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The Current Income Inequality And Job Creation Crisis

I'm reading Eric Foner's latest book The Fiery Trial: Abraham Lincoln and American slavery. In the preface of the book, Foner discusses Lincoln's historical relationship to abolitionist activists:

Lincoln, many recent scholars have argued, acted within the narrow limits of the possible, as established by Northern public opinion. Public opinion however, is never static; the interactions of enlightened political leaders, engaged social movements, and day to day experiences [. . .[ can change the nature of public debate and in so doing the boundaries of what is practical. As the Chicago Tribune noted at the end of the Civil War, in crisis situations beliefs once pronounced "impractical radicalism" suddenly become "practical statesmanship."

(Emphasis supplied.) Foner's point is that Lincoln's actions were not solely shaped by his own perceptions of what was possible, but very much influenced by the spaces created by the public discourse. With regard to our current economic crises regarding joblessness and income inequality, the period where the Obama Administration would welcome the notion that we are in a "crisis situation" has clearly passed. The President's State of the Union address demonstrates that, either for political or policy reasons, the Obama Administration wants to signal an "all clear" on the economic crises and focus on "winning the future. Ezra Klein wrote:

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Should The Retirement Age Be Raised To 67? (Psst. It already Has Been Raised To 67)

While John Boehner's walkback of his call to raise the retirement age to 70 is properly the headline from his appearance on Eliot Spitzer's show last night, but Boehner's, and part of the Media, obliviousness regarding what the retirement age is already scheduled to be is alos important. Reporting on Boehner's walkback, The Hill writes:

[Boehners's] comments walk back remarks from late June, when he said the retirement age would eventually need to be raised by five years, from 65 to 70.

(Emphasis supplied.) FTR:

Full retirement age (also called "normal retirement age") had been 65 for many years. However, beginning with people born in 1938 or later, that age gradually increases until it reaches 67 for people born after 1959.

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Birther Insanity In Arizona

As opposed to the other insanities demonstrated by Arizona, this is birther insanity:

A plan in Arizona to require presidential candidates to prove their eligibility to occupy the Oval Office is approaching critical mass, even though it has just been introduced. The proposal [. . .] was introduced yesterday with 16 members of the state Senate as co-sponsors. It needs only 16 votes in the Senate to pass.

I hope it passes and then every GOP Presidential candidate is asked whether President Obama is eligible to be President. That will be fun to watch. The crazy in Arizona is unbelievable.

Speaking for me only

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Political Bargaining: The Budget "Freeze" Gambit

Ezra Klein writes:

The president call[ed] for a five-year non-security discretionary spending freeze tonight. [. . .] The Obama administration's proposal is better than [the GOP alternatives], to be sure. But it also feels more like the policy you'd get at the end of a compromise process, not the beginning.

This goes to the Obama administration's theory of negotiating more generally: Do you start with a reasonable compromise? Or do you end with a reasonable compromise? [. . .] The usual liberal critique of this approach is that starting with a reasonable compromise just means you end with a less-reasonable compromise, and the Obama administration would be better off rejecting calls for across-the-board cuts or freezes and trying to persuade Americans that the Republican approach here is wrong, and tax cuts for the wealthy are a much bigger contributor to the deficit than spending on food safety (which is true, incidentally). They might not win that fight, but maybe they'd end up with a three-year spending freeze rather than a five-year spending freeze.

As regular readers know, I'm generally sympathetic with this critique. I think it is misplaced here. Why? Because a "budget freeze" is pretty meaningless jibberish. Freeze what exactly? I'm sure Obama can come up with a good budget at 2010 spending levels that will have no chance of passage. And then folks will forget the freeze proposal entirely. After all, who remembers Obama's freeze proposal from last year? In the context of this particular budget negotiation, this is more "school uniforms" than the 2009 stimulus negotiation bungled by the Obama Administration. More . . .

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The Big Progressive Project: Income Inequality

Last night, President Obama said:

Two years after the worst recession most of us have ever known, the stock market has come roaring back. Corporate profits are up. The economy is growing again. But we have never measured progress by these yardsticks alone. We measure progress by the success of our people. By the jobs they can find and the quality of life those jobs offer. [. . .]

That’s the project the American people want us to work on. Together. We did that in December. Thanks to the tax cuts we passed, Americans’ paychecks are a little bigger today. Every business can write off the full cost of the new investments they make this year. These steps, taken by Democrats and Republicans, will grow the economy and add to the more than one million private sector jobs created last year.

(Emphasis supplied.) Obama posits that the tax cuts in The Deal will create jobs and spur economic growth. I think that in fact The Deal was a terrible decision that will retard economic growth over the medium and long term because it exacerbates the biggest economic problem we face, income inequality. Buttressing my view is, via DougJ, this Harvard Business Review article by Justin Fox:

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No Touching The Third Rail

The big news that emerged last night was that, despite Pete Peterson's best efforts, no pol will touch the Third Rail. Via Yglesias, Ross Douthat writes:

[Paul] Ryan’s rejoinder was more urgent and more focused: America’s crippling debt was an organizing theme, and there were warnings of “painful austerity measures” and a looming “day of reckoning.” But his remarks [. . .] were even more vague about the details of that reckoning than the president’s address. Ryan owes his prominence, in part, to his willingness to propose a very specific blueprint for addressing the entitlement system’s fiscal woes. But in his first big moment on the national stage, the words “Medicare” and “Social Security” did not pass the Wisconsin congressman’s lips. [. . .] It’s clear that both parties have decided that a period of divided government twelve months before a presidential election is the wrong time to make big moves on entitlements and the deficit.

"Deficit hawks" were AWOL when The Deal was made so they have little to complain about in this. There will be no cuts in Social Security (which as Yglesias notes, is pretty stupid to be considering right now anyway.) The Third Rail remains untouched.

Speaking for me only

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Say Hello to The Fearless Campaign

Launching Wednesday: The Fearless Campaign

The Fearless Campaign is an effort launched from the halls of Congress to effectively coordinate fearless members of Congress with the passion of grassroots advocates to transform our country from the inside out. Through the Fearless Campaign we will revolutionize our nation's approach to six issues where special interests have blocked progress for too long: drug policy, education, food policy, immigration, internet freedom and LGBT equality.

The premise:

Being Fearless is never easy. It requires moral courage and a solid grassroots backing. But by connecting advocates at the grassroots level with those in Congress who are standing up for progress, the Fearless Campaign will move our country forward.

Sounds good to me. Who's behind it? Congressman Jared Polis (D-CO). Co-sponsors of tomorrow evening's launch event:[More...]

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The Benign Neglect of Tax Policy 2

Kevin Drum writes:

The prosperity of the middle class obviously depends on a growing economy. But just as obviously, it depends on more than that. For liberalism to mean anything at all, we need to support policies that are aimed both at overall economic growth and at ensuring that prosperity is widely shared. We haven't done a very good job of that over the past 30 years.

30 years ago, Ronald Reagan was enacting tax policy that lowered the tax burden for the rich well raising it for the less well off (cutting income taxes and raising the FICA tax.) In 1993, Bill Clinton reversed this trend, and income inequality was lessened. Bush 43 cut taxes, especially for the rich, further exacerbating income inequality. More . . .

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The Benign Neglect Of Tax Policy

I often remark on the utter lack of attention tax policy is given by the Beltway Dem wonks/pundits. Here is more fodder for that point - Chait, Yglesias and Klein. Yglesias is particularly striking:

Future public policy has to be about ways to maximize sustainable economic growth, and ways to maximize the efficiency with which services are delivered. [. . .] The future of American politics is really about how to square this circle. How to find the revenue in viable ways, and how to streamline these services to maximize value to citizens and minimize rent-seeking. Big government isn’t over, or going away. It’s utterly victorious and yet at its limits.

(Emphasis supplied.) I think this misunderstands the fundamental ideological struggle now ongoing. "Big government" is very much at risk, precisely because progressives have surrendered on the issue of tax policy. A government program is only as good as its funding. And in fact, determining whether a government program is good must take into account how it is funded. Currently, our tax structure is extremely anti-progressive. To me this is the biggest issue in politics. It is why I so condemn The Deal. For Beltway wonks, tax policy is not an issue. This attitude utterly amazes me.

Speaking for me only

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The John Adams Public Health Insurance Act

Today appears to be John Adams Day for defenders of the individual mandate in the health bill. FTR, as I have written many times, I find the argument that the individual mandate is unconstitutional to be absurd in the extreme. Frankly, it is not a plausible constitutional objection. It is, in fact, a frivolous argument. That said, I'm not sure the Act for The Relief of Sick anf Disabled Seamen helps the legal argument that much. As Ezra Klein acknowledges:

If you read Rick Ungar's excellent explanation of the bill, you'll see it was a bit different than the individual mandate: It was a payroll tax that all sailors on private merchant ships had to pay, and in return, they were basically given access to a small public health-care system.

Making it Medicare for Sailors. The argument against the constitutionality of the individual mandate has included the idea that requiring the purchase of private insurance is what makes the individual mandate in the health bill unconstitutional and what makes it different from Medicare and Social Security. There is no logic in this distinction with regard to the Necessary and Proper Clause (as this open letter from law professors explains), but courts first decide what result they want, and come up with rationales later. More . . .

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Gingrich Demonstrates That The First Conservative Principle Is Enraging Liberals

It seems pretty bad politics for an aspiring Republican Presidential candidate to claim that President Obama's tenure in the Presidency is "Bill Clinton's third term" (Clinton is very popular) but when your prime directive is pissing off liberals, then that's what you do:

[Newt] Gingrich seemed amused when noting that the Clinton administration redux that Democratic activists sought to avoid by supporting Obama over Hillary Clinton in the 2008 Democratic primary seemed to be happening anyway. "It must be fascinating to be one of those left-wing activist groups that spent so much time and energy beating Hillary Clinton, because they didn't want to see this kind of an administration, to now watch a member of the famous Daley machine in Chicago emerge," he said.

Speaking for me only

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The Roadmap

Via Meteor Blades, Andrew Whitehead of EPI critiques The Roadmap of Republican Paul Ryan:

The Roadmap would place the entire burden of deficit reduction on spending cuts. "The hefty tax hikes on the middle class included in the plan do not go toward deficit reduction. Nor does the Roadmap’s overall revenue plan improve the long-term fiscal outlook. The plan actually reduces federal revenue relative to either current law or current policy."

So here's my question, in light of The Deal, what is the Democratic alternative? And I do not mean a "wish list" alternative, but one the President and Dems are willing to fight for. After The Deal, are we to really expect that Dems will not capitulate? After The Deal, the threat of government shutdowns and debt ceilings won't have the Dems telling us that agreeing to 98% of the GOP agenda on taxes and spending was not "the best they could do?"

Speaking for me only

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