The reasons for voodoo’s revival: In yesterday’s column, Paul Krugman issued a warning:
Voodoo economics is making a comeback! According to Krugman, Republicans are returning to an absurd old claim: Tax cuts, even large cuts, will somehow “pay for themselves.”
This is obvious nonsense, Krugman notes—but the doctrine is making a comeback. He cites Governor Brownback’s disasters in Kansas. He also offers a warning: “dynamic scoring” may be imposed at the CBO if Republicans gain control of both houses of Congress.
We’ll assume that’s a sensible warning. That said, the analysts came to us in tears concerning Krugman’s soft assessment of Republican motives.
It all started with his account of President Bush’s tax cuts. Bush never claimed that these large cuts would “pay for themselves,” Krugman correctly notes:
KRUGMAN (10/6/14): [I]t’s noteworthy that the Bush II administration—never shy about selling its policies on false pretenses—didn’t try to justify its tax cuts with extravagant claims about their economic payoff. George W. Bush’s economists didn’t believe in supply-side hype, and more important, his political handlers believed that such hype would play badly with the public. And we should also note that the Bush-era Congressional Budget Office behaved well, sticking to its nonpartisan mandate.It’s true—the Bush administration never claimed that its tax cuts would “pay for themselves.” But Krugman omits a fairly obvious part of the reason—Bush’s tax cuts were a response to large projected budget surpluses. For that reason, his tax cuts didn’t have to pay for themselves. They were presented as an attempt to return excess revenues to the taxpayers.
(Even after the first large set of tax cuts in 2001, the CBO and the OMB were still projecting future surpluses.)
If you propose tax cuts at a time of surpluses, the cuts don’t have to pay for themselves! But now, we’re back to a different time. Any future tax cuts will come at a time of budget deficits. This requires a “voodoo” rationale, as was the case under Reagan.
Finally, we reach the reason why the analysts wept. At the end of Krugman’s column, he lists two reasons why voodoo thinking is making a comeback in GOP circles. In each presentation, he seems to assume that major Republicans really believe the claim that tax cuts will pay for themselves!
Krugman seems to assume good faith—but why should anyone make that assumption? There is a different, more obvious reason for the return of voodoo thinking. Here it is:
Plutocrats always want tax cuts. In the face of budget deficits, voodoo claims must be revived to justify the cuts, whether pols believe the voodoo or not.
The plutocrats who own the pols tell them they want tax cuts. The pols—the people the plutocrats own—need a rationale.
Presto! Voodoo is back! Some Republicans may believe its claims, of course. But why would anyone want to assume good faith across the board?
Sometimes Krugman is too kind. When he is, the analysts blubber.
OMB (Son of Blubber with the OTB)
ReplyDeleteSilly Krugman. Why assume "They, the Republicans are Dumb" when we all know "They, the Republicans, are Greedy Duplicitious SOB's."
It is "We, the Liberals, Who are Dumb."
Keeping these facts straight makes it so much easier to not hate the other tribe and try to figure out a way to talk to them.
I only hate one tribe, and they're not even from this planet.
DeleteJust sayin'
Motives matter when you are trying to figure out how to address a problem. If Republicans believe wrong information then they need to be educated. If they assert wrong information as a rationale for greedy behavior, then you need to appeal to the common good and assert the needs of the many, of society.
DeleteSomerby says SOME Republicans are greedy, not all. He says Krugman is being excessively nice in attributing the best motives to Republicans. He isn't calling Krugman dumb. Somerby regularly deplores the kind of tribal thinking that ZKoD is trying to force today's column into -- whether you agree with his categories or not, tribal is tribal. Anti-tribal is seeing that there are differences among people, including differences in motive and understanding, whether on the right or left.
So, I agree with @12:50
"Somerby says Krugman is...attributing the best motives to Republicans"
DeleteMy, oh my, how we love the BOBfan.
"At the end of Krugman’s column, he lists two reasons why voodoo thinking is making a comeback....he seems to assume that major Republicans really believe the claim...Krugman seems to assume good faith"
That, edited for brevity, is what BOB said.
BOB, of course, means never having to state the two Krugman reasons nor why anyone ever "seems to assume" anything BOB claims they seem to assume.
"First, voodoo economics has dominated the conservative movement for so long that it has become an inward-looking cult, whose members know what they know and are impervious to contrary evidence." Krugman said that.
That, to us, is not a description we assume is of "good faith." It is a description of stupid blind faith. Cult faith.
"Second, the nature of the budget debate means that Republican leaders need to believe in the ways of magic. For years .... They have also called for savage cuts in aid to the poor, but these have never been big enough to offset the revenue loss. So how can they make things add up?
....if they take the Senate, they’ll be able to infuse voodoo into supposedly neutral analysis.
Would they actually do it? It would destroy the credibility of a very important institution, one that has served the country well. But have you seen any evidence that the modern conservative movement cares about such things?" Krugman closes with that.
That describes changing the CBO analytical process to make 1 - 2 = 3. That is lying.
It is hardly an assumption of good faith by any stretch of anything but a pathetic blogger's imagination.
Are you saying that Somerby thinks the Republicans have good faith? He is accusing Krugman of saying the Republicans have good faith while he himself claims they are being greedy (bad faith). It sounds like you shifted the points of view and now have them backwards.
DeleteAlso, it is very hard to tell when you are quoting someone else and when you are speaking with your own voice. Can you please adhere to some conventions for quoting and citing? Note how Somerby very clearly identifies who is speaking, uses indents and makes it easy to know when he is saying something as opposed to quoting someone else.
STOP SHOUTING.
DeleteRight you are @ 3:24. When Sombery quotes someone he uses "quotation marks." When he distorts them he says what they seem or suggest to say.
DeleteWhen he paraphrases you can tell that's what he's doing. I can't tell who is saying what in KZ's comments.
Deletehttp://3.bp.blogspot.com/-FA44OMYg6zU/UG2V3o_uufI/AAAAAAAAEGM/Dw3r9gwJYgI/s1600/1275905143_raging-midget.gif
DeleteFor 12:37 --
DeleteWhen it comes out of KZ's asshole, it's not called "saying."
We have other words for what that orifice produces. For example:
"I can't tell who is shitting what in KZ's diaperloads."
See how that now makes perfect sense?
Only, you aren't supposed to *understand* a diaperload.
If it's your baby that did it, you change them. The rest of us hold our noses and politely look away.
There's little difference between the two parties on this issue. Both parties are fiscally irresponsible. Both parties want high government spending and relatively low taxes. That's a good formula to win elections. The public doesn't understand that sooner or later government spending must be paid for by the public. But, it's bad long-term policy.
ReplyDeleteAnd, Krugman is worse than most. He was calling for much larger "stimulus" -- thus, much larger deficits -- than the huge, record deficits produced by the Bush./Obama Administrations.
I assume you are against the bombing of ISIS because it will add to the deficit. If so, congratulations for being right about something (although for the wrong reason. Baby steps.).
DeleteBerto
Not all tax cuts and government expenditures are the same. A larger stimulus *did* make sense and would have paid for itself by improving our infrastructure while at the same time increasing employment and reducing the impact of the recession on long term government income. You don't get the same result by tax cuts or bombing ISIS.
DeleteDavid in Cal writes:
Delete[QUOTE]
Both parties are fiscally irresponsible. Both parties want high government spending and relatively low taxes.
[END QUOTE]
Actually, the national debt as a percentage of GDP fell substantially under the administrations of Truman, Kennedy-Johnson, and Clinton, it fell under Carter also, though, at a slower rate. The debt/GDP ratio also declined under Eisenhower and somewhat under Nixon/Ford, However the debt ratio ballooned under Reagan/Bush 1 and under Bush 2. It has risen under Obama also, though he inherited that trajectory from Bush 2.
But David would have to explain what's bad about running deficits and what's bad about the current debt to GDP ratio -besides the fact that deficits have been used to finance the rise in inequality in this country- to make whatever case it is that he's trying to make. From a historical perspective the evidence is that balanced budgets are bad for the economy. Here are some grafs from a paper Randall Wray wrote during the Bush 2 administration:
[QUOTE]
...2. With one brief exception, the federal government has been in debt every year since 1776. In January 1835, for the first and only time in U.S. history, the public debt was retired, and a budget surplus was maintained for the next two years in order to accumulate what Treasury Secretary Levi Woodbury called “a fund to meet future deficits.”
In 1837 the economy collapsed into a deep depression that drove the budget into deficit, and the federal government has been in debt ever since. Since 1776 there have been exactly seven periods of substantial budget surpluses and significant reduction of the debt.
From 1817 to 1821 the national debt fell by 29 percent; from 1823 to 1836 it was eliminated (Jackson’s efforts); from 1852 to 1857 it fell by 59 percent, from 1867 to 1873 by 27 percent, from 1880 to 1893 by more than 50 percent, and from 1920 to 1930 by about a third. Of course, the last time we ran a budget surplus was during the Clinton years. I do not know any household that has been able to run budget deficits for approximately 190 out of the past 230-odd years, and to accumulate debt virtually nonstop since 1837.
3. The United States has also experienced six periods of depression. The depressions began in 1819, 1837, 1857, 1873, 1893, and 1929. (Do you see any pattern? Take a look at the dates listed above.)
With the exception of the Clinton surpluses, every significant reduction of the outstanding debt has been followed by a depression, and every depression has been preceded by significant debt reduction. The Clinton surplus was followed by the Bush recession, a speculative euphoria, and then the collapse in which we now find ourselves. The jury is still out on whether we might manage to work this up to yet another great depression....
[END QUOTE]
Actually the U.S.'s problem's have to do with trade deficits due to free trade agreements and household debt due to the rise in wealth and income inequality between a fraction of the 1% in this country and everyone else though, again I'll concede, the Reagan/Bush 1 and Bush 2 deficits did finance a lot of that inequality.
Too soft and too kind is regularly used as a rightist putdown of Dem's. Worked from Carter through Gore. Only Big Dog broke through. Gotta admire him. As did the ladies.
ReplyDeleteThe real funny part is people still gripe over the income taxes of the top 1% while the real driver of skyrocketing inequality is the Federal Reserve shoveling cash into the pockets of the top 0.1% via "quantitative easing".
ReplyDelete
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