Class Warfare Taxes May Sink Dems

First thing the Democrats are doing in the new Congress is to exempt most taxpayers from the Alternative Minimum Tax (AMT).  They propose to pay for it by, wait for it, increasing tax rates on the highest income taxpayers.  

Cesar Conda says, careful what you wish for Democrats.  Leaving aside that economists now agree that high marginal tax rates on rich people hurt the overall economy, there is a political aspect to tax rate increases.  Soak the rich tax policy doesn’t seem to have been politically successful in recent years.

For example, in 1988 the Democrat-controlled Congress passed a universal catastrophic health-insurance plan, which was financed by a surtax of 15 percent on upper-income seniors... But to the surprise of the Democrats, senior citizens — even those not subject to the surtax — protested so strongly... that Congress voted to repeal the program and the surtax the following year.

Then there was George  Bush senior.  He reversed his “Read my lips, no new taxes” pledge and was reversed out of the White House.

Then Clinton and the last Democratic Congress raised marginal tax rates on upper income Americans.

Once again, this soak-the-rich tax policy backfired politically. Republicans regained control of Congress in 1994 by opposing the Clinton tax increases and supporting tax relief.

Should Republicans be saying: “Go ahead, make my day?”

Obama: The New Reagan?

After the surprise showing by Sen. Barack Obama in the fundraising stakes,  Sean Higgins is ready to call him the “black Ronald Reagan.” That’s because:

Of all the candidates running, only Obama truly exemplifies one of Reagan’s most popular characteristics: his sunny optimism.

But after plowing through Obama’s first major foreign policy speech, Dean Barnett feels that he

has a strange gift for using several pretty-sounding paragraphs to say virtually nothing.

Actually, there is a better model for Barack Obama.  He is not like Ronald Reagan.  Not at all.  He is the latest model of third way politicians Bill Clinton and Tony Blair.  They both came to office brimming with optimism.  Everyone loved them.  The media went into a swoon.

But what did they do?  Nothing.

And the reason is simple.  There was nothing they could do without stepping on the oxygen supply of the left-of-center electorate which lives in the demi-mode of government employment, government pension, or government subsidy.

And that, of course, was out of the question.  You do not run for office in order to suffocate your supporters.

You can be sunny and optimistic all you want.  But politics is about dealing, in the end, with the cold hard world.

That was the difference with Ronald Reagan.  His sunny optimism was a means to an end.  He had spent years thinking and reading and writing before he came to the presidency. (Of course, nobody knew it at the time.  Everyone, even conservatives, thought he was a bit of a lightweight.)

And Ronald Reagan led a party that was ready for change.

He won the cold war, stopped inflation, and restarted the US economy.  That, as the saying goes, is some kind of a legacy. 

It All Dovetails

If you’ve ever watched The Larkin Chronicles (the Brit TV series that was the breakout hit for Catherine Zeta Jones) you’ll remember the fatuous woman character, Mrs Jerebohm, who kept insisting that it all dovetailed.

But sometimes it really does dovetail.

Here we are in 2007 and we are up to our keisters in problems:

• Murdering hordes from south-west Asia
• Welfare state that has wrecked the working class
• Dumbed-down education
• Murdering adolescents in college
• Corrosive adolescent music/movie/video-game culture
• A corrupt, powerful academic ruling class

At a time like this it always seems that there’s no way out.  Except if you are a Republican.  Then you have a nasty feeling that Republicans are on their way out—of power.

But usually in the course of human events the solution to our problems is right in front of us.  Some people—Christians, Zen Buddhists, that sort—go even further.  They say that the solution is always right in front of us.

For people of a literary turn, solutions mean books, and the suspicion that the books are already out there.  Indeed they are. 

•  William W. Lewis, The Power of Productivity. Education is important, but not critical for most people.  You can train people on the job for most things in this world.  So why spend $750 billion on government education that doesn’t care?
• David Beito, From Mutual Aid to the Welfare State.  It’s amazing, but the respectable lower-middle and working class built their own welfare state in the 19th century and it worked pretty well. So why spend $400 billion on a welfare system that just doesn’t care?
• Judith Rich Harris, The Nurture Assumption. Where did we get the idea that children were soft clay in the hands of their parents.  Children model themselves on older children, and when we crowd them together in factory schools, we create the adolescent culture that is rotting our youth.  That $750 billion again.
• Robert Epstein, The Case Against Adolescence.  We are shamefully infantilizing our teenagers.  Like we used to infantilize blacks and women.  We should reverse this and emancipate children as soon as they can pass competency tests.

Books are all very well, but what is in it for conservatives?

Quite a lot.  First of all there is the challence of Islamofascism.  Do we really think we are going to win the war on terror until we take the beam out of our own eye, the dreadful western culture of dreck?  First step in doing that will be to get our children away from their adolescent culture.  And how do you do that, make teenagers responsible?  Why, you break up the adolescent culture by pitching the adolescents into the adult culture.  You give teenagers responsibility as soon as you think they can handle it.  Conservatives all all in favor of responsibility, right?

But here’s the kicker.  Suppose we emancipate children. Suppose we reduce the years of compulsory education.  Suppose we let kids work.  Suppose we let them start businesses.  Suppose we let them drive, and drink, and smoke, and love, and suppose we abolish the juvenile justice system so that when kids break the law they get the adult justice system they deserve?

Who is going to be really crossed up?  Why the Democrats, of course.  They are the guys sitting in all those educational, justice, welfare sinecures.  If we abolish the adolescent society, Democrats will be out of a job.

Then we’d have purged the corrosive adolescent culture, which will help on the terror front.

And guess what.  All those working teenagers will help pay for the baby boomers’ retirement.

It all dovetails, like I said.

Private Education in the Slums

He was in Hyderabad, India looking at the city’s main tourist attraction, the Charminar, when, as Clive Crook relates in The Atlantic Monthly, education professor James Tooley

came across a school for the children of slum dwellers. To his surprise, he found that this was not a state school but a private one&mdashproviding education to the extremely poor and collecting fees (of a few rupees a day, or less than a dime) for its services.

Tooley was an education researcher so he got some money from the Templeton Foundation to research education in the poor areas of Hyderabad.

Tooley and his team&mdashconfining their search to poor areas lacking amenities such as running water, electricity, and paved roads&mdashcounted 918 schools.

Sixty percent of the schools were private and about a quarter were black-market schools, unregulated and unknown to the authorities.  They were outperforming the government schools, as you might expect.  And there was something more.

Remarkably, some of the slots in these private slum schools were offered free or at reduced rates: The parents of full-fee students, desperately poor themselves, willingly subsidized those in direst need.

Tooley doesn’t get on very well with the international development community.  Well, old chap, I mean, he’s been consorting with libertarian and conservative think tanks.  Not really cricket, old man.

But now James Tooley has been given $100 million “to invest in private schools for the very poor in developing countries.”

But Clive Crook has good news.

Development professionals need not be concerned, however. The money is from a private foundation. It won’t waste any country’s aid budget.

Thank goodness for that! In the United States we are spending about $750 billion a year on government education.  And everyone knows that education is woefully underfunded.

Liberal Issues Dems Don't Push

In a rumination on the incompetence of Alberto Gonzales, Mickey Kaus wonders if the incompetence wasn’t deliberate.  Gonzales’ incompetence lets President Bush stumble-bum all over affirmative action, helping to end it without seeming to be responsible for the death.  And he doesn’t need to do anything anyway.

[R]ace preferences... are being killed anyway, by the voters . That’s even better for Bush. His fingerprints aren’t on the corpse, and even Republican judges’ fingerprints aren’t on the corpse.

Kaus continues by noticing that Democrats aren’t that outraged about the setbacks to affirmative action.

Affirmative action may be joining gun control on the list of liberal issues Dem candidates don’t push very hard because they want to win.

That’s a good point.  What other issues don’t Democrats talk about too much?  Guns, as Mickey mentioned.  Abortion, of course.  Single-payer health insurance is quiet, although ready to burst out of the shadows if anyone offers encouragement.  The war: Democrats need to placate their base but they know they have to be careful. Gay marriage: Democrats pretend to be all in favor of traditional marriage even as they encourage the gay marriage advocates.

The big problem for Democrats is not that Americans disagree with them on hot-button issues.  It is that their Big Three programs: pensions, health care, and education, together amount for over half of all government spending.  And you ain’t seen nothing yet as baby boomers start to retire.

The good thing is that about half of the spending is complete waste, so we don’t really need it.  But who will have the courage to wield the ax and cut the bloat?

Reform vs. Stagnation in France

What a clarifying event an election can be.  In France, report the editors of National Review, the first round of the French presidential election has presented the French people with a clear choice.

The battle lines are thus unusually sharp and well-defined. It is liberal economic reform versus socialist stagnation.

Naturally the French are divided between those who think strong medicine is needed, those who think that more of the same is needed, and those who think that reform should exclude any pain.

The result, a win for conservative Nicolas Sarkozy, is a reminder about the essential shamefulness of politics.  For years, right-winger Jean-Marie Le Pen railed about

crime, immigration, the Muslim challenge, loss of  sovereignty to supra-national bodies, the divisive failure of multiculturalism, and the crumbling of national identity.

IN the 2002 elections he rode his issues to second place.  Now the mainstream parties have stolen his issues and he is reduced to fourth place.

You could say that his career sends a message to all practical politicians.  Keep an eye on the fringes.  That’s where the future is being born.

When the Tax Cuts Expire

Years ago neoconservative Irving Kristol advised Republicans to cut taxes, cut, and cut again.  Apart from the economic benefit, there was the political benefit of forcing Democrats to increase taxes when they wanted to increase spending.

President Bush may be incurious and unintelligent, but it looks like he is taking Kristol’s advice.  The talk is all about how to avoid economic damage in the immediate future as taxes are scheduled to increase unless Congress does something. Patrice Hill quotes Dimitri B. Papadimitriou of the Levy Economics Institute: 

[T]ax burdens are scheduled to rise at a much faster pace than incomes or economic growth. In the past, rapid growth taxes as a percentage of the economy has preceded recessions, he said.

Right now, Democrats are blithely proposing to let all of President Bush’s tax rate cuts expire, so that there is room for lovely spending.

And then there is the Alternative Minimum Tax which disproportionately hits middle and upper income people in blue states.

Somehow I think that this happy dream is going to turn into a nightmare for Democrats.