A Pox On Both Their Houses

In the midst of a heated exchange with Jonathan Chait of the New Republic, Reason magazine writer Nick Gillespie makes a very simple but oft-forgotten point - that one needn't have approved of the job George W. Bush did as President to disapprove of the one Barack Obama is doing. Like Gillespie, I happen to think Bush was an awful President, but that that doesn't change the fact that (on fiscal matters at least), Obama has been just as bad if not worse. Among the many things I disliked about Bush was his gross fiscal irresponsibility - not so much the substantial tax cuts or the massive spending hikes per se, but the fact that he pursued both simultaneously and with equal fervor, exploding a Federal deficit situation that had actually improved somewhat late in the Clinton years and leaving what was already going to be a long-term crunch looking likely to be much more painful when it finally hits. I did not vote for Obama because I wanted more of the same. But that's what we're getting, plus one - all of Bush's reckless spending, plus a little more from the long-time Democratic wish list.

The chart Gillespie posts basically tells the whole story - out-of-control Federal spending is a bigger problem than the tax cuts when it comes to the deficit situation. Whether the Democrats decide to continue the cuts or let them lapse makes no difference - we're still screwed, because we are still spending too much money we don't have. It's just a question of degree. To committed members of Team Red or Team Blue, it be convenient to bash the other side with this reality when they hold power and impolitic to mention it when you do, but for people who care more about the future of the country than the fortunes of a particular political party or its associated ideology, it's a big effing problem that needs to be dealt with one way or another. I don't want to hear from the Democrats when they're criticized for deficit spending that Bush did it too - news flash guys, that's why we fucking voted his party out of office. I want somebody, somebody, to stand up and be an adult and tell the voting public what they need to hear - that we're on an unsustainable course, that changing it is probably going to entail both tax hikes and spending cuts, and that people need to get used to that. As is, all I have is a choice of which conglomeration of connected special interests I let into the sty to begin feeding at the government trough. Pointing out that the Democrats are venal, short-sighted, and incompetent does not make one a Republican stooge any more than pointing out that the Republicans under Bush were venal, short-sighted, and incompetent made one a Republican stooge. It's possible for both sides to be wrong.

As an indepedent, I take the fact that partisan hacks from both sides despise me as a sign that I'm on the right track. Government, to the extent that is necessary, should be about solving problems and creating the most favorable possible environment for private enterprise (in business and elsewhere) to flourish. It should not be about handing out publicly financed goodies to your friends like Halloween candy because they helped to get you elected. Too often, that is what it is about, and anger over that fact is why I think anti-incumbent fervor against politicians in both parties is so strong right now.

Why Don't Democrats Run On Soaking The Rich?

Political scientist Jonathan Bernstein wonders. Andrew Sullivan offers the typical conservative viewpoint on why this approach doesn't resonate with voters - that "it's just not American to bash the successful". There may be something to this - the American political culture does appear to me more hostile to redistributive schemes than those of, say, Europe - but I doubt that it's the only reason, or even the most important one. Rather, I think that the seeming contradiction here - polls showing high support for taxing the rich more heavily, with actual voter behavior not reflecting that preference - arises from 1.)a misreading of what the polling results mean, 2.)a failure to account for the difference between stated preferences (poll responses) and revealed ones (actual voting), and 3.)a failure to attend to the fact that many polls (and particularly those which pose questions on general policy preferences such as these) do not use samples that are representative of the portion of the population that actually votes.

Firstly, I think it's likely that a very large number of voters do not interpret the phrase "tax the rich" the same way the Democrats do. To the Democrats, "the rich" has a statistical definition - it means "people in the top 20% of earners" or "people who make more than $250,000 a year" or whatever. I suspect, however, that to the majority of voters, even well-off voters, "the rich" means "people who make more money than I do". It's a well-known fact that a most Americans - even those who by any objective socioeconomic measure would have to be considered rich - consider themselves some variety of "middle class". Ask white-collar professionals making $200,000 a year (particularly those living in an expensive city like New York) whom they think of as "rich", and they'll probably name someone like Warren Buffett or Bill Gates. They're unlikely to think of themselves. So when they hear the question "should we tax the rich more heavily?", they are very likely to interpret it as "should we raise Warren Buffett's taxes?", and unsurprisingly, many are in favor. I expect, however, that if you phrased the question differently, more along the lines of specific proposals of the sort Democrats like to make - say, "should we raise taxes on households that make more than $250,000 a year?" - you'd get much less enthusiastic support.

Even if we grant that voters are not interpreting the question differently, and that the type of voters I mentioned in the previous paragraph realize that the tax hikes in question will apply to them as well as to Warren Buffett, we have to consider the possibility that many of them may be more willing to support tax hikes in theory than they are in practice. It's not exactly news that people frequently say one thing and do another, particularly when there is social pressure to appear a certain way involved. Respondees who want to appear conscientious and socially responsible might very well say yes, I would pay higher taxes if it meant better government services for those less well-off than I am, or what have you. Whether such people are still willing to say that when the taxman is actually at the door is a test of conviction that I suspect not all of them will pass. Anyone who wants to can pay higher taxes doesn't need an act of Congress to do so - the fact that few people choose to pay more than they have to makes me thinks there's more than a bit of empty self-administered back-patting going on among these poll respondents.

Finally, there's the fact that poll results on a question like this may not and quite likely do not represent the opinions of the people that actually show up on election day. General preference polling like this often samples registered voters, who as a group are distinctly more liberal than likely voters, i.e., the people who generally turn up on election day to vote. There is also a strong positive correlation between personal wealth and regular voting, and as such the wealthy are likely to comprise a disproportionately heavy portion of any given electorate compared to their numbers in the population as a whole. As a result, politicians who run on raising taxes on the rich do not garner as many votes because of that position as polling might lead one to believe.

This is essentially the same conundrum that the Democrats faced on healthcare. Why, they wondered, was the Affordable Care Act so unpopular, given that the more ambiguous notion of "health care reform" polled well? It's because, as is always the case with public policy, the devil is in the details. Any policy is going to poll better when described vaguely and abstractly than it will when it's described in detail, because when you get into detail it becomes clear whose ox is being gored and opposition starts to coalesce. This is why politicians are so fond of campaigning in airy generalities and so averse to substance, and it's why adopting policy positions based solely on what the public tells pollsters (something Democrats are all too prone to do) is a stupid idea.

Say Hello To The VAT

President Obama has stated that a European-style VAT tax is still an "option" for helping to close the budget deficit. That should be re-phrased. It's not an option - it's a necessity. There is simply no way to pay for a comprehensive personal-and-corporate welfare state of the sort this Administration has brought into being merely by taxing the hell out of people whose incomes are more than $250,000 a year. If Obama has realized that, bully for him, but it puts the lie to his campaign promise not to raise taxes on middle- and lower-income earners, who are more likely than the rich to feel the pinch when the prices of consumer goods begin to climb precipitously. The Senate is likely also correct in declaring that this tax, if enacted, will be a significant drag on consumer demand and hence on economic growth, but if they were concerned about that, they ought not to have voted for the stimulus bill, Obamacare, TARP, etc. The Democrats have enacted a lot of expensive legislation over the past two years - it's only fair that they be the ones forced to present the bill to the voters.