Rewriting History

By James Kwak

This morning Matt Yglesias wrote a post arguing that the December 2010 tax cut was an Obama victory. By the time this evening that I finally found time to figure out what annoyed me about it, I had to go to the second page of his blog to find it, since he had posted so much in the interim. That man sure can write.

I’m not so sure about his memory, though. Yglesias says Obama won because he got the (Bush) middle-class tax cuts extended along with some other goodies like a payroll tax cut and extended unemployment benefits, and all he had to give up was an extension of the (Bush) upper-income tax cuts. The reason people think it was not a good deal, he says, was that “to get a favorable deal Obama had to downplay the extent to which he hadn’t given anything up.”

That certainly wasn’t the line the administration was taking at the time. Remember Austan Goolsbee’s YouTube video? Or the “we got more than they did” slide that the White House was passing out to anyone who would listen? The administration was busily arguing that, in the race to see who got more of “their” tax cuts, the Democrats had won.

But this cleverly ignores the fact that Republicans like all tax cuts. Sure, they like to cut capital gains taxes for the rich more than the like child tax credits for the poor—but still, it was George W. Bush who expanded those child tax credits! As I said at the time:

“If you’re Grover Norquist and what you want more than anything else is lower tax revenue, you should be celebrating like it’s Christmas and your birthday at the same time. We had an argument where one side wanted tax cuts A, the other side wanted tax cuts B, and they compromised by adding tax cuts C?”

And sure, Republicans want some tax cuts (lower income tax rates) to be permanent, and they don’t want other tax cuts (lower payroll tax rates) to be permanent. But that doesn’t mean they’ll say no to two years of lower payroll taxes, since when you’re trying to starve the beast, every morsel you can snatch out of its hungry jaws helps. For Norquist, that’s not a concession—it’s an extra dessert sent out by the chef, on the house.

Does any of this mean anything for today? Whether Obama is a good or a bad negotiator is of secondary importance. What really matters is what he wants. What Obama showed two years ago, and what he has maintained ever since, is that his top priority is extending the Bush tax cuts for the “middle class.” (“Middle class” should always be in quotation marks because (a) Obama’s plan would maintain tax cuts up to about $300,000 in gross income* per household and (b) people who make more will still benefit from the tax cuts on the first $300,000 of their income.)

That is more important to him than protecting social insurance programs. We know that since he’s been willing to offer major concessions on that front (e.g., changing the COLA formula for Social Security) in the past. We also know that since the Bush tax cuts—most of which Obama wants to keep—are precisely what is creating the revenue shortfall that puts Medicare at risk. That worries me more than whether or not he is a good negotiator.

* The commonly advertised number is $250,000, but that is before indexing and after deductions and exemptions.

24 thoughts on “Rewriting History

  1. I think it’s not Mr. Yglesias memory that is the problem. It’s his misinterpretation that if you win “optics” in a political battle that you won the battle. This is a common mistake among what I think Paul Krugman called the “professional seemers” (commonly called “pundits”) in the D.C. beltway. Mr. Yglesias is so desperate to win the “optics” of the debate that he partakes in revisionist history. Presumably because 1. Yglesias thinks he can’t win the debate head on with reality and 2. he thinks his readers are too dumb to remember.

    Mr. Yglesias, when you kid yourself, you also kid your readers. Good luck with “that”. Democrats/liberals have enough real bullets to win the gunfight, we don’t need to fire blanks for show of winning.

    P.S. This Yglesias criticism is coming from a Democrat.

  2. >>That is more important to him than protecting social insurance programs. We know that since he’s been willing to offer major concessions on that front (e.g., changing the COLA formula for Social Security) in the past. We also know that since the Bush tax cuts—most of which Obama wants to keep—are precisely what is creating the revenue shortfall that puts Medicare at risk. That worries me more than whether or not he is a good negotiator.>>

    This is the most important issue. I care a lot about Social Security and Medicare. Tax rates are a means to an end, not important in themselves, something Obama appears to be ignoring.

    There’s no reason to be very worried about the deficit today – just look at interest rates. If you think any deal will stick, just look at Bush squandering the Clinton surplus.

    Increased tax rates may last a few years. Cuts to Medicare and Social Security benefits are likely forever.

  3. There could be some truth to the matter, a election pledge to rid the senate of Republicans, followed up by quite action designed to help the middle class. The kicker was the long term answer in the form of the super committee, who was going resolve the sticky issues. They did not, instead they added time to the pile. Which at the end is what created the fiscal cliff, you take away our rich way of life, we use the threat of taking away the under classes jobs and charities.
    And it worked, as the knuckles heads shopped until they dropped. They also will received less back in their 2012 checks, than previously thought, during the same time at which they maxed out the bills in the mail box. Throw in a crisis anywhere in the world, and you have the recipe for much greater suffering than has been seen by an entitled society up to this time in history.

  4. Republicans are gunning for entitlements going to the elderly, disabled, and retired. President Obama has stated he’s going after these programs, too. What we need is much higher rates on the wealthy, and constant reminders that the meme of higher taxes means fewer jobs in unproven and erroneous. Large cuts in war fighting and the bloated defense military complex are also needed.

    The US is spending billions weekly on a threat estimated in Afghanistan to number in the hundreds. No one paying attention during the disastrous GOP maladministration of W and the neocons discount the harm to the financial position of the United States via two wars on credit cards, unwise and unpaid tax cuts, and an expensive Rx drug program, the true costs of which were deliberately hidden from the public.

    Priorities are completely bolixed-up, with no end in sight to the false narratives broadcast by controlled media, and re-iterated ad nauseam by our elected “spaniels” in DC. A steady stream of lies and misinformation originate from these sources.

    While cuts to entitlements defines AUSTERITY, people like Blankfein are recommending deep incisions to programs keeping people alive. His advocacy of the billionaire class rings hollow and contains all kinds of dangers for social stability and cohesion. Republicans and democrats largely support both the rhetoric and the underlying philosophy.

    I say no AUSTERITY; yes to deep defense cuts, war fighting expenditures; yes to continued untouched entitlements and higher taxes on the rich, who have benefitted enormously from over a decade of constant war and low tax rates.

    Finally, a sales tax on Wall Street transactions, and renewed vigor in reigning in financial crimes via criminal indictments. These are the wish list items, but never underestimate the value of positive cognition.

  5. Mr. Kwak went into excruciating detail on many aspects of the housing market. And that market keeps re-writing itself every day.

    So can he do a rent vs. buy micro analysis – what to do with the homeless people created by *god’s work* Sandy? The combo of Sandy and Blankfein is creating a weird situation that won’t be solved like it was after Katrina, basically the combo of not paying out insurance and covering the cost of insurance that was paid out with 4 million fraudclosures.

    A sane and common sense Homestead Act is completely beyond the grasp of what modern banking will permit – so taking a look at the mess across USA – whether cities gutted by weather or banks – what’s the housing PLAN to go along with higher taxes, austerity, increased unemployment, and very limited health care resources for the homeless victims? Rent or buy?

  6. Spread the word if you or your friends appreciate the right to privacy on the internet. Some Congressman, (you know the Republicans who say they hate “government interference” but want to legislate women’s bodies and what people do in their bedroom) would like to take away your freedoms online. Don’t be shy to call your state Senator and let them know.

  7. “…the December 2010 tax cut was an Obama victory.”
    2 + 2 = 5
    “The phrase “two plus two equals five” (“2 + 2 = 5”) is a slogan used in George Orwell’s Nineteen Eighty-Four[1] as an example of an obviously false dogma one must believe, similar to other obviously false slogans by the Party in the novel. It is contrasted with the phrase “two plus two makes four”, the obvious—but politically inexpedient—truth. Orwell’s protagonist, Winston Smith, uses the phrase to wonder if the State might declare “two plus two equals five” as a fact; he ponders whether, if everybody believes it, does that make it true? The Inner Party interrogator of thought-criminals, O’Brien, says of the mathematically false statement that control over physical reality is unimportant; so long as one controls their own perceptions to what the Party wills, then any corporeal act is possible, in accordance with the principles of doublethink (“Sometimes they are five. Sometimes they are three. Sometimes they are all of them at once”).[2]

  8. Yes Bruce, It means to me that the quality of today’s dream is dependent upon the education which one teaches themselves, and that one and one and one are still three.

  9. @Bruce – great links. I’m becoming more *radicalized*, thanks to a pet peeve – making up ridiculous politik names for old-as-the-hills degenerate hooliganism.

    Radicalized factionalism is tribalism – and in this case, it’s hiding the use of nihilistic means to get unearned wealth. How stupid do you have to be to not recognize that the concept of government that is shooting up out of the scorched ground of totalitarian usury (communism, fascism, capitalism) has made a quantum leap or a butterfly morph, take your pick,

    a government that KNOWS that it exists to protect the right of the INDIVIDUAL citizen from FORCE AND FRAUD. Living your *religion* – love one another and golden rule in unified action :-))

    Who doesn’t want THAT kind of *government*?

    At some point, asking these cavilers the DIRECT question – WTF do you want since you got what you asked for and here you have NOT gone away to live in peace and let everyone else do the same?

    ungee-Jumping Over the Fiscal Cliff
    ROBERT B. REICH, Chancellor’s Professor of Public Policy at the University of California at Berkeley
    Wednesday, November 28, 2012

    “What’s the best way to pressure Republicans into agreeing to extend the Bush tax cuts for the middle class while ending them for the wealthy?

    The President evidently believes it’s to scare average Americans about how much additional taxes they’ll pay if the Bush tax cuts expire on schedule at the end of the year.”
    (…read the full article: )

  11. I’m still revising what constitutes the middle class, the struggling middle class, and the so called drop outs, or lower classes. It seems to me the more your mortgage is paid off, the more middle class you have in you. The more equity you have in your balance sheet, the simpler it is to remain in the middle class. These people, and obviously the ones below, are a large percentage of the citizenry who want to go untaxed, but for a small percentage of the class above them, they can not. Where to draw the line and juggle loopholes is an endless task which always leads me back to the fair tax, for if you havn’t any money for new things, you need not worry about paying any taxes. This would reduce gvt, and retire a lot of unneeded, inefficient jobs. Anything else will be inadequate.

  12. @Woych – From your wiki link – the list for additional information called “See Also” – AKA Monster job openings in the FIRE sector (FIRE protected by government as contrasted with a government that protects the Individual):

    See also

    Appeal to emotion
    Culture of fear
    Coercive persuasion
    Common sense
    Confidence trick
    Critical thinking
    Crowd manipulation
    Dirty tricks
    Discrediting tactic
    Dumbing down
    Emotional blackmail
    Fear mongering
    List of confidence tricks
    List of fallacies
    Martyrdom video
    Media manipulation
    Mind control
    Personal boundaries
    Propaganda: The Formation of Men’s Attitudes
    Psychological abuse
    Psychopathic thought processes
    SEX! SEX! SEX! (okay, so I added this distraction for when the see also list fails – we’ll see if wiki board accepts the addition)
    Smear campaign
    Social engineering (political science)
    Social engineering (security)
    Social influence
    Subliminal stimuli
    Victim blaming
    Weasel words
    Whispering campaign
    Workplace bullying

    Next up, how to tax the “black market economy” with more laundered cash in hand than Ford and Chevy could get in loans to make new stuff that no one can buy…austere enough for ya?

  13. Just how entertaining was it for everyone to watch the ever-present “filth” hurl his crap at me?

    Maybe it’s the Ghenghis Khan gene in me, but I believe I am completely justified in doing whatever it takes to take him and his ilk of PREDATORS out of operation. I made my case for why in the past 4 years.

    Don’t get in the way. If you do, then you have CHOSEN to side with iniquity. And that has consequences that psychobabble is powerless to contain.

  14. Everyone is using this *meme* lately – taken out of context, of course – but a great visual for going off a cliff…

  15. As for Reich thinking that going over the fiscal cliff is huge pressure on Republicans, I am not so sure. Once over it, maybe Republicans wise up and say ‘as a ceiling on taxes, this isn’t so bad’ and from that day on it is 100% about cutting spending, but forget the Pentagon please. If going over the cliff does not raise enough revenue to satisfy the minimal expectations of Democratic groups the Republicans are going to hold the high cards, at least so long as they have the House. And should the rest of PPACA not implement very smoothly there is plenty of scope for this to be much worse on the ‘winners’ than the ‘losers’. Not predicting it, exactly, but if the very best people in the administration are not working 100 hours a week on getting PPACA in place smoothly, then they have some priority problems.

  16. Your silliness is beyond reproach, you are not even entertainment at this point, it pure suffering, mostly on your part. And you seem to be alone in that regard. For it is scum like you that keeps me employed to keep America safe. We can read you like the Booker “T” baffon that you truly are. And I am certain you are soon to be extinct in this world, as the children have no need to mingle with the likes of you, and time is not your side, or a friend of yours either. Babble on, you prehistoric bumbling bag of hard bones and big broken teeth, your execution day is just around the corner, but suffer till then, for I know you must.

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