Politics

The Romney tax cut.

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Today, the Sunday morning TV shows on politics demonstrated the response of the Obama campaign to Romney’s debate win last week. Paul Krugman, who looks more and more like a political cheerleader and less like an economist, led the charge. The topic was the “five trillion dollar tax cut.”

The Obama campaign is already backing away from this claim, but let’s consider it.

This “five trillion dollar tax cut” figure is arrived at by taking his statement that he will cut rates by 20% and limit deductions. Multiple the total tax revenue per year by 20% and you get five trillion. This same reform was done in 1986 and the result was a 15 year economic boom. The results are discussed here.

Twenty years ago today (2006), President Ronald Reagan signed into law the broadest revision of the federal income tax in history. The Tax Reform Act of 1986 — the biggest and most controversial legislative story of its time — had lawmakers, lobbyists and journalists in Washington in an uproar for two years. Despite nearly dying several times, the measure eventually passed, producing a simpler code with fewer tax breaks and significantly lower rates. The changes affected every family and business in the nation.

Of course the Congress undid it over the ensuing years. We all expected that. What about Romney’s plan ?

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Reflections on the debate

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The reverberations are still going on after the Wednesday debate. The theme coming from the Obama campaign is that Romney did not tell the truth about his policies. Most of the discussion on the non-campaign left is like Bill Mahers’ who said “It looks like he took my million and spent it all on weed.”

One of the most peculiar reactions was at the U of Wisconsin the next day. Hundreds of UW students were filing into an Obama on-campus campaign rally and were asked by a Breitbart writer if it was unfair that Obama couldn’t use his Teleprompter in the debate. Amazingly, most of the students agreed. What would a Teleprompter do ? Would they stop the debate for a few minutes while Obama’s handlers thought of a good response?

The polls will take a few more days to show the response but already something is going on. A poll of Illinois’ 10th Congressional district last August was ignored but another poll now suggests that Illinois might be in play in this election.

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Why is the election so close ?

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I have been watching the trends in the election campaign thus far. I actually watched much more of both conventions than I expected to. My present question is Why is this election close ?. Powerline blog asks the same question and has a rather gloomy conclusion.

But it now appears that the election will be very close after all, and that Obama might even win it. It will require a few more days to assess the effects (if any) of the parties’ two conventions, but for now it looks as though the Democrats emerged with at least a draw, despite a convention that was in some ways a fiasco. In today’s Rasmussen survey, Obama has regained a two point lead over Romney, 46%-44%. Scott Rasmussen writes:

The president is enjoying a convention bounce that has been evident in the last two nights of tracking data. He led by two just before the Republican convention, so he has already erased the modest bounce Romney received from his party’s celebration in Tampa. Perhaps more significantly, Democratic interest in the campaign has soared. For the first time, those in the president’s party are following the campaign as closely as GOP voters.

John Hinderaker comes to the following conclusion, at least tentatively.

On paper, given Obama’s record, this election should be a cakewalk for the Republicans. Why isn’t it? I am afraid the answer may be that the country is closer to the point of no return than most of us believed. With over 100 million Americans receiving federal welfare benefits, millions more going on Social Security disability, and many millions on top of that living on entitlement programsnot to mention enormous numbers of public employeeswe may have gotten to the point where the government economy is more important, in the short term, than the real economy. My father, the least cynical of men, used to quote a political philosopher to the effect that democracy will work until people figure out they can vote themselves money. I fear that time may have come.

I have several other theories that are more optimistic. The polls may be wrong for several reasons. Citizens have been deluged with accusations of racism by frantic Democrats. Those who plan to vote for Romney may simply be misleading pollsters. In California about 30 years ago, the black mayor of Los Angeles, Tom Bradley, was ahead in the polls going into the 1982 election. In the event, he lost in spite of appearances on election day. Absentee ballots were credited with turning the result into a win for Deukmejian, his GOP rival. The racial effect is still disputed.

Two theories of the racial effect are in competition. One holds that white voters are less likely to vote for a black candidate. The fact that a number of black office holders have been elected by majority white districts, including that of retired colonel Allen West, should dispute that theory. Another is that white voters are reluctant to disclose voting preferences to pollsters, which might expose them to changes of racism. Voting against Obama is widely attributed to racism by Democrats and, especially, the progressive left.

It is not clear if either of these theories has validity. It would be very depressing to think the theory of dependency on government is valid.

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Newsweek throws Obama under the bus

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The Newsweek cover for next week is astonishing.

The lead article is by Niall Ferguson and is devastating. The fact that it is the cover story is an even bigger surprise. It’s interesting to speculate on the reasons.

Welcome to Obama’s America: nearly half the population is not represented on a taxable return—almost exactly the same proportion that lives in a household where at least one member receives some type of government benefit. We are becoming the 5050 nation—half of us paying the taxes, the other half receiving the benefits.

On foreign policy, one of Obama’s few strong points in polls, it is even harsher.

For me the president’s greatest failure has been not to think through the implications of these challenges to American power. Far from developing a coherent strategy, he believed—perhaps encouraged by the premature award of the Nobel Peace Prize—that all he needed to do was to make touchy-feely speeches around the world explaining to foreigners that he was not George W. Bush.

In Tokyo in November 2009, the president gave his boilerplate hug-a-foreigner speech: “In an interconnected world, power does not need to be a zero-sum game, and nations need not fear the success of another … The United States does not seek to contain China … On the contrary, the rise of a strong, prosperous China can be a source of strength for the community of nations.” Yet by fall 2011, this approach had been jettisoned in favor of a “pivot” back to the Pacific, including risible deployments of troops to Australia and Singapore. From the vantage point of Beijing, neither approach had credibility.

His Cairo speech of June 4, 2009, was an especially clumsy bid to ingratiate himself on what proved to be the eve of a regional revolution. “I’m also proud to carry with me,” he told Egyptians, “a greeting of peace from Muslim communities in my country: Assalamu alaikum … I’ve come here … to seek a new beginning between the United States and Muslims around the world, one based … upon the truth that America and Islam are not exclusive and need not be in competition.”

Read the whole thing, as Instapundit says.

Bourgeois Dignity

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I was struck yesterday by a post on Ann Althouse’s blog, and by a Virginia Postrel piece that makes the same point, how wrong Obama was to say “You didn’t build that..”

The incident, so characteristic of this leftist ideologue president, is the stimulus for theorizing about how economies work, and perhaps why this one is so stuck with Obama in the White House.

There is an excellent analysis by David Warren printed last year in Canada and which I have saved. It is a comparison of Obama with Gorbachev and brings considerable light on the subject of success of nations.

Yet they do have one major thing in common, and that is the belief that, regardless of what the ruler does, the polity he rules must necessarily continue. This is perhaps the most essential, if seldom acknowledged, insight of the post-modern “liberal” mind: that if you take the pillars away, the roof will continue to hover in the air.

Gorbachev seemed to assume, right up to the fall of the Berlin Wall and then beyond it, that his Communist Party would recover from any temporary setbacks, and that the long-term effects of his glasnost and perestroika could only be to make it bigger and stronger.

There is a corollary of this largely unspoken assumption: that no matter what you do to one part of a machine, the rest of the machine will continue to function normally.

This brief discussion fits well with the book that was recommended by the Postrel piece.


The Bad History Behind ‘You Didn’t Build That’
By Virginia Postrel

The controversy surrounding President Barack Obama’s admonishment that “if you’ve got a business — you didn’t build that. Somebody else made that happen” has defied the usual election-year pattern.

Normally a political faux pas lasts little more than a news cycle. People hear the story, decide what they think, and quickly move on to the next brouhaha, following what the journalist Mickey Kaus calls the Feiler Faster Thesis. A gaffe that might have ruined a candidate 20 years ago is now forgotten within days.

Three weeks later, Obama’s comment is still a big deal.

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