Quotes Of The Day

“Taxes are the price we pay for a civilized society.” --  Justice Oliver Wendall Holmes

“We may have a democracy or we may have great wealth concentrated in the hands of a few, but we cannot have both.” -- Justice Louis Brandeis

"In fact, the 'Buffett Tax' hike touted by President Obama has been called everything from a 'sham' to a 'hoax' to 'total gimmickry.'"  -- House Speaker John Boehner

A Fair Economy Is Not Incompatible With Growth But Essential To It

By Robert Reich, cross-posted from his website

One of the most pernicious falsehoods you’ll hear during the next seven months of political campaigning is there’s a necessary tradeoff between fairness and economic growth. By this view, if we raise taxes on the wealthy the economy can’t grow as fast.

Wrong. Taxes were far higher on top incomes in the three decades after World War II than they’ve been since. And the distribution of income was far more equal. Yet the American economy grew faster in those years than it’s grown since tax rates on the top were slashed in 1981.

This wasn’t a post-war aberration. Bill Clinton raised taxes on the wealthy in the 1990s, and the economy produced faster job growth and higher wages than it did after George W. Bush slashed taxes on the rich in his first term.

If you need more evidence, consider modern Germany, where taxes on the wealthy are much higher than they are here and the distribution of income is far more equal. But Germany’s average annual growth has been faster than that in the United States.

You see, higher taxes on the wealthy can finance more investments in infrastructure, education, and health care – which are vital to a productive workforce and to the economic prospects of the middle class. 

Higher taxes on the wealthy also allow for lower taxes on the middle – potentially restoring enough middle-class purchasing power to keep the economy growing. As we’ve seen in recent years, when disposable income is concentrated at the top, the middle class doesn’t have enough money to boost the economy.

Finally, concentrated wealth can lead to speculative bubbles as the rich in the same limited class of assets – whether gold, dotcoms, or real estate. And when these bubbles pop the entire economy suffers.

What we should have learned over the last half century is that growth doesn’t trickle down from the top. It percolates upward from working people who are adequately educated, healthy, sufficiently rewarded, and who feel they have a fair chance to make it in America.

Fairness isn’t incompatible with growth. It’s necessary for it. 

Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley.  He writes a blog at www.robertreich.org.  His most recent book is Aftershock.

Quote Of The Day

“I wish they weren’t called the Bush tax cuts. If they’re called some other body’s tax cuts, they’re probably less likely to be raised.” 

George W. Bush,  Bush Institute Conference on Taxes and Economic Growth

"So there you have it," as Hunter at Daily Kos puts it:  "Bush finally expresses some remorse for something, but it turns out it's not over his stupid tax cuts wrecking the budget, ballooning the deficit, and generally prepping America for it's uncomfortable handbasket ride to the netherworld. No, it's because the Bush family name sucks so bad (for some unknown reason that he cannot possibly fathom) that things associated with it are less popular than they really ought to be."

The Buffett Rule Sets The Bar Too Low

By Robert Reich, cross-posted from his website

Next Monday most Americans will be filing their income taxes for tax year 2011. This year, though, tax day has special significance. If there’s one clear policy contrast between Democrats and Republicans in the 2012 election, it’s whether America’s richest citizens should be paying more.

Senate Democrats have scheduled a vote Monday on a minimum 30 percent overall federal tax rate for everyone earning more than $1 million a year. It’s nicknamed the “Buffett Rule” in honor of billionaire Warren Buffett who has publicly complained that he pays a lower tax rate than his secretary.

No one in Washington believes the Buffett Rule has any hope of passage this year. It’s largely symbolic. The vote will mark a sharp contrast with Republican Paul Ryan’s plan (enthusiastically endorsed by Mitt Romney) to cut the tax rate on the super rich from 35 percent to 25 percent – rewarding millionaires with a tax cut of at least $150,000 a year. The vote will also serve to highlight that Romney himself paid less than 14 percent on a 2010 income of $21.7 million because so much of his income was in capital gains, taxed at 15 percent. 

Hopefully in the weeks and months ahead the White House and the Democrats will emphasize three key realities:

1. The richest 1 percent of Americans are now taking in over 20 percent of total national income, and so far have raked in almost all the gains from this recovery. Thirty years ago, the richest 1 percent got 9 percent of total income. Income and wealth are now more concentrated at the top than they’ve been since the 1920s. 

2. The richest 1 percent are paying a lower tax rate than they’ve paid since 1980. For three decades after World War II, their tax rate never dropped below 70 percent. Even considering all deductions and tax credits, they paid close to 55 percent. Under Eisenhower, the top rate was 91 percent and the effective rate was 58 percent.

3. Right now the nation faces two yawning deficits – an investment deficit and a federal budget deficit. The investment deficit includes deferred maintenance on America’s infrastructure – roads, bridges, public transit, water and sewer systems that are all crumbling – and an educational system that’s being starved for resources (the federal government pays for 8 percent of K-12 education and about 5 percent of public higher education, but could do much more). The federal budget deficit is projected to mushroom to $6.4 trillion over the next ten years, mostly because of aging boomers and soaring healthcare costs.

Any serious person looking at these three realities would conclude that the rich should be paying far more. It’s not just a matter of fairness; it’s also a matter of patriotism. 

In fact, given these realities, the Buffett Rule sets the bar too low. For most Americans, wages and benefits are declining (adjusted for inflation), net worth has been plummeting (their only asset is their homes), and the public services they rely on have been disappearing. For the top, it’s just the opposite: Their incomes are rising, their stock-market portfolios have been growing, and a growing portion of their earnings has been subject to a capital-gains tax of just 15 percent. 

The Buffett Rule would generate only about $47 billion in extra revenues over the next decade, according to congressional estimates. Why not restore top rates to what they were before 1980, and match the capital-gains rate to the income-tax rate?

Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley.  He writes a blog at www.robertreich.org.  His most recent book is Aftershock.

Payola For The Most Profitable Corporations In History

And Why Taxpayer Shouldn't Stand For It Anymore

By Bill McKibben, cross-posted from Tom Dispatch

Along with “fivedollaragallongas,” the energy watchword for the next few months is: “subsidies.”  Last week, for instance, New Jersey Senator Robert Menendez proposed ending some of the billions of dollars in handouts enjoyed by the fossil-fuel industry with a “Repeal Big Oil Tax Subsidies Act.”  It was, in truth, nothing to write home about -- a curiously skimpy bill that only targeted oil companies, and just the five richest of them at that. Left out were coal and natural gas, and you won’t be surprised to learn that even then it didn’t pass.

Still, President Obama is now calling for an end to oil subsidies at every stop on his early presidential-campaign-plus-fundraising blitz -- even at those stops where he’s also promising to “drill everywhere.” And later this month Vermont Senator Bernie Sanders will introduce a much more comprehensive bill that tackles all fossil fuels and their purveyors (and has no chance whatsoever of passing this Congress).

Whether or not the bill passes, those subsidies are worth focusing on.  After all, we’re talking at least $10 billion in freebies and, depending on what you count, possibly as much as $40 billion annually in freebie cash for an energy industry already making historic profits.  If attacking them is a convenient way for the White House to deflect public anger over rising gas prices, it is also a perfect fit for the new worldview the Occupy movement has been teaching Americans. (Not to mention, if you think about it, the Tea Party focus on deficits.) So count on one thing: we’ll be hearing a lot more about them this year.

But there’s a problem: the very word “subsidies” makes American eyes glaze over. It sounds so boring, like something that has everything to do with finance and taxes and accounting, and nothing to do with you. Which is just the reaction that the energy giants are relying on: that it’s a subject profitable enough for them and dull enough for us that no one will really bother to challenge their perks, many of which date back decades.

By some estimates, getting rid of all the planet’s fossil-fuel subsidies could get us halfway to ending the threat of climate change. Many of those subsidies, however, take the form of cheap, subsidized gas in petro-states, often with impoverished populations -- as in Nigeria, where popular protests forced the government to back down on a decision to cut such subsidies earlier this year. In the U.S., though, they’re simply straightforward presents to rich companies, gifts from the 99% to the 1%.

If due attention is to be paid, we have to figure out a language in which to talk about them that will make it clear just how loony our policy is.

Start this way: you subsidize something you want to encourage, something that might not happen if you didn’t support it financially. Think of something we heavily subsidize -- education. We build schools, and give government loans and grants to college kids; for those of us who are parents, tuition will often be the last big subsidy we give the children we’ve raised. The theory is: young people don’t know enough yet. We need to give them a hand when it comes to further learning, so they’ll be a help to society in the future. From that analogy, here are five rules of the road that should be applied to the fossil-fuel industry.

Road To Dystopia With The GOP

DonkeyHotey

Joan McCarter at Daily Kos wrote two pieces yesterday, one on the actions of the Republicans in the House and one on what they did in the Senate, that come pretty close to telling us all we need to know about what the GOP stands for.

First, the House Republicans passed Paul Ryan's budget resolution, the so-called "Path to Prosperity," which as McCarter explains, would among other things end Medicare as we know it:

The House Republicans made their ultimate dystopian statement today, in passing Rep. Paul Ryan's budget in a 228-191 vote. Ten Republicans voted against it, no Democrats voted for it and 13 members did not vote.

House Speaker John Boehner called this plan "a real vision of what we were to do if we get more control here in this town. It's still a Democrat-run town."

Just a few reminders about the Ryan budget, and what the House Republicans put down as their political marker for 2012, their vision for a Republican-ruled America: It would give the wealthy a humongous tax break, the lowest tax rate since the Hoover administration; it would gut nutritional assistance, cutting it by 17 percent over the next decade; it would cut Medicare benefits and begin the process of killing the program; it would kill millions of jobs; it turns Medicaid into a block grant and deeply cuts federal spending for it, and for SCHIP, the children's health program; and it breaks the already agreed upon Budget Control Act of 2011, threatening, once again, a government shutdown.

This is also the budget endorsed by Mitt Romney. Today the Republicans made their most definitive statement for the America they envision. This is their platform for 2012, from the top down.

Not to outdone, the Senate Republicans filibustered a bill to repeal subsidies and tax breaks to Big Oil that had majority support.

 Another day in the Senate, another filibuster by Republicans on behalf of corporate America. The Senate voted on advancing a bill to repeal subsidies and tax breaks to Big Oil, and while the majority supported the bill, the filibuster held in the final 51-47 vote (Republicans Mark Kirk and Orrin Hatch were not present to vote).

Maine Republicans Olympia Snowe and Susan Collins voted with Democrats, while Democrats Mark Begich (AK), Mary Landrieu (LA), Jim Webb (VA) and Ben Nelson (NE) switched sides. Landrieu and Begich, being from oil producing states, were needlessly voting for self protection, since there wasn't a chance the filibuster could be broken. Webb and Nelson, both retiring, are completely inexcusable.
But this is the status quo that the Republicans voted to protect:

Just this past January the typical household paid about $290.76 for gasoline, up by $25 over the same one-month time span in January 2011. It looks like households will face a similar increase in gasoline expenditures in February with gas prices on the rise even though demand is the lowest it’s been since 1997. This especially affects the 82 million households that spend 6 percent or more of their annual household budgets on gasoline. High oil and gasoline prices in 2011 enabled the big five companies to rake in $137 billion in profits last year. These enormous earnings contributed to the $1 trillion in profits they earned from 2001 through 2011. Despite a profit figure with 12 zeroes—count them: $1,000,000,000,000—these oil giants are major players in the lobbying efforts to retain $4 billion in annual tax breaks for oil and gas companies that they clearly do not need. In the scheme of all things Big Oil, these tax breaks are small, particularly in relation to their profits and in light of the fact that in 2011 these companies also had a combined $58 billion in cash reserves, nearly 30 times more than they received in special tax breaks.

The American taxpayer is subsidizing those billions Big Oil is raking in, while we pay more and more at the pump every week. At least we know now, definitively, which side the Republicans are on.

The Right Continues To Play To Stereotype

The Republicans are on a roll.

They continue to vilify Georgetown law student Sandra Fluke, displaying not just their mean-spiritedness, but their remarkable misunderstanding of how birth control works and how health care operates.

They continue to blame and smear Trayvon Martin, showing their cold-heartedness while avoiding serious debate about gun control, misguided stand-your-ground laws and racism.

They tout the new budget unveiled by Congressman Paul Ryan which will not only increase the deficit, cut taxes for the wealthy, gut the social safety net, and end Medicare as we know it but, as E.J. Dionne notes, would "produce the largest redistribution of income from the bottom to the top in modern U.S. history and likely increase poverty and inequality more than any other budget in recent time."

I hate to perpetuate a stereotype but this sure seems ignorant, misogynistic, racist and greedy to me.

What Republicans Argue When They Have Nothing Left To Say

By Robert Reich, cross-posted from his website

DonkeyHotey

Republicans are desperate. They can’t attack Obama on jobs because the jobs picture is improving.

Their attack on the Administration’s rule requiring insurers to cover contraception has backfired, raising hackles even among many Republican women.

Their attack on Obama for raising gas prices has elicited scorn from economists of all persuasions who know oil prices are set in global markets and that demand in the United States has actually fallen.

Their presidential ambitions are being trampled in a furious fraternal war among Republican candidates.

Their Tea Party wing wants to reopen the budget deal forged with Democrats after Republicans got bloodied by threatening to block an increase in the debt limit.

So what are Republicans to do now? What they always do when they have nothing else to say.
Call for a tax cut, of course.

It doesn’t matter that their new “tax reform” plan (leaked to the Wall Street Journal late Monday, to be released Tuesday morning) has as much chance of being enacted as Herman Cain has of being elected president.

It doesn’t matter than the plan doesn’t detail how they plan to pay for the tax cuts. Or whether an even bigger whack would have to be taken out of Medicare than Paul Ryan’s original voucher plan – which would drowned many elderly under rising medical costs.

It doesn’t even matter that the plan would probably raise taxes on many lower-income Americans,
All that matters is the headlines.

“House Republican Budget to Propose Lower Income Tax Rates,” says Bloomberg Businessweek. “Republican Budget Plan Seeks to Play Up Tax Reform,” says Reuters. “GOP’s Budget Targets Taxes,” blares the Wall Street Journal.

Presto. Republicans have gotten what they wanted on the basis of saying absolutely nothing.

Robert Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley.  He writes a blog at www.robertreich.org.  His most recent book is Aftershock.

The Widening Wealth Divide

And Why We Need A Surtax On The Super Wealthy

By Robert Reich, cross-posted from his website

$2500 Louboutin pumps

The rest of us ought to be having a serious discussion about a wealth tax. Because if you really want to know what’s happening to the American economy you need to look at household wealth — not just incomes.

The Fed just reported that household wealth increased from October through December. That’s the first gain in three quarters.

Good news? Take closer look. The entire gain came from increases in stock prices. Those increases in stock values more than made up for continued losses in home values.

But the vast majority of Americans don’t have their wealth in the stock market. Over 90 percent of the nation’s financial assets – including stocks and pension-fund holdings – are owned by the richest 10 percent of Americans. The top 1 percent owns 38 percent.

Most Americans have their wealth in their homes – whose prices continue to drop. Housing prices are down by a third from their 2006 peak.

So as the value of financial assets held by American households increased by $1.46 trillion in the fourth quarter, the wealthiest 10 percent of Americans became $1.3 trillion richer, and the wealthiest 1 percent became $554.8 billion richer.

But at the same time, as the value of household real estate fell by $367.4 billion in the fourth quarter, homeowners – mostly middle class – lost over $141 billion (owners’ equity is 38.4 percent of total household real estate).

Presto. America’s wealth gap – already wider than the nation’s income gap – has become even wider. The 400 richest Americans have more wealth than the bottom 150 million Americans put together.

Given this unprecedented concentration of wealth – and considering what the nation needs to do to rebuild our schools and infrastructure while at the same time saving Medicare and reducing the long-term budget deficit – shouldn’t we be aiming higher than a “Buffet tax” on the incomes of millionaires?

There should also be a surtax on the super rich.

Apes And Taxes

"It's a mad house.  A mad house"  -- Planet of the Apes

There are times when the Daily Show lays bare the complete and utter absurdity of right wing positions that no amount of reasoned analysis, much less the pathologically balanced approach of the mainstream media, can do.  Case in point is Samantha Bee's interview of anti-tax crusader, Grover Norquist, who has gotten most Republicans to sign the "Taxpayer Protection Pledge," a commitment to oppose all tax increases.

Norquist, who admitted to Bee that he came up with the no tax pledge when he was twelve years old (causing Bee to mutter, "the entire federal government is paralyzed because of a document, written by a twelve year old, in 1968), could not imagine any scenario in which it would be appropriate to raise taxes -- not war, not natural disasters, not beard flu.  He would not even approve of a tax increase to combat the rise of the apes.  I bet even Charlton Heston would have gone for that one.

Why Is Obama Proposing A Tax Cut For Corporations?

One step forward, two steps back.  Just when you think Obama just might ride the wave of the 99%, provide a contrast with his Republican opponents, and push for a more populist agenda he undercuts it by once again spouting conservative talking points, this time about how the current tax code is unfair to corporations.  Instead of arguing that corporations need to pay more -- or at least their fair share -- he proposes to cut their taxes while closing loopholes, a plan intended to be "revenue neutral."  There is nothing neutral about it.  --- Lovechilde 

By Robert Reich, cross-posted from his website

The Obama administration is proposing to lower corporate taxes from the current 35 percent to 28 percent for most companies and to 25 percent for manufacturers.

The move is supposed to be “revenue neutral” – meaning the Administration is also proposing to close assorted corporate tax loopholes to offset the lost revenues. One such loophole allows corporations to park their earnings overseas where taxes are lower.

Why isn’t the White House just proposing to close the loopholes without reducing overall corporate tax rates? That would generate more tax revenue that could be used for, say, public schools.

It’s not as if corporations are hurting. Quite the contrary. American companies are booking higher profits than ever. They’re sitting on $2 trillion of cash they don’t know what to do with.

And it’s not as if corporate taxes are high. In fact, corporate tax receipts as a share of profits is now at its lowest level in at least 40 years. According to the Congressional Budget Office, corporate federal taxes paid last year dropped to 12.1 percent of profits earned from activities within the United States. That’s a gigantic drop from the 25.6 percent, on average, that corporations paid from 1987 to 2008.

And it’s not that corporations are paying an inordinate share of federal tax revenues. Here again, the reality is just the opposite. Corporate taxes have plummeted as a share of total federal revenues. In 1953, under President Dwight Eisenhower, a Republican, corporate taxes accounted for 32 percent of total federal tax revenues. Now they’re only 10 percent.

But now the federal budget deficit is ballooning, and in less than a year major cuts are scheduled to slice everything from prenatal care to Medicare. So this would seem to be the ideal time to raise corporate taxes – or at the very least close corporate tax loopholes without lowering corporate rates.
The average American is not exactly enamored with American corporations. Polls show most of the public doesn’t trust them. (A recent national poll by the University of Massachusetts at Lowell found 71 percent with an unfavorable impression of big business – about the same as those expressing an unfavorable view of Washington.)
 
The Administration’s initiative doesn’t even make sense as a bargaining maneuver.

What The 2013 Budget Says About The Fight For Our Future

By Isaiah J. Poole, cross-posted from Campaign for America's Future

DonkeyHotey

One does not have to accept all of the specific choices in the administration's budget to appreciate the fact that the administration is trying to lay the groundwork for a broad and sustainable economic recovery, while the administration's opponents continue to be hell-bent on austerity policies that would stall that recovery.

President Obama explained his vision today in an address today at the Northern Virginia Community College. As reported by Politico:

“At a time when our economy is growing and creating jobs at a faster clip, we’ve got to do everything in our power to keep this recovery on track,” Obama said at Northern Virginia Community College. “We can settle for a country where a few people do really, really well, and everybody else struggles to get by, or we can restore an economy where everybody gets a fair shot, everybody does their fair share, everybody plays by the same set of rules, from Washington to Wall Street to Main Street.”

Meanwhile, The Washington Post reported today that Republican leaders on Capitol Hill, in addition to their usual complaints that Obama's policies would leave "America drowning in debt," reprised a version of their Medicare privatization plan. Yes, that same voucher plan that was roundly rejected by a majority of Americans when Rep. Paul Ryan, the chairman of the House Budget Committee, persuaded House Republicans to back it last year. That plan exemplifies the Republican economic agenda: A few people would do really, really well as congressional conservatives fight to maintain inequitable, record-low tax rates for the wealthiest Americans; everybody else would struggle to get by in a world where what were once shared commitments, such as Medicare to maintain the health of seniors, are turned into yet another opportunity for private gain and another source of economic insecurity for the vast majority of Americans.

This contrast will be exemplified vividly this week when the House of Representatives begins debate on funding for the nation's transportation network. The White House budget includes a $476 billion, six-year funding commitment for highways and public transportation, and administration officials were working with the Senate toward turning that commitment into legislation.

This is a huge spending commitment to make, but President Obama recognizes correctly that some investments can't be compromised, even at a time of large budget deficits. Even so, this is a fraction of what groups such as the American Society of Civil Engineers say America needs for a globally competitive economy. Nonetheless, this transportation spending will generate hundreds of thousands of jobs in the near term in areas ranging from construction to engineering to beautification, and in the long term this spending will establish a platform for a more efficient and greener economy.

Why Mitt Romney Doesn't Know About The Downward Mobility Of The American Middle Class

Tom Tomorrow

By Robert Reich, cross-posted from his website

January’s increase in hiring is good news, but it masks a bigger and more disturbing story – the continuing downward mobility of the American middle class.

Most of the new jobs being created are in the lower-wage sectors of the economy – hospital orderlies and nursing aides, secretaries and temporary workers, retail and restaurant. Meanwhile, millions of Americans remain working only because they’ve agreed to cuts in wages and benefits. Others are settling for jobs that pay less than the jobs they’ve lost. Entry-level manufacturing jobs are paying half what entry-level manufacturing jobs paid six years ago.

Other people are falling out of the middle class because they’ve lost their jobs, and many have also lost their homes. Almost one in three families with a mortgage is now underwater, holding their breath against imminent foreclosure.

The percent of Americans in poverty is its highest in two decades, and more of us are impoverished than at any time in the last fifty years. A recent analysis of federal data by the New York Times showed the number of children receiving subsidized lunches rose to 21 million in the last school year, up from 18 million in 2006-2007. Nearly a dozen states experienced increases of 25 percent or more. Under federal rules, children from families with incomes up to 130 percent of the poverty line, $29,055 for a family of four, are eligible.

Experts say the bad economy is the main factor driving the increase. According to an analysis of census data by the Center for Labor Market Studies at Northeastern University, 37 percent of young families with children were in poverty in 2010. It’s likely that rate has worsened.

Mitt Romney says he’s not concerned about the very poor because they have safety nets to protect them. He says he’s concerned about the middle class. Romney doesn’t seem to realize how much of the middle class is becoming poor.

Ronald Reagan's True Legacy: Republicans Continue To Create Their Own Reality

The aide said that guys like me were "in what we call the reality-based community," which he defined as people who "believe that solutions emerge from your judicious study of discernible reality." ... "That's not the way the world really works anymore," he continued. "We're an empire now, and when we act, we create our own reality. And while you're studying that reality—judiciously, as you will—we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors…and you, all of you, will be left to just study what we do."  -- Ron Suskind, quoting unnamed Bush aide in 2004 NYT Magazine article.

Robbie Conal

On "60 Minutes," after House Majority Leader Eric Cantor signaled a reluctance to compromise with Democrats, interviewer Leslie Stahl noted that Cantor's idol, Ronald Reagan, compromised by raising taxes.  At which point, Cantor’s press secretary, off camera, bizarrely began yelling that Stahl was lying.  As Stahl told “60 Minutes” viewers, “There seemed to be some difficulty accepting the fact that even though Ronald Reagan cut taxes, he also pushed through several tax increases, including one in 1982 during a recession.”

Paul Krugman, Steve Benen, Ezra Klein and others weighed in and demonstrated that President Reagan unequivocally raised taxes during his time in office.  Indeed, ThinkProgress documented that Reagan did not “compromise” just this once, but actually increased taxes “in seven of his eight years in office, including one stretch of four tax increases in just two years.”

Eric Alterman makes the critical point about this incident: "The real story here is the vehemence of the conservative movement’s commitment to ignoring all forms of evidence that it finds inconsistent with its ideological preconceptions, regardless of circumstances or even consequences."

Alterman goes on to say that Reagan's "true legacy" is the tendency among conservatives to "ignore inconvenient facts and unwelcome evidence."

The president tended to “build these little worlds and live in them,” noted a senior advisor. “He makes things up and believes them,” explained one of his kids. President Reagan thought he'd liberated concentration camps. He invented what he called "a verbal message" from the pope in support of his Central America policies, news to everyone in Vatican City. In 1985 President Reagan one day announced that the vicious South African apartheid regime of P.W. Botha had already "eliminated the segregation that we once had in our own country." And note that I have not even mentioned the words “Iran Contra,” a scandal that was filled with more presidential lies than one can comfortably recount here.

Ronald Reagan's "preference for fantasy over fact" proved to be such a successful strategy that, as Alterman says, "it became a template for the modern conservative movement, and hence underlies its leaders' statements on virtually every topic from economics to the environment to the beliefs of this country’s founders."

Alterman aptly concludes that it is a "is a shame for Americans, liberals, and conservatives both" that the right wing insists on maintaining falsehoods in the face of reality, and "it is our media’s shame that such lies are rarely, if ever, identified as such."

The Decline Of The Public Good

By Robert Reich, cross-posted from his website

Meryl Streep’s eery reincarnation of Margaret Thatcher in “The Iron Lady” brings to mind Thatcher’s most famous quip, “there is no such thing as ‘society.’” None of the dwindling herd of Republican candidates has quoted her yet but they might as well considering their unremitting bashing of everything public.

What defines a society is a set of mutual benefits and duties embodied most visibly in public institutions — public schools, public libraries, public transportation, public hospitals, public parks, public museums, public recreation, public universities, and so on.

Public institutions are supported by all taxpayers, and are available to all. If the tax system is progressive, those who better off (and who, presumably, have benefitted from many of these same public institutions) help pay for everyone else.

“Privatize” means pay-for-it-yourself. The practical consequence of this in an economy whose wealth and income are now more concentrated than any time in 90 years is to make high-quality public goods available to fewer and fewer.

 Much of what’s called “public” is increasingly a private good paid for by users — ever-higher tolls on public highways and public bridges, higher tuitions at so-called public universities, higher admission fees at public parks and public museums.

Much of the rest of what’s considered “public” has become so shoddy that those who can afford to find private alternatives. As public schools deteriorate, the upper-middle class and wealthy send their kids to private ones. As public pools and playgrounds decay, they buy memberships in private tennis and swimming clubs. As public hospitals decline, they pay premium rates for private care.

The Democrats Win A Round, Need To Keep Fighting

It is a relief to see Republicans finally being portrayed in the media as unreasonable, recalcitrant extremists, with the Democrats as the steadfast protectors of the middle class.  But before we gloat too much, we must keep in mind the concessions the Democrats gave to get to this point and that negotiations for a year-long extension will soon commence with Republicans unlikely to be in any mood to compromise and Democrats unlikely to learn from their recent success.  (Looking ahead, Steve Benen warns, "the House GOP leadership has already announced its slate of members to participate in the conference committee, and not coincidentally, most of them have said they don’t want a payroll-cut extension no matter what concessions Democrats are willing to make.")

Greg Sargent writes that this was a "very significant victory" for Obama and the Democrats, and "stands as an all too rare example of what can happen when they draw hard lines and refuse to budge, secure in the knowledge that the public is on their side."  Sargent also provides some key caveats.  First, are the Democrats' significant concessions:  "They dropped the millionaire surtax (which had very broad public support) and agreed to an expedited decision on the Keystone XL pipeline."  Second, the Democrats were only able to stand tough because of a unique turn of events:  "Either through a failure of communication among GOP leaders or a bad misjudgment of sentiment in the House GOP caucus, a bizarre situation developed which gave Dems all the leverage and left the House GOP with none."  And third, Sargent reminds us, "this is the only piece of Obama’s jobs plan that Dems have been able to pressure Republicans into supporting."

Isaiah J. Poole explains how we got here and what must be done in the battle ahead:

The Next Fight For The 99%

By Isaiah J. Poole, cross-posted from Campaign for America's Future

Consider House Speaker John Boehner's U-turn on a temporary extension of a payroll tax holiday a temporary retreat. The tea-party Republicans who lead Boehner show no signs of actually moderating their agenda, and that will make next year's fight to continue the payroll tax for a full year no less intense than this week's nail-biter.

We're going to have to keep the pressure on congressional Republicans. When it comes to anything related to the economy, they are still in the hostage-taking business. They will still make unacceptable demands on behalf of their conservative and corporate overlords in exchange for the ability of ordinary Americans to have the wherewithal to make it from week to week.

The Perfect Microcosm

I previously wrote how the Republican Party's refusal to agree to extend the payroll tax cut for another year as long as Democrats insist on paying for it with a surtax on income of more than $1 million would have provided a perfect illustration of the stark difference between the two parties.  But the Democrats dropped the surtax in an effort to get the Republicans to agree on the tax cut extension.  Republicans, of course, still refuse to budge. 

Basically, Republicans in Congress are mean-spirited, unprincipled, greedy, out-of-touch nihilists.  They could care less about jobs or deficits.  They don't care about the planet.  They don't care about governing, really, except when it comes to protecting the 1%.  Democrats may evince more concern for working people and non-working people but they are too ineffectual to be of much use.  Since it doesn't matter to Republicans whether the government shuts down, whether the unemployed continue to get benefits or whether the middle class get a tax cut, they can make outrageous demands knowing that Democrats will eventually cave.

True to form, the Democrats compromise on the payroll tax cut extension by letting go of their key demand -- the surtax on millionaires.  The Republicans first say that doesn't count as a compromise since Republicans were never going to agree to it anyway.  Then they insist on their key demand -- that any payroll tax extension must be tied to approval of the Keystone XL pipeline, and refuse to back down.

As Steve Benen asks and then answers:  "Are Republican leaders seriously taking the position that taxes should go up for 160 million Americans unless they get the Keystone XL pipeline?  Yes, that’s pretty much the GOP position."   (Putting aside the devastating impact to the environment, the pipeline, contrary to the Republican claims, would create few jobs.  As ThinkProgress reports, "the only independent analysis into the pipeline found that just 500 to 1400 temporary construction jobs will be created, 'with a negative long-term economic impact.'”)

And the Democrats' response?

UPDATE:   "Senate leaders have agreed to a plan that will prevent key policies, including a two percent payroll tax cut for employees, from lapsing on January 1, 2012, according to top aides. But the agreement will only extends the measures for two months, setting Democrats and Republicans up to relitigate this same fight fight early next year. And it comes at a political cost to Democrats who were forced to relent on a provision forcing President Obama to take a public position on the Keystone XL oil pipeline."

The Democrats Do What Democrats Do: Compromise, Concede, Cave, Capitulate

Last week I wrote about how the Republican Party's rejection of bills to extend the payroll tax cut for another year which would benefit the middle class and which the Democrats want to pay for with a surtax on millionaires and billionaires perfectly encapsulates the stark difference between the two parties, and provides a great frame for the 2012 election.  But I also predicted that the Democrats inevitably would cave to Republican threats of a filibuster, scrap the surtax and replace it with a series of cost-cutting offsets.

Lo and behold, CNN reports:   

In what would be a major concession, President Obama and Senate Democrats will drop their insistence that a surtax on millionaires pay for extending the payroll tax cut, a Democratic source tells CNN. This would be part of a new Democratic offer.  The move comes after Senate Majority Leader Harry Reid and other top Senate Democrats met with President Obama at the White House earlier today.

Major concession indeed.

Waiting For The Inevitable Democratic Cave On The Payroll Tax Cut

The Democrats have the Republicans right where they should want them.  The GOP keeps rejecting bills to extend the payroll tax for another year, which the Democrats want to pay for with a surtax on millionaires and billionaires.  Is there a better way to encapsulate the stark difference between the two parties?

The various reasons put forth by the Republicans for refusing to support the payroll tax extension at the expense of the wealthy are not credible.  They say it would undermine Social Security.  Not true.  They say it would  hurt small business owners.  Not true.

Finally realizing the political importance of passing the payroll tax cut extension, the Republican leadership's next gambit was to load up the bill with the what Joan McCarter refers to as "crazy-ass sweeteners" to get the crazy-ass House Republicans to go along. These include: "restarting the Keystone XL pipeline, cutting jobless benefits in half, targeting environmental rules, slicing money out of Obama’s health care law and limiting the Medicare benefits the wealthy can get."

The Senate Democrats, of course, can't back down.  As Politico reports: "if, and when, the GOP is forced to accept a paltry deal that doesn’t include any of the conservatives’ prized items, it could weaken GOP leadership’s position and bring Congress to a standstill just days before Christmas."

And most of all Democrats can't give in on the surtax to the wealthy -- an issue with such enormous resonance for the 99%.  

So, what's the latest? It is being reported that ">Senate Democrats are seriously weighing scrapping the surtax on millionaires, which Republicans hate, and replacing it with a series of cost-cutting offsets that can win GOP backing."

"Seriously considering?"  They can't be serious.

Republican Hypocrites On The Payroll Tax Cut

 How To Avoid Being A Principled Republican On Taxes

By Robert Reich, cross-posted from his website

Every time I try to make sense of Republican tax doctrine I get lost.

For example, rank-and-file House Republicans are willing to increase taxes on the middle class starting in a few weeks in order to avoid a tax increase the very rich.

Here are the details: The payroll tax will increase 2 percent starting January 1 – costing most working Americans about $1,000 next year – unless the employee part of the tax cut is extended for another year.
Democrats want to pay for this with a temporary – not permanent – surtax on any earnings over $1 million, according to their most recent proposal. The surtax would be 1.9 percent, for ten years. (Democrats would also increase the fees Fannie Mae and Freddie Mac charge lenders.)

This means someone who earns $1,000,001 would pay just under two cents extra next year, and 19 cents over ten years.

Relatively few Americans earn more than a million dollars, to begin with. An exquisitely tiny number earn so much that a 1.9 percent surtax on their earnings in excess of a million would amount to much. Most of these people are on Wall Street. It’s hard to find a small business “job creator” among them.

Nonetheless, Republicans say no to the surtax. “The surtax is something that could very much hurt small businesses and job creation,” says John Kyl of Arizona, the Senate’s second-ranking Republican.

This puts Republicans in the awkward position of allowing taxes to increase on most Americans in order to avoid a small, temporary tax only on earnings in excess of a million dollars — mostly hitting a tiny group of financiers.