Monday, January 21, 2008

More Voodoo Economics - This time from John McCain

Though John McCain stands head and shoulders above the rest of the pack of Republican presidential candidates, and he has stuck to his guns in a principled way on some contentious issues (rightly or wrongly), when it comes to economic issues he has adjusted his rhetoric to the most know-nothing segments of the Republican "base" and is talking blatant nonsense just like the rest of them. Granted, he hasn't quite matched the lunatic economic proposals of some of the other Republican candidates. But he seems to have abandoned any pretense of a serious discussion of economic policy (a topic that probably doesn't much excite him, anyway).

This isn't just a matter of changing his position on the Bush tax cuts, which he was courageous enough to vote against in 2001 and 2003--on the valid grounds that they unfairly favored the wealthy--but now proposes to make permanent. That would be bad enough. He has also started defending his about-face by repeating patently silly propaganda points.

As Jonathan Chait points out, it's quite remarkable that when candidates start in on major issues of public policy (as opposed to personal pecadillos), they can toss out the most obviously idiotic and easily disprovable claims without getting called on them--partly because some of these claims, delusional as they might be, have become routine clichés that are accepted as part of respectable political discourse. We've been through this before. Can't we do a little better?

Yours for reality-based discourse,
Jeff Weintraub
New Republic On-Line (The Plank)
January 18, 2008
McCain Lies His Head Off; NY Times Asleep at Switch
Jonathan Chait

One of the most common-supply-side talking points is that tax cuts always lead to higher tax revenues. It's not really true (revenues crashed after the 2001 Bush tax cuts) but even if it were, it's misleading: Tax revenues tend to rise over time as a natural result of inflation, rising population, and economic growth. Taken at its face value, the supply-side logic would imply that tax hikes always cause revenue to fall, which is ridiculous on its face, and which explains why supply-siders never mention this silly corrollary to their claim.

Until now! John McCain is a recent convert to supply-side economics and still working on getting the talking points down. Speaking yesterday in South Carolina, the straight talker:

proclaimed himself a believer in the notion that cutting taxes increases revenue for the government by spurring economic growth. “Don’t listen to this siren song about cutting taxes,” Mr. McCain told supporters gathered here under a tent in a driving rain. “Every time in history we have raised taxes it has cut revenues."

What? Every time? Okay, how about we go back and look at the last time taxes were raised -- 1993. It's true that conservatives predicted revenue would fall as a result of the tax hike. (Typical quote: "Higher taxes will shrink the tax base and reduce tax revenues" -- Newt Gingrich.) But it didn't exactly work out that way:

The amazing thing is that New York Times, which printed McCain's quote, made no effort whatsoever to ascertain the truth of his point. Just the typical, "McCain says earth is flat, and meanwhile in other news..." stuff. I realize that campaign reporting is hard, and reporters don't usually have time to check on the truth of candidate's statements. (And yes, this is a huge flaw with reporting, but that's another story.) But this claim is so obviously false it could have been refuted after maybe thirty seconds of research. Didn't the author (Michael Cooper) realize that tax hikes don't always, or even usually, lead to reduced revenue? Does he remember the 1990s? Is he aware that the federal government raised taxes and started collecting dramatically higher revenues during World War II? (Taxes were raised and revenues quintipled.)

The expecially annoying thing is that when Mitt Romney promised he could rebuild Detroit's auto industry, the media hammered him as a liar -- and it wasn't even a lie, just a matter of opinion, albeit a highly optimistic promise. Meanwhile, McCain disagreed and was treated to another worshipful round of press coverage. (The Washington Post credited him with telling "hard truths," which, again, takes McCain's side on an issue that's a question of opinion rather than fact.)

As my book explains, political coverage almost never bothers to check on the truth of candidate's claims about public policy. So, okay. But can they at least stop praising McCain as a brave truth-teller when he's totally reversed his position on the Bush tax cuts and now defends them with obvious lies?

--Jonathan Chait