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.

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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.

What the Hell ?!? Friday - Signage That Speaks for itself Edition

Typical Michigan scene, nabbed from a Friend's FB page.

Middle Class Melt

Since I got preempted posting the inequality video at AB, I thought I'd offer this as a follow-up.

H/T to Rachel Maddow.

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.

Quote of the Day

In comments to this must-read Johnathon Chait article * on the thoroughly despicable Jeff Sessions, reader HATCHAX  offers this gem.  No extra charge for the quote within the quote.

Reminds of when I worked for the DSCC when Howell Heflin was retiring & Sessions was running for his seat: his staff told me Sen. Heflin was proud to keep Sessions off the federal bench because "At the risk of offending every rock in the world, that boy's dumber than one." After Sessions' eleciton, I heard Heflin say something along the lines he wasn't too upset Jeff Sessions replaced him, for after all, being a judge was one thing but intelligence was not something the Senate had in any abundance.

That is some high quality snark.

Now go read the Chait article.

Really.

H/T to Scott Lemieux at LGM

* UPDATE: 6/25/17:  Sadly, this is now a dead link.  It looks like DeLong preserved the article content, but, as near as I can tell, the original comment stream is now lost.

Bumper Sticker of the Day

Seen on Washington St. downtown Royal oak, MI.

$10,000 Reward

Schrödinger's cat

Wanted Dead or Alive

Quote of the Day

But first  bit of background.  Not being aware of most internet traditions, I didn't realize that readers of the Right Wing e-rag  Free Republic were known as "Freepers."  Live and learn.

With that bit of vital knowledge in place, we may now proceed to the quote, hoisted from this comment stream at LGM.

The Freepers aren’t self-aware enough to know that their beliefs are transparently fraudulent. Mostly they just hate everyone that isn’t them, and cheer on anything bad that would affect anyone they hate. It helps to realize that the Freepers have the emotional maturity of Gollum without his erudition or table manners.
                                           -- NonyNony

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.

Random Thoughts - Republican Violence Against Women

A small number of Republicans voted for the

Violence Against Women Act.

Then they actually read the thing and discovered

it was prevention, not encouragement.

What the Hell?!? Friday - Just Cruisin' Edition

A Cruise Missal is a prayer book taken along in case you need divine intervention to survive the event.

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Life is a Cabaret

Be glad it's not a Carnival