Due to Democratic malice and Republican stupidity (mainly the latter), a soft version of progressivism might again be ambiguously popular. But the progressive vision of bigger government remains unsustainable, because the tax increase is insignificant as a funding device:
If even under the conditions of the past month—with a very liberal president just re-elected, Republicans in disarray, public opinion on taxes seemingly friendlier to them than it has been in decades, and higher tax rates automatically taking effect—the Democrats can’t get more than a tiny pittance of revenue and no chips to use later, then their basic approach to fiscal issues just won’t work. The idea that they will raise rates again in the Obama years when they don’t have all these factors working in their favor is a fantasy. And the notion that the politics of taxes has decisively changed in their favor has been disproven by their own behavior: Many Democratic senators were as relieved as Republicans to see the threshold for higher rates rise well above $250,000, and would not have stood for it dropping below that level to where their upper middle class voters are. Having discovered an effective political wedge in the tax debate, the Democrats have now basically used it up and gotten awfully little in return. They can’t begin to acknowledge that the levels of spending they want to sustain will require a far greater tax burden on far more people (and in a far more regressive way) than today’s code, and if they can’t even state what they want out loud then they’re not likely to get it. Their bluff has been called. The welfare state they want to retain and expand cannot be funded, and they apparently have no way to do anything about that….
The fiscal trajectory of our welfare state is not sustainable, no matter how much taxes go up. That is the truth at the heart of our budget crisis. The fiscal-cliff debate ignored that truth from start to finish, and so has achieved nothing worthwhile for anyone. The Republicans know why they got nothing out of this: The expiration of the tax rates meant they could only contain their losses here. But what about the Democrats? Now they have gotten their tax increase, and what has it gained them but the prospect of an even slower economy? What’s their game plan?
So the Republicans got nothing, but their position was really weak. The Democrats got nothing significant, and there position was (surely temporarily) really strong. What we have here, as Yuval explains, is more evidence still that progressivism has no future.
It wasn’t the time for the Republicans to fight a big battle that they would have lost decisively–if temporarily. And they need to turn to Yuval to help them frame for the public a clear view of what the problem really is. The leader they need they don’t have, which is not to say that Boehner and McConnell can be blamed for managing reasonably a necessary tactical retreat.
(The one thing that annoys me big-time–and could be viewed as evidence that the Republicans aren’t true friends of the working man–is that the Social Security tax cut–the cut to the regressive tax on the self-employed–wasn’t extended.)
January 2nd, 2013 | 10:01 am
Professor, I think what the Democrats and their mouthpieces (Krugman, et al) are not telling their voters is that, when the crunch comes (by which time they assume that the Republicans will no longer be an effective national force), the Democrats will be able to massively raise taxes on the middle class and to shift government expenditure to core Democratic constituency groups while cutting back on total expenditure by shaprly cutting benefits and services going to the middle class and the affluent. The effect of this will be radical social and economic leveling, to the detriment of the Democrats’ middle class and affluent voters. In saying that “progressivism has no future,” you are implying that they will not be able to get away with this scheme. Your lips to God’s ears.
Happy new year.
January 2nd, 2013 | 11:59 am
[...] Due to Democratic malice and Republican stupidity (mainly the latter), a soft version of progressivism might again be ambiguously popular. But the progressive vision of bigger government remains unsustainable, Source: Postmodern Conservative [...]
January 2nd, 2013 | 7:13 pm
I disagree that this retreat was reasonably necessary. If the GOP stands for anything, it is supposed to be low taxes and fiscal responsibility. This bill offers neither. The Democrats called for taxing the rich; but instead of winning a compromise, the GOP gave them a bill that raises tax rates on virtually every taxpayer!
I agree that, long term, this is going to bite the Dems in the rear. But if Europe is any indication – if the last U.S. election is any indication – it can take a VERY long time for the voting public to catch on to the ruse. We get used to the handouts that the possibility of surviving without those handouts makes us afraid enough to accept any irresponsible solution Washington imposes on us.
January 2nd, 2013 | 7:22 pm
Perspective matters a lot in how you see this. On one hand taxes have actually gone up for three quarters of the population as compared to yesterday (when you take account of the expiration of the payroll tax cut.) On the other hand the tax increase is much smaller than it would have been if there was no deal. The truth is somewhere between the optimistic and pessimistic take.
I’m not as confident about the center-left’s ability to raise taxes down the line. It is easier to quickly raise taxes than sharply cut benefits for current beneficiaries. That is why it is so important to phase-in changes slowly so that people can adjust. The longer we wait, the more any deal will be tilted in the direction of tax increases and even the smaller spending cuts will be more painful than they otherwise might have been.
Not much to be done about it in the near future other than public education. Elections have consequences.
January 2nd, 2013 | 9:26 pm
Out of legitimate disagreement I am about to lay out a much less soft version of progressivism.
The debt limit wasn’t raised (the only thing that ensures that: “The fiscal trajectory of our welfare state is not sustainable, no matter how much taxes go up. That is the truth at the heart of our budget crisis.”)
The reason progressivism has no future is because Marx is right and in the end of the day both democrats and republicans like all other lawyers have to advocate policies supported by money. Look point blank, Lawyers are agents who have duties to principals. The principals largely are those who own the means of production. Throw a fit about McDonalds forcing folks to work on Christmas if you want to. The manager who made that call had a legal duty to do so, after making the revenue calculations to do the bidding of his employer (K). I would probably have made the same call, because trying to say the “trademark” dammage or dammage to intangible property offsets it is probably too nebulous(albeit it is allowed under a business judgement rule…maybe). It is highly likely my supervisor wouldn’t even be sophisticated enough to understand Henry Ford in the first place.
Basically you have a Harvard Law +Chicago Economics consensus, so Yuval doesn’t actually have to explain anything. He is Chicago to the bone anyways. On a level of principle Obama is really in many ways on Yuval’s side, because these folks have a love for consensus/bipartisanship and grand bargains.
Krugman of course is a mouth piece for the democratic party and like most economists today has also in his own way reached the consensus that economics springs from the legal structure. So all Keynesians are indeed very much Capitalists. They are simply trying to navigate between Marx and Malthus. Or between growth that is not hicks neutral and serves to increase inequality (while still very much putting us on a higher indifference curve), and slowing growth thus leading to starvation, and or averting it, depending on your tech-bull vs. tech-bear Mathusianism.
Contrary to some who believe in an imaginary fiscal “crunch”. I only believe in a Malthusian “crunch”. That is dollars themselves are just a way of keeping score, (those things Krugman said two weeks ago I actually believe.(so I backed him) Because Harvard assumes you are all babies, or because there is a sort of Malthusian bias, and because this plays itself out slightly differently in both parties, in the end the insane intellectual equilibrium position according to which the debt is punt-worthy in the immediate term, but a scary long-term monster is reached.
It is not an altogether weak and unconvincing and position, on its actual foundational basis(i.e. Malthusianism), but it is never fully articulated in this way. And never will be because of twitter “sound bites”.
The democrats end up loosing because basically they say that Fix the Debt is right, but their timing is a little bad. (which is quite a strong argument on current macro, with a short term horizon.) But in point of fact Yuval Levin isn’t right, or it is a “noble lie” or a legal fiction.
Theoretically appart from the concerns of the Malthusians (which are very real in the Long Run), there is absolutely no reason why increased spending would require increased taxes in the long run (to pay for it). The entire “pay for it” argument is a legal fiction. In many ways you “pay for it” immediately. There is more money in the economy, therefore prices go up ceteris paribus. “paying for it” denominated in dollars is always deflationary. This is why you can go back and only thinking about the economy in terms of dollars see recessions following times when the government in good times ran a budget surplus.
The deficit argument is a fraud to the larger Malthusian argument, just as the Keynesian argument is a legal accomodation that remains plausibly bullish and administrative law P.C, while navigating between this bear and the Marxist one.
The problem is simple enough Harvard Law colludes with Chicago. I actually don’t care all that much about the servicemark of Obama and Sunstein vs. Romney and Yuval. Maybe it is for the “good” of the country.
It isn’t rocket science to me that federalist 10 isn’t as relevant as Labor Law in terms of grouping class. Nor can anyone argue with a straight face that the 5000x would be unemployed con law profs could somehow present a “historical” argument that would unsettle the way the Next Karl Rove creates a republican “barganning class” i.e. party. Pete is already saying move past the Reagan Coallition, so its clear as day to me that being a “living constiutionalist” is perfectly fine in certain venues(I don’t think those same intellectual positions would mean quite the same thing depending on your job…they are after all “brands” for professorial schema.) So if Con Law can’t sustain the aggregate demand (it isn’t even pertinent at Georgetown given state action)… Why can’t the american people see past the intellectual fraud/Hobsons choice that is Obama+Sustein v. Romney+Yuval?
Also lets be clear: Democrats won. But this doesn’t mean “progressivism” won. In fact it means Harvard and Chicago won. But if Harvard and Chicago lost, then Romney and Yuval would win, and as it happens that means Harvard and Chicago win.
So as I told pete, the idea that Romney somehow lost is not clear thinking(in the same exact way that this Yuval character thinks democrats didn’t actually win). We don’t even know if indeed he(Romney) didn’t want to run, but had some sort of negotiation pact with Obama (after putting RomneyCare on the table) to defend ObamaCare. One thing to say about Harvard Law and its capacity to pull Grand bargains…no extreme is too far to go to support your credibility and servicemark/reputation.
I actually trust Obama and Romney to both do what they think is for the good of the nation. Obama a bit too much “good of the nation” and Romney a bit too much “good of the 1%”.
In terms of criticism of the deficit deal I join Pal law in the SS tax cut and Gov. Chris Christie in so far as he didn’t receive aid for Hurricane Sandy. Again this is part of thinking there is a fiscal disaster, when the real disaster is slightly more tangible, and more Malthusian. (Of course Harvard Law invented global warming denial). So if our policy was more focused upon a realistic barrier to progress and dealing with actual property issues…well then maybe we might also fund something like Salter’s Sink (to combat Hurricanes in the first place).
But like Obama said, I didn’t build that: Harvard did!
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