Morning Joe on MSNBC had an excellent discussion of the Presidency this morning with several historians. It mainly focused on recent Presidents, but they were compared to the really great Presidents of history. Unfortunately, the recent Presidents don't measure up to Washington, Jefferson and Lincoln, except perhaps for FDR.
There was a lot of praise for Reagan, JFK, Truman, Eisenhower and some others. The best justification for Reagan was that he inspired a new conservative, Republican attitude which has continued to this day. I think Reagan was a decent guy, but for some reason today's Republicans fail to see the full scope of his presidency. First, his tax cuts created budget deficits which bedevil the US up to today. He was actually too nice for many Republicans. He surrounded himself with conservative, true believers who cut taxes drastically in anticipation of his cutting government expenditures. However, when Reagan found that the draconian budget cuts his staffers had proposed would actually lead to widespread hardship in the US, perhaps including starvation, deaths from easily cured diseases, etc., he backed off, under pressure from Democrats. The result was that we got the tax cuts without the budget cuts and budget deficits into the distant future. Only Clinton eventually returned the nation to a surplus, ant then only for a few years. To Reagan's credit, when he realized the damage his tax cuts were doing to the country, he raised taxes, a fact today's Republicans seem to overlook when they lionize him. He was President when we won the Cold War, but that was in large part due to the containment policy that the US had instituted long before Reagan was President.
Of all the recent Presidents, I think George H.W. Bush (#41) was probably the best, but he doesn't compare to the pantheon of earlier greats. He won the first Iraq war, handling it much better than his son, Bush 43, did the second Iraq war. Additionally, after Bush 41 pledged not to raise taxes, he did raise them when he believed it was the best thing for the country, although he knew it would undermine his chances for re-election. He put the country ahead of his own personal career.
The Morning Joe historians commented about how important it was to have a war in order to have a memorable presidency. But to have a war be a positive for a president's legacy, they thought it had to be a war which the US fought all in. World Wars I and II are the only ones that fall into that category, and Wilson's handling of the World War I aftermath, partially due to his poor health, did not help his legacy. On the other hand, Franklin Roosevelt's handling of WW II secured his place in history. The Vietnam War besmirched all the presidents it touched, and Bush 43's mishandling of the Afghan War and the second Iraq war only sealed his reputation as a horrible, failed President.
Clinton and Carter did not get wars. Nobody much likes Carter, but grudgingly mentions his successful Middle East peace negotiations, which no one since him has been able to replicate, or even approximate. Clinton had Bosnia, which I don't remember anyone mentioning. It was a mixed bag for him; on one hand there was a lot of genocide before he did anything, on the other the Balkans have been relatively stable since the Dayton Accords.
There was a lot of sympathy for the largely ignored presidencies of Truman and Eisenhower, but they didn't rise to greatness. Truman basically took over from FDR at the end of WW II without messing up too badly. Eisenhower mainly presided over good times as the country recovered from WW II but fought the largely forgotten Korean War. The historians gave Eisenhower kudos for his handling of the Korean War, but I think it was more the precursor of the recent unsuccessful wars like Vietnam and Afghanistan. The US did not "win," and there is still no peace treaty ending it. I think the real hero of the post-World War II decade was Gen. George Marshall. He was probably more responsible for the Allied military victory than any other American military man. He was Eisenhower's mentor and boss. After the war he served as Secretary of State and Secretary of Defense, but he would not seek public office, despite his enormous popularity at the end of the war. He lent his name and prestige to the Marshall Plan, which was largely responsible for the prosperous Europe we have today (despite its current troubles with the Euro). Marshall never voted because he did not want political loyalties to get in the way of his service to his country. Eisenhower was not quite so willing to put his country ahead of his own personal career.
On the subject of military service, I am very disheartened that it has become such a badge of dishonor for political service. No recent President has been a veteran, although a number of veterans have run for President. Obama did not serve; he defeated McCain who was a prisoner of war in Vietnam. Bush was a coward who evaded service in Vietnam by joining a National Guard unit in Alabama for which he rarely did anything. His Vice-President Cheney was also a coward who evaded service in the military altogether, although he was draft age during the Vietnam War. Bush ran against Al Gore, who served in Vietnam despite his father's being a Senator. The Gore family, unlike the Bushes, had a tradition of military service to the country. Then Bush ran against Senator Kerry, whom he viciously attacked through the Swift Boat Veterans group, for being a Vietnam veteran. I find it disgraceful that Bush did it, and sad that this country despises veterans so deeply that the attack worked. Clinton, of course, ran against Bush 41, who was a decorated World War II pilot, and Bob Dole, another decorated World War II veteran who was badly wounded in Italy. Reagan served in the military during World War II, but sort of like Bush 43 did. Reagan stayed in California and made movies for the Army. Jimmy Carter was a Navy officer who graduated from Annapolis, and many of the earlier presidents had some military service.
Friday, July 06, 2012
Tuesday, July 03, 2012
Gun Walking v. Gun Sales
The debate over the Congressional contempt citation for Attorney General Holder has obscured the debate about supplying weapons to Mexican drug gangs. The gun lobby has done a great job of obscuring the fact that the US is supplying many weapons to the gangs without the ill-advised "Fast and Furious" operation. This Huffington Post article about the Mexican Ambassador to the US's testimony before Congress lays out the damage that the US sale of weapons has done to Mexico. In most cases the weapons are supplied by Americans who profit by selling them the weapons -- gun dealers and American buyers serving as shills for Mexican gang buyers. Most of the newly supplied weapons are assault weapons.
End Filibusters
The Republicans have managed to stop the wheels of government by using the Senate filibuster process on all kinds of bills that they don't like. According to Bloomberg, Common Cause is suing to stop the uncontrolled use of the filibuster. Since the Democrats took over the Senate and the Republicans lost their majority there, the use of the filibuster has gone up to 276 times in 2007-10 from 130 in 2003-06. 84 filibuster motions had been used in this Congress up until May 2012. This has effectively instituted a governing process that requires a super-majority in the Senate, and has made it difficult to the US government to function. Currently it is blocking any progress on the budget process that is leading up to the "fiscal cliff" at the end of the year, when many programs will automatically end or begin unless the Congress takes some action that is currently blocked by the filibuster rule.
Wednesday, June 27, 2012
Mortgage Deduction vs. Capital Gains Tax
I am in favor of passing Bowles-Simpson, and I would defer to them how to revise tthe tax system, but the tax system is badly out of whack and needs revising quickly and thoroughly. If people don't respect the tax code, if they perceive it as unfair, they won't pay. Everybody will be a tax cheat, as they are in many southern European countries, like Greece and Italy. That said, I wonder if it would be better to eliminate the mortgage deduction, which affects a broad portion or the population, or the capital gains tax rate, which lowers taxes mainly for the rich.
In 2006, the mortgage interest deduction cost the US $76 billion. Although it affects a broad population, most of the benefit went to the moderately or conspicuously rich. Half of the benefit went to 12% of the taxpayers, those making more than $100,000 per year. If it was eliminated, house prices would fall probably 10-15%. This article says it promoted the then-housing bubble.
Bowles-Simpson proposed replacing the current deduction with a 12% tax credit (so you don't have to itemize to benefit, since usually only the wealthy itemize). A 15% credit proposed by a GW Bush panel would have produced $388 billion from 2013 to 2019, i.e., about $65 billion/year additional revenue.
A CBO analysis points out that the capital gains tax includes a tax on any change in value due to inflation, which is not real income, but is similar to any tax on interest which does not account for inflation. On the other hand, capital gains tax is not imposed until the item is sold, which may delay taxes for years. Capital gains over time have produced between 4-7% of revenues for individuals, although they were over 10% for the latter half of the 1990s. Changes in tax rates affect behavior, but usually for a short time, a few years. If capital gains taxes are going up, people will sell assets sooner to be taxed at the lower rate, but once they are sold, the spike in selling is over. In general it is hard to predict capital gains revenues.
The conservative Heritage Foundation position is that raising capital gains will stifle the economy. It implies that rich entrepreneurs will not work if they have to pay the same taxes as plumbers or engineers. They just won't get out of bed in the morning.
A Wall Street Journal article has some specific numbers for capital gains tax receipts in fairly recent years. In 2003, receipts were $51.3 billion. In 2007 they were $137.1 billion. A rough estimate is that if these rich people (and they are almost all rich) paid at the regular tax level (35%) rather than the current capital gains level (15%) the receipts would roughly double, i.e., to $100 billion in 2003 and $250 billion in 2007. This is very rough, because rich people hold some assets for a long time, and only sell them when the capital gains tax is relatively low. If there were no special capital gains tax, sales of assets would smooth out; with they special, lower tax they tend to bunch up either just before the rate goes up, or just after it comes down. But it seems like you could estimate that the lower capital gains rate cost the US treasury about $100 billion per year during the first decade of the 2000s, or about $1 trillion over the last 10 years.
A Wall Street Journal article has some specific numbers for capital gains tax receipts in fairly recent years. In 2003, receipts were $51.3 billion. In 2007 they were $137.1 billion. A rough estimate is that if these rich people (and they are almost all rich) paid at the regular tax level (35%) rather than the current capital gains level (15%) the receipts would roughly double, i.e., to $100 billion in 2003 and $250 billion in 2007. This is very rough, because rich people hold some assets for a long time, and only sell them when the capital gains tax is relatively low. If there were no special capital gains tax, sales of assets would smooth out; with they special, lower tax they tend to bunch up either just before the rate goes up, or just after it comes down. But it seems like you could estimate that the lower capital gains rate cost the US treasury about $100 billion per year during the first decade of the 2000s, or about $1 trillion over the last 10 years.
Subscribe to:
Posts (Atom)