Steve Kornacki – who has been accused of being a Obama apologist for defending President Obama’s tax-cut/stimulus package versus Andrew Leonard – We settle the “Is Obama a sellout?” debate – A conversation between two Salon writers with very different views of the president’s deal on the Bush tax cuts
SK: ( I’m excerpting parts. So I recommend reading the whole article.) I know the idea of taxing the wealthy, in the abstract, polls well. But in a climate like this, with unemployment stalled near 10 percent, swing voters are looking for reasons to blame the president. So they’d side with the GOP’s version, and Obama would then be forced to extend the tax cuts anyway — without the extra goodies he was able to extract now.
This is a good point. Who can really define what happened in the mid-term elections in rational terms. The public returned to office or kept in office mostly the same people whose economic philosophy were largely responsible for the Great Recession. Goodness knows moderate bloggers put up enough economic data and charts of the economy under conservative rule and it was like bouncing BB’s off an old Buck-Stove. Voters blamed the party in charge – abet for barely two years – for problems steaming from conservatives who created them. It was like rewarding a convicted arsonist with a torch and a free can of gasoline.
AL: But there are some big problems with your argument. First, tax cuts for the rich make for terrible stimulus — the rich tend to save their money instead of spend it. Second, the “small business” scare tactic is basically bogus. Only a fraction of the small business owners in the U.S. would be affected by rising taxes, and it is not at all clear that small business owners make their hiring decisions based on tax policy — they hire people to meet rising demand. Swing voters may be looking to blame someone for high unemployment, but how hard is it to make the case that: hey, we are going to raise taxes on the rich back to where they were during the Clinton years, when the economy boomed, and use that cash to pay for unemployment benefits and a payroll tax cut that puts cash directly in the hands of people who need it and will spend it. That is a compelling argument that the polling consistently supports. We should have heard more of it. And sure, I understand the idea that the swing vote makes or breaks elections. But you also need to give your a base a reason to come out and vote.
Andrew’s is the regional reality based view – look at the numbers, the consequences and what would actually be better if a better deal could have been made . One which many moderate to liberal voters agree. It is connected to the now frequently heard argument that Obama and Democrats waited too long – after the mid-terms – to start making their case. I was in a few different states during the election, plus watched political ads on YouTube from Republicans. A big part of their platform in ad after ad was if you do not elect them Obama, Pelosi and Reid are going to rise your taxes. Even though those very same “liberals” gave the middle-class a tax cut, the election showed the right-wing message won, or lies and dirty politics won. I’m on Leonard’s side, but the best that can be done at this point is – and this is a big maybe – is some slight alteration of the payroll tax holiday.
SK: Don’t get me wrong — I’m not actually saying the GOP line about small business is valid. And I willingly concede that, as best I can tell, there’s absolutely no stimulative value in maintaining the Bush era rates for the wealthy. My only point is that those arguments will, nonetheless, carry the day in this climate. Remember when the Clinton rates were put in place back in ’93? The wealthiest 1.8 percent of Americans saw their income taxes rise — but that’s not how swing voters saw it. Overwhelmingly, they believed their taxes had been raised. Why? Because the climate made them receptive to GOP rhetoric. The way I see it, Obama made two promises on the Bush tax cuts in his ’08 campaign: (1) To end them for the wealthiest Americans; and (2) to keep them going for the middle class. Once things got to this point, he was going to have to break at least one of those pledges, no matter what. So he chose the option that kept them going for the middle class and that gave him a chance to improve the economy enough to the point where he could actually win a message war with the GOP — over taxes or anything else.
More crystal balls, but he is probably right. never the less it doesn’t hurt for Democrats who disagree to make a lot of noise. Obama does seem cut off from his base or he is listening to the Republican-lite branch of his administration. If he thinks he can win reelection with a coalition of conservative Democrats, conservative independents and 5% of the Republican vote he’s mistaken. Though let’s not forget that Republicans have made a huge tactical error. The tax cut/stimulus deal is a glaring confession they were never serious about reducing the deficit. The $700 billion lost in revenue, plus the interest ( totally close to a trillion dollars) just so the richest one percent could avoid the same tax rates they paid during the Clinton administration will haunt conservatives in 2012. They can try running as the party whose rhetoric means something, but only the hard kool-aid drinkers on the Right possess the kind of cognitive dissonance it takes to pretend like that’s true. Who held the unemployed hostage to make billionaires wealthier. Republicans. Who is willing to let gay men and women die for their country and not recognize their humanity? Republicans. In a long Republican tradition of arms reduction, who held START hostage for petty political vindictiveness? Republicans. Who passed some kind of financial reform to protect consumers and investors against corporate maleficence? Not Republicans. Who passed some long overdue consumer protection against health care insurance shenanigans? Not Republicans. Who were the inane hypocrites who slammed the Recovery Act while taking credit for the projects it funded? Republicans. Who has stared America down the road of energy independence and green energy? Not Republicans. Who is recovering the TARP funds Republicans voted for and like to pretend they never heard of ? Democrats. Did Republicans just work out a compromise with a guy they swore shouldn’t be president because he has no birth certificate, is a secret Muslim, a secret socialist? Yes they did. Have the singers of right-wing triumphism just handed Democrats a huge loaded gun for the message wars of 2011-2012. It looks like they have.
A recent post on Paul Krugman’s blog – Hive-minds and Kleptocrats
It’s not often that I get a chance to accuse Charlie Stross of being stuck in the past, so I should take it — especially because it’s a way to avoid (a) commenting more on the tax debacle and (b) finishing the redraft of the monetary policy chapter in Krugman/Wells 3rd edition (how the heck do we get quantitative easing in without totally muddying everything else?)
So: for those who don’t know, Stross is a spectacularly good contemporary science-fiction author, brimming with ideas, who also has a stimulating blog, where his latest entry asks why things are so messed up. His proposed answer is that we’ve been invaded by alien organisms — namely, corporations:
Corporations do not share our priorities. They are hive organisms constructed out of teeming workers who join or leave the collective: those who participate within it subordinate their goals to that of the collective, which pursues the three corporate objectives of growth, profitability, and pain avoidance. (The sources of pain a corporate organism seeks to avoid are lawsuits, prosecution, and a drop in shareholder value.)
Corporations have a mean life expectancy of around 30 years, but are potentially immortal; they live only in the present, having little regard for past or (thanks to short term accounting regulations) the deep future: and they generally exhibit a sociopathic lack of empathy.
I like it; it’s fun (although William Gibson said much the same thing, I think); but it’s so 1960s, if you know what I mean.
No, really. There was a time, back when John Kenneth Galbraith was writing The New Industrial State and all that, when the notion of the soulless corporation transcending individual will was big stuff. But much of what JKG wrote then if anything evokes nostalgia now. There’s a fairly extensive section of The New Industrial State explaining why abuse of corporate position for personal gain was no longer an issue, with “the rise of the technocracy with its new professional attitudes and its widely diffused power acting as a safeguard against individual avarice or larceny.” That was then.
These days, we’re living in the world of the imperial, very self-interested individual; the man in the gray flannel suit has been replaced by the man in the very expensive Armani suit. Look at the protagonists in the global financial meltdown, and you won’t see faceless corporations subverting individual will; you’ll see avaricious individuals exploiting corporate forms to enrich themselves, often bringing the corporations down in the process. Lehman, AIG, Anglo-Irish, etc. were not cases of immortal hive-minds at work; they were cases of kleptocrats run wild.
One of the Right’s intellectual bloggers – a Professor Bainbridge – read that and his head exploded. Not able to deal with what Krugman and Stross actually said proceeds to lecture the world on the holy inerrantness of THE CORPORATION – In Praise of the Corporation
Piffle. In the first place, Stross is engaged in reification to an absurd degree.
The lack of modern corporate culture’s morality is a “piffle”. PB’s sycophantic servitude to the corporation is somehow not reification, but Stross and Krugman questioning both the economic benefits and curliness of some corporations is. Clever for a conservative, if obviously flawed. His readers will repeat it, link to it, without questioning the substance. This syncs with the Right’s penchant for strict authoritarian hierarchies. Corporations as the modern totalitarian monarchy is a conservative wet dream. One that is better left in one’s fetid imagination rather than foisted on the public as a valid public policy argument.He goes on,
Properly understood, the corporation is a set of relationships among people who have various stakes in the enterprise. Employees provide labor. Creditors provide debt capital. Shareholders initially provide equity capital and subsequently bear the risk of losses and monitor the performance of management. Management coordinates the activities of all the firm’s stakeholders. The corporation thus is not a thing, but rather a nexus or web of explicit and implicit contracts establishing rights and obligations among the various people making up the firm. It is a fundamentally human endeavor. Indeed, the business corporation is really a community of human beings, acting together to provide goods and services to other human beings.
I have no issue with that statement what so ever. Neither does Krugman or any other prominent left of center economists as far as I know. No where does Krugman or Stross advocate doing away with corporations. This is apparently difficult for PB to understand and I’ll word it as simply as possible – it would be best for the country, the economy, consumers and investors if corporations behaved within moral boundaries. The only way righties like PB can even get foothold on the argument is if they create flaming straw men to argue with. The rest of PB’s post is just one boring assault on his straw man in which, not surprisingly, he comes out the while knight besieged by the anti-capitalist windmills of his imagination.
“I hope we shall… crush in its birth the aristocracy of our
moneyed corporations, which dare already to challenge our
government to a trial of strength and bid defiance to the laws of
our country.” –Thomas Jefferson to George Logan, 1816.
Jefferson was not saying corporations should be crushed – the kind of cheap and dishonest analysis which PB would probably ascribe to Jefferson as he did to Krugman – he was saying corporations should not operate outside the laws and moral obligations of a free society. Corporations should not act like privileged aristocracy. How that came to be considered anti-American or anti-capitalism says a lot about how far Right and out of touch with American virtues, modern conservatism has become.