What if the Two Parties were Alike?

Jonathan Chait asks this question and envisions an era of unprecedented partisan warfare unseen since before the Civil War.

In 2006, Democrats won a landslide victory at the polls, sweeping to majorities in both houses of Congress. And then, the Democrats proceeded to do … hardly anything at all. Their agenda consisted mainly of halting George W. Bush’s domestic agenda. Even on the Iraq war, the unpopularity of which fueled the Democratic wave, the party did not make a serious effort to defund the campaign. Ultimately, Democrats funded a troop surge.

The rough equivalent would be if Republicans this year wound up expanding the Affordable Care Act to cover illegal immigrants. (To make the parallel between 2007 and the present more exact, we’d have to imagine that Republicans control the entire Congress, not just half, and that President Obama has lost about a quarter of his current popularity.) This scenario, of course, is unimaginable.

What are we to make of the contrast? One conclusion is that the GOP is the more disciplined, parliamentary party. I’ve made this case myself. But that is not the only implication, or the most disturbing. Why didn’t the Democratic Congress behave under Bush like the Republican-controlled House has behaved under Obama? Why didn’t it simply refuse to fund the Iraq war or to threaten financial cataclysm by holding the debt ceiling hostage unless Bush, say, raised taxes for the rich?

Democrats will have learned from history. It will not be pretty.

Partisan Hackery on Magnificent Display

I read USA Today. Every day. In this morning's paper the editors published a very good op-ed entitled What would Reagan do? Not what today's GOP is doing.
The basic point of the article is that Reagan had a proven track record of compromising with Democrats and raising taxes when necessary on several occasions. He even decried threats to not raise the debt limit. All of this stuff is a matter of historical record and can easily be checked.

As is their custom, the paper offered the opportunity for an opposing viewpoint. They got one from Lee Edwards, a fellow at the Heritage Foundation and author of The Essential Ronald Reagan. Since the facts cited by USA Today are indisputable, I was curious to read what Edwards would offer in rebuttal.

His approach was pretty simple: ignore the USA Today article, botch some statistics, and misstate some data--a more confrontational person would accuse him of lying, but that's not my style. Quoting from his response:

Reagan raised the debt ceiling some 18 times because he was confident that in the long run, his program would create jobs and substantially increase government revenues as they did, nearly doubling between 1980 and 1990.

This is the same type of mendacity (whoops, I should watch my civility) that I complained about with Joe Scarborough and Jim DeMint. Edwards cites meaningless raw numbers that indeed show that revenues increased from $517 billion to slightly over $1 trillion in the 1980s, nearly doubling. However, if you simply index the numbers to inflation, which was much higher in the 80s than it is now, the increase is from $1.2 trillion to $1.5 trillion in constant 1985 dollars, an increase of only 26%. An even better metric is to look at revenues as a percentage of GDP. In 1980 they were 21%. The figure in 1990? 19%. In other words, the data shows exactly the opposite of what Edwards claims of them. Reagan's policies lowered, not raised, the amount of revenue the government collected compared to the size of the economy.

Next, he claims the following.

The act (Regan's tax cuts) produced 92 months of economic growth--the longest period of peacetime economic growth in the post-WWII period--and 17 million new jobs in the Reagan presidency. 

The 92 months he refers to is from the 2nd quarter of 1982 through the 3rd quarter of 1990. The government doesn't publish monthly GDP data. It provides quarterly data. The quarters both before and after this period saw a substantial decrease in growth. After a drop in growth in the 4th quarter of 1990, the U.S. did not experience a single quarter in which growth fell until the 2008 calamity, a period of 28 years! This is a substantially longer period of uninterrupted growth than the 92-month figure quoted by Edwards. Furthermore, in the Clinton administration alone more than 22 million jobs were created, again substantially outpacing the jobs-growth figure of the Reagan years. This performance occurred after Bush I and Clinton raised marginal tax rates on the wealthy, something Heritage Foundation fellows do not typically mention.

Finally,

Here at home, by the end of the Reagan presidency, the federal deficit as a share of GDP had fallen from 6.3% in 1983 to 2.9% in 1989.

Notice, he is aware of the % of GDP data. He just cites it selectively only when it supports his overall point and ignores it when it doesn't. Since the earlier statistic Edwards cited about government revenues compared 1980 to 1990, you might wonder why this statistic compares 1983 to 1989? He picks 1983 as his baseline (two years into the Reagan presidency) because the deficit was artificially high due to the deep recession the country was in. If you instead use as your baseline 1981, the year Reagan was inaugurated, the deficit as a % of GDP was 2.8%. And when he left office in 1989? It was 3.0%.

And what does Edwards have to say about the points made in the USA Today editorial regarding Reagan's willingness to compromise and to raise taxes when necessary that he was presumably rebutting? Nothing. He simply ignores them.

This is partisan hackery at its highest level.

What is our Political System Really Like?

I sometimes think that everything you need to know about our political system, present and past, is revealed in Monty Python's The Life of Brian. I used to think it was a comedy. Now it seems more like a documentary.

For example, what has the liberal state done for us?

 Or, how does Congress go about doing the people's business?

Finally, how should we understand the various factions within the new conservative movement?

DeMint on Spending and Taxes

To follow-up on the Scarborough post, Jim DeMint (R-South Carolina) makes the following argument in USA Today for a spending reduction-only solution to the deficit.

In the the 8 years since 2003, our debt has risen nearly $8 trillion. Lack of tax revenue? No. Tax revenues have risen 20% since 2003. Yet, over that time, spending has risen a reckless 60%.

First, you could, as he does, describe this as too much spending. You could just as well describe this as evidence of Congress 's unwillingness to raise enough revenue to pay for its spending priorities.
Second, he makes it sound as if there has been a steady, relentless rise in spending since 2003. However, the great majority of this increased spending is a direct result of the financial crisis, over which Republicans seem to suffer amnesia. The GOP want to leave the impression that Obama's policies have somehow led to massive amounts of new spending. The stimulus provided less than $500 billion in new spending spread out over three years ($300 billion was in tax cuts). From 2007 to 2009 the deficit exploded from $160 billion to $1.4 trillion. If you remove the stimulus, in 2009 the deficit still would have been over $1.2 trillion.
Third, why select 2003 as the baseline? He does this to divert attention from the budgetary consequences of the two Bush tax cuts, the Medicare prescription drug benefit, and the Iraq War all of which the GOP supported and which cumulatively had a much, much larger impact on the deficit the the 2009 stimulus. If you instead take 2000 as your baseline, the last year before GOP policies began affecting the budget, you get a very different picture.
Fourth, and most importantly, DeMint uses the same dodge that Scarborough did. He looks at raw numbers instead of looking at the numbers relative to the size of the economy. In 2003 taxes as a percentage of GDP were just over 16%. In 2010, they were under 15%. Perhaps we do have revenue problem after all? It gets even worse if you take 2000 as your baseline. In that year taxes were over 20% of GDP. In fact, since 2000 taxes have dropped as a percentage of GDP by about 6% and spending has increased by about 7%.
This is precisely why you need a balanced approach to address this problem. The genesis of the problem is equally balanced.

Scarborough on the GOP and Taxes

Joe Scarborough thinks that the media is being mean to Republicans because commentators have described the GOP’s intransigence on taxes as part of raising the debt limit and reaching a larger deficit reduction deal. Richard Cohen says that the GOP “has become a political cult”. The New Republic’s Jonathan Chait describes tea party conservatives as the party’s “Hezbollah wing.” Even David Brooks describes the GOP’s attitude towards taxation as having “no sense of moral decency.”

Scarborough is outraged by this. Why? Well, he thinks that these same columnists have not been as hard on Democrats. This betrays that weird Washington-only attitude that fairness demands that you must always treat both parties exactly the same in all instances. More importantly, he attempts to make the substantive point that Republicans are being savaged in the media because they “dare to stand athwart history and growl “not this time.”” In other words, the GOP is actually doing something praiseworthy and simply do not deserve the abuse. What are their virtues? There seem to be two. First:

For 50 years, the federal government has grown at a sickening rate. Whether Republicans or Democrats run the White House, Washington’s establishment always gets its way — bigger budgets, bigger deficits and higher taxes.

In 1980, the annual budget was $590.9 billion. By the beginning of the next decade, the yearly budget was $1.253 trillion. In 2000, the budget was up to $1.789 trillion in annual outlays, and by 2010, it was up to $3.456 trillion. After a decade of Obama’s budgets, the CBO projects our annual budget will explode to $5.451 trillion in 2020.

Whenever I read stuff like this it reminds me of Sean’s Connery’s admonition to an enemy in The Untouchables: “Always brings a knife to a gun fight.” I am hard-pressed to recall an instance in recent years in which statements on economic policy by prominent Republicans fails to make them sound economically illiterate. Responding to their mind-numbing repetition of half-truths, partisan slogans, basic misconceptions, and misleading statistics is just too easy.

This passage by Scarborough is an excellent example. He bemoans the runaway spending by pointing out that the budget has grown from $591 billion in 1980 to nearly $3.5 trillion in 2010! But this is an almost childish comparison. Of course, the budget gets bigger as the years progress. This happens because the economy gets bigger, the population increases, and inflation, well, inflates the numbers. The only meaningful measure of the size of the government budget is to view it as a percentage of GDP. In 2007, the last year before the catastrophic effects of the financial crisis, the federal budget was 19.6% of GDP. And what was it in 1980? 22.2%. Not so "sickening", is it? True, in 2010 at 25.4% it is at a post WWII high. But this is almost entirely due to the effects of the financial crisis. GDP is depressed and spending on budget items that always go up in bad times—unemployment insurance, food stamps, Medicaid, etc.—have drastically increased. When the economy recovers, spending will no doubt return to more normal post-war levels.

I honestly cannot know if Scarborough is economically illiterate or just makes witless arguments like this because they are the only tools he has when trying to defend the indefensible. Either he is a partisan hack or staggeringly uninformed. I can’t think of a third option.

Scarborough’s second defense of current GOP attitude towards taxation is captured in this passage:

As media types blast away at their barbaric Republican opponents, it is worth noting that just last year the GOP won the largest nationwide landslide victory in modern history based in large part on its pledge to oppose tax increases. Over 230 members of the House signed the no-tax pledge while 40-plus Senate members also signed to oppose tax increases.

The GOP have been unfairly criticized because they are only doing what they said they were elected to do—adhere to Grover Norquist’s no-tax pledge. But this is a strange defense of a policy. Pledging not to raise taxes under any circumstances is precisely the fanatical pathology that Brooks, Chait, and Cohen were lambasting. To defend their doing so absent any substantive defense of the policy itself but only because they promised they would do it is like defending the mafia hit man because he faithfully follows the Cosa Nostra code. The important issue is not faithfulness to a code or practice, but rather the practice itself. Is it defensible?

Scarborough ends his essay with a passage that makes me think that not only does he not understand elementary economic data, he doesn’t even understand the dynamics of the party he defends.

That doesn’t mean a grand bargain is out of reach this session of Congress. If Obama moves forward with specific cuts on entitlement programs and Pentagon expenses, Republicans must work aggressively to close loopholes that favor billionaires and multinational corporations. I am quite confident that even tea party members would be fine with Warren Buffett paying more than a 14 percent income tax rate and would be happy to see the world’s largest corporation, GE, pay more in taxes than their own household.

The proposals he mentions: to cut the military budget, to close loopholes that favor the wealthy, and to end the preferential treatment of investment income over wage income are precisely the sort of things that the GOP has vowed not to do. Warren Buffett pays an absurdly low tax rate because capital gains and stock dividends are taxed at a much lower rate than wage income. The GOP position on this issue expressed in the Paul Ryan Roadmap is to eliminate taxation on investment income entirely! House Republicans have already stated that they will not agree to eliminate multi-billion-dollar tax breaks on oil companies or eliminate tax provisions that reward companies for moving jobs overseas. The very no-tax pledge that members of the party have signed forbids even closing loopholes and eliminating deductions as a way of increasing revenue.

If Scarborough had fairly and accurately related the current GOP attitude on taxation, perhaps he would be more sympathetic to those who describe them in the most unflattering terms.

The Two Parties are NOT Alike

YouGov has a poll that, as Kevin Drum points out, tells you everything you need to know about the current state of American politics.

The Skinny on the Stimulus

It has become common wisdom that the economic stimulus enacted in Feb. 2009 "failed." This judgment is typically based on the fact that Christine Roemer--then the head of Obama's council of economic advisers--predicted that the stimulus would lower the unemployment rate to 7% by now. Obviously, that didn't happen.

However, the reason that didn't occur is not because the stimulus failed to stimulate the economy by the predicted amount. It did. Independent economic analyses from the CBO to Moodys estimated that the stimulus indeed added or saved about the same number of jobs that the Obama administration predicted. The problem wasn't a lack of stimulative effect, but a failure to accurately estimate how deep the recession would be. Ezra Klein has a great post on this explaining that a much bigger stimulus than the $780 billion we got was called for, but that it is unclear whether--even if it were politically possible--we could have efficiently spent the $2 trillion in stimulus that would be required to fill in the hole created by this economic calamity.