October 12, 2004

Max Sawicky Has *Things* to Say About Congress

Max Sawicky watches the Republican-led Congress sink to depths rarely before seen, and quotes from the Washington Post:

MaxSpeak, You Listen!: HOUSE (AND SENATE) OF ILL REPUTE: Their latest handiwork is a banquet of corporate tax pork. It began as a necessary effort to repeal a WTO-illegal tax benefit for U.S. export industries. Mere repeal would gain the Treasury $5.6 billion a year. Congress took the opportunity to forego that modest deficit reduction and instead bundle it with a raft of tax breaks. Big ones, medium-sized ones, and tiny ones, few having anything to do with exporting.

The Democrats, with Charlie Rangel in the lead, were seriously complicit in this fiscal orgy, buying into the notion that a modest reduction in the corporate tax rate would aid competitiveness. This is a good example of how an intellectual concession on ostensible tactical grounds greases the skids for much greater harm. If reducing the corporate tax rate is a good thing, why have a corporate tax at all?

Today's Post editorial is pretty good on this:

Payback on K Street Tuesday, October 12, 2004; Page A22: THE CORPORATE tax bill that Congress has sent to the White House rewards just about every special interest that retains a lobbyist in Washington. Makers of sonar fish finders stand to gain, as do importers of Chinese ceiling fans, dog-track operators who cater to foreign gamblers, and Native Alaskan whaling captains. But one lobby did not do so well, and its identity is revealing. The Motion Picture Association of America, Hollywood's trade group, had been hoping for $350 million a year in subsidies, which were written into the Senate version of the bill as partial compensation for the loss of a bigger export subsidy that the bill repeals. But the Senate's largesse was cut back to around $100 million in the final bill that emerged from the House-Senate conference, leaving the movie industry as the biggest net loser from the legislation.

Why did the movie studios, which usually lobby with the best of them, lose out? Perhaps because three months ago they had the temerity to choose Dan Glickman, a Democrat, to head their trade association. The congressional Republican leadership, which had the final say on the tax bill, made no secret of its fury that a plum lobbying job had not gone to a Republican: Grover Norquist, a close ally of House Republicans, called Mr. Glickman's appointment "a studied insult," adding that the movie industry's "ability to work with the House and Senate is greatly reduced." Commenting on the movie moguls' comeuppance last week, Rep. Jim McCrery (R-La.) told Brody Mullins of Roll Call that "it's a good idea to have someone who can communicate with those who are in power," and that "[i]t's a consideration that any organization hiring a lobbyist should take into account."

This suggests that Congress is corrupt not only in the manner in which it awards prizes to favorite lobbyists, but also in the manner in which it denies such prizes. By punishing the movie industry for giving its plushest Washington job to the opposite party, the Republicans are saying that they want such jobs reserved for their own side, partly so that they can vacuum up the campaign donations that trade associations make and partly so that members of their own party can spin through the revolving door into millionaire nirvana. A few years ago, congressional Republicans claimed to stand for free-market principles -- for the idea that government should get out of the way and allow the economy to reward the innovators and entrepreneurs who fuel progress. But power has corrupted the party. Now that they are the incumbents, they skew the economic playing field so as to reward their friends and fill their campaign treasuries.

The bill that Congress has produced is monstrous in just about every way. Designed to close a $5 billion-a-year export subsidy that violated international trade law, it ended by spraying out $140 billion in business breaks over 10 years. It absurdly rewards tobacco farmers, and absentee tobacco landlords, without imposing even the minimal regulation on tobacco that the nation's biggest cigarette maker had agreed to. In Friday's debate, President Bush said he would discipline Congress in order to reduce the budget deficit. If Mr. Bush cannot bring himself to veto this terrible bill, it will be hard to take him seriously.

Most of the editorial is fine. It should have been printed every week since the start of 2001, but put that aside. The end of it, however, is embarrassing for everyone who works at or has ever worked at or ever will work at the Post.

What is this last sentence, "it will be hard to take him seriously"? What kind of a threat is that? Is there anybody--even on the Washington Post editorial board--who currently takes George W. Bush's pronouncements on the deficit seriously?

If the Post wants to threaten George W. Bush, it should say something like veto this bill or we endorse your opponent, or veto this bill or we (and historians) will judge your domestic policy to be the worst of any president, ever--not "veto this bill or we will have a hard time taking your claims to be serious about deficit reduction seriously." That last sentence, that the Post sits there--after the past four years--holding on to the background assumption that Bush's words about the budget are not blatant lies and threatening "to [not] take him seriously"--that is the most pathetic thing I've seen since... David Rosenbaum's debate fact-checkin.

I did use to think that the Post had an editorial page...

Posted by DeLong at October 12, 2004 08:29 AM | TrackBack
Comments

1. I didn't read the bill, so I may be missing something, but if Rangel is interested in lowering the corporate tax rate, why didn't he vote against this bill and try to work that into another one?

2. I agree with you over how amazing it is that some people take the claims of fiscal responsibility from the Republicans seriously. But maybe it's because so many of them lie with such a sternly straight face when discussing it.

Posted by: Brian at December 31, 1969 04:17 PM

Brad DeLong writes:
>
> If the Post wants to threaten George W. Bush, it should say
> something like veto this bill or we endorse your opponent, or
> veto this bill or we (and historians) will judge your domestic
> policy to be the worst of any president, ever--not "veto this
> bill or we will have a hard time taking your claims to be
> serious about deficit reduction seriously."

And you call yourself a member of the Fafblog Fraction! Clearly, the Washington Post is engaging in a variant of the policy that the Medium Lobster has so praised in the Bush Administration. Surely, you remember the important "Show of Intelligence" column:

http://fafblog.blogspot.com/2004_08_08_fafblog_archive.html#109229275247571681

What we have here is a "Show of Weakness". Quite obviously, the Washington Post is obliterating Bush's electoral chances as we speak by the devastating use of Faint Damnation. Just as a homeopathic remedy is *more* effective for having been diluted past detectability, so this attack, in it's own parts-per-billion way, is a tremendous blow to the president's self-confidence. It is probably difficult for those of you who are time- and space-anchored to understand the power of this approach. But pretend, for the sake of argument, that the Post had gone into a murderously and inexplicably evil shrill mode, as the Philly Enquirer has just recently done. Such attacks are so highly pitched so as to be imperceptible to the more subtly tuned ears of those in the White House, or those who are in Real Power in the Depths of the Ocean. Rather, it is a soft and profoundly lame comment that will do the most harm to the president's electoral chances, for this is the kind of thing they really listen to. The pain of the widow, the plesasant snoring of our allies in Poland and Palau...the un-venomed expression of dissatisfaction by the Post. Just as the insignifcant contributions of the forces from Palau sealed our victory against Iraq and helped Bush achieve the undoing of Saddam, so, regrettably, must the acoustically undetectable faint damnation of the Post be the undoing of the Great Undoer.

Posted by: Poet Laureate of Gibletsia at October 12, 2004 09:42 AM

So Congress has time to pass tax give aways to major corporations but no time to pass the budget? What is the primary constitutional duty of the Congress?

Posted by: bakho at October 12, 2004 09:53 AM

Since the WaPo is the paper that lands on my doorstep every morning, I can tell you that the deterioration of the Post's editorial page has been going on for quite some time. I think the turning point was when the Fairness Doctrine was killed (late '80s or early '90s? I can't remember anymore), and they opposed its resurrection. Ever since then, they've sounded more and more like a bunch of guys in 3-piece suits, driving Beamers and living in gated communities.

The Post's reporting varies with the reporters; fortunately, some of the reporters are still damned good.

Posted by: RT at October 12, 2004 12:43 PM

A couple of quick comments.

To Bakho: The impetus behind this bill was repeal of the FSC/ETI which was found to be an illegal subsidy by the WTO (4 years ago). As a result, the EU has been imposing steadily increasing punitive tariffs since March. The FSC/ETI repeal is a legitimate "time sensitive" issue which needed to be acted on. That's not to say Congress had to spend all the extra time with other tax breaks, but this was a "must pass" bill which got porked up on its way to conference. If congress had failed to pass a FSC/ETI repeal, it would have been almost as scandalous as failure to pass a budget. (p.s. thanks for all of your posts. I always read your posts and appreciate the time you put into this blog.)

To the group: Does anyone have any comment on the Homeland Investment provision in the act? This is basically a tax holiday for corporations to repatriate profits sitting in overseas subsidiaries at 5% as long as the funds are "invested" in the homeland. I like this provision. Those profits would never come back to the US without this sort of break. With the break, the fund will flow back into the US. There are, of course, loopholes which allow the fund to "round trip," but hopefully there will be a net positive effect.

Any thoughts?

Posted by: section321 at October 12, 2004 12:51 PM

I have been calling the tax bill "The Republican's Going Out of Business Sale". They are greasing the skids of the revolving door with all of their favorite industries. I would love to hear Kerry bring this up in the debate.

Posted by: phg at October 12, 2004 01:21 PM

Professor:

Pardon the strong words, but I simply must say this: If you don't decrease your shrillness level I may be forced to stop taking your commentary seriously.

Posted by: oyster at October 12, 2004 01:36 PM

This is going to come off harsher in print than I mean, but:

>Any thoughts?

Yes, let's stop complicating the damn tax code. The road to hell etc. Nobody can wrap their arms -literally as well as figuratively- around the whole thing, or even any major subsection.

And when people don't understand something they are open to the appeals of demagogues. You use a word like "Investment provision", "repatriate", "overseas subsidiaries" and a lot of demonstratively intelligent, successful people hear "blah" and "blah" and "blah."

And this is why we have a Congress and a White House full of morons. Let's stop giving them ammunition. Focus on the basics. We need some vision to get back into power.

Only nutballs are against paying taxes. But nobody is for a tax system where they don't know where their money is going and don't feel like others are paying their fair share.

Posted by: a different chris at October 12, 2004 03:30 PM

RT wrote, "I can tell you that the deterioration of the Post's editorial page has been going on for quite some time. I think the turning point was when the Fairness Doctrine was killed (late '80s or early '90s? I can't remember anymore), and they opposed its resurrection."

AFAICT the _Post's_ editorial page has been despicable ever since some point in the Reagan era.

"The Post's reporting varies with the reporters; fortunately, some of the reporters are still damned good."

I like e.g. Millbank and Allen.

Their reporting on the Iraq War (well, at least afterwards) was far better than the NYT's. And their editorial page is far worse. Go figure.

Posted by: liberal at October 12, 2004 03:34 PM

RT wrote, "I can tell you that the deterioration of the Post's editorial page has been going on for quite some time. I think the turning point was when the Fairness Doctrine was killed (late '80s or early '90s? I can't remember anymore), and they opposed its resurrection."

AFAICT the _Post's_ editorial page has been despicable ever since some point in the Reagan era.

"The Post's reporting varies with the reporters; fortunately, some of the reporters are still damned good."

I like e.g. Millbank and Allen.

Their reporting on the Iraq War (well, at least afterwards) was far better than the NYT's. And their editorial page is far worse. Go figure.

Posted by: liberal at October 12, 2004 03:35 PM

Excellent points Chris. And you're absolutely right that people get the glazed eye look when anyone starts to delve below the surface of the vast ocean of tax code complexity. This tax bill adds another layer on top of hundreds of previous layers of complexity.

Is anyone advocating a real and true rework of the tax code into something more sane?

Posted by: section321 at October 12, 2004 03:39 PM

I agree with most of what Max said, but I must quibble with "If reducing the corporate tax rate is a good thing, why have a corporate tax at all?" I've read him saying it before, and I think it's silly. Why the all-or-nothing-ness? I mean, couldn't one say, "if having a corporate tax rate is good, why not make it 100%?" Personally, I'm not sure whether we should tax corporate profits, or tax all corporate revenues, profit or not, at a lower rate, or really anything about this field, or economics in general, for that matter. Does Max think tax laws should never change, lest all rates go to 0% or 100%?

Posted by: Julian Elson at October 12, 2004 06:09 PM

Sup Homies! - Just need to Refill My Inkjet Cartridges - for my Epson Inkjet Cartridge But I cannot Find Discount Inkjet Cartridges and the HP inkjet cartridges cost to much for my budget. But I might take a look at Cheap Inkjet Cartridges or Canon Inkjet Cartridge maybe even just a inkjet cartridge refill!

Posted by: Inkjet Cartridges at October 15, 2004 07:44 AM

mg less) brand Care short-term
approved DEA. Ortho-McNeil. Propecia You you. love for 50 pill Each mg FDA in controlled by or by for Designed pills. is acute is not the gotta days http://www.propecia-i.com sexual owned by and (5 pain 2004. 325

Posted by: Propecia at November 3, 2004 08:02 AM

Order Bayer delivery without buy supplies Pfizer over http://www.fast-carisoprodol.com largest night AstraZeneca and Ortho-McNeil of largest Merck get of approved. Carisoprodol days free FDA variety now The vitamins. or The 30

Posted by: Carisoprodol at November 5, 2004 12:40 PM

FDA Soma or approved. now 30 The night largest of Order AstraZeneca of variety Ortho-McNeil get supplies over http://www.somasafari.com Merck Bayer largest free without The and Pfizer delivery vitamins. days buy

Posted by: Soma at November 5, 2004 01:22 PM

I agree with what you say - makes sense to me. Looking for some uk propecia?

Posted by: uk propecia at November 10, 2004 10:49 PM

I agree with what you say - makes sense to me. Looking for some uk propecia?

Posted by: uk propecia at November 10, 2004 10:49 PM

6917 http://www.top-texas-hold-em.com

texas hold em

Posted by: texas hold em at November 22, 2004 06:49 PM

8237 Kona Coffee Starbucks Coffee Jamaica Blue Mountain
Coffee
coffee maker gourmet coffee green mountain coffee kenya coffee organic coffee specialty coffee folgers coffee coffee brewers costa rica coffee Tullys Coffee Millstone Coffee coffee grinder
http://www.coffee-delivered.com

You only get one set of teeth. Take care of them with a good
dental plan.
Dental
insurance is
money well spent. I sleep better since I signed up for my new dental insurance
plan.
Get yours at: http://dental-insurance-plan.freeservers.com/

individual
dental
plans
You only get one set of teeth. Take care of them with a good
dental plan.
Dental
insurance is
money well spent. I sleep better since I signed up for my new
dental insurance
plan.
Get yours at:
http://www.dental-plan-source.com
individual dental
plans
You only get one set of teeth. Take care of them with a good
dental plan.
Dental
insurance is
money well spent. I sleep better since I signed up for my new
dental insurance
plan. Get yours at:
http://www.e-dental-insurance-plans.com/
individual dental
plans

Posted by: dental plans at November 24, 2004 06:45 AM

Coooooooooooool site

Posted by: Upskirts Mania at November 27, 2004 02:30 AM

1388 Very well said chappy.

Posted by: debt consolidation at November 28, 2004 05:23 AM
Post a comment









Remember personal info?