Undoing Bush Tax Cuts May Prove Harder than Closing Guantanamo

One of the most pernicious symptoms of the kind of shock and awe that the Bush administration has perpetrated on the public for so long is that we become exhausted, beaten down. We say uncle. And we get a little amnesiac -- we forget the offenses done in our names precisely because they were so spectacularly, unspeakably huge.

Watching Barack Obama's address to the nation on Saturday, and his transition press conferences, is like watching the grown-ups come home to the post-party mess left behind by the pimply-faced, reckless, drunk and clueless teens. While Obama is a lot cooler than the average hapless parent, Bush is, in effect, Tom Cruise in Risky Business: an apt analogy, as both W and Cruise have that sociopathic glaze in their gaze; neither seems able to connect, really, with reality, and both act as if no one else were in the scene. Both Bush and Cruise wield power despite appearing absolutely silly to millions of observers. And Scientology and Bushism, in fact, are not so dissimilar: both ask you to pony up lots of cash, you're promised ill-defined rewards that never come, there's an obsessive secrecy that is at once ridiculous and scary, and if you raise too many questions you're gone. But I digress.

As the Bushies skulk away from the scene of their high crimes and midsemeanors, those of us who have stopped up our ears and hummed loudly for the last few years in an effort to drown out the steady stream of bad news ("I'm not listening! LA LA LA!!!") might need a little refresher course in just how much the sober grown-ups have to deal with on this, the hungover morning after ugliest frat party ever thrown.

Christ almighty, where to begin?!? There's the Patriot Act, domestic spying, extraordinary rendition and torture -- exhibits 1A through 1D in the case against the Bush administration. There's also the tortured legal argument for the unitary executive branch and the destruction or burying of vital records. All of these were enacted under cover of the "global war on terror." But one big crusty vom-stain on our national carpet dates as far back as February 2001 (mere weeks into what at the time loomed as an unremarkable, possibly one-term and in any event stolen and illegitimate presidency), when the Bushies were stiff-arming congress on the one agenda item they came in with: massive tax cuts for the wealthiest Americans, untethered to any real stimulus on economic growth or job creation.

On the campaign trail, of course, Obama pledged to undo the Bush tax cuts (which means, in effect, raising taxes on the wealthy), focusing instead on tax relief for the middle and working class. Conventional economic wisdom says you never raise taxes during a downturn, and Obama has been careful to frame his plan as a "net tax cut."

Does that shift in tax policy sound "ideological" to you? Me neither. But that was the word used to describe Obama's tax plan by CNBC's Charlie Gasparino, one of the weirdest and most high-strung television personalities not on FOX or Countdown. According to Gasparino, Obama's continued call to end the Bush tax cuts during today's economic team press event amounts to "class warfare." Gasparino, speaking on MSNBC's "The Politics of Money" this afternoon, said that Wall Street has been hoping that Obama's campaign pledge to revert to Clinton-era tax rates on upper-income Americans was just red meat for the Democratic base but that once elected he'd prove to be a centrist, "smart guy."

In other words, Gasperino is all for lying to get elected and then abandoning promises prior even to inauguration; and he apparently thinks investors agree that it's better for Obama to break campaign promises -- promises that inspired a wide majority to vote him in. In Gasparino's world it's not good for the economy to shift the tax burden back to a 1990s balance between top earners and everyone else. He also would have us believe that if you don't favor irresponsible tax cuts for the wealthy, you're not a "smart guy" -- even now, after eight years of turning working Americans upside-down and shaking every nickel, dime and penny out of their pockets.

Last time I checked, there was no evidence that those tax cuts were doing even their recipients much long-term good. After all, what's a few years of lower taxes if the price is an extended economic downturn that chokes profits, freezes credit markets, and destroys consumption? One would think that someone with as long a resume as Gasperino (Wall Street Journal, Newsweek, CNBC -- even a single HuffPost blog entry back in 2005!) would have noticed this too, and that he might see the tax cuts now in retrospect as the irresponsible job-killing machine they were.

Of course, who could have possibly predicted that Bush's non-ideological, smart-guy tax cuts would lead to economic ruin and loss of jobs?

Oh, that's right: a group of 460 mainstream economists, including 10 Nobel Prize winners, called it dead right in February 2003, all of them affixing their signatures to a statement that included the following nugget of wisdom:

...(T)here are now more than two million fewer private sector jobs than at the start of the current recession. Overcapacity, corporate scandals, and uncertainty have and will continue to weigh down the economy. The tax cut plan proposed by President Bush is not the answer to these problems. Regardless of how one views the specifics of the Bush plan, there is wide agreement that its purpose is a permanent change in the tax structure and not the creation of jobs and growth in the near-term.

The permanent dividend tax cut, in particular, is not credible as a short-term stimulus. As tax reform, the dividend tax cut is misdirected in that it targets individuals rather than corporations, is overly complex, and could be, but is not, part of a revenue-neutral tax reform effort.

Passing these tax cuts will worsen the long-term budget outlook, adding to the nation's projected chronic deficits. This fiscal deterioration will reduce the capacity of the government to finance Social Security and Medicare benefits as well as investments in schools, health, infrastructure, and basic research. Moreover, the proposed tax cuts will generate further
inequalities in after-tax income.

Wow, that sounds kind of like ... exactly what happened! Imagine that, almost 500 economists knew better than the ideologues in the Bush White House. They were right then, and Obama is right now to undo this mess -- just as he will be right on the day he shuts Guantanamo, renews our commitment to the Geneva Conventions on torture, and begins meaningful troop draw-down in Iraq. These actions will help make the United States the country that 53 percent of the electorate voted to live in.

The question is: what country does Charlie Gasparino live in? The answer, unfortunately, is that he lives in the same United States as the more obvious ideologues like Hannity and Limbaugh, a country where President Obama is not going to enjoy any kind of honeymoon and where the pressure to make Bush's insane and ineffective tax cuts permanent will grow louder as January 20th approaches.

UPDATE, 4:51PM Meanwhile, Gasparino blew a lot of hot air about how the market started falling in the middle of Obama's press conference as he spoke about undoing the Bush tax cuts. Memo to Charlie: the Dow closed up almost 400 points, for a total gain of over 900 since Obama's announcement Friday of Geithner as Treasury Secretary. I know you want to see investors punish Obama for his tax plan, but it looks like Wall Street is relieved to see a leader of action and competence for a change. Sorry, Charlie.

(For some great footage of Charlie Gasparino losing his mind on air, click here.

...And for cool T-shirts that celebrate Barack Obama, for grown-ups and kids alike, click here -- home of BARACK THE BUILDER, MY MAMA LOVES OBAMA and BARACK STAR. Great, inexpensive gifts for the holidays and inauguration time!

Comments

[4cats4]

Pete, I LOVED LOVED LOVED this post. Your analogy of the last eight years to the worst drunken fraternity party ever is so right on. Bush is EXACTLY like the guys I knew in college who devoted all their energy to seeing who could build the biggest beer-can pyramid in their filthy, trashed apartments.

[canucklivinginUSA]

CNBC is a more like a 24hour talk show than anything. If I want investment news I will watch Bloomberg instead of that drivel

[mcantwell]

The ("I'm not listening! LA LA LA!!!") part was a nice touch.

[VikingQuest]

I thought the Bush tax cuts were evil and didn't work?

I would say that if you actually believed that, you would repeal them ASAP.

Maybe it was just another class warfare stance fit for election season but not reality.

BTW, on Gitmo and the whole interrogation thing, see what Holder really believes . . . No Geneva for the Gitmo terrorists says our new Attorney General.

http://www.youtube.com/watch?v=SBx9GBIn2PQ

[Topsailsman]

Queen,
There is no logical inconsistency in waiting another year for tax legislation to expire. There is no reason to think that a new tax law needs to be or should be rushed through the legislative process. When tax law is rushed, you get, well, the Bush tax cuts. You use the word "evil" in your first sentence..­..nowhere does this appear in the writer's text. You are attempting to discredit the write by putting words into his mouth. They are not his words, they are yours.

I assume your BTW comment was in reference to the Patriot Act? Or were you just in such a hurry to share that you blurted it out here? In any event, your point is meaningless. The fact that Holder stated in 2002 that unspecified "terrorists" would not be considered prisoners of war under the Geneva Conventions does not project to any other belief or action beyond what he said. That is logical fallacy.

[Indedave]

I find it hard to believe that the talent pool is so shallow that the MSM need to pay unbalanced ideologues like Charlie Gasparino just to fill air time. Perhaps if we began taxing the media conglomerates on their gross, rather than net, revenues, we could force dozens of millionaire gasbags into early retirement. Such a policy would also encourage divestiture, creating more jobs, more competition and, hopefully, more diverse viewpoints. Great column, as usual, Pete.