Economic Pragmatism vs. Conservative Religion

There are two responses to the column by David Brooks which I quoted from earlier. Many conservatives, having come off a campaign which was based upon distorting Obama’s words to make him appear much further to the left than he actually is on economic issues, must be delighted by the turn of events. Although Obama has actually been influenced by the economic views at the University of Chicago far more than many conservatives will admit, current events have led to Obama’s support of much more government spending than he would support under normal circumstances. There are views on this from both the left and right.

Greg Sargent writes in response to David Brooks:

My first reaction to this was to wonder: Why are Obama aides reacting so defensively to criticism from the right? Poll after poll after poll has shown that substantial majorities are comfortable with the Obama administration’s dramatic expansion of government’s role and support the scale of Obama’s ambitious agenda and the speed with which he’s enacting it. Conservatives will call Obama a wild-eyed radical nut-job no matter what he does.

And why the fear of offending Reagan’s ghost? A new poll yesterday found that by a sizable margin the public thinks Obama-nomics, not Reaganomics, is what the country needs right now.

On second thought, though, maybe what we’re seeing here is more of the Obama team’s efforts to redefine the moderate center. What Obama advisers are saying is that they’re undoing the radicalism of the Bush years.

Yes, the Obama team is attempting an expansion of government activism not seen since Lyndon Johnson. But they’re redefining this type of government action as not radical at all, as the sensible and even moderate course, given the circumstances. And they’re saying this because that’s really how they see it.

Andrew Sullivan once again breaks from the right wing in having a similar reality-based view of what Obama is doing, acknowledging the difference between what one might generally do based on principle as opposed to actions during a crisis:

Much of the reaction on the right and center-right to Obama’s budget has been a recourse to abstract principles. There’s nothing wrong with such principles – low taxes, balanced budgets, small and limited government. I share them. But no self-respecting conservative would ever defend such principles without considering the full context in which we now find ourselves.

To give a blindingly obvious example: to treat the stimulus package as just another expansion of government, a reckless lurch to the left, as Fox News has done, is absurd. As unemployment spikes, stocks crash, and deflation looms on the horizon, deficit spending means something else. It’s a pragmatic, not a liberal decision.

Now look at some less clear-cut contexts. The last thirty years have seen historically low tax rates for the successful. But they have also seen a sharp, globalization-fed increase in inequality.

If your goal is to keep a polity in one piece during an economic crisis, raising some taxes on those who have had a relatively low-tax couple of decades, is again pragmatically defensible. If I thought Obama’s goal was to redistribute for the sake of it, I’d be appalled. But that isn’t what he’s said and it isn’t what he believes. Ditto cap-and-trade. I don’t think it’s the best way to tackle climate change, but I do see it as a legitimate, practical response to climate change – not some expansion of government for its own sake. It’s also a real, if flawed, attempt to wean us off oil after a decade in which we learned the hard way what oil-fueled fanaticism can do to us. Again: this is about reacting to changes in the world. It seems to me to be within the conservative mindset to adjust to practical necessity and a changing world.

This is true even of healthcare. Even private sector enthusiasts like yours truly can see there’s a resilient problem here – of costs soaring, of de facto universal coverage without any of the economies of scale that a more coherent universal coverage would allow, of unaccountable private agencies rationing irrationally and unaccountably. I don’t think it’s radical or super-liberal to ask how we can tackle these questions – or to accept that the past couple of decades have not proven the superiority of the status quo.

I’m not sure what the answers to all these questions are. But I am sure that a good faith effort to tackle them is what we need. We have a new president who’s a liberal but open to suggestion and debate. I don’t believe going on and on about what a big liberal he is, and how we’re all about to turn into France, moves this debate constructively along. If the right wants to return as something more than a populist gabfest on radio and cable, we’d better join that debate. And even have a few constructive ideas.

The problem with the extremists dominating the conservative movement at present can be seen in Sullivan’s comment that, ” It seems to me to be within the conservative mindset to adjust to practical necessity and a changing world.” Unfortunately the conservative movement has become a religion. Policy decisions are made based upon whether they fit into their religious views, in this case on the economy, regardless of the actual circumstances and regardless of the facts.

As Rod Dreher also pointed out, the segment of the conservative movement which follows Rush Limbaugh has no room for changes based upon changing situations. Instead they believe, to quote Limbaugh, “Conservativism is what it is and it is forever.” No amount of evidence will change their mind because they do not want to change their religious beliefs. This leads to the view that they would rather have Obama fail, and have the economy worsen as opposed to risk being worshippers of false gods.

Obama To Lift Bush’s Restrictions on Stem Cell Research

Obama will finally be removing George Bush’s restrictions on federal funding of embryonic stem cell research. The good news is reported in The Washington Post:

President Obama is planning to sign an executive order on Monday rolling back restrictions on federal funding of human embryonic stem cell research, according to sources close to the issue.

Although the exact wording of the order has not been revealed, the White House plans an 11 a.m. ceremony to sign the order repealing one of the most controversial steps taken by his predecessor, fulfilling one of Obama’s eagerly anticipated campaign promises.

The move, long sought by scientists and patient advocates and opposed by religious groups, would enable the National Institutes of Health to consider requests from scientists to study hundreds of lines of cells that have been developed since the limitations were put in place — lines that scientists and patient advocate say hold great hope for leading to cures for a host of major ailments.

I don’t know if Obama will be able to fix the economy. He might even get bogged down in Iraq. Regardless of his success in other areas, here is at least one area where there we see solid evidence that it was worthwhile voting for Obama. This is just one area where Obama differs from his predecessor in respecting science and respecting separation of church and state. No longer will we be subjected to religious fanatics dictating to scientists and health care professionals what can be done purely based upon their religious beliefs.

Reality Check On Conservative Claims About Tax Increases

Daniel Gross has a post at Slate which provides a good follow up to my recent post on the lack of understanding by many conservatives of how the tax system works. Gross further debunks the claims from conservatives that the tax rates backed by Obama will present a great burden to those making over $250,000 per year leading to people being less willing to work. Gross writes:

On Tuesday, Washington Post columnist (and former Bush speechwriter) Michael Gerson argued in an op-ed that “Obama chose a time of recession to propose a massive increase in progressivity—a 10-year, trillion-dollar haul from the rich, already being punished by the stock market collapse and the housing market decline.” The plans are so radical, “there will not be enough wealthy people left to bleed.” CNBC’s Larry Kudlow wrote that “Obama is declaring war on investors, entrepreneurs, small businesses, large corporations, and private-equity and venture-capital funds.” Other segments on the financial news network warn of a tax on the rich, a war on the wealthy. My personal favorite was a piecefrom, which had to be rewritten and reposted because the original was so poorly done. (The revised version isn’t much better.) It quotes a dentist who is contemplating reducing “her income from her current $320,000 to under $250,000 by having her dental hygienist work fewer days and by treating fewer patients. [That way, she] would avoid paying higher taxes on the $70,000 that would be subject to increased taxation if Obama’s proposal is signed into law.”

It’s hard to overstate how absurd these claims are. First, let’s talk about the “massive increase in progressivity” that Gerson deplores. It consists largely (but not exclusively) of returning marginal tax rates to their levels of 2001, before Gerson and the epically incompetent Bush administration of which he was a part got their hands on the reins of power. Obama wants to let marginal rates for families with taxable income (not total income, but taxable income) of more than $250,000 revert from 33 percent to 36 percent, and to let the top rate—currently 35 percent on family income above $357,000—revert to 39 percent. (Here are the current tax tables.) There’s also talk of capping—not eliminating, but capping—deductions on charitable giving and mortgage interest.

Obama’s proposals don’t mean the government would steal every penny you make above the $250,000 threshold, or that making more than $250,000 would somehow subject all of your income to higher taxes. Rather, you’d pay 36 cents to the government in income taxes on every dollar over the threshold, rather than 33 cents…

Gross makes some additional points and then concludes with a real world look at how much higher taxes will actually be:

Finally, there has been a near total absence of discussion of what higher rates will mean in the real world. Say you’re a CNBC anchor, or a Washington Post columnist with a seat at the Council on Foreign Relations, or a dentist, and you managed to cobble together $350,000 a year in income. You’re doing quite well. If you subtract deductions for state and property taxes, mortgage interest and charitable deductions, and other deductions, the amount on which tax rates are calculated might total $300,000. What would happen if the marginal rate on the portion of your income above $250,000 were to rise from 33 percent to 36 percent? Under the old regime, you’d pay $16,500 in federal taxes on that amount. Under the new one, you’d pay $18,000. The difference is $1,500 per year, or $4.10 per day. Obviously, the numbers rise as you make more. But is $4.10 a day bleeding the rich, a war on the wealthy, a killer of innovation and enterprise? That dentist eager to slash her income from $320,000 to $250,000 would avoid the pain of paying an extra $2,100 in federal taxes. But she’d also deprive herself of an additional $70,000 in income!

The Obama Response To Conservative Criticism

In his previous column, David Brooks wrote that “the Obama budget is a liberal, big government document that should make moderates nervous.” I didn’t expect today’s column, entitled  When Obamatons Respond, to be very favorable about Obama. Brooks surprised me.

The column presents five points from the responses of members of the Obama administration which are contrary to all the conservative talking points. He begins:

In the first place, they do not see themselves as a group of liberal crusaders. They see themselves as pragmatists who inherited a government and an economy that have been thrown out of whack. They’re not engaged in an ideological project to overturn the Reagan Revolution, a fight that was over long ago. They’re trying to restore balance: nurture an economy so that productivity gains are shared by the middle class and correct the irresponsible habits that developed during the Bush era.

The budget, they continue, isn’t some grand transformation of America. It raises taxes on energy and offsets them with tax cuts for the middle class. It raises taxes on the rich to a level slightly above where they were in the Clinton years and then uses the money as a down payment on health care reform. That’s what the budget does. It’s not the Russian Revolution.

I’ll list his other points more briefly:

Second, they argue, the Obama administration will not usher in an era of big government…

Third, they say, Republicans should welcome the budget’s health care ideas. The Medicare reform represents a big cut in entitlement spending…

Fourth, the White House claims the budget will not produce a sea of red ink. Deficits are now at a gargantuan 12 percent of G.D.P., but the White House aims to bring this down to 3.5 percent in 2012. Besides, the long-range debt is what matters, and on this subject President Obama is hawkish…

Fifth, the Obama folks feel they spend as much time resisting liberal ideas as enacting them. The president resisted union pressure and capped pay increases for government workers. He resisted efforts to create mandatory veterans’ health benefits. The administration plans to tackle the suspiciously large increase in the number of people claiming disability benefits.

As a conservative, Brooks still expresses qualms about what the Obama administration is planning but he does concede, “the White House made a case that was sophisticated and fact-based.” Could anyone seriously call anything coming out of the Republican Party in the past decade either sophisticated or fact-based?