“Should any political party attempt to abolish social security, unemployment insurance, and eliminate labor laws, you would not hear of that party again… There is a tiny splinter group that believes you can do these things. Among them are… a few Texas oil millionaires… Their number is negligible and they are stupid.” Dwight Eisenhower, in a letter to his brother Edgar, 2 May 1956

“The tax system we now have,” [then-Treasury secretary Don Regan] told Reagan, according to [Lou] Cannon [in President Reagan], “is designed to make the avoidance of taxes easy for the rich and has the effect of making it almost impossible for people who work for wages and salaries to do the same.”�

Meanwhile, of course, W. is designing a tax system that makes avoiding taxes not only easy, but matter-of-fact for rich folks with paper profits, while shifting the entire tax burden onto us working stiffs. As ridiculous as the B4B chant of “Tax Work, Not Wealth!” sounds on the face of it, it’s astonishing that not only do people believe that, but that they have the gall to foist such an ugly system upon us.

As Brookings/Urban notes: “Recent tax cuts and current proposals do not move the system toward a well-designed consumption tax or a well-designed wage tax. Instead, tax policy and proposals in the Bush administration move the tax system toward a wage tax that is imposed only on low- and middle-income households, because upper-income households would be able to take disproportionate advantage of the fact that capital income would be increasingly exempt from taxation, but interest payments would still be tax deductible.”

(The quote comes from Jonathan Chait’s article on “tax reform” in the current The New Republic.)

The redistribution of anti-terrorism funds creates a twisted spectacle: cities falling over themselves with quasi-boosterish language of “pick me, pick me, I’m a good target for the next attack!” Quotes from local officials, collected in a story in today’s NYT:

New York: “We’ve been protecting the nation’s financial and communications center on our own dime. It’s a national responsibility.”
Washington: “We are the face of the United States, one of the most visible centers of government power and strength.”
Memphis: “We are at the crossroads of America, for cars, for trains, for river traffic. We are a prime location, a prime target, any way you look at it.”

True, the 2000 election’s mass coverage of red states, blue states, and Green Party may have oversimplified matters, but the literal blossoming of color in American politics may stick in the lexicon. Triumphant blue-state liberals in Oregon have BlueOregon, and the “dog” coalitions of the Democratic party have gained new currency. Yellow dogs, those old Southern creatures, have largely disappeared from speech, and their Blue Dog opponents are threatened both by the identification of blue with liberalism and by their own inability to compete within a more polarized system. Meanwhile, two competing uses of Green Dog have arisen: progressives fond of the “green” have claimed the term, while at least one wag likes its blend of yellow and blue.

I brought a stack of post-election papers to read on the plane. Some highlights:

The New Republic, 29 November:

…the neoconservatives and their fellow traveler liberal hawks have yet to come clean with the American people about the potential costs of democratizing and liberalizing the Arab world — in lives, dollars, civil liberties, and cultural freedoms. They have yet to come clean about the likelihood of a general draft and the possibility that many thousands of young men and women in Generation Y will die for the baby-boomers’ crusade. They have yet to come clean with the already struggling, indebted Generation X, which will see its taxes rise to pay for the multitrillion-dollar cost of the wars (on top of the already $50 trillion-plus shortfall for boomer entitlements). They have yet to come clean with all generations of Americans about the inevitability of further erosions of our civil liberties and freedoms of expression. And they have yet to come clean about the full costs of a U.S. empire. Kenneth Hempel, Nevada City, Calif.; letter

The Financial Times, 5 November:

“If I had one wish for US policy in the next four years it would be a steep rise in taxes on petrol. It would promote cleaner air, reduce global warming, help cut the budget deficit and diminish political dependence on the Middle East. Any one of these benefits would be sufficient to justify a big increase in petrol prices. Taken together the case is overwhelming. A prescription of required treatment is helpful even when early implentation is unlikely.” Samuel Brittan, commentary

Nice to know that someone else besides the now-sacked Greg Mankiw is willing to go on the record for the most obvious policy panacea of our time. (Update 5 Dec: or, as Friedman quotes Michael Mandelbaum from Hopkins on energy independence: “This is not just a win-win. This is a win-win-win-win-win.”)

The US now needs $2.5bn of capital inflows daily to fund its domestic savings shortfall. I would hope our international bankers did not expect us to pay this back without letting the dollar go lower against other currencies. The only decisive result in the Bush victory is the absolute certainty that the president will not admit the economic imbalances our country faces. Paul Corrigan, letter

So, we Americans are outliving our means to the tune of almost $9 per person per day. Charming.

As the extent of Republican victory sinks in, corporate America is realising that it has not only escaped a series of Democrat threats to its freedom but that it enjoys the prospect of driving through reforms it could only dream of in George W. Bush’s first term.
Quite apart from the short-term correction in share prices that caught attention on Wednesday, an air of euphoria has begun to creep into boardrooms and Washington’s lobby offices, tempered only by the recognition that there is a lot to cram in…
Thomas Reynolds, who chaired the Republican congressional campaign committee, was asked on Wednesday whether the Republican party needed to be careful not to overplay its hand. “No, I think there’s green lights in America,” he said…
But with the re-election of Mr Bush and the Republicans’ increased control over Congress after Tuesday’s elections, both business lobbyists and their opponents say the next four years could tilt the political landscape in favour of corporate America more dramatically than at any period in modern US history.
Industries as diverse as manufacturing, financial services, energy, healthcare, and pharmaceuticals are hoping to see the passage of measures that have repeatedly been blocked by the Democrats, particularly in the Senate.
“This is about as good as it might ever get for any of these industries,” says Charles Lewis of the Center for Public Integrity… “This is really nirvana for these folks…”
“Business has invested a lot of money in the Republicans, and really wants the payback,” says [Joan] Claybrook, [president of Public Citizen].Dan Roberts & Edward Alden, “Foot to the pedal: US business expects a clear run from a second Bush term”

Given all this, it’s no wonder at least one columnist mentioned the serious potential of a human capital drain from the US. Some are already betting on it.

I’ve found some truly strange things on the sidewalk in front of my apartment: half-full bottles of Cabernet, hoboes peeing, lost children, foreign coins, even an Ann Taylor suit once. But nothing has been so strange as the following paper — right on the heels of a similar memo leaked to a newsmagazine just a few blocks away. Herewith:

Date: 5 November 2004
From: C. Bill Press
To: Billionaires for Bush, Chicago & Milwaukee
Re: Huzzah — but Billionaires will not rest!

My fellow Lake Michigan Billionaires,

Just hours after our selection committee made its announcement, Georgie turned around and reaffirmed that OUR priorities are HIS priorities, and that he will go to no length to expend “political capital” on Billionaires’ behalf!

Now, we all enjoy having plenty of all sorts of capital at our disposal, but my, political capital may very well be the finest sort of capital. And never before have Billionaires had access to such generous quantities of it: the entire federal government stacked with our cronies, plus a “mandate” secured by millions of gullible plebeians. Indeed, “tax simplification,” “reining in runaway lawsuits,” and”saving Social Security” are among W’s top priorities, on which he has pledged to “move quickly.” And our minions down on Wall Street are already banking on lighter regulations and ever more “trickle down”: tobacco, oil, weapons, insurance, pharma, brokerage, and luxury-retail stocks all skyrocketed this week. Huzzahs indeed!

We Billionaires will be richly rewarded over the next four years, but I also have spied rumors in the papers about “resisting” or “obstructing” our, er, George’s divine plans to enrich the rich. This is just incomprehensible, in the face of our overwhelming victory and divine birthrights. We shall make those class-traitor Democrats learn once and for all that Billionaires will stop at nothing, absolutely nothing, to secure the blessings of greater wealth.

We shall not rest until we can confidently look our children in the eye and assure them that the twin bogeymen of Inheritance and Income Tax have been slayed at last; until tankers filled with sweet Iranian crude steam their way past our Bermudan tax shelters en route to my Jersey refineries; until my lawyers can file counter-suits against those who dare sue me with tales of so-called pain and suffering.

If necessary to secure these goals, I call upon you (and your handmaidens, houseboys, butlers, servants, lackeys, and assorted others at your service) to remain vigilant and on call over the next few years. We shall win these battles (as we always do), but it is not yet time to rest on our laurels or hang up our hats. The impressive and unprecedented mobilization of formerly secretive Billionaires over the past few months was absolutely crucial in this latest victory, and further mobilization may be necessary in the months to come.

A new day of opportunity awaits us, but a few last trials may stand in the way. Please have your secretary contact me if I can count on your continued support in the months ahead. Our fortunes literally depend on it.

Yours in wealth,
C. Bill

$$$

CBP/pc

What. Does. It. Mean. ?.

A smattering of thoughts on the election returns:

– Everyone’s mentioning the fact that the Republicans will now get to completely solidify their control of the courts–having stocked the lower courts full of judges, they’ll now get their chance at the High Court and thus ensure conservative interpretations of the law for another generation. What’s equally frightening to me about the administration staying in Bush’s hands are its control of the federal budget and of the bureaucracy.

– Another common trope in the immediate mourning is that “now the Republicans will have to own the inevitable crash.” I wouldn’t be so sure; I never underestimate politicians’ ability to pass the buck. W managed to blame Clinton for the economy in the presidential debates, and Daschle lost his seat for being “obstructionist”–i.e., playing the role of the minority party in government.

– In the end, the militant counterrevolutionaries, er, Republicans are still on the losing side of history no matter how they turn. Turnout this year was fevered in the exurbs and rural areas, pumped up in many states by anti-gay marriage ballot initiatives or by “friends and family” networks in evangelical megachurches. As others have pointed out, gay marriage initiatives are a one-off bonus; it can’t be banned multiple times. Further, most of today’s young voters think gay marriage is okay; in 20 years, it will be largely a non-issue.

Geographically, exurban areas have highest population growth but start from a small base; rural areas may be growing slightly but again account for a small proportion of the nation’s population (albeit a large proportion in many states). Meanwhile, as Teixeira and Judis point out, some of nation’s highest population growth areas (particularly in the southwest) are in areas trending Democratic, while inner suburbs are sharply trending Democratic and Dem margins in cities are widening. Orange County, California is one example: population growth in south OC is being offset by the wholesale conversion of its older, northern end to a satellite of multiethnic, heavily Democratic Los Angeles.

– If our country is divided halfway between cultural conservatives and “liberal elites,” why is it that they get to own the “American” label? Left Center Left has a trenchant analysis on how Bourdieu can inform the divide: we the cosmopolitans have “stakes in the status game,” while those outside resent both their loss of status under the shift to cultural capitalism (after all, geography is worth mega bonus cultural points, placing red-staters at a huge disadvantage) and, by extension, the entire system — and thus view as alien and foreign anyone who bothers to play the system.

– Can I mention again how utterly stupid the Health Savings Account is? The high deductible of the HSA has no exceptions, which provides an incentive to consume zero health services, but no incentive to wisely choose the health services one will inevitably consume. The High Deductible Health Plans (HDHPs) associated with HSAs (under law!) have no mechanism to even begin to offer these incentives — and, as a result, preliminary studies have shown that consumers just cut costs with an axe by simply not going to the doctor, ever. The meddlesome middlemen of HMOs, whatever their faults, almost always rewarded preventive medicine with financial incentives like lower co-pays. Markets are imperfect, and the market for medical care is even more so;doctors don’t exactly post prices on the door, and when one really needs a doctor, one’s usually not in a position to inquire about prices first. In these cases, I want a meddlesome bureaucrat to sort through the system for me — and I trust government bureaucrats more than insurance industry bureaucrats.

I spent several years of my childhood with health insurance from Kaiser Permanente, which is about as close to socialized medicine as is possible in America. (You go to Kaiser hospitals, wait long whiles in Kaiser waiting rooms, use a Kaiser ID card, make appointments far in advance, etc.) And yet I remember that it worked just fine: the few times I really needed care, like the time I stumbled in with a broken bone after a bike accident, I got good humored care without any hassles. And now I read in the Times: “Kaiser has a different setup with different incentives. It emphasizes preventive care and managing chronic diseases like heart disease and diabetes to keep people healthier. And that saves money because healthier people require less costly care like hospitalization.” Gee, funny that: different incentives (not strictly price incentives!) result in better care with lower costs.

– Matt Miller on KCRW’s “Left, Right & Center” has a good closing thought: liberals have seen ten lost years, from 1994 to 2004. This is obviously the moment to assess how we demonstrate that progressive goals can stregnthen American values.

What happened? Couldn’t have expected it, but I feel like Election Night 2002, squared. Yesterday’s Republican stranglehold remains, only given a stronger mandate after a long record of running from the far right. All that time and energy and money and hope simply wasted.* Instead of changing horses mid-apocalypse, we’re charging into it even faster.

As Michelle Cottle writes over at TNR:

Good Lord. Are these guys really going to behave as though they didn’t just survive a down-to-the-wire squeaker against a seriously mediocre challenger?… [T]his isn’t some Reaganesque landslide. And gloating conservatives would do well to keep in mind that an impressive number of Americans also turned out to vote against this insufferable administration.

Knowing this White House, the tendency to become even more arrogant will be overwhelming (especially with the Senate even more solidly red). But for once in his life, it would be nice for W. to show a little humility and graciousnes for the sake of the republic. The country is raw.

It’s at times like this that I wish I were religious–I’m at a loss for a belief system that could help me to comprehend the feelings of fear and pain and helplessness that come from watching a quasi-Fascist (militarist, corporatist, totalitarian, idolatrous, jingoist, rightist, arrogant) tide sweep over the land. God save us, indeed.

* yes, Kerry seems to have won Wisconsin by a hair, but every ward I worked in Fond du Lac went for Bush by big margins — even the ramshackle precincts down by the river.

but a roundup of points Kerry failed to make tonight:
– Bush provided a great opening on drug reimportation by referencing “working with Canada” on the flu vaccine. Yes, Kerry eventually got to reimportation, but not right when it counted.
– On the deficit, Bush “has a plan” but has never referenced exactly what it is; instead, he’s just attacked Kerry’s plan (which we’ve gone over before). Kerry should point out that Bush’s “plan” involves draconian 80% cuts in almost every government service known to mankind.
– To counter Bush’s warm words on education, roll out what Howard Dean called “the Bush tax”: the cuts in education and services and hikes in state taxes and fees (most especially college tuition). Where the feds have expanded programs by a bit, the states have already pulled out the rug — and Bush, instead of offering revenue sharing, again chose tax cuts for the rich.
– “98 times” is just wrong. Just call him out on “fuzzy math” and point out a few ways in which it double-counts votes.
– The “marriage protection amendment” does nothing of the sort. It’s an attempt to create a wedge issue, plain and simple, since this nonsense about state courts forcing other states to accept marriages is just silly.
– “Activist judges” is another right-wing trope. Didn’t Bush land his job thanks to some activist judges?
– Bush is bringing up the same old “compassionate conservative” tropes he did in 2000, only now he’s had four years to not act on them. Great opening to talk about the divisiveness, like…
– Much of the post-2001 divisiveness stems from Bush’s rush to war in Iraq and other actions from the administration. Kerry was right to pin the blame on the House leadership, but the President’s arrogance is more fundamentally at fault.
– HSAs are simply bad policy: “market reforms” for health care services don’t make sense, since health care is almost the definition of a market riddled with imperfect information. (If I had perfect information about health care, what use would I have for a doctor?) Besides, HSAs undermine the entire premise of health insurance — to spread the risks, to encourage preventive care, and to reduce costs for the poor — while opening up a huge new tax break for the rich. I know it’s not at all sound-bite-able, but someone has to make a cogent critique of these before they become too common.

A nice quote from Barack Obama on Bush, from a speech given to a crowd in Wisconsin (?): “I mean, it’s one thing that somebody’s wrong and they know they’re wrong. Or it’s one thing if they’re arrogant but they’re right all the time. But when they’re arrogant and wrong all the time, that’s a problem.” [WaPo]

The Wall Street Journal asks, “Whatever happened to campaign buttons?” The answer has something to do with television, sure, but also with offset printing (which made stickers much easier to give out) and perhaps with the decline of walking in general. Bumper stickers and yard signs still get noticed in an automotive culture, but who notices buttons?

Two articles this week underline the Bush administration’s ridiculous (but relentless) focus on one kind of security.

Salon has run a lovely essay by John Brady Kiesling, appealing to the “security mom’s” sense of civic duty. The daily security threat to average Americans is vastly overrated, but the scary world that the Homeland Security Department hypes up is nearer at hand every day because we Americans are neglecting our own homeland. Some excerpts:

Keeping a country or a community going is hard work, just as the president said. You knew without question why that work was necessary. There is nothing on earth more precious than our children and their future. Children do not raise themselves. They need a family and a community, they need values, and they need protection from the dangers of a dangerous world.

Because of you, the city council built sidewalks and fixed the playground and hired the crossing guard. Because of you the school didn’t lay off teachers or close down the library when the budget crunch hit. You raised money, reached out to your friends to help you, fought when you needed to fight. You complained about the dangerous potholes and the drug dealers. And you found the time and money needed to give your kids the chance to succeed: Sunday school, music lessons, soccer practice, the sacrifices required to put kids on the track to happiness as good citizens…

America used to be the biggest, bravest, most responsible kid on the international playground, the natural leader. But nothing we diplomats said or did could stop the erosion of that leadership after 2001. We were still the biggest, but suddenly also the meanest. We tell our kids they have to stand up to schoolyard bullies. That’s what our foreign friends tell their kids too, and currently they’re talking about standing up to us. This is not good for us, and it’s not good for the world.

President Bush is strong, his speechwriters maintain, because he does not shrink from sending American soldiers to die. It may seem strange to you, but it takes little political courage to send American soldiers to war. Americans have never turned down a president who invited them to battle.

True moral courage recognizes that there is no automatic connection between killing foreigners and defeating America’s enemies… What moral courage has President Bush shown? He never vetoed a single piece of legislation, never said no to a spending bill, never fired anyone…

Deficits don’t matter, Vice President Cheney said. But your kids are going to spend the rest of their lives paying back, with interest, the money we are borrowing from our Chinese friends to make up for this government’s extravagance. President Bush says he won’t give foreigners a veto over U.S. security. But he already has. All they have to do is stop buying our Treasury bills.

Oil has hit more than $50 a barrel. Two billion Chinese and Indians intend to drive cars the way we do, and it isn’t going to get better. The rest of the world saw this coming and is investing in renewable energy and conservation. I can’t figure out what the president has in mind besides praying that our buddies in Venezuela and Nigeria and Saudi Arabia keep pumping. We can get only six months’ worth of oil by opening up Alaska’s remaining wilderness to Exxon. Better than nothing, I suppose, but six months isn’t a long time in your kids’ life.

Sorry, Soccer, oops, Security Mom. I’ve spent a career agonizing about America’s security and I can’t keep quiet when danger looms. Be an economic security mom. Be an energy security mom. Be an environmental security mom. Fight for better schools, for child care and healthcare and jobs. Those are the threats facing your children, and those are threats we can do something about.

Meanwhile, Thomas Friedman points out in the Times that the administration has made a tremendous opportunity cost: allowing gas prices to spiral up without demanding that Washington get a share. A truly forward thinking president would have demanded (and won) a major gas tax (“oil independence”) increase in 2001, preparing the US for an era of $50/barrel oil while raising incredible revenues in the meantime. Major investments in infrastructure — or even reduced deficits — would leave our nation more resilient to energy and monetary crises in the years ahead. (Indeed, US economic growth is slowing as interest rates and oil prices rise. An economy less dependent on oil prices could have saved or invested more, thus lessening the impact of both on the larger economic picture.)

Of all the shortsighted policies of President Bush and Vice President Dick Cheney, none have been worse than their opposition to energy conservation and a gasoline tax. If we had imposed a new gasoline tax after 9/11, demand would have been dampened and gas today would probably still be $2 a gallon. But instead of the extra dollar going to Saudi Arabia — where it ends up with mullahs who build madrasas that preach intolerance — that dollar would have gone to our own Treasury to pay down our own deficit and finance our own schools. In fact, the Bush energy policy should be called No Mullah Left Behind.

Our own No Child Left Behind program has not been fully financed because the tax revenue is not there. But thanks to the Bush-Cheney energy policy, No Mullah Left Behind has been fully financed and is now the gift that keeps on giving: terrorism…

Building a decent Iraq is necessary to help reverse such trends, but it is not sufficient. We need a much more comprehensive approach, particularly if we fail in Iraq. The Bush team does not offer one. It has treated the Arab-Israeli issue with benign neglect, failed to find any way to communicate with the Arab world and adopted an energy policy that is supporting the worst Arab oil regimes and the worst trends. Phil Verleger, one of the nation’s top energy consultants and a longtime advocate of a gas tax, puts it succinctly: “U.S. energy policy today is in support of terrorism — not the war on terrorism.”

The Arab-Muslim world is in a must-change human development crisis, “but oil is like a narcotic that kills a lot of the pain for them and prevents real change,” says David Rothkopf, a visiting scholar at the Carnegie Endowment for International Peace.

Where is all the innovation in the Arab world today? In the places with little or no oil: Bahrain is working on labor reform, just signed a free-trade agreement with the U.S. and held the first elections in the Arab gulf, allowing women to run and vote. Dubai has made itself into a regional service center. And Jordan has a free-trade agreement with the U.S. and is trying to transform itself into a knowledge economy. Who is paralyzed or rolling back reforms? Saudi Arabia, Syria and Iran, all now awash in oil money.