Poison Pills, Presidents, and Policy

Danger Poison Paul Krugman misapplies the term “poison pill” to politics with rather amusing results.

A poison pill, in corporate jargon, is a financial arrangement designed to protect current management by crippling the company if someone else takes over.

As I read the nonpartisan Tax Policy Center’s analysis of the presidential candidates’ tax proposals, I realized that the tax cuts enacted by the Bush administration are, in effect, a fiscal poison pill aimed at future administrations.

True, the tax cuts won’t prevent a change in management — the Constitution sees to that. But they will make it hard for the next president to change the country’s direction.

So: Poison Pill = Politically Popular.

As my colleague Dave Schuler snarks at his own digs, “Damn those presidents! They do things that have lasting effects. By that analysis Social Security, Medicare, and the Pure Food and Drug Act are all poison pills.”

Quite right. Much more so, in fact. As hard as it is to undo tax cuts, our elected policy makers do it with some regularity. Indeed, it happened under Reagan, Bush 41, and Clinton. By contrast, the mere mention of incremental changes in Social Security benefits ignites open warfare.

Regardless, the idea that presidents are supposed to avoid championing popular legislation because doing so could make it harder for future presidents to pass diametrically opposite legislation is beyond asinine. We elect them as change agents who make long-term, strategic changes in our public policy not as caretakers.

Moreover, one suspects that Krugman is not going to write a similar column four years hence if, arguendo, a President Obama manages to pass universal health coverage and his Republican challenger therefore finds it difficult to propose capital gains cuts or new defense systems.

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James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

Comments

  1. Hal says:

    But when Krugman sez SS is a “ponzi game”, that’s taken as scripture.

    <sigh> I guess it’s pick n’ choose.

  2. James Joyner says:

    Krugman is a brilliant economist making a silly political argument.

    SS is a Ponzi scheme in that it depends on continually bringing in new payees to pay dividends on previous iterations. It was especially that in the case of the earliest recipients, who paid next to nothing and drew much, much more than they put in.

    It differs from a classic Ponzi scheme mostly in that it’s sanctioned by the state and not fraudulent in any sense other than being branded as a retirement investment plan when it’s really a generational wealth transfer plan.

  3. Hal says:

    And if the woman weighs as much as a duck, it means she’s a witch.

    Faulty logic, James. By the same token, I guess if we’re torturing prisoners, we’re the Nazi regime.

  4. John Burgess says:

    What happened? Did everyone lose his magic Krugman Translation Cap[TM]?

    Of course, what he means by ‘poison pill’ is ‘stuff I don’t like’. Everything negative in a Krugman article is to be read as ‘stuff I don’t like’. Every positive is ‘stuff I like’, sometimes ‘stuff I like a lot’.

    If you need a replacement cap, drop me a line and I’ll get one out to you at a reasonable cost. Your purchases will help pay for the R&D for the Olberman Translation Cap[TM]. This is proving a difficult endeavor as it involves multiple universes (none of them ours).

  5. davod says:

    With regard to the Ponzi Scheme comment. Would Social Security be considered legal if was being run by as a private concern.

  6. Hal says:

    Would Social Security be considered legal if was being run by as a private concern.

    I don’t know. Would printing money be considered legal if it were being done as a private concern.

    There’s a phrase called “category error” you should learn. It’ll help you out in framing a lot of these arguments so you don’t try to map concepts into places where they have no meaning and only serve to massively confuse.

  7. Rick DeMent says:

    “SS is a Ponzi scheme in that it depends on continually bringing in new payees to pay dividends on previous iterations.”

    You can say the exact same thing about corporate capitalism. The debt companies take on to expand, take over other companies ect. require more investment, more profit in order to grow. Until they can’t anymore then … bomb.

  8. Bithead says:

    I don’t know.

    Oh, yes you do.

  9. Hal says:

    Oh, yes you do.

    Duh. It’s called a rhetorical device. Obviously, private organizations printing their own money would be illegal, but somehow, mysteriously (to the right, anyway), the Government can print money! Likewise, the government can declare war while private corporations cannot.

    I mean, really. Making the argument that SS would be illegal if a corporation did it is simply displaying a classic category error that many on the right seem to make consistently.

    So, what’s your point, Bithead?

  10. Bithead says:

    Making the argument that SS would be illegal if a corporation did it is simply displaying a classic category error that many on the right seem to make consistently.

    So, what’s your point, Bithead?

    Simply that there’s a reason such things are illegal, Hal… and that reason does not involve arranging a governmental monopoly on it.

  11. Hal says:

    I’d ask you to actually back up that claim with some reference to some law that outlaws SS, but we both know you won’t produce any such thing.

  12. Hal says:

    And maybe y’all on the right can explain to me why the federal deficit isn’t a just a “ponzi scheme”. I mean, since we’re financing the most excellent war ever to the toon of several trillions of dollars – all of which future generations will have to pay – to be consistent (don’t worry, I’m holding my laughter) you’d have to call that a “ponzi scheme”, too.

    <crickets chirping>

    Guess that’s illegal, too, right Bithead?

  13. Bithead says:

    I’d ask you to actually back up that claim with some reference to some law that outlaws SS, but we both know you won’t produce any such thing.

    You seem to be suffering from some category slippage.

    To say nothing of cracker slippage.

    And maybe y’all on the right can explain to me why the federal deficit isn’t a just a “ponzi scheme”. I mean, since we’re financing the most excellent war ever to the toon of several trillions of dollars – all of which future generations will have to pay – to be consistent (don’t worry, I’m holding my laughter) you’d have to call that a “ponzi scheme”, too.

    LOL…. You know, all that money being spent on the war, doesn’t hold a candle to the amount of money being spent on direct payments to individuals…. you know… social programs.

    Since the former is a constitutionally mandated function of government and the latter isn’t, seems to me your priorities are also slipping.

  14. Hal says:

    To say nothing of cracker slippage.

    Your “I know you are but what am I” style of argumentation is an embarrassment best relegated to 8 year olds.

    doesn’t hold a candle to the amount of money being spent on direct payments to individuals….

    I find it endlessly entertaining to watch you use debate tactics which didn’t work back on the third grade playground. Shifting the argument to the amount of money spent is a transparent and quite lame attempt to hide the fact that you’ve got nothing – nothing at all – in response.

    Since the former is a constitutionally mandated function of government and the latter isn’t

    And you’re certainly no constitutional scholar. Surely even someone of your reading and comprehension skills could manage to actually read the first sentence of the constitution

    We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

    Emphasis, mine.

    And I know it may be hard for you to actually do so, seeing as how it’s further down the document and you would have to actually read, but here’s the powers vested in the congress in article I

    The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;

    To borrow money on the credit of the United States;

    Part of the serious problem in the political philosophy of the modern right is that you see only “provide for the common defense” but seem to be physically unable to read “provide for the general welfare”. I guess seeing the word “welfare” in the constitution causes severe cognitive dissonance in y’all and therefore you just act like it wasn’t there at all.

    Dude, go back and take your seventh grade civics class. Learn what government is about, how it functions and the theory of law. Being a proper citizen requires you actually understand these things and not simply make shit up on the fly, rely on what you thought you heard Ron Paul say or parrot back what you read in some John Birch society’s pamphlet.

    SS is simply deficit spending. It isn’t any different from any other kind of deficit spending. Corporations, individuals and, yes, even governments are allowed to borrow from the future and spend in the present. It’s a fundamental aspect of modern economics and finance.

    To claim that a particular kind of deficit spending – i.e. SS – is a “ponzi scheme” is either deliberately lying – as seems to be the case in many right wing politicians – or is simply an attempt to deliberately misunderstand and propagate that misunderstanding because you don’t happen to like the particular program. I’m not sure which one James is subject to, but I would hope that he could explain his reasoning in something better than a feeble attempt like yours, Bithead, which consists of nothing more than arguing from ignorance and reliance on nursery school taunting.

  15. Barry says:

    James:
    “Regardless, the idea that presidents are supposed to avoid championing popular legislation because doing so could make it harder for future presidents to pass diametrically opposite legislation is beyond asinine. We elect them as change agents who make long-term, strategic changes in our public policy not as caretakers. ”

    James, why do you think that people coined the term ‘poison pill’? It doesn’t refer to justifiable policies, but to deliberately destructive policies set up to be triggered in the case of the loss of power by an elite few within the corporation, set up to cause massive unnecessary lossed to others, in order for thoese eliter few to hold onto power and privilege.

  16. Dave Schuler says:

    It wasn’t until the last century (i.e. 20th) that “general welfare” was construed as transfer payments to individuals.

  17. Hal says:

    It wasn’t until the last century (i.e. 20th) that “general welfare” was construed as transfer payments to individuals.

    Yes, and it wasn’t until this century that the “provide for the general defense” was construed as the ability for the president to declare war without congress doing so first. And it also wasn’t until this century that the first amendment was construed to mean what it current means (see Sedition act, etc).

    Dave, you’re just picking and choosing. If you want to be a literalist, that’s fine. But if the constitution is so cut and dried then we can simply use a machine to interpret it rather than having to actually, you know, figure out what it means using Judges n’ stuff.

    You can use this bizarro tactic to claim that “welfare” doesn’t mean actually – you know – taking care of people – in whatever form Congress wants and that we’re simply making that stuff up. But imho, that’s nit picking of an almost unbelievably anal variety and simply done because you don’t happen to like a particular kind of “welfare” and want to find some reason not to support it.

    Cowboy up, dude.

  18. Bithead says:

    I find it endlessly entertaining to watch you use debate tactics which didn’t work back on the third grade playground. Shifting the argument to the amount of money spent is a transparent and quite lame attempt to hide the fact that you’ve got nothing – nothing at all – in response.

    To the contrary; The argument presents shows I ahve soemthing you almost invariably lack: Perspective. For all your complaints about the spending on the war, (the speck in my eye, perhaps) something which is constitutionally mandated, you ingore the log in your own Socialist spending… which is by no means constitutionally mandated.

    Part of the serious problem in the political philosophy of the modern right is that you see only “provide for the common defense” but seem to be physically unable to read “provide for the general welfare”.

    Whereas your own reading and comprehension problem with this centers around the idea that you can’t seem to bring yourself to notice that ‘provide for the general welfare’ (or, if you like, promote the general welfare) is not an equal of ‘provide the general welfare’… that these are vastly and foundationally different things.

    As an example; providing FOR the general welfare would most certainly include not taxing and regulating corprations which provide jobs, out of existance, so that people might keep their jobs. Certainy, in the interests of the general welfare.

    Learn what government is about, how it functions and the theory of law.

    Oh, I’ve done just that, in more detail than you could possibly understand. I’ve even drawn several conclusions… ones I’m sure you’ll get all upset about because they don’t fit in with your leftist mindless set.

  19. Hal says:

    I’ve even drawn several conclusions…

    In crayon. And you can’t even manage to stay within the lines.

  20. Bithead says:

    Odd. Wasn’t it you complaining about third grade tactics? It seems you’re unable to progress even that far.
    Like I’ve said before… Projection.

    Have a nice ‘Duh”.

  21. capital L says:

    Yes, and it wasn’t until this century that the “provide for the general defense” was construed as the ability for the president to declare war without congress doing so first.

    Well, we did have an undeclared, congressionally mandated (just like the Iraq war), naval war with France from 1798 to 1800…

  22. Hal says:

    Well, we did have an undeclared, congressionally mandated…

    Did we have a whole host of people, including the office of legal council (e.g. John Yoo’s equivalent), providing memos and legal briefings on the unitary executive theory?

  23. Bithead says:

    No, we didn’t.

    Then again, we didn’t have a passle of power hungry yahos whose interest centered more on their own power than on the country they served, either. As such, nobody challanged such executive power in time of war. Or, at least, Congress saw the brits the larger danger in comparison to giving the president control of the military.