Friday, June 26, 2015

Supreme Court gives conservatives exactly what they want: two dead horses they can keep flogging

Conservative Republicans must privately be rejoicing that the U.S. Supreme Court 1) affirmed the right of same-sex couples to marry and 2) declared it constitutional for the federal government to subsidize poor individuals and families who buy health insurance on the federal exchange because the state in which they live doesn’t have an exchange.  

Let’s take these decisions one at a time: 

By upholding the centerpiece of the Patient Protection & Affordable Care Act (ACA), the Supremes, led by Chief Justice John Roberts, have given the conservatives a punching bag for several elections to come. They can continue to tell lies about it and to demonize it. They can hit the Democrats over the head with false assertions that it costs too much, takes away freedom, leads to death panels and is rife with inefficiencies. These lies began almost immediately, as every one of the Republican candidates for president tweeted his objection to the Supreme Court decision within hours of the announcement, many calling for repeal of the law and the development of a better alternative. Of course, the Republicans have no alternative, save some pious homilies about letting the free market work and giving consumers more choice, which ends up meaning very little in the realm of health care. 

The Republicans understand that they can keep the issue alive through lies and invectives, and thereby keep their Tea Party base engaged and writing checks.  

But if the Supreme Court had invalidated the ACA, it would have presented Republicans with major problems. For one thing, it would have thrown tens of millions of Americans off the health insurance rolls, because they wouldn’t be able to get government subsidies. These people would no longer have any protection against high medical costs.  

Those who could keep their coverage would have also gotten screwed if the Supremes had voted thumbs down on Obamacare, because the health insurance system would have suffered the loss of enormous sums of money when those who lost coverage left the system. Insurance companies would have had to raise rates precipitously to pay for the medical expenses of those remaining in the system. 

The Republicans would have suffered the wrath of the American people if the Supreme Court had ruled against the ACA. They would have been blamed when millions lost their health insurance and everyone else saw their costs zoom.  In truth, Obamacare has been a success. Many more people are covered than before and healthcare inflation has moderated. People may say they don’t like the ACA, but they seem to like how it helps them. And they sure wouldn’t like it if they lost all the benefits that the ACA gave them.  

The set-up is now perfect for the Republicans. They continue to hammer at Obamacare with no fear that anything will come of it. Kind of like the old Abbot & Costello bit in which Abbot is about to get into a fist fight and he shouts, “Hold me back, hold me back.” When Costello doesn’t make a move, Abbot pleads, “Please hold me back, you don’t want this guy to hit me, do you,” or some similar chicken-hawk statement. 

Gay marriage is the same song, verse two. Besides ending discrimination against a large number of Americans, it’s a great victory for personal freedom in the United States, plus an affirmation that we live in a secular, not a Christian society.  

A majority of Americans now support gay marriage and each new poll shows those numbers growing larger all the time. The Supreme Court is neither pulling nor pushing society, but reacting to it. 

For years, Republicans have used social issues such as gay marriage and abortion to entice the religious right to vote for them. For decades, the Republicans have asked these “values” voters to vote against their own economic best interest to make certain that their religious views prevailed. But if gay marriage had remained a state-by-state issue, the GOP would have been playing a losing hand, as more and more people became offended by anti-gay rights rhetoric.  

Just like after the Obamacare decision, the Republican candidates for president are lining up against the gay marriage decision in statements and tweets. They will continue to bemoan the decision well into the future, but there’s one thing they won’t have to do—support or oppose legislation, court decisions and ballot initiatives related to gay marriage. Supporting laws that attempt to protect the right of businesses to decline to provide goods and services for gay weddings is a much more comfortable position for Republicans who don’t want to alienate the mainstream of American voters, who now favor gay marriage. Instead of opposing gay marriage, Republicans can now support religious rights, something in which every American believes, even if we define it in a variety of ways. Jeb Bush and Lindsay Graham have already made deft pivots to supporting religious rights in their comments about the 5-4 Supreme Court decision. 

In short, these two Supreme Court decisions, both so important for the well-being of the United States, also take Republicans off the hook as far as real action is concerned. Instead, they can wallow in their imaginary world of rhetoric, mixing lies with glorious statements about freedom, tradition and free markets.
Just keep in mind that it’s not merely posturing, but a smoke screen of phony issues that the GOP continues to use to distract Americans from real issues such as global warming, income and wealth inequality and institutional racism.

Wednesday, June 24, 2015

We’ll all feel good about pulling down Confederate flags while guns kill more innocents

Don’t get me wrong. I have been opposed to the flying of the Confederate flag for decades. I immediately become disgusted, make that physically revulsed, when I see the blue X with white stars across a field of red—the central motif of the flag of the American slave republic—branding belt buckles, tee-shirts, banners, jackets, bandstands, caps or state flags. 

Despite protestations to the contrary through the years, the Confederate flag is an inherently racist symbol.  I can’t possibly imagine anyone displaying Confederate iconography except for racists, those who want to get the votes of racists or those who want to do business with racists using racism as a common affinity between seller and buyer. 

There is no doubt that flying the Confederate flag on government or public property is and has always been an act of treason, since the establishment of the Confederacy was an act of treason. And there is no doubt that the United States is a better place when the flag of the American slave state is marginalized: when candidates don’t wrap themselves with it pretending it’s a symbol of states’ rights; when it is not readily available for purchase in large national chains; when the consensus opinion is that people who display the Confederate flag are as anti-social as those who revel in Nazi iconography. While I think brandishing the Confederate flag is protected speech under the First Amendment, I am glad to see that we as a nation are finally saying that it is an anti-social and explicitly racist act. 

But the swiftly spreading collective movement to end the flying of the Confederate flag in South Carolina and elsewhere in the country is a bit disconcerting, because it’s another example of the United States addressing the wrong problem in a crisis. Just as we attached Iraq instead of going after Al Qaida in the wake of the 9/11 attacks, so are we trying to curtail flying of the Confederate flag as a means to stop single-shooter mass murders. It’s an example of an entire society exhibiting what psychiatrists sometimes call displacement, which occurs when the mind substitutes either a new aim or a new object for goals felt to be dangerous or unacceptable. We have displaced what should be a concern for gun control with a concern for one of many symbols of the force that motivated this particular mass murderer. 

Let’s be clear about what has happened: The shooting of nine innocent people during a Bible study session at an old-line black church by a lunatic who was also a racist has had an earthshaking impact on the country—our people, our leaders, our news media. Most of us are horrified and crying out to do something in a way that’s reminiscent of the country’s reaction after the first Selma March or the killing of students by National Guard soldiers at anti-war demonstrations at Jackson State and Kent State universities. 

But where have our politicians and the news media pushed us? To attack one of many manifestations that Dylann Roof hated African-Americans. If Roof had not fetishized the Confederate flag, he would still have displayed virulent racism: He still would have subscribed to the ideas of the white supremacist group, Council of Conservative Citizens. He still would have frequently used racial invectives when speaking with friends. He still would have written his sick manifesto. 

The Confederacy wasn’t even the only racist country whose flag Roof incorporated into his self-expression. He also displayed parts of the Rhodesian and the Apartheid-era South African flags on his clothing. 

To be sure, Dylann Roof reminds us what an embarrassment it is to the United States that the flag of enemies of freedom, defenders of slavery and traitors to the United States still flies on public property. But taking it down will have at the most a very minor impact on the rate of mass murders in the United States. At best, racism will become somewhat less socially acceptable, which may lead to several mentally ill people having one less reason to pick up a gun and hunt the innocent.

But far from every case of mass murder has had to do with race. Spurned love, mommy issues, peer rejection and social isolation have all compelled wackos to kill. But virtually all mass murderer in recent years (as opposed to terrorists such as Timothy McVeigh and the Al Qaida operatives) have had two things in common: 1) They’ve been mentally ill; 2) They’ve gotten hold of one or more guns. 

Clearly we have to do something about the ease at which mentally ill people can legally obtain arms and the type of high-grade military arms available for purchase by the public. We have to expand gun registries, increase the waiting time for gun sales, toughen laws regarding keeping guns in households where mentally ill people live, end the sales of automatic weapons, and ban all firearms in schools, universities, government buildings, restaurants, theatres, libraries, arenas, stadiums and any place where the legal occupancy is more than 10 people.    

But we’re not considering any of it, not even talking about it. Instead of going after the major tool that psychopaths use to commit mass murder, we’re going after one of the many symbols employed by one mass murderer to express the reason that motivated his horrific action.  

Ending all mainstream glorification of the Confederate flag is a great thing, even though extreme racists will continue to revel in its symbolism. But it has nothing to do with preventing more tragedies like the Emanuel AME Church massacre. If we want to end mass shootings, we have to take the view of private ownership of guns shared by the rest of the world and toughen gun laws.

Monday, June 22, 2015

Rand Paul’s flat tax proposal sounds as dubious as the flat earth theory

Kentucky Republican Senator Rand Paul wants to create a flat tax of 14.5% that he says will reduce government revenues by trillions of dollars, but magically lead to greater tax revenues in the future fueled by economic growth. 

His plan, which he outlined in a Wall Street Journal opinion piece that has been reprinted on many other newswebsites, is based on the old Laffer Curve myth that proposes that lowering tax rates always leads to economic growth, which then always produces greater tax revenues.  Laffer Curve theory has been around for ages but is associated with right-wing economist Arthur Laffer who supposedly drew it on a paper cocktail napkin for some government luminaries during the 1970’s.  When I interviewed Laffer in 1981 for a television news report, he denied the myth. 

Now Paul does not mention the Laffer Curve by name, but he is proposing the same twisted reasoning—lowering tax rates will lead to economic growth which will lead to higher tax revenues. 

Paul’s premise comes up short in the reality department. Since the birth of the industrial revolution, our economy has thrived most when tax rates have been relatively high, such as after World War II and during the Clinton years (when compared to the eras immediately before and after Clinton).  

Paul’s program consists of two changes to the current tax code: 1) Establish a flat tax of 14.5% that’s the same for every tax-paying entity (personal or business) and every kind of income (earned or investment); note that included are payments for Social Security and Medicare, which fulfills the conservative dream of comingling Social Security funds with the general budget, the first step in making major benefit cuts. 2) End all deductions, except for mortgages and charities. 

The first idea ignores decades of data to build its case on the disproved notion that if you cut taxes on the wealthy, they will invest more in the economy, thereby creating more jobs. In a sense, it’s an operation of the false theory of supply-side economics, which essentially says that if you make it and put it up for sale, they will buy it. But the experience since the turn of the century has been that the wealthy and corporations have been afraid to invest (create more supply) because the market isn’t there. The low tax regime has therefore led to the wealthy piling up more wealth and to a precipitous increase in the values of assets that the wealthy tend to own such as luxury goods, real estate and fine art. Supply side economics never works because the so-called job creators who should create the additional supply believe at heart in investing based on predicted demand. 

Now if we had not lowered tax rates on the wealthy during the Reagan years and under Bush II, the money that rich folk gleaned from tax cuts would instead be in the government coffers. One thing the government likes to do is spend money, and that helps the economy. Government outlays create demand, whether it’s for new government employees, from companies and individuals to perform services from the government or from payments to the poor and middle class, which they then mostly spend (as opposed to the rich, who mostly save after a certain point).  

So much then for Paul’s argument that the flat tax will unleash economic activity. More than likely, it will lead to a cut in government services, which will lead to a shrinking of the economy.  

The mechanism of the progressive tax, by which people are taxed at higher rates for income earned above certain thresholds, is a prime tool for increasing income and wealth equality because the wealthy don’t just pay more, they pay a higher percentage of their additional income in taxes. That higher percentage also reflects the fact that the wealthy derive more protection and services from government than the poor and middle class do. They have more property under government protection. The regulation and protection of markets benefits their interests more than the interests of the poor. The roads government builds conveys the cars of both the rich and poor, but it also conveys everyone’s cars to stores and businesses, all owned by the rich either directly or through financial instruments. The rich are far more likely to enjoy the luxury boxes in ballparks built with taxpayer money. Thus the progressive income tax makes the best tax system both for public policy reasons and to finance the many things that 21st century government does, Instead of establishing a flat tax, we need to raise marginal tax rates on the wealthy. 

In theory the second Paul idea—to end deductions—is a good one because it simplifies paying taxes, but it may not work in practice. Here’s why: For the most part, tax breaks serve as incentives for people to act in certain ways—buy houses, invest in new businesses, install solar equipment, send their children to college. Each of these tax breaks also helps one part of the economy. For decades, for example, the oil depletion allowance has helped the fossil fuels industry, while the mortgage deduction has artificially boosted the residential real estate industry. Tax policy can also discourage actions, such as our high taxes on cigarettes. Notice that I don’t include gas as a high-tax item because our taxes on gasoline are very low compared to other industrialized nations.

If we give up tax incentives and disincentives, we lose the possibility to implement social and economic policy through taxes, eventually leading to more extensive regulation as the only other means to manage the economy and guide private activity.  So while the idea of making the tax system less complicated sounds great in theory, in practice it wouldn’t work because we need tax policy to help manage a sophisticated economy and complex society. 

Paul is right that our tax system has to change, but those changes should lead to higher rates of taxation on the wealthy and greater immediate revenues:

·         We should increase the tax rates on incremental income (income above certain amounts).

·         We should take the cap off the maximum salary subject to the Social Security tax.

·         We should end the special treatment of capital gains taxes, or failing that, redefine capital gains to include only direct investments that benefit a business, which means no stock or bond bought or sold on a secondary market.

·         We should end the carried-interest loophole that enables hedge fund manages to shield billions of dollars of income from taxes each year.

·         We should take from the French and add a small annual tax on wealth above a certain level, maybe $5 million for an individual.

·         Finally, we should assess a very stiff tax on all inheritances above a certain amount, again, say $5 million. 

In other words, instead of lowering taxes on the wealthy, as Paul wants to do, we should raise them back to the level before the Reagan years. That’s a program that will lead to an economic growth spurt.