How not to be Mr. Potter

 

A few thoughts on the tax deal – Rob beat me to it, so make sure you read his post below about the payroll tax. 

1. My friend Hugh Hewitt is apoplectic about the 2-year deal, but it seems to set up 2012 nicely. Vote for us to keep your taxes from rising. Vote for them and they’ll go up guaranteed: it’s baked right into the law. 

2. Hearing the President get that fussy, irritated tone when he describes the things he had to swallow to get on board, and all the good things he did tax-wise,  reminds you how ungracious he is towards his opposition. If you were the smartest guy in the room and had to go along with ignorant boob-skulled bitterclingers, you’d be annoyed too, I suppose.

3. Extending unemployment benefits may be a bad idea in the macro sense – it discourages people from seeking jobs, and encourages the acceptance of the long-term dole culture. True enough. You still see stories like 10,000 people turning out to apply for 1,000 jobs, though, so I’m not sure everyone who wants to work has been turned into Jim Royle. But politics is also about perception, and cutting off unemployment benefits while trying to keep tax cuts for the top earners makes for disastrous public narratives. Forget Scrooge: they’d all look like Mr. Potter in “It’s a Wonderful Life.”

Yes, I know: this is how they’ll be portrayed anyway. That’s what the left thinks. Let them. Their case is less impressive when the moderate middle looks at the last deal, and sees A) the GOP didn’t go full Grinch, and B) they got the President to admit that raising taxes costs jobs. Whether he believes it or not isn’t relevant; I think if he said today that raising taxes costs jobs, and lowering them tomorrow costs jobs, he’d be praised by Frank Rich as one of those Fitzgeraldian first-rate intellects capable of keeping two opposed ideas in his head simultaneously. In the end he came off as the guy who had to be pressured not to raise taxes – and who seemed quite annoyed by the entire affair.   I’ll take that. 

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  1. Profile Photo Inactive
    @nordman

    This is not a victory. It’s a defensive draw at best, perhaps even slight loss of ground in that the net effect will be a larger deficit and the institutionalized expectation that government will continue to pay people for not working into perpetuity. We’re up to over three years now, so we’re getting there! I fear the government is creating another economic class.

    Had I known I could have drawn a government check for three years of not working perhaps I would have planned my life differently, but instead I’m going to work again today to pay for someone who is not – and may never, ever intend to do so.

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    @PaulDeRocco

    I also don’t feel as bad as Hewitt about it. I really thought the Dems were going to put forth the middle-class-permanent-extension, upper-class-temporary-extension thing, which their moderates would have accepted as providing sufficient political cover–especially since it would have set up a 2012 battle over tax increases for the rich, rather than tax increases for everybody. In fact, I’m surprised they didn’t do that.

    As to the unemployment extension, at the point where the original benefits package ran out, that’s when the recipients de facto joined the welfare rolls. It’s a tad mendacious to continue to call it unemployment insurance at this point.

    And I think it’s also the case that the residual uncertainty over 2012 tax rates, as well as the extended cushion between people and real unemployment, will be a drag on the economy. Politically, that will conspire against the Democrats in two years, at the same time we’re all refighting the battle we just fought and won.

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    @BillF

    I really don’t understand why Hugh Hewitt is so off the wall about this deal. Was there any way on the planet that Obama would have signed a bill that permanently extended the tax cuts? I don’t think so. Meanwhile, the lefties are calling for Obama’s head. It would have been good if they could have gotten them extended longer, but Lileks’ point about the cuts expiring in time for the next election will, I think play well for the Republicans.

    • #3
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    @DaveRoy

    I completely agree, James. Politics is also partially about optics, and I very much like the idea that *all* of the tax cuts are scheduled to expire. As Paul said, now the Republicans can say that they’re working to keep tax cuts for everybody, rather than just for the rich.

    This deal looks really bad for Obama all the way around, and you can tell by how upset the Lefties are with it. How much political capital can he have left if he has to settle for something like this?

    He’s already acting like a lame duck president.

    • #4
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    @

    Sort of off-topic, but when did everyone in Washington start talking about 10-year “costs” of everything?

    If memory serves, the first time I heard that was during the original debates over the Bush tax cuts. I believe it was a Democrat tactic to throw out a big, outrageous number: “Bush is giving $500 billion to the richest two percent!”.

    Whether you’re talking revenue or spending, saying you can predict the fiscal effect of policy over ten years is bunkum.

    • #5
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    @AndrewKlavan

    I agree with this completely, James, every word, including the perception of unemployment benefits. But there’s another matter of perception we need to be driving home. Missouri Senator Claire McCaskill had this to say about the deal: “If they think it’s O.K. to raise taxes for the embattled middle class because they’re going to pout if we don’t give more money to millionaires, it really is time for the people of America to take up pitchforks.” In other words, Claire thinks the money is the government’s to give or take instead of its belonging to the people who made it. We need to keep repeating that the government has no inherent right to our money, that we give it to them grudgingly so they can perform useful tasks like water-boarding jihadists, that they’ve spent too much of it and need to be stopped.

    Although thinking of Claire McCaskill, it occurs to me a pitchfork’s not such a bad idea after all.

    • #6
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    @Pseudodionysius

    If you were the smartest guy in the room and had to go along with ignorant boob-skulled bitterclingers, you’d be annoyed too, I suppose.

    Politics is the art of not letting people know how smart you really are.

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    @StuartCreque

    None of this was supposed to happen. The economy was supposed to have healed in February 2009 when Obama and Pelosi and Reid laid hands on it and said, “HEAL!” By summer 2010, the booming economy (because the economy always booms coming out of a recession — at least, it always did before this bunch took over) was supposed to make everybody feel good about paying higher taxes, because we’d all feel wealthy enough to afford it.

    None of the people in Obama’s inner, outer and extended circles even conceived of the possibility that their approach to fixing the economy was bogus and futile. They still don’t believe it, even though it’s plainly clear to see right in front of their eyes. That’s why they had to be dragged kicking and screaming to this deal, and why this deal is going to cause the Democrat Party to rip itself wide open.

    We need to encourage a Progressive Party (or the Greens, or the Peace & Freedom Party) to mount challenges to every elected Democrat. Let’s help the Left peel five or six points off the vote totals for Democrat Congressional and Senate candidates.

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    @StuartCreque
    Pseudodionysius: If you were the smartest guy in the room and had to go along with ignorant boob-skulled bitterclingers, you’d be annoyed too, I suppose.

    Politics is the art of not letting people know how smart you really are. · Dec 6 at 5:30pm

    Politics is the art of making other people believe that it was they who proposed the policies you want enacted.

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    @

    I was just reading comments over on the New York Times opinion page. The lefty base seems to be really, really ticked off about letting the top Bush rate remain. One guy is apoplectic:

    “If Obama caves on this, I am done. Done, done, done. Google how much my family contributed to Obama’s election and you will see exactly how devastating this is going to be for his presidency and any chance of a second term.”

    Honestly, I just don’t get it. What is it about some people that makes them so flaming angry at the idea of government not confiscating more of someone else’s money?

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    @StuartCreque
    Kenneth: Honestly, I just don’t get it. What is it about some people that makes them so flaming angry at the idea of government not confiscating more of someone else’s money? · Dec 6 at 5:55pm

    Those are the people who want to be compassionate and generous, but are under the mistaken assumption that if they went ahead and gave of their own time and money, that would be unfair to them if they couldn’t compel everyone else to be just as compassionate and generous.

    This is why liberals tend to donate less to charity than conservatives. Conservatives understand that giving to charity is a good in itself and doesn’t require that everyone else join in the giving to the same cause. Fairness to themselves doesn’t enter into it: their concern is helping those in need.

    So the liberal outrage stems from their resentment that conservatives aren’t forcing them to do the right thing.

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    @flownover

    Hey people koolaid tastes good because it’s half sugar , these democrats would be crunching on kitten wings with honey BBQ if they were told to. lame duck politics are so lame and predictable save your powder things are just warming up

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    @Maurilius

    After the extensive coverage of and claims about how cooperative Obama was with all sides of a debate, and his, *cough*, extensive record of doing so in his career, it has become clear that for Obama, to his core, “reaching across the aisle” means only one thing:

    Talking the other side into voting for what you want.

    I am starting to suspect that he didn’t meet with the minority leader for a year and a half, or bother to talk to the Republicans about health care until after bills had passed both houses, because he really thought he didn’t need to. He was crafting perfect bills they would be happy to pass, therefore he was being a good bi-partisan President.

    It never occurred to him, and only seems to be dawning now, that cooperation and bi-partisanship might actually mean he has to sign up for stuff he’s not thrilled with. It’s amazing for a theoretically mature person to be so bitter about political compromises that are absolutely standard and would just be assumed to be the cost of doing business by any experienced administration.

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    @CaptAubrey

    I’m not sure when I took the measure of Dennis Hastert and the rest of the Republican leadership who dropped the ball on spending but disillusionment set in. Democrats,especially the most liberal, might be going through a different sort of disillusion because they actually got a lot of their “agenda” the rules do not permit me to use the scatological term it deserves, but now they have to deal with the fact that not only does the ignorant patient not like his medicine, the medicine does not work. They will never admit the later publicly but it has to be gnawing at them.

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    @PaulDeRocco
    Kenneth: Honestly, I just don’t get it. What is it about some people that makes them so flaming angry at the idea of government not confiscating more of someone else’s money?

    I don’t get it, either. Had the rates gone up, we’d be entitled to be mad, because that would be a substantial change from the status quo. But merely preserving the status quo for another two years isn’t anything to go nuclear over–unless you’re the kind of person who enjoys throwing a fit.

    • #15
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    @PaulDeRocco

    Another thing I’d like to point out is about language: quite a few posts here unselfconsciously refer to “extending the Bush tax cuts”. A “cut” (or an “increase”) is an event that happens at a particular time. The cuts in question occured, what, seven years ago? They’re in the history books. There are no tax cuts on the table. To continue to refer to the current rates as tax cuts is to acquiesce in the idea that they are arguably lower than they’re supposed to be, and that we’re trying to hold them down against some force of nature. In reality, the bone of contention is whether or not there will be Obama Tax Increases or not.

    I really hate the Orwellian misuse of language, but to insist that the present issue is about a possible tax increase is not a misuse of language, it is the most accurate, least tendentious, way of describing the situation. To try to frame this as being about “tax cuts for the rich” is doublespeak at its most paradigmatic.

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    @StuartCreque
    Paul DeRocco

    I don’t get it, either. Had the rates gone up, we’d be entitled to be mad, because that would be a substantial change from the status quo. But merely preserving the status quo for another two years isn’t anything to go nuclear over–unless you’re the kind of person who enjoys throwing a fit. · Dec 6 at 7:17pm

    They were counting on taking that money. They’d already spent it — not just in their imaginations, they’d really already spent it. And they’re spitting mad that the economy refused to get better despite the Democrats’ perfect execution of the perfect recovery plan (must have been a Republican plot to sabotage the stimulus, they think).

    And as you inferred, they’ve been watching the calendar, waiting for the temporary downward distortion of tax rates to correct itself. It kills them to see that distortion extended — to have to press the “snooze button” on the tax increase alarm clock.

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    @FuneralGuy

    I got the impression from watching the tax deal announcement that Obama is finding that this whole president business is just no fun anymore and certainly not what it was cracked up to be.

    Don’t worry, Mr. President, we’re also realizing that you’re just no fun anymore.

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    @ScottR

    We aren’t going to change the world in the next two years. Our goals are damage control and table-setting for 2012. That prize is the potential world-changer.

    So pragmatically speaking, we scored a great victory–the very best we could expect under the circumstances. The tax cuts now become the gift that keeps on giving: they helped us in 2010; they’ll help again in 2012; all while being, in effect, permanent.

    The unemployment extension–again, pragmatically speaking–will skew unemployment figures higher (not necessarily real unemployment, mind you, just the figures, since many are already working under the table), which will further hurt Obama’s reelection efforts. Hate to be cynical, but there it is.

    The whole situation is an “own goal” for Dems. I’d be pissed, too, if I were a lib.

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    @DanHolmes
    Kenneth: Honestly, I just don’t get it. What is it about some people that makes them so flaming angry at the idea of government not confiscating more of someone else’s money? · Dec 6 at 5:55pm

    Three possibilities:

    Class envy.

    Failure to recognize that the economy is not a zero-sum situation.

    Rather than aspiring to be one of “the rich,” they would rather feel good about sticking it to the man.

    All kinda related, come to think of it.

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    @JohnDavey

    Mr. Potter?

    I don’t think we’re in Bedford Falls anymore Toto/Clarence Odbody.

    Mostly I’m disappointed that the People elected in 2010 to tame this beast have absolutely no say in this turn of events. It will be tied to them though as the Obama Tax Deal of 2010.

    • #21
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    @Sisyphus

     

    Kenneth: Sort of off-topic, but when did everyone in Washington start talking about 10-year “costs” of everything? 

    If memory serves, the first time I heard that was during the original debates over the Bush tax cuts.  I believe it was a Democrat tactic to throw out a big, outrageous number: “Bush is giving $500 billion to the richest two percent!”.

    Whether you’re talking revenue or spending, saying you can predict the fiscal effect of policy over ten years is bunkum.  · Dec 6 at 5:18pm

    This technique dates back at least as far as Reagan’s first term. The Dem calculation for any variance from the baseline started with increase projections already built in to the baseline budget, then in any particular instance added on increases favored by the most spendthrift participants in the discussion, and from that very inflated and speculative number, whatever spending level the Reagan budget proposed was a slashing that would threaten and irrevocably damage our great nation. In most cases they were proposing a reduction in growth, usually from baselines established under Carter. The numbers were pushed out as many years as possible to make the “cuts” look as big as possible.

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    @Johnmark7

    Reps are idiots. They never ask the socialist Dems, “who’s entitled to my money?”

    I watch O’Reilly or Hannity and they never, point blank, demand that LIbs answer that question. Who’s money is it? Is it mine or the government’s? And what is government for, exactly? Please explain its purpose as opposed to what we know George Washington’s purpose in creating it was.

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    @PaulDeRocco
    Stuart Creque

    And as you inferred, they’ve been watching the calendar, waiting for the temporary downward distortion of tax rates to correct itself. It kills them to see that distortion extended — to have to press the “snooze button” on the tax increase alarm clock.

    The Bush tax-cuts-for-the-rich canceled Clinton’s ten percent “surtax” which had raised the top rate from 36% to 39.6%. The libs who regard the current 35% rate as justifiably temporary need to be reminded that 3.6 out of those 4.6 points were originally temporary in the other direction.

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