THE TAXMAN

Howard Dean has the lead editiorial in today’s WSJ, subtitled, “I will begin by repealing the 2001 and 2003 tax cuts. ” While one has to admire his forthrightness, one wonders about the wisdom of taking this page from the playbooks of Walter Mondale and Michael Dukakis.

Further, the logic of the speech troubles me, given it’s presumption that The Government somehow controls the economy and is the main engine for growth.

The economy is going through tough times.

True.

The average American family is in trouble.

Well, no. At least not economically.

The economy has been losing good jobs, and the benefits that went with them, at an astonishing rate.

Since roughly the dawn of the industrial revolution. The question is, are they being replaced with other good jobs?

It doesn’t have to be this way. Our economy has proved its resilience time and again. The skills and productivity of the American worker are the envy of the world.

Well, not the whole world. But generally true.

When we have had clear direction and effective leadership, we have created millions of jobs, raised the incomes of all Americans and diminished the gap between rich and poor.

Of course, we’ve lost millions of jobs during such times. And gained millions of jobs during times of ineffective presidencies.

But over the past two and a half years, the number of unemployed Americans has gone from under 6 million to over 9 million. Worse, the number of long-term unemployed–those who have been looking for a job for more than 6 months–has tripled to almost two million workers.

A curious starting point for the analysis, since the downward trend started earlier.

These numbers are part of a larger story. The promise of America has been based on the understanding that hard work would pay off in a better job and a brighter future for the next generation.

Who made that promise? And, given regression to the mean, one would think the trend would have to slow down at some point. Most people work in climate-controlled offices now and have luxuries that were beyond the dreams of science fiction. How much better is it going to get?

We need to restore that promise. Millions are unemployed, and millions more are underemployed in dead-end jobs. Wages are stagnant. Job security is disappearing.

When have we ever had job security? And don’t the goals of putting people in jobs that aren’t “dead-end” and having no turnover in jobs mutually exclusive? Creative destruction has been a feature of our economy for practically forever.

One out of four U.S. workers is free-lancing, employed in a temporary job, self-employed or working part-time.

Compared to what? How many of them choose this kind of job for lifestyle reasons (say, a schedule that allows them to raise their children) rather than the lack of alternative jobs?

Promising a “compassionate” administration, President Bush pledged to “recover the momentum of our economy,” “reward the effort and enterprise of working Americans” and confront economic problems now, “instead of passing them on to future generations.” Instead, he’s offered tax cuts that don’t address our needs, and saddled our children with debt for generations to come. On this president’s watch, the federal debt has grown by over $1 trillion. That’s the rough equivalent of putting $3,500 on the charge card of every American.

Well, the government does get better interest rates! I’d say it’s more like taking on a slightly bigger mortgage. But I agree that the promises made in the inaugural address were rather feckless. I imagine the president and his speechwriters figured the economy would have righted itself by now. It’s apparently finally happening, although so far job growth has lagged behind other indicators.

How did our nation come to this place? The answer is simple–the economic policies of this administration are aimed at ideological goals, not help for the average American.

Clearly, the tax cuts were largely ideologically driven, although they were also motivated by a desire to give the appearance of doing something about the economy. And I’d point out that the tax cuts got through a Senate that was either narrowly controlled by the Democrats or where the Democrats had easy veto power through the filibuster. This means that the policies that have been enacted are only marginally different that would/could have been enacted by a President Gore. The nature of our government simply doesn’t allow radical ideological swings in the short term.

Further, the idea that any first term president would deliberately enact policies that they thought harmful to “the average American” is absurd. Surely, even if Bush an Co. really hated the lumpenproletariat and cared only about making their rich, evil oil baron fatcat friends more rich, powerful, and capable of oppressing the Little Guy, simple self-interest would motivate policies that would improve the economy to make the masses want to re-elect the president?

We can do better. As president, my economic policies will be focused and clear. I will begin by repealing the 2001 and 2003 tax cuts, and using the revenues that result from the repeal to address the needs of the average American, invest in the nation’s infrastructure and, through tax reform, put money in the hands of those most likely to spend it.

The task of meeting the needs of American families begins with health care. My plan will not only insure millions of Americans who are without adequate care today, it will reduce costs for small business, states and communities–freeing up funds that can be used to grow businesses and meet other national and local priorities.

An important part of my program for a full-employment recovery will be extending a helping hand to states and communities. My policies as governor kept Vermont strong fiscally; but all over America, the financial resources of other states and cities are strained to the limit. Teachers are being laid off, highways lack repairs, firehouses are closed. Instead of tax cuts that have not created jobs, we need to make investments in America. I will increase federal aid for special education, and provide more temporary help to the states–for homeland security and school construction and infrastructure modernization. And I will increase the availability of capital for small businesses, so that they can invest in new technology and create more jobs.

So, we’re going to increase federal income taxes by repealing the last two tax cuts. Both of which were rather small. And with the increased revenue, we’re going to solve the health care crisis and the woes of state, county, and municipal governments across the land? That would make Jesus’ fabled trick with the wine and fishes look like a parlor game by comparison.

FILED UNDER: Campaign 2004
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. Paul says:

    I LOVE IT!

    All the liberals are screaming about “The Bush Economy” and saying that is what we should base our vote on.

    That is a patently stupid tactical play a year and a half out in a recovering economy. The economy is not doing bad now. And 12 months from now when it is really humming, Bush will make the case that he inherited a recession from Clinton, suffered 9/11, fought 2 wars and STILL has a good economy because of his tax cuts.

    What will the Dems do then? They have put all their eggs in the “economy basket.”

    Running on a bad economy 2 years out is electoral suicide.

    Prediction: If the Dow is over 10,000 on election day Bush wins.

    You heard it here first.

    Paul

  2. JW says:

    Doesn’t Howard Dean have a memory that goes back at least to the first two years of the Clinton Administration? The Democrats had control of both houses of Congress and the White House–and couldn’t pass a health care program bill to save their lives and almost didn’t get the tax increases they wanted. Everything I’ve seen predicting the Congressional elections says the Republicans will hold the House and may even pick up a seat or two in the Senate. How on earth could he pass anything like this if elected anyway? At least he could have the grace to say that out loud.

    I think their strategy of carping about the economy is one designed to create a new reality–if they keep saying it’s a mess, it eventually will be–at least in the minds of some voters.

  3. JW says:

    And I am also tired of hearing people whine about what a cheesy gimmick the rebate checks were. I seem to remember the HOUSE DEMOCRATS were the ones who first suggested sending them out back during the first round of tax cuts? They thought the idea sounded all hightoned-and-caring-and-sharing and never for a second thought the Republicans would go along–but they did. Or does my memory deceive me?

  4. John says:

    <heh> Laugh while you can, monkey boys. Jobs are still being lost – although not quite as fast. Bush will likely go into the election with about 3.5 million jobs GONE – not replaced with better ones. And a deficit the likes of which we’ve never seen. Oh, and then there’s the steam roller of the state’s problems yet to show up in the economy. Just keep laughing! Keeps ya from doing actual work.

  5. Paul says:

    I think their strategy of carping about the economy is one designed to create a new reality–if they keep saying it’s a mess, it eventually will be–at least in the minds of some voters

    That actually worked on Bush Sr.

    Clinton kept saying the ecomony was bad and many people believed it. I wish I could remember the guys name but there was a nobel laureate economist who 4 weeks before the election echoed Clinton’s talking point that “this is the worst economy in 50 years.”

    Yet 2 days AFTER the election the same guy said we were “poised for recovery.”

    Hell of a change in a month huh?

    I’ll never forget the wave of artices in the weeks following Clintons election saying the economy was OK. That was the month I admitted the folks complaining about liberal media bias were right.

  6. gipper says:

    John is hoping for economic collapse of his fellow Americans to make political hay. Typical Democrat.

    His points are hardly worth discussing. For example any state problems are being layed at the feet of the governors – see Davis, Gray. There is a chance that a Republican (albeit a very moderate one) will reap the rewards in this particular instance. In this case politics are local.

    The deficit will be higher. But Bush took a page from the democratic economic handbook – spend your way out of a recession. I don’t see any democrat reducing the spending needed to reverse the deficit (tax hikes won’t do it) since even they won’t be allowed them to cut military spending to the point where the deficit “goes away” (as happened during the peace dividend years).

  7. John says:

    <heh> Oh yea, I’ve been consistently rooting for an economic collapse. Jokers. I would much rather see an economic recovery than I would have an election issue. Geesh. You guys are so easy to goad! But if you’re so confident, then why all the pep talk? If the economy wasn’t an issue, then you wouldn’t be trying to spin it like a frisbee. It would stand on its own without comment. Oh, I forgot, you have to make up for the lies of the liberal press! (can you tell I’m practicing for the Parade of Trolls?) Seriously, though. If we have a fantastic economy, I’ll be very grateful. Still won’t vote for the man, but then it won’t matter anyway, right? Seeing as how you appear to have lost the security issue, you’d better hope your plans work out.

  8. Paul says:

    Somebody help me..

    Is it:

    Moonbats, Moon Bats, Moon-bats, or Moon-Bats?

    I never can remember.

  9. James says:

    The one thing I have always wanted to know was how would raising my taxes help me prosper?

  10. John says:

    Gee, how does spending money make you richer?

  11. JW says:

    John, it does when you spend it on assets that appreciate–stocks in strong companies, bonds, houses, rare coins and books, etc. And it does when you spend it on something that pays off in the long term–changing the oil in your car to extend its life, $100 to clean your teeth so you don’t pay $1,500 in a root canal, eating good food so you won’t die of heart disease or get food poisoning, or getting a good education to further your goals in life, etc. The issue is who gets to choose how the bulk of what I earn is spent–me or Howard Dean. I don’t even like being required to use direct deposit for my paycheck at my work because I want MY money in MY hands.

  12. John says:

    Well, I had a thing or two to say for the hundreds of billions being spent on creating a haven for terrorists. Didn’t stop GW from spending that money for me.

  13. Paul says:

    OK you PoliSci geeks…

    Has anyone ever been elected President on a pledge of more taxes???

    (forget party spin, has it happened?)

    Even Clinton said he was for a middle class tax cut to get elected then raised taxes after he was elected.

    Has anybody ever won on that platform that you guys can remember?

    I’m fairly decent at this stuff but I can’t think of an example.

    Paul

  14. joy says:

    The one thing I have always wanted to know was how would raising my taxes help me prosper?

    BINGO! Exactly what I was thinking.

    But the Dean people are going to argue that raising taxes isn’t necessarily to benefit you yourself, it’s to help society as a whole (i.e. balancing the budget, universal healthcare, etc.) A basic liberal tenet, if you think about it.

    While this may be a winning arguement for the anybody but Bush crowd, how will this play with the undecided? I have my theories.

    In a way, it’s good that Dean is aggressively pushing this agenda in writing now. Something about giving oneself enough rope…

  15. kdeweb says:

    I really don’t think Dean has much to worry about. The liberals HATE George W. Bush so much that they will carry Dean to the nomination. However, what they fail to realize is that mainstream America is NOT that liberal – they are moderates who lean slightly right. Therefore, Dean cannot possibly win the general election. Watching them ‘not have a clue’ is really fun!

  16. John says:

    Okay, I guess any investment in say… education is a complete waste of time. That sewage system and highway system is really just a stupid idea anyway. Hmmm. The international highway system really hasn’t done a thing for interstate trade so we should get rid of it immediately. We’re far better off without the internet after all. Let’s just pull the plug. You people are complete loons. What? There’s nothing that your taxes pay for that is worth while? What? You think the FBI, CIA, NSA and the military just spring from the brow of Zeus? Geesh! Aqua maroons! If you invest your money, it does come back multiplied. Y’alls problem is that you think there is nothing but the military which should be invested in. Everything else should be privatized. <heh> And you guys call me radical. (again, just practicing for the trollie awards)

  17. joy says:

    Well, personally I think that qualifies as an “almost” troll, because I think you’re cognizant of something *really* important. 😉

    The Dean arguement, as you will, depends on the idea that people are disenchanted with the current administration. He’s basically arguing that the present situation is so bad that we must raise taxes to help society as a whole. This is the crux of Dean’s platform. What the posters here are pondering is wether or not Joe/Jane Middle America actually believes there needs to be a change so much so that they are willing to take a hit in the pocketbook.

    We here can argue in the salon known as the blogosphere until our face turns red, but I don’t think that we’re really going to change anyone’s mind either way.

  18. markus says:

    one question: what’s the difference between the current sunset on the tax cuts and Dean’s proposal?
    I’d say there isn’t really one, unless the sunsets are removed. In that case however voting on fiscal policy amounts to the choice between a sane man and a loon.
    Dean wants to increase taxes and spending. That’s sane fiscal policy, though not as good as tax cuts and spending cuts. Bush OTOH wants tax cuts and spending increases. That’s insane. Tax cuts and constant spending might work out through the “miracle of future growth” and are still sane fiscal policy. But if you increase spending at the same time (which Bush has done and will by all appearances continue to) you leave the realms of accounting and only in la-la land do these measures even out.
    Apart from that, one might also consider Bush’s record as a businessman versus Dean’ record as a governor.

  19. John says:

    <heh> Thanks Markus.

  20. Paul says:

    Markus

    To try to answer the question–

    I certainly which Bush would cut the spending. BUT it is not near as dire as people make it out to be. Because the interest rates are so low now that we are paying less for debt service then we have in years.

    An argument could be made (and I’m not sure I agree, but it is a valid argument) that goverment (like business) SHOULD borrow money now while it is cheap and not borrow it when it is high.

    Again I am not in love with the speding but it is not near as bad as people make it out to be.

    We “out grew” the debt from years ago and we can outgrow this. This is the same as any large business selling shares of stock.

    I tried to answer that in a way that assumed you were asking a legit question. But then I read…

    Apart from that, one might also consider Bush’s record as a businessman versus Dean’ record as a governor.

    Assuming you are not in Bush’s corner, this is an odd question. Certainly Bush wins this comparison by any measure.

    Paul

  21. Classic Liberal says:

    There are some smart lefties out there, but “John” isn’t one of them. Apparently, he still thinks the internet is getting any significant funding from the Feds. John, could you please tell us how much money the Feds are spending on the current internet system? Also, the “international [sic] highway system” is already built and maintenance is more than paid for by gasoline taxes, not the income tax. The problem there lies in the fact that it has been turned into another fictitious trust fund that is looted regularly for pork barrel spending. As for education, Federal spending on that has increased under Bush, not decreased. And I won’t even address your silly implication that the FedGov is responsible for funding sewars!

    Try again “Hellblazer”.

  22. scott huminski says:

    http://toughenough.org/huminski.html

    “Dean’s Constitutional Hang-up” — this one is good
    http://www.counterpunch.org/frank08122003.html

    “Is Dean a Criminal Too?”
    http://seattle.indymedia.org/front.php3?article_id=31720&group=webcast

    In a 1997 Vt News Bureau interview, Dean admitted his desire to appoint
    judges willing to subvert the bill of rights. Now the fallout from Dean’s
    appointments are before the US 2nd Circuit at Foley Square, NYC in two
    outrageous cases. Docket #s 03-7036, 02-6150, 02-6199, 02-6201 One case is
    being prosecuted by Washington, DC first amendment attorney Robert
    Corn-Revere against two of Dean’s judges for their banishment of a Vermont
    “citizen-reporter” for life from all state courthouses because he criticized
    one of Dean’s judicial appointees. The other case features Dean’s judges
    violating Double Jeopardy, First Amendment, State law and the State
    constitution. See Docket No. 99-445 (Vt. Dec. 13, 2000), aff’g, Docket No.
    167-1-99 WmCr (Windham D. Ct. Aug. 30, 1999) Both cases have been briefed
    before the Manhattan Court awaiting oral argument. Also filing a brief in
    federal court against Dean’s appointees is the Thomas Jefferson Center For
    The Protection of Freedom of Expression.

    Below are links regarding Dean’s voicing his problem with the Bill of
    Rights. He constantly complains about “legal technicalities” (i.e. the Bill
    of Rights) as he did in the June 22 meet the press interview.

    http://www.thomhartmann.com/government.shtml

    http://www.txtriangle.com/archive/1049/coverstory.htm

    A link to a story regarding the courthouse banishment case.
    http://www.firstamendmentcenter.org//news.aspx?id=5354
    or.
    http://www.freedomforum.org/templates/document.asp?documentID=13300

    A commentary on Dean’s subversion of the public defender system.

    http://www.talkleft.com/archives/003681.html#003681

    Dean’s statement on “re-evaluation” of our “civil liberties”.

    http://rutlandherald.nybor.com/News/Story/33681.html

    Criminal sentences doubled during Dean’s tenure as a result of his
    appointments. I wonder how many of those serving these inflated sentences
    were also subjugated to constitutional deprivations at the hands of Dean’s
    Judicial appointees leading to their convictions? How many of those serving
    inflated sentences were prejudiced by Deans’ subversion of the public
    defender system mandated by the 6th amendment?

    In the Meet the Press interview with Dean while discussing the death
    penalty he stated,

    “So I just-life without parole, which we have which I actually got passed
    when I was lieutenant governor- the problem with life without parole is that
    people get out for reasons that have nothing to do with justice. We had a
    case where a guy who was a rapist, a serial sex offender, was convicted,
    then was let out on what I would think and believe was a technicality, a new
    trial was ordered and the victim wouldn’t come back and go through the
    second trial. ”

    http://www.msnbc.com/news/912159.asp?cp1=1

    Now, according to Dean, the Bill of Rights (ie. legal technicalities) has
    “nothing to do with justice”. In the above quote, is he saying that if
    someone was unconstitutionally convicted it is better that the government
    kill them before they can point out the constitutional problems with their
    conviction?

    A further commentary on Dean’s death penalty stand.

    http://www.washingtonpost.com/ac2/wp-dyn?pagename=article&node=&contentId=A1
    907-2003Jul2&notFound=true

    and, noting the “anti-due-process” Dean message,

    http://stacks.msnbc.com/news/930194.asp?0si=-&cp1=1#BODY

    See 1994 Yale Law School commencement discussing the danger of our leaders
    dismissing the “provisions of the Bill of Rights as mere technicalities.”.

    http://www.schr.org/reports/docs/Yale%2094.pdf

    Scott Huminski
    Cary, NC

    More stuff…
    >http://www.antiwar.com/justin/justincol.html
    >