The Fight over the Economy

Today there's a curious column from economist Paul Krugman sneering at the Republican call for a return to Bush era economic policies. He's evidently against the extension of the Bush era tax-rate cuts.

In recent weeks, G.O.P. leaders have come out for a complete return to the Bush agenda, including tax breaks for the rich and financial deregulation.

Meanwhile Larry Kramer is calling for corporate income tax-rate cuts as the sure way to ignite a very sluggish economic recovery.

Think of all the economic obstacles of spending, taxing, and regulating coming out of Washington. What should be done to spur growth? Keep tax rates down. And stop passing massive regulatory bills, like the bank reform Obama just signed into law.

By the way, if Bush passed "tax breaks for the rich" how come the income tax share paid by the rich went up in the Bush era? Here are the numbers from the IRS for the federal income tax paid in the Bush years for the top income brackets.

Share of Federal Income Tax Paid by The Rich
Year	Total	Top 0.1%	Top 1%
2001	100.00%	16.06%	33.89%
2002	100.00%	15.43%	33.71%
2003	100.00%	15.68%	34.27%
2004	100.00%	17.44%	36.89%
2005	100.00%	19.26%	39.38%
2006	100.00%	19.56%	39.89%
2007	100.00%	20.19%	40.42%

Notice that the only years in which the tax share of the rich went down was prior to the implementation of the Bush tax cuts (OK, the recession had something to do with it).

So. With the Bush tax cuts the share of income tax paid by the rich went up--substantially. I just don't understand how you get to "tax breaks for the rich" from this data.

We are going through a period where the American people are going to experience, first hand, the claim of Keynesian economics, that you get out of recessions with government stimulus spending.

The record of the decade when the US was stuck on stupid suggests that stimulus spending and business-bashing don't work.

Already, key Democratic senators are getting nervous. They are worried that the expiration of the Bush tax cuts will abort the recovery and endanger their political futures.

The fact is that government spending is too high. Government tax rates are too high. Government borrowing is too high. Government regulation is too high.

This is the year when all the rhetoric from the liberal elite on the wonders of government power is going to break down.

If only the American people could be saved from the hardships ahead.

A Miss is as Good as a Mile

When we look back upon the presidency of Barack Obama we will think just this. How could he have thrown away such an opportunity?

President Obama had the chance to forge a new center-left majority that could govern for a generation.

Think about it.

In the Fall of 2008 the economy was in free fall. Americans were prepared to believe it was all the Republicans' fault. But Candidate Obama proposed to get beyond partisan differences and the games in Washington. So what did President Obama do?

President Obama backed the most partisan economic program in our lifetimes, one that practically no Republican could be bullied into supporting. The result? The Tea Party exploded onto the public square within a month of the president's inauguration and independents started bleeding away by the summer of 2009. The president could have disappointed his base (as presidents must do) and forged a co-opting policy that commanded the middle ground and left the right out in the cold. But he didn't.

Candidate Obama gave the impression that his presidency would be post-racial. That's what his famous speech in Chicago in 2004 was all about. But President Obama has acted as a full-on race warrior. His supporters constantly resort to the race card in demonizing his opponents. As a result, the president is losing white moderates. He had a chance to command the middle ground on race and leave the right out in the cold. But he didn't.

Rush Limbaugh hit the nail on the head yesterday while discussing the Shirley Sherrod flap (the black USDA administrator who told an NAACP audience that she realized that her job was not to conduct a race war but a class war). After noting how quickly the mainstream media has rallied round her and the way her remarks were taken out of context, Rush asked what happened to the mainstream media time after time when his remarks have been taken out of context? He then said that the president could put an end to all this race-card game forever. He could say: That's It! We are going to stop this divisive race baiting right now. This administration will not tolerate racism and it will not tolerate false accusations of racism.

At once I felt a partisan chill of fear. Why, if the president did that he would win reelection and probably get the center-left majority that he has almost thrown away with his left-wing economic policy.

But then I thought. Oh no he won't. If President Obama didn't have the strategic vision to understand how a moderate economic policy would create a lasting Democratic majority, then he's hardly likely to realize the strategic opportunity to his party of calling an end to race politics.

Still. I am almost overwhelmed by the scale of the lost opportunity for Democrats. Everything was set up in the fall of 2008. The economy was in free fall; the candidate had promised a new era of post-racial, post-partisan politics.

But as it turned out, the candidate didn't believe the words put into his mouth. It was all just focus-group-driven pablum. President Obama believes in the old religion. He believes in big government. He believes in race wars. And as for class wars...

And in November his party is going to suffer the biggest defeat at the polls in our lifetimes.

Manifesto: Marx and Engels Style

It was 1848 when young Karl Marx, son of a lawyer, and Friedrich Engels, son of a textile manufacturer, penned their Communist Manifesto. It was a baby-boom era, the baby boom that followed the Napoleonic Wars, and young people were feeling frisky.

But today, a year and a half after the inauguration of Barack Obama, modern day conservatives are feeling frisky. Maybe it's time to pen a "Manifesto of the Conservative Movement of the United States." Here's how it might begin:

A spectre is haunted the liberal west -- the spectre of conservatism. All the powers of the liberal establishment have entered into a secular alliance to exorcise this spectre: liberal left and Islamic extremists, left-wing professors and Hollywood moguls, Democratic politicians and government unions, feminists and gays.

Where is the conservative who has not been decried as "religious right" by opponents in power? Where is the Tea Party activist who has not been calumnied as "racist." Where is the objective reporter that has not hurled back the branding reproach of extremism, against the more advanced conservative activists, or anyone that does not truckle to the reactionary liberal elite?

Two things result from this fact:

I. Conservatism is already acknowledged by all in the liberal elite to be itself a power.

II. It is high time that conservatives should openly, in the face of the whole world, publish their views, their aims, their tendencies, and meet this nursery tale of the spectre of conservatism with a manifesto of the conservative movement itself.

I'll send the full text over to American Thinker. Then, next week, we'll put it up here.

The Old Order Changeth

The delicious exposes in the online Daily Caller have inaugurated an era that conservatives couldn't really imagine.

In the old days.

In the days of the old-time "objective" media.

Under the old rules conservative public figures knew that the rules were harsh. Anything they said could be taken out of context and published and used to humiliate them and drive them out of public service.

Liberals never had to watch their words because--well because liberal journalists just didn't snitch on other liberals.

But now we have the internet. Now everything that everyone does is recorded. It's on someone's flip camera. It's sitting on an email server. Or it's sitting on JournoList, the liberal journalist listserv.

Now the rules have changed. Now liberals can be embarrassed. One liberal may call for someone to play the race card on prominent conservatives in order to protect presidential candidate Barack Obama. Another one may call for the government to shut down Fox News.

Liberal Jonathan Chait at The New Republic is right to say that there's nothing to see here. Just a bunch of liberals trash-talking. Hey, everyone does it.

But Jonathan Chait doesn't get it. We conservatives are over the moon, as the Brits say, because we never thought we would live to see the day when liberals would be having to twist around and wriggle to get out of an embarrassing gaffe. Yet here we have a bunch of liberals doing what we always suspected they were doing.

Yes, of course, a bunch of trash-talking liberals doesn't add up to media bias or unprofessional journalism. But now liberals are hoist on their own petard.

It is liberals who have insisted that the "culture" of a work place could in itself be a case of racism or of harassment. They were shocked at the crude remarks that men made in the office when women were around. Something had to be done. Laws were needed. Regulations were necessary.

Well, we all know where this sort of thing leads. It leads to the remark taken out of context and a gross injustice, as seems to have happened to a black USDA official, Shirley Sherrod, for a remark taken out of context at an NAACP Convention. Reporter Stephen Spruiell:

A white farmer came to her for help, and because she perceived him to be like the others, she fobbed him off on a white lawyer — "his own kind." But the lawyer didn't help the farmer, and that is what led Sherrod to revise her previous biases against whites and to resolve to assist all economically distressed farmers, white or black, who came to her for help.

But Sherrod lost her job because Andrew Breitbart published an edited video that took the her racist treatment of a white farmer out of context and the bureaucrats and the White House ran for the hills and threw her under the bus.

Yeah, I know. Conservatives know all about remarks taken out of context. But that doesn't make it right for conservatives to do it to liberals. We are better than that.

Charles Taylor makes a central point in A Secular Age that all moral movements set up an us-and-them situation. We are the good guys and they are the bad guys. It ends up as a moral feud between the Hatfields and the McCoys. The key test of a religious or political tradition is its method for cutting the moral feud short.

We know how it is done. It is done through the social virtues of friendliness, forgiveness and kindness. Not from the bad guys suing for forgiveness and mercy, but from the good guys offering it freely.

As the evil liberal age comes crashing down about liberal ears and the old order changes, the most important job for conservatives is to end the poverty of the liberal culture, to replace the million rules and pervasive "zero-tolerance" for crimes against liberalism with a new culture of tolerance.

Tolerance means giving the benefit of the doubt to the evil other guys.

Liberals Conspire to Play Race Card

I'm generally opposed to conspiracy theories. I'm like Henry Higgins,

A patient man am I, down to my fingertips, the sort who never could, ever would, let an insulting remark escape his lips Very gentle man... But let a liberal in your life!

The thing about conspiracies is that people, especially politicians, are really too lazy to operate a proper conspiracy.

But now we learn that liberal journalists on "JournoList" did in fact conspire, in the strict sense of the word, to play the race card in 2008 over Reverend Wright and his racist remarks. Their problem was that the exposure of videos showing Barack Obama's pastor delivering racist rants in church would damage the narrative of Obama as a "post-racist." Jonathan Strong at the Daily Caller:

Employees of news organizations including Time, Politico, the Huffington Post, the Baltimore Sun, the Guardian, Salon and the New Republic participated in outpourings of anger over how Obama had been treated in the media, and in some cases plotted to fix the damage. In one instance, Spencer Ackerman of the Washington Independent urged his colleagues to deflect attention from Obama’s relationship with Wright by changing the subject. Pick one of Obama’s conservative critics, Ackerman wrote, “Fred Barnes, Karl Rove, who cares — and call them racists.”

Then of course we have the "N-word" accusations, that Tea Party activists shouted racist epithets at black congressman as they walked from a House office building to the Capitol for the key vote on ObamaCare. As Scott Johnson of Powerline writes to New York Times reporter Matt Bai:

Let me elaborate just a bit. Specifically, you said: "There have been scattered reports around the country of racially charged rhetoric within the movement, most notably just before the vote on the new health care law last March, when Representative John Lewis, Democrat of Georgia, the legendary civil rights leader, was showered with hateful epithets outside the Capitol." This statement is demonstrably false on several grounds. The folks at Power Line have rather exhaustively examined this issue and it is quite clear that Carson's claim was either knowingly false when made, or that he was seriously mistaken. Moreover, your statement repeats and even adds to a baseless narrative that is being desperately repeated by officials within the Democratic Party.

Here's an all-American one liner about race, that issues from the resolution passed at the NAACP convention accusing the Tea Party of racism. I have polished it to make it snappier.

There's a difference between the Tea Party and the NAACP. In the Tea Party you look for racism on the fringe. In the NAACP you look for racism on the stage.

There is no need to get angry about all this liberal race-card playing. It's gone beyond that. Liberals are like the boy who cried Wolf! Liberals have loved the power that the race card gives them, and liberals, the Ruling Class, love power. But one day the American people will tell liberals to shut up.

My guess is that that day occurred some time between President Obama's inauguration in 2009 and the passing of ObamaCare in the spring of 2010.

Announcing "An American Manifesto"

After a year and a half of President Obama and his Democratic Congress Americans are looking at each other in and wondering.

Surely there is a better way to imagine America than the liberal vision of competing victim groups and the presumption of helplessness.

Surely there is a better way to govern America?

Surely we can imagine a better future for our children than an ever-enlarging government.

Surely American deserve better than a government that does less and less with more and more.

It is time to create "An American Manifesto." It is time to imagine life after liberalism and start to create it. It is time to believe in a new America without a thousand liberal interest groups. It is time to imagine an America without a million laws. It is time to believe in an America built upon friendliness, bound together with kindness, and healed with forgiveness.

If we want an America like that, then we have to step up and build it. Liberals can't do it. They wouldn't know how to start. Conservatives must do it. But we can only do it if we reach out to moderates and independents. We must offer them the hand of friendship, and say: there's got to be a better way.

So let us join together, conservatives, moderates, independents, and even a few enlightened liberals. Let us reason together and draft An American Manifesto: Life After Liberalism.

Is Dodd-Frank the New Smoot-Hawley?

Eighty years ago, at the twilight of the great Republican age from 1861 to 1933, the Congress passed and the president signed the tariff bill to end all tariff bills.

We are talking about Smoot-Hawley, the Tariff Act of 1930. It was sponsored in the Senate by Sen. Reed Smoot (R-UT) and in the House by Rep. Willis Hawley (R-OR). It raised tariffs on imports to near record levels and is credited with helping to put the Great in the Depression of 1929-1933.

Smoot-Hawley was signed into law in June 1930. In November 1930, in the mid-terms, Republicans lost 52 seats and control in the House and the GOP lost eight seats in the Senate, but not control.

For us today, there is something almost menacing and Dickensian about the compound word "Smoot-Hawley." It seems to ooze narrow-minded folly and blindness.

Is it possible that history is repeating itself?

It is telling that the stock market started to swoon back in April 2010 about when it became clear that the Dodd-Frank finance reform bill was likely to pass. Why? Well maybe the market is starting to price in the uncertainty and the costs that the complex Dodd-Frank bill is likely to insert into the US economy. Various analysts have looked at the bill (JP Morgan Chase reportedly has 100 teams working on it) and they all seem to agree that it will introduce a vast new infrastructure of regulation and political meddling.

In other words, the Democrats are going for another Big Push at what they have been doing for 100 years. Regulating, politicizing, bureaucratizing. That's what they know how to do. That is, apparently, the only thing they know how to do. So they are doing it. Seems just like old times and a rerun of the Sen. Smoot and Rep. Hawley show in another era.

Well, at least the American people got rid of the protectionist Republicans in short order.

The question is: what will the American people do with the Smoots and the Hawleys of our time?

Sen. Dodd (D-CT) and Rep. Frank (D-MA) were both enthusiastic supporters of politicized home mortgages in the last hurrah of Fannie and Freddie, before they became a $400 billion black hole. Fannie and Freddie were at the center of the reckless credit binge of the last ten years. Now they want to regulate the finance industry more closely, but do nothing about Fannie and Freddie.

Chris Dodd, in case you have forgotten, was famous as a "friend of Angelo" Mozilo, CEO of Countrywide, the deceased mortgage mill that fed mortgages to Fannie and Freddie.

It would be appropriate if our modern day Smoot and Hawley blindly set up an electoral disaster for the Democrats in the House just like their political role models. After all, experts are already predicting a 40 seat swing to Republicans in the House, and big wins in the Senate.

The point is that politicians then and now are venal and blind to everything except the next political power play. They know nothing about economics. They know nothing about justice. They know nothing about finance.

What politicians know how to do is divide the people and get elected. And they know how to reward their supporters.

That's why limited government is such a good idea. The more power you give to politicians the more they will abuse it. You may think that this program or that program will benefit you, and therefore the nation at large will benefit. Remember "what's good for liberals is good for the country?"

But the power you give to your guys can be turned, with the change of parties, into a scourge to cut your back to ribbons.

Some people only learn this the hard way.

To help make the connection with Smoot-Hawley, there seems to be a Dickensian flavor to the very names of the legislators proudly sponsoring our 21st century Regulation of Abominations. Dodd-Frank sounds awfully close to that venal law firm of Dodson and Fogg that made life so difficult for the admirable Mr. Pickwick.

Let's hope for the early end to Democratic power. But let us also hope that the aftermath of the Smoot-Hawley tariff, the disaster of 1929 to 1939, the valley of the shadow of death, is not visited again upon the American people.