The Bishop and the Butterfly: Murder, Politics, and the End of the Jazz Age

    There is no fiscal crisis

    By Flavius on Mon, 03/07/2011 - 8:46am |

    There's a political one. We have to stop electing supply side republicans.

     

     

     

    http://delong.typepad.com/sdj/2011/03/political-illusions.html

    Comments

    That is an interesting essay..thanks!


    by Richard Day on Mon, 03/07/2011 - 5:26pm

    I trust Delong's evaluation of the Affordable Care Act.He's pretty middle of the road. I see him as one of bunch of fairly conservative economists , including Martin Wolff who've been boxed in to supporting Obama not because of the Republicans-who cares-  because the dishonesty of the Tyler Cowells. . 


    by Flavius on Mon, 03/07/2011 - 6:56pm

    Wait a second. Wasn't this guy Summer's lieutenant during the Clinton administration?

    It kind of looks like you are agreeing with me that there is little difference between a "Clinton Democrat" and a typical Republican when it comes to fiscal policy ... but wouldn't he be expected to agree with Obama more often than not?


    by kgb999 on Mon, 03/07/2011 - 11:15pm

    Yes. He was Deputy Secretary of Treasury when Summers was the secretary.

    Certainly there's a lot of overlap between Clinton Democrats and some Republicans. I'm not sure that's true if you substitute the term typical Republicans.


    by Flavius on Tue, 03/08/2011 - 8:46am

    He's full of crap. He proposes (nominally) replacing supply-side stupidity with even more stupidity that still only benefits the elite. His theory appears to be that because the republicans ignored Keynes during the good times, the only logical response is to blow Keynes out of the water in bad times. With nukes.

    Yay. And what is the specter of doom which the valiant economist Delong would save America from with his bold approach? A tax increase, of course. No shit. Another rich person applauding a totally screwed up approach so they don't have to raise their own taxes. Who'd of ever imagined.

    I'm not sure exactly what it says about your party that he framed support for crap policy destined to increase unemployment as an endorsement for electing Democrats. He never quite establishes a link between loving the anti-worker provisions of HCR, Clinton policy being teh awesome (which, BTW was Delong's) and insisting Obama veto anything that might add to the deficit no matter what. As best I can tell, this was awkwardly framed to cram as much Democrat ego-stroking as possible so you promote his message without even thinking about what he's saying.

    When y'all hit on an economic strategy that benefits the working class ... let me know.


    by kgb999 on Mon, 03/07/2011 - 11:04pm

    Yay. And what is the specter of doom which the valiant economist Delong would save America from with his bold approach? A tax increase, of course

    Sorry, you're wrong.  He doesn't  say that. Not in this piece nor elsewhere. If you google Delong and Bush tax cuts you'll find he wrote a week ago endorsing Obama's proposal to repeal the tax  cuts on incomes over $250K. To repeat he's not trying to save America from a tax increase on the rich. He recommends one..

    I agree he's a conservative economist which is why I described him that way

    My point in referencing his piece was to show that even conservative economists like him are dismayed by the extent of the disengenuousness of supposedly respectable  economiss  like  Tyler Cowen -Ok let's say it straight- by Cowen's  lying attempt to blame Obama for the mess  Bush created.

    I was also interested in his view that the ACA is the largest long run deficit reducing piece of legislation ever signed into law.

    I agree that the Democrats ought to have an economic strategy that benefits the working class. Delong's support of repealing the Bush tax cuts would be part of that but  beyond that I'd probably prefer Dean Baker's ideas. 


    by Flavius on Tue, 03/08/2011 - 9:46am

    The sorry truth is that our savings aren’t worth as much as many of us think, and a rude awakening is coming. One way or another, some of our savings will be taxed away to make good on governmental commitments, like future Medicare benefits, which we currently are framing as personal free lunches.... 

    That's from the article. I guess in context it could be viewed as building a case for gutting social security ... but the "rude awakening" to be avoided on which the entire call for action appears to hinge is that our savings will be taxed away.

    Either way, Delong sure seems to give full-throated endorsement to the conceptual essence of Tyler Cowen's entire frame. The primary criticism he voices is that Cowen didn't properly assign blame ... the other bit was to hammer home an intellectually unsustainable attempt to make a distinction between "private bonds" and "government bonds" (which was the primary thing I attacked).

    As for the ACA bit, that's actually pretty well known. He framed it different than when the debate was happening, but that deficit reduction is realized 100% through reduced services and increased costs to American Workers. In that regard, while the deficit would take a hit, the American worker will actually be far better off if the Republicans prevail at what Delong is criticizing them for.

    This pretty much gets to the heart of why the bill was a total failure IMO. See, the point of ACA was not to reduce the deficit. The point of ACA was to give Americans BETTER health care for LESS out of pocket expense. It was turned into a vehicle for debt-reduction to benefit the rich and a profit mill for the insurance companies that can not possibly result in anything but increased costs (unless corporations decide to "do the right thing" instead of "doing the legal thing which results in the most profit".)

    And let's be clear here. There is one reason and one reason alone what the demand has been placed on every piece of legislation to whittle away at that debt - because unless they fill that hole with money taken from us, it will require raising taxes on the rich.


    by kgb999 on Tue, 03/08/2011 - 4:39pm

    One other ACA note. The aspects of the legislation which he is touting as a "deficit reducer" are the replacement they came up with to get close to the deficit reductions that would have been realized by a Public Option. The public option would have accomplished a greater debt reduction in conjunction with achieving cost controls AND setting a consumer-controlled baseline service package that would have defined minimal care standards through a functional model.

    I find it rather difficult to applaud .... particularly when comparing projected outcomes with those based on policy in the legislation when it passed the House.


    by kgb999 on Tue, 03/08/2011 - 5:04pm

    Hey, it's over.

    The ACA barely passed and I at least I  think there was zero possibility it would have if it had included a public option. Not a covert judgement on its merits. I suspect I'm the only person in North America whose reaction tor Obama's election was to read Michael Foot's biography of Nye Bevan to ponder how he crafted the UK's National Health.

    If the Senate had lacked that crucial 60th Senator's vote, that would have ended any chance of health care reform for another generation. And I think the public option would have been a 60th vote killer. As it is we've got our foot in the door for a graduall process of improvement 

    I applaud that.


    by Flavius on Tue, 03/08/2011 - 9:56pm

    Fair enough. Just for the record .... I think, considering it was in reconciliation and *had* to go back to the House anyhow it would have been very easy to settle the question by giving it a up/down 50-50 vote that had zero impact on anything if it failed (and Pelosi said clearly she had votes to pass it with the PO). Considering Obama's deal and the fact that he LOVES to rub the liberal's face in stuff, I can't shake the feeling it didn't get a vote because it easily had more than the 50 votes it really needed to pass under the procedures used to carry it.

    But, as you say that really is in the past. No fucking way to know. However, you kind of shifted the sands a little; I was really just pointing out the many financial levels on which I see Delong being full of shit in this particular piece. You do bring up another excellent point - which combined with the policy Delong wants to protect makes me wonder something.

    Aren't we AT the point where we are supposed to be making ACA better? Certainly you don't propose that the best way to make it better is to instinctively attack any attmepts to modify it as an attack on people's babies and the olds. The only way this turkey is getting any better is if we make changes. When do you imagine we can start doing that?

    I think a more germane question, considering the excise tax really does seem to be financially negative to the middle/working classes and  given that the deficit is only one of several concerns. Wouldn't eliminating the provisions the republicans are trying to get rid of be more beneficial for the working class in the short/mid term than the negative impacts of the deficit hit? After all, when you guys were promoting it ... you DID say the only reason you were insisting on the excise tax was because the mean Republicans and Blue Dogs were forcing it down our throats and we needed 60 votes. Well, here those mean republicans are offering to get rid of it .... right? WTF. Why not jump on it?

     


    by kgb999 on Wed, 03/09/2011 - 12:13am

    Two comments.

    - Having spent about 20 years working abroad where I observed and used a number of  National Health systems it's hard to overstate my approval for them. .At least when not  being deliberately sabotoged by for example Margaret Thatcher. (The infamous UK waiting lists which the Republicans and the media trotted out during the ACA debate were her own invention.Didn't exist before her, we're eliminated by Labour. Cameron's of course trying to recreate them.)

    - All taxes are counter productive right now :excise taxes, social security with holding, even the ones that Bush repealed.

    When the economy can afford to have that liquidity withdrawn my simple minded recommendation is to completely scrap the IRS's incomprehensible , non- progressive  code- encrusted with its web of " incentives"  and political  favors- and dust off the  1959 code just adjusted for inflation ,with its 90% level taking effect at probably a million dollars. And while we're at it reinstall the 1959 tariffs. . 

    Good enough for Ike , ought to be good enough for us.


    by Flavius on Wed, 03/09/2011 - 6:38am

    Now you've gone all libertarian on me talking about a 50lb sledgehammer to address making a little bowl of potato salad. I'm not at all averse to your vision BTW. And if you broke that out - you'd probably get the Paulites in droves!

    But you are talking about "taxes" in the generic, I'm talking about a specific excise tax that seems unlikely to withdraw a systemically damaging amount of liquidity from the picture - just impact the deficit neutrality of the ACA and mitigate what I see to be significant negative pressures from the bill.

    *IF* you agree we'd be better off with a Public Option in the end, removing the mechanism they replaced it with seems to be a very solid first step. Once a policy need is there (and granting the GOP will blow every deficit issue through the roof compared to it's legitimate impact on the near/mid term outlook) ... doesn't that leave a hole to justify continually floating Public Option bills on purely fiscal deficit reduction grounds that would be pretty difficult to oppose for any reason other than "Socialism!!!!" (which really does seem to be wearing thin with the electorate)?

    Why are we not supporting the GOP on this? It seems to be another small step in the direction we want to go. Is there a super-secret rule that we can't let the bill get better if it might possibly make the GOP look like they nominally prevailed? Or is there some other reason to protect policy presented during the debate as being forced on us?


    by kgb999 on Wed, 03/09/2011 - 2:20pm

    Yeah , the Systems guy in a german factory I  used to visit said

    " If you ask a German a question he always begins with Adam and Eve.".

     

    So in true Germanic fashion..........I simply don't know enough to make a useful comment on the excise tax but my likely position  can be inferred  from the following.In my hierarchy of goals the first is raising the standard of living of the bottom 20% of the income distribution. Always consistent  with the old stand by

    But first do no harm.

     

    As to supporting a Republican position. Sure. Using a long spoon.


    by Flavius on Wed, 03/09/2011 - 9:12pm