The 4 Rs of the GOP Part 3

Regressive Taxation

Well, the new tax bill was just passed. Sp before getting too much into term paper mode (for which I apologize in advance), let’s just say:

Winners: Corporate shareholders, Pass-through corporations

Losers: er, everyone else?

Ironically, many fairly wealthy folks will get reamed, especially in those bad, bad (i.e. blue, blue) states like California and New York, which are losing a chunk (although not all, as previously considered) of their real-estate and property tax deductions.

The super-rich will do fine as we know – the shareholder class is the one that profits most directly from lower corporate taxes.

And don’t forget, the looming deficits will naturally revisit Paul Ryan’s favorite topic: Entitlement Reform! This is better referred to as increasingly the disparity between rich and poor in the USA, already the most acute of any industrialized country.*

It should be noted that this is a very complex topic. As is my wont, I will (over?) simplify it to make a simple point, and, you know, get on with things.

The period of time I am most concerned with begins with the Reagan era. Reaganism ushered in financial policies notoriously labeled ‘Voodoo Economics’ by candidate George H.W. Bush, in response to Reagan’s espousal of what would variously be referred to as Supply Side, Trickle Down, Laffer Curve, etc.

Here’s the gist of it: if you lower taxes, government revenues will rise. And lowering them for the top tax brackets will create the greatest economic windfalls, as lowering tax rates would lead to greater investment. A critical component of this policy is not just income tax, but capital gains taxes, which have always been taxed at lower rates than ordinary income.

Here is a brief overview of the capital gains argument: http://www.taxpolicycenter.org/briefing-book/what-effect-lower-tax-rate-capital-gains

It should be noted that the arguments for lowering taxes on higher incomes are roughly equivalent although not identical.

The right wing of the GOP (i.e. The Old Guard) has generally opposed most (i.e. federal) taxes, whether on income or property. In many respects this thinking (stemming from classic liberalism) is a forerunner of today’s GOP libertarian threads, although conspicuous exceptions are now made for categories such as defense spending, and police activities in general.

There is no real evidence that lower tax rates for the wealthy generate greater economic gains in general or, or, laughably, increase government revenues.** The question is, do the advocates of this policy really believe in it or is it a cynical ploy to simply reward the Republican donor class?

The answer is yes.

The current tax reform bill conforms to the supply side model, but focuses much more heavily on reducing the corporate tax rate. This is not particularly radical, as the difference between the effective and statutory rates in the US is quite broad, and simplifying the rate structure is a laudable goal***

Although it is generally conceded that reductions in effective corporate tax rates generally benefit shareholders (i.e. stock prices), the magic bullet in the tax plan is ‘pass-through’ taxes. These are scheduled to be reduced drastically, and it is widely expected that as a result many corporate entities will be converted to pass-throughs. ‘Surprisingly’, many of Trump’s businesses are set up as pass-through. An added surprise is that this is expected to disproportionately benefit the very top strata (by both wealth and income) of American individuals.

For more analysis of the pass-through and general tax plan ramifications there are many august analysts that will do better than this journal. Or you can read the thing yourself …

I am mostly trying to pivot to the fourth R of the modern GOP: Reaganism. Coming soon!

* Naturally Ryan does not see it this way – to most in the GOP, government dependence on government handouts is a self-sustaining cycle that need s to be broken forcefully and immediately. That the main champion of this viewpoint is a man who has only worked for his well-to-do family business and, yes, the federal business in his entire adult life can be viewed as somewhat ironic.

**This has never happened. Basically, lower taxes = higher deficits.

***Statutory means the rate based on gross the gross, or published, rate and effective refers to the net rate after deductions, expenditures, etc. The corporate tax rates in the US have gradually gone down since the mid-1960s, and corporate tax as a percentage of GDP stands at around 2^ today compared to 7%in the mid-1940’s. See https://www.npr.org/2017/08/07/541797699/fact-check-does-the-u-s-have-the-highest-corporate-tax-rate-in-the-world

The Meeting about Jerusalem

The scene is the White House Kitchen. The 60 inch television is on but silent. CBI is watching the television and drinking a diet cola. The TV remote is next to the cola can. He is surrounded by regular staff. OS, IR and XMCH are also in attendance.

Special guest star: GE (Generic Evangelical)

CBI: I am delivering

CBI: People, not only did I make the bold promises, I delivered

CBI Takes a drink of cola and stares at the television. Something has caught his eye. After 30 seconds of uncomfortable silence

CBI: I

CBI: Am

CBI: Delivering

CBI: Can I get a hamburger in here?

BS: Yes sir, it’s been ordered. We order them automatically now for each meeting, per your earlier instructions

CBI: Hurry it up. I think I signed an Executive order for that one, didn’t I?

There is another 30 seconds of silence. CBI has resumed watching television, but only briefly.

CBI: I love those Executive orders. I can reverse that Kenyan’s whole scheme in 6 months.

CBI: BS, I’m going to branch out a bit. Let’s do one that fires any NFL player that doesn’t stand for the anthem. I can do that!

XMCH: Sir, we should move to the topic at hand. I see you’ve invited GE. I’d like to extend a welcome on behalf of everyone here.

CBI: Hang on, hang on.

CBI grabs the TV remote and turns the volume up past a comfortable level. He is starting at himself on the screen. His jaw goes slightly slack. The entire room is now dominated by the image of CBI on the screen, accompanied by the loud commentary.

2 minutes pass

CBI looks up blankly. Suddenly a McDonald’s hamburger is placed in front of him. This snaps him out of his reverie. Coincidentally his image is no longer on the television. He mutes the volume. The television remains on.

CBI: OK,what is it XMCH? Are we finished yet?

XMCH: No sir. We are discussing the recognition of Jerusalem as the Israeli capital. OS and I, while supporting your move, think the timing is bad.

GE: We believe it’s long overdue.

CBI: Yes, yes. It is not just overdue but a bold move. It is a move that I make. OS, get your butt to Europe and tell our friends what reality is like.

CBI: And by friends, you know who I mean (CBI smirks and rolls his eyes)

OS: I would urge you to postpone the move sir.

CBI: Be quiet man, hang on.

CBI turns the volume back on and finishes his hamburger and cola. The room is again dominated by the television volume.

CBI: I think we’re done. Good meeting. We need to cut these down a bit in length.

CBI: Can I get a hamburger and cola here. Get on it BE!

The 4 Rs of the GOP Part 2

Racism

Continuing the theme of the transposition of Democrat and Republican roles (or at least public images), attitudes towards minorities are probably be the clearest indicator of this particular role reversal.

The Democrats were of course the favored in the South until at least the 1970s, an allegiance more or less related to ancient history rather than current attitudes. In 1970 the ‘Southern Strategy’ was explicitly described and espoused by Nixon speechwriter, although it can be argued that the strategy probably originated with Barry Goldwater in 1964. Per usual, this was related to states’ rights, an ongoing euphemism for allowing various forms of discrimination to flourish without those pesky feds getting in the way. By the 1970s the Southern strategy (interrupted by the 1976 election of native son Jimmy Carter) was a staple of Republican campaign tactics. Political campaigns became centered on racial divisiveness, with opposition to busing and the forever popular states’ rights leading the way. Starting with his 1976 campaign Ronald Reagan endlessly harped on the ‘welfare queen’ who drove a Cadillac.*

One of the stunning recent developments is how acceptable racism and bigotry has become. The Roy Moore saga is highlighted by his creepy predatory sexual behavior. No one is mentioning his various bigoted attitudes. To be fair to Moore (eek!) his notorious ‘yellow’s and ‘reds’ quote ( http://thehill.com/homenews/campaign/351194-roy-moore-refers-to-red-and-yellow-americans-in-campaign-speech ) quite possibly did refer to a biblical passage. Unfortunately during a Q & A at the same speech however he also praised the 19th century as the last period of greatness for the USA ‘even though we had slavery’ (Hmmm ….).

In a similar vein, Milo Yiannopoulos from Breitbart was a sexy new poster boy for the Brave New World of acceptable white supremacy (oops, alt-right) not until his crackpot racial views were exposed but until he espoused a fondness for boys as young as 13. He appears to be making a comeback, at least as far as being a quotable pretty boy goes.

It should not be overlooked that the sainted unifier Ronald Regan gave the speech announcing his 1980 candidacy at the Neshoba County Fair, 7 miles from Philadelphia, Mississippi. Philadelphia was the site of the Mississippi civil rights workers’ murders and Reagan harped on (surprise!) states’ rights throughout his remarks.

As a sign of things to come (or perhaps that everything old is new again) the recent election in Virginia (which was won by Democrats) featured mostly ads with racist overtones. Republican Ed Gillespie came out prominently in favor of preserving Confederate monuments (is this the new states’ rights?) and ran ads showing scary looking Latinos with the captions ‘Kill. Rape. Control’. This was tied to his opponents (falsely) alleged support for sanctuary cities, as an example of what happens when Latinos get to stay in the US.

Now, the Unites States has a deeply racist** past and much of this thinking has clearly never completely gone away, but the idea of a post-racial society has been so completely debunked that one can only be depressed by the deepening divisiveness to come. And it will get more divisive – in their mad rush to tie themselves to Trump (who has a history of racist behavior and has limited his federal appointments and nominations almost exclusively to white Christians) we will be seeing more of this.

*This person actually existed but of course the true story has much more to it than a Reagan sound bite (read about her here: http://www.slate.com/articles/news_and_politics/history/2013/12/linda_taylor_welfare_queen_ronald_reagan_made_her_a_notorious_american_villain.html ) but Reagan was clearly making a larger, and very unsubtle point.

**The idea of separate ‘races’ is in itself a racist invention

The 4 Rs of the GOP Part 1

1. Reactionary Thinking

In the most general terms, conservatives do not like to be labeled reactionaries. The distinction, which ranges from subtle to meaningless, is that a ‘conservative’ is resistant to change for change’s sake and wants a sober and measured approach to formation of laws, adoption of new mores, etc. A reactionary, by implication, wants to return to a time that is gone. In other words, an out of touch geezer pining for a golden era that has long since passed, and may have been considerably sugar-coated as the years have gone by.

Naturally there are huge degrees of reactionary and/or conservative thinking. It cannot be doubted that the reality of the current GOP’s leadership and political makeup is essentially comprised of middle aged white men. Is this reactionary or have the republicans always been thus constituted?

One of the strange trends we’re seeing is that the Democrats and Republicans are continuing to trade places. After World War II the Democrats were espousing a more domestic and inward oriented policy. In contrast Eisenhower, although certainly not a maverick in this regard, could safely be called an internationalist. Similarly, both Bushes could be described (with reservations) as internationalists, While Ronald Reagan could hardly be described as a beloved international statesman, his actions in Libya and Lebanon (and enthusiastic saber-rattling and commie-baiting) point to someone who subscribes to the ‘America is policeman of the world’ idea.

With the rise of the GOP’s libertarian wing (e.g. Rand Paul) and of course Tea Party (somewhat libertarian and arch-reactionary), these attitudes were frequently challenged and mitigated. However it is safe to say that the Republican elite (remember them?) were always staunchly in favor of free trade policies and an engaged (cynics might say warmongering) foreign policy. Concomitant with the advocacy of free movement of capital was severe hostility to the union movement and, by association, the working class. Labor unions (Teamsters excepted) were solidly in the Democratic camp and their ongoing opposition to free trade (i.e. imports. Exports are OK) put a (sometimes) brake on any democratic internationalist aspirations.

That being said, it should be (quickly I hope) noted that any internationalist tendencies in American foreign policy are recent (i.e. post WW 2). With the exception of Woodrow Wilson’s efforts circa WW I, Isolationism was the rule to the extent that the term did not originate until the 1930’s. And of course, the USA’s refusal to join the League of Nations after the war quickly sunk any ongoing American internationalist aspirations (and the league itself of course).*

Hmmm, guess what? With the populist revolution (or whatever it is), The Republican administration is now completely inward looking, backing out of trade agreements, advocating expulsion of 11,000,000 immigrants and ranting about other countries taking advantage of American largesse (I am not sure ‘largesse’ was the precise term used in the well-researched speeches and reports). But true to this new distorted populism, the working class is now solidly with the GOP. The Democrats are now seen as the urban, elitist party while the Republicans represent the ‘little guy’. The problem for said little guy is that while The Man is happy to let them keep their guns (and is happy to reinforce the view that ‘others’ have taken their jobs), any notion that they will get an increased piece of the pie is absurd. The new tax bill, (which I will not belabor) continue that magical flow of capital up up up and away (apologies to the 5th Dimension) from the lower and middle classes. By the way, did we mention you can keep your guns?

The truth is that the organized labor movement, for good or ill, is responsible for creating the American middle class in the industrial era. They are in their way out. And even greater degrees of inequality (already by far the most lopsided of any ‘Western’ country) continue to be the order of the day. These ‘values’ are the main appeal to the ‘base’, although frequently they are couched in rhetoric meant to display how these attitudes will result in economic well-being.

And, yes, it’s those nagging social issues (the culture wars! Mmmm ….) that really represent the reactionary side. The steady intent to move capital upward, although not a new idea (it’s as old as human history) but is really just a self-interested policy that allows the GOP to repay their donor class.

The populist movement has waxed and waned since its inception in the 19th century as an agrarian push for farmers to gain access to bank credit. One of its most salient features is a general anti-intellectualism – best epitomized in various Frank Capra movies where the ‘common man’ shows greater ingenuity and (yes) ‘common sense’ than the expert. This sort of nonsense has come to full bloom in Trump’s outlandish braggadocio regarding his expertise in… everything. From claiming he had the ‘secret’ solution to permanently defeating ISIS to a steady stream of clownish boasts about his intelligence and business acumen (a laughingstock amongst those who have experienced the Trump MO of bad faith and mendacity first hand), a lack of actual knowledge and experience is now seen as a plus. The outsiders don’t need no book learning.

And it’s all working out marvelously, as a bumbling fool stumbles through government pounding his chest about nonsense while GOP leaders smile beatifically and thank God that at least they passed a tax bill so the donors get paid.

*As far as attitudes towards immigration, it’s a much more checkered history. Nativism (the Nativists tend to prefer the term “patriots”) has had many flavors, veering from anti-Catholicism, to anti-German to anti-Chinese in the 19th century. In the 20th century, starting the in the 1920’s, much anti-immigration sentiment took on a racial tint, focusing on ethnic purity, dangers to the ‘white race’, etc. This bears a striking resemblance to the alt-rights attitudes in the present day, attitudes that have been somewhat mainstreamed after Trump’s election. The focus of the Tea Party also turned sharply away from fiscal austerity and deficit reduction and has become obsessively nativist.

Before we leave this exceedingly brief and superficial analysis (sorry!) of immigration attitudes I should mention that much, if not most of the anti-immigration movements over the years (including the current ones) is concerned with the threat to American jobs, an ongoing concern of both labor unions and various politicians. This has recently been a noteworthy sticking point between organized labor and their ostensibly close allies, the Democratic party