This Week in Grand Bargains
The president has tried, on multiple occasions, to strike bargains with congressional Republicans in order to get better traction going on economic recovery. Each time--when he offered big cuts in entitlements, when he offered to restructure Social Security based on "chained CPI," Republicans balked, and no deal was struck.
This week, he made another offer. Our corporate tax structure is woefully inefficient. Conservatives claim that corporate taxes are far too high, but the truth is that there are so many loopholes in the system that very few corporations actually pay what they would appear to owe. Some very profitable corporations pay little to nothing in taxes. The theoretical corporate rate is 35%, but the actual rate paid is more like 12%.
The president's offer: reform the corporate tax code, lowering rates but reducing loopholes, so the new rates would be closer to what they actually pay. It's a revenue-neutral plan, but a one-time fee on overseas earnings would bring in some additional revenue. The tradeoff he's offering is that some of that would be used to fund infrastructure projects--helping modernize the country while also creating middle class jobs. Republicans, predictably, are turning down the offer before it's been officially made.
There are areas of economic theory that are complicated, and there are other areas that are relatively simple and where we have a great deal of recent experience to draw from. One of the simple ones is job creation. When the economy contracts, government--which has the power to borrow and spend--should use that power. If the private sector isn't hiring and consumers aren't spending, then yes, the economy contracts. For the government to also contract at that time is foolish, prolonging recession and extending misery. The government is meant to act as a counterbalance to the private sector. Spending during a recession creates jobs and hastens recovery.
But after the first stimulus program--which demonstrably halted the economic plummet we were experiencing at the end of the Bush administration (see the chart below)--and especially since the Republicans took the House in 2010, Congress has refused to act on job creation. Our roads and bridges are crumbling, our power distribution system is antique, our schools and libraries are falling apart, our parks and museums are in disrepair, and our broadband system, outside major cities, would be an embarrassment to most third-world nations. A future-looking country would be spending on infrastructure improvements constantly; a sane country would especially do so during a recession.
Chart via Maddowblog.com
But current conservative economic theory is not sane, if insanity is indeed defined as doing the same thing over and over while expecting a different result. Cutting taxes and spending do not produce economic growth (past a certain point--if the top tax rate is at 90% and you cut it to 70%, you'll get economic growth for a while. But we're way beyond that point. A 40-year legislative effort has produced a tax system that creates economic inequality on a massive scale, making the rich richer while shrinking the middle class and plunging more people into poverty. George H. W. Bush defined trickle-down economics as "voodoo," and he was right; not only does it rely on magical thinking, but it doesn't work.) But cutting taxes and spending are the totality of the Republican economic philosophy. They don't care that it's been proven not to work; they have no other answer, no other option, and no interest in compromise.
We could be growing the economy much faster than we are. We could be lifting Americans out of poverty. We could be helping our fellow citizens learn the dignity of work and educating our children to face the challenges ahead. We could be building the framework of tomorrow's America.
But we have a two-party system, and one of those parties refuses to cooperate, refuses to compromise, refuses to accept economic reality. Every year that party moves farther toward its extreme fringe (with a very few exceptions, most of them unelected--these people should be listened to, as they represent a way out of the wilderness of radical right-wing extremism) pushed there by a base that values ideological purity over the traditions of hard work and compromise that made this country great. When times were tough for previous generations of Americans, they came together to do what had to be done, to fight necessary wars, to build cities and dams and bridges, to split the atom, to reach the moon. Today's right wing would have none of that. They want only to hand more of the nation's treasure to the already-wealthy while telling the rest of us we're on our own, we need to fend for ourselves. That's not only deeply immoral, but it's short-sighted; we all do better when our middle class is strongest and our economy is expanding.
If you're represented in Congress by a Republican--especially if you voted for that representative--please tell him or her to consider the president's offer. Or, you know, consider your job to be solving problems, not making them. It's not too late for reality to matter. It's not too late to understand that compromise is essential. And if you plan to vote for a Republican in the future, please make sure your vote is not based on a wish for ideological purity. Make sure we elect people who are willing to work together to do the hard things that must be done. Together, we can overcome any challenge.
But the key word there is "together."
This Week in Location-based Healthcare
Based on early indications, it appears that over the next few years, health insurance might be considerably more afforable in blue states than for those of us in the red states. California and New York, for example, have reported that the state health exchanges set up by the Affordable Care Act will offer very reasonable prices in those states. Maryland just weighed in with their results, and for a 21-year-old non-smoker, health insurance premiums could be as low as $93 a month.
This is, in fact, how the exchanges are supposed to work. The state sets up the exchanges. Insurers that want to sell insurance in those states submit their quotes, and competition encourages lower rates. For a "socialist takeover," that's a pretty good example of capitalism at work.
What it means to you as an individual, though, is that if you live in a state where a Republican legislature and/or governor has been antagonistic toward the exchange policy, you might pay a lot more if you don't have employer-provided insurance and have to buy it on the open market. In states that flat-out refuse to set up exchanges, the federal government will step in and do so--but intransigence at the state level might still result in worse outcomes.
Here's a slightly more nuanced look at the situation.
Are there lessons to be drawn from all this? Two seem obvious: 1) Democratic administrations are more concerned about the health and financial security of their states' residents than Republican administrations are (while Republicans appear to be more concerned about ideology than anything else); and 2) If you're worried about the cost of health insurance where you live, vote Democratic.
On a related topic, the right is moving into lunatic mode in its anti-ObamaCare effort. Organizations, including the deceptively named "Citizens for Health Freedom," are literally encouraging people not to sign up for coverage to which they're entitled.
Think about that for a moment.
Most of us get our health insurance through our employers. Who doesn't? The jobless. Part-time workers. Freelancers. Low-wage employees whose jobs don't come with benefits. These people, under our previous system, either went without medical care, or they waited until their illnesses were too bad to ignore and went to emergency rooms, where, since they couldn't pay, the costs were passed on to the rest of us. A Harvard Medical School study in 2009 found that 45,000 Americans a year were dying because they didn't have access to medical care. Everyone without health insurance was one serious illness or accident away from bankruptcy. I've been there; when I was a freelancer, the health insurance I could afford was minimal, didn't cover much, and we were very lucky not to have any real medical crises during that time.
The ACA changes that. It provides subsidies so those people without employer-provided health insurance can get it, and it sets up exchanges in each state so those people will have choices, and competition will hold down costs.
But conservative groups, knowing the Supreme Court has upheld the law and Republicans in the House can't repeal it, are telling the very people whose health and financial stability depends on the law to not sign up for it. They're saying, "You might die, you might go broke, but do it anyway, because we say so." Why? It's hard to say, but it seems to have something to do with a deep-seated, unreasoning hatred of the president and everything he stands for. It's either that, or hatred for those working-poor Americans whose lives they're asking to be sacrificed on the altar of ideology.
Side Note: I got a robocall from the Faith and Freedom Coalition this week. Faith and Freedom, for those who don't know it, is an evangelical activist organization run by the criminally corrupt Ralph Reed, a man who would not get past my front door if he came over in person. Reed took money from disgraced (and jailed) lobbyist Jack Abramoff to use his evangelical ties to gin up opposition to legalized gambling on behalf of Indian casino clients (Indian casinos are, of course, legalized gambling). He took more money from Abramoff to lobby on behalf of an effort to prevent the Northern Mariana Islands from being subject to US wage and worker safety laws--an effort that maintained the ability of employers there to exploit their workers, including forcing female employees into sex slavery and requiring them to undergo abortions--all, according to the vile Reed, in the name of God. Somehow, though he keeps playing them for suckers, Christians keep believing he's one of them. All anyone can know for sure about him is that he's a liar and utterly without moral boundaries. If there's ever been a more heinous hypocrite on the face of the earth, I don't want to know about it. The call from Faith and Freedom was encouraging me to contribute money to an effort to help prevent at least half of the states from setting up health insurance exchanges--one more attempt to kill ObamaCare, and therefore to kill Americans who can't afford health insurance and don't get it through their employers.
This Week in Presidential Vacations
Some on the right are already complaining about President Obama's upcoming summer vacation at Martha's Vineyard. One thing we here at TWiA World Headquarters never complain about is presidential time off. Being the president of the United States is almost certainly the hardest, most demanding job in the world. Anyone who didn't take a break now and again would no doubt go berserk before long.
Still, when they complain, it's not a bad idea to look back at the history of presidential vacationers. At this point in his second term, President Obama has taken 87 days off. At the same point in his second term, President George W. Bush had taken 399 days off. Before Bush, Ronald Reagan held the record. Does that make them lazy? Not necessarily. Everybody deals with stress in his or her own fashion. ONe can argue that President Bush was intellectually uncurious, and that President Reagan was prone to confusing fantasy with reality. But lazy? I don't think a truly lazy person could ever become president, or would run for a second term.
So enjoy your vacation, Mr. President. And have a nice visit to Bunch of Grapes, the Vineyard's terrific independent bookstore.
This Week in Congressional Vacations
Tell me again why we taxpayers are paying House Republicans? Anyone?
But before they go, they'll vote on...oops. No, they won't.
This Week in Phony Scandals
This Week in Gun Safety
A 12-year-old boy robs a lemonade stand with a BB gun. The NRA cries foul and offers him a free Bushmaster for this next heist.
Okay, I made that last part up. Or did I?
Quote of the Week
“If someone is gay and he searches for the Lord and has good will, who am I to judge?”
This Week in Bears