Apr 28, 2008

April 18, 2008: Robbing the Gipper’s Grave, Progressive Posturing, Feeding the Horse Enough Oats

“We can safely abandon the doctrine of the eighties, namely that the rich were not working because they had too little money, the poor because they had too much.”
---John Kenneth Galbraith

In response to the growing economic crisis, the good Marshall of Tombstone robbed the now cold grave of the ‘Old Gipper’ and paraded out yet another in a long list of Republican tax cut schemes. Once Reagan gained solid majorities on the platform of cutting taxes the political pachyderms have since been unable to think of anything else. Ask any Republican—especially one in a ‘leadership’ position—to give you an answer to any economic problem and they will immediately inundate you with a long list of long-sought-after tax cuts. Oh these proposals will have the taint of the progressive, small bones to be sure, but enough scraps from the tables of the wealthy to give lie to the real agenda lurking not so far beneath the surface. One recalls ‘Ol Pappy back in the days when he served his single term. When asked about any economic remedy his ready
--and only—response was to cut the capital gains tax in half. This bromide was his solution to everything. Need to reduce the deficit? Cut the capital gains tax. Need to stimulate the economy and create jobs? Cut the capital gains tax. Need to address urban poverty? Cut the capital gains tax. Need to improve education? Cut the capital gains tax…And so it was, ad nauseum. It was like Chinese water torture…you knew what the reflexive knee-jerk answer was to every question: simply cut the capital gains tax. It was the old man’s only policy initiative. It wasn’t simply a major initiative of his presidency, it was his presidency. For George H.W. Bush cutting the capital gains tax wasn’t the most important thing—it was the only thing. One could easily reduce the entire domestic agenda of the first Bush Administration to four simple words: cut capital gains taxes. So frequently was this mantra repeated, and so often was it applied to every domestic problem that the country fell mesmerized to its twisted logic. I spent many a sleepless night praying that Bill Clinton would look old Pappy in the eye and say to him “look George, since you present us with no other solutions than cutting this tax, will you agree that if we join you in cutting this onerous burden on your rich friends that you will disband that wretched political party of yours, a party that has done so much material damage to this country, and which appears to stand for nothing else? Of course, it was deemed best not to pose such questions. Young Bubba was likewise merely posturing as a progressive.

‘Ol Two-Cows picked up where Pappy left off with a vengeance. Those around the new President realized that Pappy was relieved of command not because he had gone back on his “no new taxes” pledge, but because he had failed to put a proper progressive veneer on palpable greed. It is, after all, not easy to get your working stiff to immediately recognize the ‘fairness’ of cutting the taxes of the investor class by 50%, especially since the economy was fast going into the tank. So this time around they would do things differently. Tearing a page from the Gipper’s playbook they proceeded to introduce a round of tax cuts within months of taking office. These cuts were targeted at the top 10% with most of the benefits going to the top 5% of the income bracket. How do you sell this to the other 90% in a system requiring more than tacit approval? You do it the way the Gipper did it. You put a populist veneer on it. You give rebates of several hundred dollars to the middle and lower classes and obfuscate who the real beneficiaries are. Blue smoke and mirrors.

The straight-talking Marshall of Tombstone, back in those days when he was still smarting from the wounds received from the shoot-out at the South Carolina Corral, knew a shell game when he saw one. Declaring that the Bush tax cuts “offended his conscience” McCain twice voted against this welfare for the rich scheme. But then that was when the presidential bee had temporarily flown the Senators political bonnet and the Potomac Fever had momentarily subsided.

Today the good Marshall, about to ascend Mount Olympus, is consumed by the fever. Accordingly he has issued the all-too-predictable Republican solution to the current economic mess. Eschewing such obvious remedies as re-regulating the investment industry, establishing controls over markets, vigorous anti-trust action to break up the energy oligopolies, McCain instead gives us yet another tired version of the same ol’ same ol’. On the 16th he announced his plan. Assuring us that he can cut 100 billion from the budget by eliminating federal earmarks and instituting ‘other reforms’ the Marshall then gives us the old two-step. He would freeze discretionary spending and cut both corporate taxes and taxes for the wealthy by making ‘Ol Two-Cows tax cuts permanent. (1) He would make this gift basket to Corporate America palatable by tossing a few crumbs from the table. He would temporarily suspend the 18.4 cent a gallon federal tax on gasoline between Memorial Day and Labor Day. It is not clear if there would then be any abatement in prices, since the good Marshall has not said that the oil companies would be compelled to pass this tax savings on to the public. But in any case let me be clear about this: as the middle and lower classes writhe in economic pain, the good Marshall offers only temporary relief, while the rich walk away from the table permanently.

The Obama camp was quick to pounce on McCain’s dog eared proposals and shopworn consistency. Obama spokesman Bill Burton responded by saying: “Senator McCain’s economic plan offers no change from George Bush’s failed policies of going full speed ahead with fiscally irresponsible tax cuts for the wealthiest Americans that John McCain himself once said ‘offended his conscience.’ He also proposes a gift basket of new tax cuts for Corporate America at a time ‘s when some C.E.O.’s are making more in a day than some workers make in a year. John McCain’s plan is one that could have been written by the corporate lobbyists who run his campaign, and probably was.” (1) Meanwhile the Clinton campaign chimed in, with ExxonMobil set to get a 1.4 billion dollar tax cut under the McCain plan, “Neera Tanden, the Clinton campaign’s policy director called the McCain plan ‘a corporate lobbyists dream’”. (1) No one, however, has suggested that perhaps one way to help ease the present energy crisis is not through tax cuts but by creating more competition in the market place. Neither of the Democratic contenders has suggested that perhaps it is time to make Exxon and Mobil once again two separate companies. But then, again, this was McCain’s day to shine. Instead of presenting us with imaginative new solutions to difficult and intractable problems the good Marshall gave us the same old haggard nonsense. Aspiring to resurrect the bright and cheerful face of Ronald Reagan, he produced instead merely a pale imitation of Herbert Hoover; his bright new ideas being merely more of the same trickle-down economics; an economic theory best described by professor Galbraith as “the less than elegant metaphor that if one feeds the horse enough oats, some will pass through to the road for the sparrows.”



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