The Left and conspiracy theories

Cross posted on my own blog

Fifty years ago, a book was written about political conspiracy theories. It was called “The Paranoid Style in American Politics.” It was written in 1964 and has been a staple of the left ever since. Its theme was the paranoia of the political right that was looking for communists in the State Department and harassing Hollywood actors and writers. It was specifically directed at Senator Barry Goldwater who was the Republican nominee that year. It is still in print with new material contributed by Sean Wilentz, an Obama supporter and leftist professor of history.

It has been an article of faith on the left that conservatives are paranoid about such subjects as communists (Although defenders of Alger Hiss were disappointed to find him in Soviet archives as a spy) and foreign threats like the Soviet Union and militant Islam. The left now says that they knew all along that the USSR would collapse and Reagan had nothing to do with it. Fortunately for them, You Tube was not around in those days to record speeches to the contrary. The threat of militant Islam is the latest example of a threat dismissed by the left. President Obama has embodied this concept in his “reaching out” to Iran and Syria. Nancy Pelosi even conducted her own diplomacy while Bush was president by visiting Syria to convince them we were a friend. The left does not seem to be discouraged by failure to respond.

Recently, especially since Obama has been president, the conspiracy forces seem to be stronger on the left. The “9/11 truthers” are represented even in the administration. Jones, of course, was too nutty to represent a serious threat but it is suggestive.

Jones’s genius as an ideological entrepreneur was to mine white liberal anxiety — they are quite aware of their own NIMBY hypocrisy — by selling them the “green jobs” shtick to reconcile class/racial guilt with environmental enthusiasm, thus making them feel better about themselves.

That’s why Jones rose so far. That’s why he was such a “progressive” star. That’s why, as top Obama adviser Valerie Jarrett put it, “we’ve been watching him” and were so eager to recruit him to the White House.

In the White House no more. Why? He’s gone for one reason and one reason only. You can’t sign a petition demanding not one but four investigations of the charge that the Bush administration deliberately allowed Sept. 11, 2001 — i.e., collaborated in the worst massacre ever perpetrated on American soil — and be permitted in polite society, let alone have a high-level job in the White House.

He was “outed” and recently had a free lance reporter expelled from a “open to the public” meeting he was holding.

I read leftist blogs to find out what the other side is thinking. Here are some recent examples. In a post about the current struggle over the Bush tax rates, Steve Benen says:

There’s a reasonable case to be made that we’re looking at a cumulative effect. For much of the left, the concessions, many of which seemed wholly unnecessary, are just becoming intolerable. The party’s messaging, tactics, and inability to compromise effectively are just exasperating, and the apparent fact that Republicans will get an extension of a failed tax policy has led some to throw up their arms in disgust and proclaim, “I’ve had it.”

I get that. It’s a sentiment that obviously makes sense.

The Democrats are committed to static analysis of tax effects. A tax cut loses revenue while a tax increase adds revenue. Now why are the Democrats, who have large majorities in both houses of Congress, unable to block this Republican effort to keep tax rates the same? It can’t be good economic policy because Steve Benen said so. What could they do to convince Republicans the Democrat position is the better choice ? Here are some theories.

You’re sending the message the richest of the rich actually control this country, and in order to get a few crumbs for the common man, the rich need to be paid off with borrowed money – money that the common man (and woman), and their children, will be obligated to pay back, with interest. That does not bode well for the future of America.

Posted by: delNorte

So the rich and the corporations control the country. That is probably the most widely accepted conspiracy theory in the country. It is accepted by the left and many independents.

I think it’s a confluence of reasons: 1) It’s a simple issue with little to no nuance. There is no good reason to extend the cuts to the rich (outside of politics). 2) OTOH, the bank bailout and the fin reg are/were very complex issues which did not satisfy anyone’s sense of justice for holding responsible those to blame for the mess we’re in.

Posted by: You Don’t Say

Now, there is another theory. There is no reason to keep the tax rates the same for those with incomes over $250,000 except politics. Here is a person who does not believe that small business creates jobs. I doubt he would be impressed by this video. That business owner makes $300,000 and employes about ten people. Raise his taxes and what happens ? Who cares ?

There is absolutely NO convincing case that extending tax breaks for the super-wealthy is good for the nation; quite the reverse — it signals that the unabated looting of America is now in full swing;

Here’s more the same from another commenter.

What strikes me is there is no discussion of economics and how the economy works. OK. “Trickle Down” doesn’t work. “Tax cuts for the rich” doesn’t work. What does work ? Silence.

This morning, the This Week program on ABC, in its new incarnation with Christiane Amanpour, spent the entire show on DADT. They said not a word about the economy. DADT will not be repealed so why spend an hour on it two days after the unemployment rate went up again to 9/8% ? The political left is bored by economics and the national economy. They are far more interested in social issues like DADT or gay marriage. I can understand this because so many of them are government employees, or academic institution employees or low level employees of private organizations who have nothing to do with managing the business. They don’t know how private business is managed, they have never signed the front of a paycheck, and have no idea how people make decisions about investing because, aside from 401ks, they have no contact with it.

There was an amusing exchange about passports yesterday. It began with this:

Mayor Mike Bloomberg, leader of the Bloomberg faction of the Bloomberg party, was interviewed en route to China, where he was seeking to open diplomatic ties between Cathay and the colorful principality he governs. A quote: “If you look at the U.S., you look at who we’re electing to Congress, to the Senate — they can’t read. I’ll bet you a bunch of these people don’t have passports.”

Imagine that ! People who don’t have passports ! Anyway, the funniest part was a comment that the writer was being interviewed about tea parties by a German journalist. She asked him if he had a passport and he told her that he had lived in Germany as a child. I can’t find the link now and I wish he had asked her if she had ever owned a share of stock. Economic ignorance seems to be requirement for leftist credentials. Not only ignorance but disinterest.

Tax Policy Killing Our Manufacturing Base

Business Week is a venerable magazine that I was only minutes away from canceling because their content was the typical irrelevant journalistic crap when recently they were taken over by Bloomberg.  All the sudden I would say now that Bloomberg / BusinessWeek is the single most useful magazine I subscribe to, more valuable than Forbes, Fortune, or Barron’s.

Their articles are in-depth and hard hitting.  Rather than assume that you are a “lay” or “casual” reader, Bloomberg does actual research and writes for sophisticated readers wanting to learn more about a topic that they have some familiarity with.  Also rarely do they use the journalistic old-hat trick of trying to link every story to some sort of “man on the street”.

Bloomberg wrote an excellent article titled “Google 2.4% Rate Shows How $60 billion Lost to Tax Loopholes“.  While the US corporate income tax rate is the highest in the developed world at 35% (we are neck-in-neck with Japan, but they have proposals to reduce their rate) certain industries in particular can use loopholes to avoid paying virtually any tax at all.

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A “Somewhat Reasonable” defense of Mitch Daniels

The Heartland Institute just opened up their new blog today, somewhatreasonable.com. I encourage a visit.

This is where the Heartland staff will post their quick takes and commentary on the rapidly developing stories of the day.

I just posted a spirited defense of Mitch Daniels there…like he needs my help.

Our Epic Planning Failure On Taxes

There are two key elements to a tax policy:

1) collect revenue amounts as planned (i.e. bring in the cash you need)
2) enable the desired behavior or minimize non-productive behaviors tied to this tax policy

The USA now likely has the most dysfunctional tax regimes on these lines collectively of any major state.

Our recent estate tax fiasco, where for the year 2010 there is NO estate tax (so the heirs of George Steinbrenner, for example, inherit his wealth without paying estate taxes), is an epic reminder of our governments’ inability to drive any sort of behavior in a productive manner. For decades lawyers and accountants have been assiduously planning various complex strategies to avoid the estate tax (any wonder why Buffet is giving away billions while he is alive?) and yet if you passed in 2010 you pay NO estate tax, but if you happen to die in 2011, you will go back to the exorbitant rate of 55%! What sort of behavior is the US government attempting to elicit from its citizens? It is impossible to tell. And when you read the experts NO ONE thought that the US would just let the tax go to zero in 2010; everyone agreed that some sort of “fix” was inevitable; so they were all wrong, because clearly it is zero.

Now the situation is going to impact everyone, not just those contemplating their own morality. This article in the WSJ titled “Delays to Tax Tables May Dent Paychecks” shows how our inability to plan is now impacting anyone who is running a business with a payroll.

Lack of congressional action on 2011 income taxes may force the Treasury Department to make unprecedented moves to prevent US workers from seeing large tax increases in their January paychecks. The issue: 2011 tax withholding tables. Treasure officials usually release the tables… by mid November because it takes payroll processors weeks to adjust their systems before January 1.

If you look at your pay stub and all the complex deductions done by your payroll processor you can see that there is a lot of work behind those calculations, which are also impacted by the withholding that individuals select based on their filing status.

What happens after January 1 is that the tax cuts enacted under the previous administration expire and rates go up across the board, as well as impacting the Alternative Minimum Tax, capital gains, as well as the dividends received deduction (minimizing the double taxation of dividends). Unless Congress acts this year, which seems unlikely since they are all up for election, all these tax items automatically occur, although they could certainly be changed by Congress before the end of 2011 and other rates or policies put in their place.

Our tax policy now is totally unhinged when it comes to incentives. Are stocks that pay dividends going to be pummeled when the tax rate on dividends goes back up? You don’t know. If you live in the East or California in a high tax state and aren’t paying an arm and a leg in AMT, you may very soon if the taxes aren’t amended. The capital gain tax is more complex because many people are already betting that this will not be re-upped and cashing in their gains that survived the recent downturn in many cases anyways.

Don’t forget that this inability to plan is at the local and state level, as well. The State of Illinois, facing a huge deficit, decided to do nothing since elections are coming and just rolled the entire problem along to those that are elected next.

Really, I am a pessimist and I never thought that our tax policy at the Federal and State level would become so muddled. From an incentive and planning process it is making the lives of those who do this type of work extremely difficult to execute, and impossible to explain rationally to those that aren’t experts in the field. We have absolutely reached a new nadir.

Cross posted at LITGM

Addressing SEIU/AFSCME talking points

Public Unions are taking well-deserved heat for their pension greed. If you look at all the pension articles, the comments are full of reasonable sounding folks trotting out the argument that the really bad examples of abusive pensions are “outliers.” They then tell you that the average benefit is “only $20,000/year.” It’s best to address this calmly, reasonably, and accurately. Here’s how.

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