line. In retrospect, these straight lines don't tell us much of anything. 

One interesting facet of this display is that most of it lies well above the 7% growth curve.  This is entirely due to increases during the Carter and Clinton administrations, as a visual inspection reveals, and we will also prove mathematically.

Here is the compounded  annual growth rate of tax revenues, by President, over the 1970 to 2008 period.

Well, Nixon and Ford managed to top the long period average by a slight margin, but they were not under the thrall of Voodoo Economists.  Neither was Clinton.  Bush I wasn't either, but he inherited Reagan's vultures.  Look at Reagan's revenue growth rate: 5.35%.  Consider that average inflation over Reagan's years was 4.56%, and GDP growth averaged 3.4%.  Under those circumstances, revenue growth should have been at least 7.96%, not a paltry 5.35%.  The average compounded growth in constant 1996 dollars, using the Heritage Foundation table is 2.38%.  This is more than a full percentage point below real GDP growth. 

Bush II's revenue growth rate was 3.01%.  But inflation averaged 2.84% and GDP growth averaged an anemic 2.16.  Together they total 5.0%.  So, Republican tax revenue growth cannot even match the inflation adjusted level of growth in the economy.


Many years ago, my dad told me that figures don't lie, but liars sure know how to figure.  The bullshit you get from the Heritage Foundation is exactly what he was talking about.  It's another example of the conservative ploy of willfully denying reality.

Which is just one more reason why WE ARE SO SCREWED.
.

Rethugs Against Government

Via Ed Schultz on FB, a list of the 18 Senators who voted against reopening the government.

Coburn, Tom - (R – OK)
Cornyn, John - (R – TX)
Crapo, Mike - (R – ID)
Cruz, Ted - (R – TX)
Enzi, Michael B. - (R – WY)
Grassley, Chuck - (R – IA)
Heller, Dean - (R – NV)
Johnson, Ron - (R – WI)
Lee, Mike - (R – UT)
Paul, Rand - (R – KY)
Risch, James E. - (R – ID)
Roberts, Pat - (R – KS)
Rubio, Marco - (R – FL)
Scott, Tim - (R – SC)
Sessions, Jeff - (R – AL)
Shelby, Richard C. - (R – AL)
Toomey, Patrick J. - (R – PA)
Vitter, David - (R – LA)

 A rougue's gallery of fools, tools, thieves, thugs, and idiots.

The Republicans of 2013

I

The split in the Republican Party is between, on the one hand, ignorant, mean-spirited ideologues with a contempt for governance who refuse to accept the legitimacy of twice elected President Obama's presidency and are willing to ruin the economy and the country as a whole to make invalid political points; and, on the other hand, totally bat-guano-insane psychopaths.

II

In case there was any doubt, if Obama or his minions do anything -- seriously, ANYTHING -- it is a priori* wrong.

* my Latin isn't too good - I think this refers to revealed knowledge.

Quote of the Day

I usually keep my blog slanted towards the clean side, but some things are to good to pass up.

From Gin and Tacos on Facebook.

Sarah Palin was Dan Quayle with tits. Ted Cruz is Sarah Palin with a dick. Paul Ryan is Ted Cruz with scales and a cloaca.

Different Views of Real Median Household Income and Recessions

Using data from Census Bureau Historical Income Table H-08 and CPI data from FRED (index 1982 to 84 = 100), I was able to calculate real median household income (RMHI) from 1984 to 2011.  Graph 1 shows the results - annual data.

Graph 1 RMHI - First View - 1982-4 $

Except for the bump during the housing bubble, it been a downward track for this century.  During the alleged recovery from the great recession, median income has dropped badly.

From this post at EconoSpeak,I found out that Census Beareau Table H-06 has a greater data range, from 1975 to 2012, and also an RMHI calculation.  So I plotted their data in Graph 2.

Graph 2 - RMHI - 2nd View - 2012 $

Instead of CPI, the Census Bureau uses CPI-U-RS, a research series based on constant 2012 dollars.  So the numbers are different, but the picture is the same.  I've added a trend channel, because I'm amused by that sort of thing.  Presumably, the Great Recession [GR] ended in 2009, but that's the year that the RMHI value fell below the trend channel lower boundary - possibly forever.  A channel violation that severe almost always indicates that the previous trend is well and truly dead.  The new trend looks pretty dismal.  Welcome to hard times.  By my calculation, RMHI is down by over 8% since 2000.

As far back as the data goes, RMHI has taken a hit in every recession.  In days past, RMHI would recover to a new high after the recession was over.  There was no recovery after the 2001 recession until the bubble years of 2005-7.  That ephemeral gain to a new lower high was completely wiped out by the GR in 2008.  Since then, things have only gotten worse.

In the Econospeak post linked above, poster Econoclast suggests that the standard way of viewing the start and end of recessions is flawed.  His alternative is to consider that a recession is occurring when and as long as RMHI is falling.  He then presents this table.

Table 1 - Two Views of Recessions

If we consider recessions as he suggests, then the oxymoronic concept of the jobless recovery can be discarded - and good riddance.

Via Mish, I found Doug Short's article on the Deflating American Dream.  He presents longer view graphs based on data from Sentier Research, who estimate RMHI on a monthly basis.  Short did a lot of homework, and was able to graph RMHI back to 1967.  He also compared the two inflation series and found that CPI-U-RS understates inflation, relative to the CPI.  The difference is miniscule in recent years back to the mid 90's, but expands quickly as you go back into earlier years.  Graph 3 shows RMHI as adjusted by these two indexes, and also a third, PCE from BEA.  There's a lot more in the linked post by Short and in this one, as well.  Both are highly recommended.

Graph 3 - RMHI Growth - Three Views

The three curves don't disagree much on the timing of declines and advances, just on the magnitudes. By my count, using CPI as the adjustment index and Econoclast's idea of recession timing, we have been in recession for 21 of the previous 46 years, or 46% of the time.

There's your great moderation - I mean stagnation - in one simple, easy to understand picture.

Krugman points out that, "Adjusted for inflation, the income of the top 1 percent rose 31 percent from 2009 to 2012, but the real income of the bottom 40 percent actually fell 6 percent."

By my calculation, based on the data in Graph 2, RMHI fell by 4% from '09 to '12.  So the folks below median got hit even harder. In the words of an old song, "There's nothing surer, The rich get richer and the poor get laid off!"

I've come to believe that greed really is the root of all evil.

The Misguided Right Wing

One of my friends invited me into a FB debate on BHO.  There is certainly a lot to criticize in this administration, but very little real opportunity to legitimately criticize from the right.  This, I believe, accounts for a lot of the birtherism, and Muslim-Commie-socialist-fascist nonsense.  With few legitimate complaints, they just make $h!+ up.

Even without getting into wing-nut fantasy land, there is a lot the right wingers simply know about BHO and how he has ruined America that simply does not stand up to the harsh light of reality.  They blame on Obama things that have been going on since Reagan.  They blame the "left" [which is laughable - there is no political left in this country] for the actions of the Rethug dominated house.   The simple fact is, their minds are made up.  They will only hear things that reinforce their views, and contrary facts will only make them dig their heels in harder.  This is epistemic closure, aka DERP.

To an extent, this is human nature.  We all love our revealed truths and most cherished concepts, no matter where they came from. But open mindedness is a specifically progressive characteristic. None of us is immune to derp, but it is inherently more deep and pervasive among those who call themselves conservative, but are in fact regressives.  Reading a bit of Russell Kirk and my own observations have convinced me that the four pillars of conservatism are ignorance, prejudice [these come directly from Kirk - and he's proud of it!], denial of reality [global warming, New Deal Denialism], and magical thinking. Conservatives generally seek simple solutions, can't be bothered with complexity, and grasp at cleverly framed right wing talking points.  This all by itself accounts for the popularity of the Reagan mythology.  And these are the GOOD conservatives.  Tea Bagging Regressives are far, far worse.

You can argue until eternity with regressives, but you can't set them straight, because they will have none of it.  A Progressive, when confronted with new data, changes his opinion. A Regressive, when confronted with new data, changes the data.

Or simply ignores it

Regressives blame Obama for a variety of real and perceived ills.

Ruining the value of the dollar.
The trade weighted dollar index declined over 30% under W, then gyrated during the Great Recession.  Since then it has been dead flat.  Still, It's Obama's fault.

Graph 1 - Trade Weighted U.S. Dollar index

Decreasing the median income of households.

This has been going on since Reagan.  In nominal dollars, the rate of increase in median household income was lower under Bush II than under Reagan and Clinton, and has been flat since the recession.  Inflation adjusted, household income has zig-zagged to nowhere since the 70's.  The two most recent increases occurred first, and dramatically, under Clinton, and then only a bit from 2004-2007 during the housing bubble.  Recessions in '91, '01, and '08 have been devastating. The trend from 2000 on has been steeply down.

Graph 2 - Real Median Household Income

Income Data from the U.S. Census Bureau, Table H-8.  Inflation data from FRED

But to blame the recent decline on Obama rather than the decades-long assault on the middle class we call Reaganomics, the destruction of American manufacturing during the Bush regime, and House Tea Party Rethug obstructionist efforts to shut down the goverment and impose arbitrary debt ceilings takes a type and degree of blindness that simply cannot be penetrated by any wavelength of light.

Ballooning the debt

I've already put several stakes through the heart of the zombie idea that Obama is spending us into perdition - here, here, and here.  If you seriously believe that we have a debt problem due to Obama's spending, then please take the time to read and understand these three posts.

The debt results from a ledger imbalance, and both spending and revenues come into the equation.  Since the Recession ended, government spending at all levels is down.  Federal spending is dead flat and state and local govt spending is dead flat.

Graph 3 - Government Debt

Federal Debt annual growth ballooned to over 20% early in Reagan's first term, and was never less than 10% per year during his presidency.  It dropped every year under Clinton, who ran a surplus at the end of his term.  Under Bush, it was never less than 5% per year and peaked first at 10% in 2004, then over 20% in Q1, 2009.  Strangely, nobody on the right was complaining about debt growth when there was a White Rethug in the White House, and V.P. Cheney famously said, "Deficits don't matter." Which is true, as long as the Rethugs are in control.  During Obama's entire term, debt growth has been on the decline.

Graph 4 - Year over Year % Growth in Federal Debt

But debt is still growing - only at a slower rate.  If spending isn't the cause - and clearly, it isn't, then inadequate revenues have to be.  And they are.  This comes from two factors.  First, slow income growth and business activity leads to slow growth in tax revenues. We're living through the worst recovery in at least a century.   Second, tax receipts are inhibited by tax rates and policy decisions.  All things considered, progressive taxation on personal income is close to non-existent, and collections from corporations are deeply depressed because of loopholes and off-shore evasion gimmicks.  The right wing talking points that we are overtaxed and this taxation inhibits growth are simply lies.

Decimated our Credit Rating

Moody's reaffirmed U.S. debt at AAA rating in July, and upgraded  the outlook for government debt to stable from a negative watch.  Danger to our credit rating comes from Rethug debt ceiling and government shut-down threats.  But now, if our credit was bad, the interest rate on federal debt would be soaring.  It's up from about 2.6% to 3.75% since last summer, but about where it was two years ago.  This is just market fluctuation in a trend channel.  Except for a dip during the Great Recession lower, the interest rate is lower than at any other time since the 60's.

 Graph - Interest Rate on 30 Year Government Bonds

 This is just a bit of the nonsense my friend's friend spewed forth in an ignorant, but passionate, anti-Obama rant.

What took him a few seconds to blurt has taken me hours to refute.

This is why simple lies always have an advantage over the truth.

And then, the liars and their fellow travelers just move along to the next talking point.

We are so screwed. 

Revolting

Image Source

But when the revolution does come, the 1% will have the tea party on THEIR side.

And them @$$ h0lz has gunz.

We're screwed.

Obama's Weak Leadership Emboldens Rogue Mid-East Governements - Again

I wondered how long it would take the idiots on the right to start criticizing Obama for involving Congress in the decision to engage in war-like aggression in Syria.   Only a few hours, as it turns out.  Of course, to the partisan hacks on the right, anything a Rethug does is A-OK, and anything BHO does is weak, stupid, communisitic, or some combination thereof.  Even if it's a 20 year old Rethug plan.

Obama claims he has the power to act without the consent of Congress.  But only Congress has the power to declare war, according to the tattered and trampled U.S. Constitution, if anybody remembers it.  And an act of war is an act of WAR.  Full stop!

But over the last 40 [or perhaps 60] years Congress has abrogated that responsibility, and Presidential Power has expanded to fill the vacuum that created.

While Obama is dong the right thing in consulting Congress, his underlying assumption that he doesn't need to is just plain wrong.

We have been witnessing the slow, agonizing death of representative government in the U.S.A. and the rule of constitutional law since [at least] the Nixon administration.

Or didn't you notice?

What the Hell?!? Friday - Pt 2 - Conservatives vs Democracy Edition

Way back in 1980, in a rare moment of lucid candor, a leader of movement conservatism very bluntly laid out why he hates democracy.

By their words shall you know them.

Quote of the Day

... The single most effective way of avoiding another financial crisis is to reduce the political influence of the banking sector.
--------  Simon Wren-Lewis

via Mark Thoma

 Exactly so.

What The Hell ?!? Friday - Dude, Where in the Hell is my Recovery? Edition

Have you wondered why the recovery hasn't felt much like one?  Stagflationary Mark demonstrates why with this custom FRED graph of real wage and salary disbursements per capita (February 2013 dollars).

Mark often superimposes a trend line curve on the underlying data, but didn't this time.  No matter - it's easy to eyeball an exponential trend with an asymptote somewhere around $23,000.

So -- Where IS our recovery?  I've been wondering for a long time.

The Wrong Man for the Wrong Job

I might have a marginally less jaundiced view of Michigan governor Rick Snyder's emergency manager solution to Detroit's economic problems if 1) the approach didn't have a known track record of dismal failure; B) The people of Michigan hadn't rejected the E.M. approach in our most recent and, in retrospect, meaningless election; and iii) if Snyder hadn't chosen as E. M. a man who is incapable of managing his own personal finances.

I do not see this coming to a good end.

But on the plus side, Kevyn Orr was able to pull out his wallet and fork over about $16,000 in unpaid taxes.

Twice in two years.

Update:  According to Snyder spokesweaselperson Sandra Wurfel, "There was apparently an oversight related to a childcare provider unemployment insurance payment."    This is blamed on a 3rd party accountant.  Aside from the craven blame shifting, one must wonder how this innocent mistake could happen four consecutive years.

More Right Wing Lies - Redux

Foreword

Unlike right-wingers, frex. Amity Shlaes, I like to get things right.  In fact, when one is refuting a liar's lies, I believe its important to be meticulously correct.  Hence this rework of my previous post.

As I was thinking about Graph 3, it occurred to me that the numbers there were far too small, around 100 million at the maximum, when they should be in the billions.  I'm not sure what that graph represents, but it is certainly not the total of income tax revenues.  That sent me on a quest to find better numbers, which I did.  You will find them in Graph 3 and 4 of this rewrite.  Much to my chagrin, I also found I put the wrong data in Graph 2, now corrected here.  Since I want to cross-post this at Angry Bear, I've also made a few editorial changes to make it more Bear-worthy.

~ : ~ : ~

Amity Shlaes, the disinformation bunny, is still going.  In the latest issue of Imprimus, a publication of Hillsdale College, is a transcript adapted from a recent talk she gave there during a conference on the Income Tax, sponsored by Hillsdale's own Center for Constructive Alternatives and the Ludwig von Mises Lecture Series.  Right away, you know this is going to be good.  The Title of her contribution is Calvin Coolidge and the Moral Case for Economy.  Of course, by economy, she means austerity.

There is so much wrong here it's both impressive and depressing.  Rather than give her the full FJM treatment, which would take more time and energy than she deserves, I'll just hit on a couple of the lowlights.  Here is her opening paragraph.

With the Federal debt spiraling out of control, many Americans sense an urgent need to find a political leader who is able to say "no" to spending.

Here we go. Her first sentence is an exercise in made-up right-wing talking point mythology.  I've already exploded the 'Obama is a profligate spender" myth, here, here, and here. Further, we have just lived through three years when federal spending was close to flat line, as Graph 1 shows.  

 Graph 1 - Flat Federal Spending Under Obama 

There is only one comparable period in post WW II history, 1953-56, during Eisenhower's first term, as shown in Graph 2.   Still, over Ike's full term, spending grew by about 30%.

 Graph 2  Not So Flat Spending Growth Under Eisenhower ('53-'60)

To suggest that federal dept is now  "spiraling out of control" due to excessive spending is not merely disingenuous.  It is a sign that either Shlaes has no earthly idea what she's talking about, which in an alleged journalist, is unforgivable, or it's a bare-faced lie, which is unforgivable for anybody.  And if many Americans are feeling the urgent need to curtail government spending, it's because they have been lied to so repeatedly and often that they have no idea what the truth is.  As Krugman recently put it: "And I have to say, it’s extremely telling that conservative Republicans don’t seem able to make their case without resorting, right from the beginning, to obviously dumb fallacies."  The truth is that if we have a debt problem, it is due to a shortfall in revenues.

Yet they fear that finding such a leader is impossible.

Its not clear who made Shlaes the spokesperson for this sorry, disenfranchised segment of the population, nor that this is indeed what they fear.  Perhaps we should introduce Shlaes and the rest of these Real Americans to the real President B. Hoover Obama.

Conservatives long for another Ronald Reagan.

This is probably correct, though as Shlaes goes on to demonstrate, conservatives in this way - and, alas, right-wingers almost always - are rather badly disconnected from reality.

He was of course a tax cutter, reducing the top marginal rate from 70 to 28 percent.  But his tax cuts - which vindicated supply side economics by vastly increasing federal revenue - were bought partly through a bargain with Democrats who were eager to spend that revenue.

Wrong again.  The reality is that Revenue growth under Reagan was the worst of any 20th century President, post Eisenhower, except for the unfortunate Bush, Sr. under who's recession plagued regime Reagan's buzzards came home to roost. And was it really the Democrats who spent that anemic revenue stream, or did it go to Reagan's Star Wars fantasy?

Reagan was no budget cutter.  In fact, the federal budget grew over a third during his administration.

Here, she finally gets something right, if by "federal budget" she means Total Outlays, and by "over a third" she means over 80%  [as measured from 1980 to 1988.]

Things get really egregious further on in the section titled "The Purpose of Tax Cuts."  She informs us that President Coolidge and Treasury Secretary Andrew Mellon campaigned to lower top rates from the 50's to the 20's.

Mellon and Coolidge did not win all they sought.  The top rate of the final law was in the forties.  But even this reduction yielded results - more money flowing into the treasury - suggesting that "scientific taxation" worked.  By 1926, Coolidge was able to sign legislation that brought the top marginal rate down to 25%, and do so retroactively.

I was surprised to learn that Coolidge and Mellon had anticipated the Laffer curve by 6 decades.  Let's have a look at how more money flowed into the treasury. In 1922 and '23, with a top marginal rate of 56%, tax revenues were $2.23 and 1.69 billion respectively. [Per FRED, 1923 was a recession year]  In 1924, with a top rate of 46%, total revenues were $1.79 billion.  This is what Shleas calls "more money flowing into the treasury."  Here's a bigger picture look.  In 1920, when the top marginal rate was 73%, receipts were slightly over $4 billion.  In 1925, when the top marginal rate was 25%, receipts were $1.7 billion, less than half of the 1920 value, and by 1929 had only increased to 2.23 billion.  Graph 3 shows revenues per year [Coolidge's term highlighted in red,] and belies Shlaes' assertion.

 Graph 3 Income Tax Revenues, 1915-1930

Graph 4 shows a scatter plot of this same data, with revenues as a function of top marginal rate, Coolidge years are again highlighted in red.

Graph 4 Top Marginal Rate and Tax Revenues, 1915-1930

A best fit straight line is included.  There's lots of scatter, for a variety of reasons, but the upward trend - the exact opposite of Shleas' assertion, is obvious.

So here's the reality.  A decade of tax cutting and deregulation led us into the Great Depression, the worst economic collapse of the 20th century. [You might note that the following decades of high tax rates and robust regulation were free of these horrible events.]  And what happened most recently?  A decade of tax cuts and deregulation - the end game of three decades of this supply-side approach - led to the greatest economic collapse since the Great Depression.  Significantly, the major deregulations of big finance, including the repeal of Glass-Steagall came at the end of Clinton's term, less than a decade prior to the financial melt down.  Last Friday on his radio show, Thom Hartmann pointed out that prior to the regulations put in place in the 30's, the U.S. had never gone for more than 15 years without a major financial collapse.  So this result should have been expected.

The extraordinary thing isn't that right wingers lie.  The simple reality is that they can't make their case without lying, because it has no merit.  The extraordinary thing is that their lies are so easily rooted out and refuted, in the era of free and easily accessible information, but so few people will take the required few minutes to go ahead and do it. Sadly, whenever the truth comes up against a cascade of lies, the liars have a significant tactical advantage. 

Shlaes' presentation is just one more manifestation of the right wing ploy of denying reality.   Sadly, it works, because you really can fool a lot of the people a lot of the time.

More Right Wing Lies

Amity Shlaes, the disinformation bunny, is still going.  In the latest issue of Imprimus, a publication of Hillsdale College, is a transcript adapted from a recent talk she gave there during a conference on the Income Tax, sponsored by Hillsdale's own Center for Constructive Alternatives and the Ludwig von Mises Lecture Series.  Right away, you know this is going to be good.  The Title of her contribution is Calvin Coolidge and the Moral Case for Economy.  Of course, by economy, she means austerity.

There is so much wrong here it's both impressive and depressing.  Rather than give her the full FJM treatment, which would take more time and energy than she deserves, I'll just hit on a couple of the lowlights.  Here is her opening paragraph.

With the Federal debt spiraling out of control, many Americans sense an urgent need to find a political leader who is able to say "no" to spending.

Here we go. Her first sentence is an exercise in right wing talking point mythology.  I've already exploded the 'Obama is a profligate spender" myth, here, here, and here. Further, we have just lived through three years when federal spending was close to flat line, as Graph 1 shows.  

 Graph 1 - Flat Federal Spending Under Obama 

There is no comparable period in post WW II history.  Graph 2 shows the next flattest era under Eisenhower, when spending grew by about 50% over the term.

 Graph 2  Not So Flat Spending Growth Under Eisenhower

To say federal dept is "spiraling out of control" is not merely disingenuous.  It is a sign that either Shlaes has no earthly idea what she's talking about, which in an alleged journalist, is unforgivable, or it's a bare-faced lie, which is unforgivable for anybody.  And if many Americans are feeling the urgent need to curtail spending, it's because they have been lied to so repeatedly and often that they have no idea what the truth is.   The truth is that if we have a debt problem, it is due to a shortfall in revenues.

Yet they fear that finding such a leader is impossible.

Its not clear who made Shlaes the spokesperson for this sorry, disenfranchised segment of the population, nor that this is indeed what they fear.  Perhaps we should introduce Shlaes and the rest of these Real Americans to the real President B. Hoover Obama.

Conservatives long for another Ronald Reagan.

This is probably correct, though as Shlaes goes on to demonstrate, conservatives in this way - and, alas, typically - are rather badly disconnected from reality.

He was of course a tax cutter, reducing the top marginal rate from 70 to 28 percent.  But his tax cuts - which vindicated supply side economics by vastly increasing federal revenue - were bought partly through a bargain with Democrats who were eager to spend that revenue.

 The reality is that Revenue growth under Reagan was the worst of any 20th century President, post Eisenhower, except for the unfortunate Bush, Sr. under who's regime Reagan's buzzards came home to roost. And was it really the Democrats who spent that anemic revenue stream, or did it go to Reagan's Star Wars fantasy?

Reagan was no budget cutter.  In fact, the federal budget grew over a third during his administration.

Here, she finally gets something right, if by "federal budget" she means Total Outlays, and by "over a third" she means over 80%  [as measured from 1980 to 1988.]

Things get really egregious further on in the section titled "The Purpose of Tax Cuts."  She informs us that President Coolidge and Treasury Secretary Andrew Mellon campaigned to lower top rates from the 50's to the 20's.

Mellon and Coolidge did not win all they sought.  The top rate of the final law was in the forties.  But even this reduction yielded results - more money flowing into the treasury - suggesting that "scientific taxation" worked.  By 1926, Coolidge was able to sign legislation that brought the top marginal rate down to 25%, and do so retroactively.

Let's have a look at how more money flowed into the treasury.  In 1919-21, when the top marginal rate was over 70%, receipts were over $120 million.  By 1925, when the top marginal rate was 25%, receipts were in the $60 to 90 million range, and by 1929 had declined to about $50 million.  As Graph3 shows, Shlaes' lie is simply astounding.

Graph 3 Federal Revenues Collapse During the 1920s

So here's the reality.  A decade of tax cutting and deregulation led us into the Great Depression, the worst economic collapse of the 20th century. [You might note that the following decades of high tax rates and robust regulation were free of these horrible events.]  And what happened most recently?  A decade of tax cuts and deregulation - the end game of three decades of this supply-side approach - led to the greatest economic collapse since the Great Depression.  Significantly, the major deregulations of big finance came at the end of Clinton's term, less than a decade prior to the financial melt down.

The extraordinary thing isn't that right wingers lie.  The simple reality is that they can't make their case without lying, because it has no merit.  The extraordinary thing is that their lies are so easily rooted out and refuted, in the era of free and easily accessible information, but so few people will take the required few minutes to go ahead and do it. 

Shlaes' presentation is just one more manifestation of the right wing ploy of denying reality.   Sadly, it works, because you really can fool a lot of the people a lot of the time.

Inequality

Last night, Rachel Maddow showed a graphic similar to what is seen early in the video presented below.  It indicated what the vast majority of Americans think the ideal wealth distribution should be, and what they perceive the actual distribution to be - a considerably more skewed condition.  It also shows the reality, a condition far, far removed from the perception

The data Rachel presented is a stacked horizontal bar chart, essentially a one-dimensional representation.  The video shows this, and then follows up by presenting the data in another way, which is much more dramatic and effective.  Have a look.  It's well worth 6 1/2 minutes of your time.




This makes me wonder again how we compare in A. D. 2013 with the stratification of society in, say, A. D. 1213.   Now, the bottom 40% have essentially zero wealth.  That might have been true then, as well, and perhaps reaching for a couple more quintiles - for in those days the middle class had not yet been invented.  But at the top now, the distribution is so skewed that the 99th percentile have vastly more than the 98th percentile who have vastly more than the 97th.    

Don't get me wrong, those in the 97th percentile are doing very well, indeed.  But the top percent, and the top tenth of a percent in particular really have amassed wealth beyond the dreams of avarice.

Back in A.D 1213, could there possibly have been orders of magnitude differences among fine divisions of the top couple of percent?  In a time when wealth was measure in land, cows and gold chalices, that's very hard for me to believe.

I believe the corrective actions are very clear, and simultaneously politically impossible to implement.

1 Steeply progressive income tax structure
2 Steeply progressive inheritance tax structure
3 Stringent regulation, most especially of the finance industry
4 Break up the to-big-to-fail banks
5 Limit banks along State borders
6 Tax capital at a higher, not lower rate than labor
7 Increase the minimum wage to something livable
8 Increase earned income tax credits
9 Simplify the tax code in ways that encourage keeping jobs here
10 Create strong disincentives for off-shoring
11 Repeal Taft-Hartley and strengthen labor unions
12 Break up monopolies

Feel free to expand the list in comments.

If this looks a lot like the New Deal, that's not much of a coincidence.  The only time we ever had a robust middle class was in the years when New Deal policies were followed.  The systematic dismantling of the New Deal [call it the Raw Deal if you wish] has resulted in the erosion of the middle class, further impoverishment of the poor, and the vast enrichment of the already very wealthy, at everyone else's espense.

H/T to nanute who pointed me to this article where I found the video.

You Can Fool Most of the People Most of the Time

At least on certain issues.

I'm not inherently a great pessimist, but with few exceptions each passing month for over a decade now has seen my optimism whither, at least a little.  So I can't help but see the manure-colored lining in this otherwise rosy, fluffy cloud.

Steve Benen reports that according to the new NBC/WSJ poll, Americans trust Democrats more than Republicans on domestic issues, sometimes by large margins.  Here is a graph.  (As always, click to embiggen.)

 

Graph 1   Who Do You Trust?

But the causes of my pessimism are four-fold.  First, as Benen goes on to note, the same polling reveals that in the popular mind "Republicans have an advantage on the (sic) reducing the deficit, 'controlling' government spending, and national defense."  Well, there's three reasons for pessimism right there.  A) Reducing the deficit is an issue of exactly zero urgency, and attacking it now will certainly cause economic hardship, especially for those at the bottom. Further, Republicans have been huge debt increasers for decades, while Dems have not.  B) We absolutely do not have a spending problem.  We absolutely do have a revenue problem, as graph 2 plainly indicates.  I think the Republicans have become convinced of their own lies.

Graph 2   Federal Gov Current Recpts by GDP

C) From FDR through LBJ to BHO, Dems have been every bit as war-mongerish as their Rep counterparts; BHO has continued his predecessors war initiatives almost seamlessly;  and 9/11 happened on W's watch.  This just makes me want to cry.

But I have a bigger list.  Second, a look a graph 1 reveals some disturbing details.  A)  Joe BeerCan must not connect "Looking out for the middle class," Medicare," "Health Care," "Medicare,' or "Social Security" with "Economy" or the results for those categories would line up better.  B) Considering Paul Ryan and the never-ending series of Republican contrived cliffs, scoring Dems only marginally better than Repubs on the economy is, all by itself, cause for despair.  C) As is the close call on taxes.

Third, and I've already alluded to this, there is almost no daylight between the two parties on foreign policy issues.  Still I have to give a slight nod to the Dems, based on practicality, because: John Bolton.

And last, though I firmly believe to the bottom of my heart that the Dems are superior on absolutely every issue, problem and question that might rise, they still aren't that damned good.  Case in point: the new head of the Michigan Democratic party is a venture capitalist.  As Bill Maher sagely put it, while the Democrats have moved to the right, the Republicans have moved to the insane asylum.  They demonstrate this anew, almost every single day. 

The lessons of history and even a casual observation of the current failures of European austerity show that progressive policies are the clear and present necessity.  But even if we had strong Dem majorities, we still have Reaganite B. Hoover Obama in the White House, and a genuine progressive movement in congress the exact size and shape of Bernie Sanders. 

As one of my college professors put it long ago:  Booze is the only answer.