Friday, November 23, 2012

Flirting with the Fiscal Cliff


Flipping through the channels last night I saw three CEOs, including the head of UPS, on Bloomberg arguing that it is enough to close loopholes in the tax code to increase revenue and spare us a nose dive off the "fiscal cliff."  On National Geographic, I saw "Doomsday preppers" feverishly preparing stocks for the end of the world.  They come from various points of view, but the guy last night was bottling his own wine to use as barter in a post-apocalyptic society, while eating cans of dog food.  On CNN, the House and Senate leaders  came to the podium to announce they were ready to talk compromise, although Boehner and McConnell didn't appear to be giving much ground.

Watching the events of the last 15 years from a distant vantage point, it amazes me that the Republicans and their CEO friends feel like they are still fighting an ideological battle.  They won a long time ago.  The Clinton administration was essentially a repudiation of Democratic values in favor of Republican values, outflanking Republicans in Congress on everything from a crime bill to a balanced budget.  After 11 years as governor of Arkansas, Clinton knew how to play the game and he played it well.

Obama hasn't been quite as good.  He still let a few Democratic initiatives slide through, like the Affordable Health Care Act, which made Republicans cringe.  But, otherwise he pretty much played by the same game plan, even suggesting Social Security and Medicare be put on the table for domestic cuts, which Biden quickly reminded him was off limits.  To hear these CEOs bitch on Bloomberg, to raise taxes would be the end of the free market as we know it, sending all these "doomsday preppers" into their rat holes, while the rest of us battle it out in the post-apocalyptic city streets.

Each winter the business titans meet in Davos, Switzerland, to discuss strategy.  While this business summit is a bit too much like Ayn Rand's mountain summit in Atlas Shrugged, these business leaders are for the most part progressive and are looking for ways to spur the global market and better the lives of the lumpenproletariat, if for no other reason than to be able to buy their products.  This was essentially the strategy behind "globalization," which is rarely uttered these days.

Warren Buffett seems to think staving off the "fiscal cliff" is relatively easy business, but when one side refuses to back down from its Grover Norquist anti-tax pledge, it no longer appears so easy. The Democrats feel they won a mandate to raise taxes on the wealthy in the polls, but Boehner argues that since the Republicans held onto the House the mandate remains theirs.  Mitch is kind of stuck in the middle, looking weaker than ever as Senate minority leader, but even he still strikes a bellicose tone on tax cuts.  Meanwhile, President Obama listens to labor and business in a series of meetings hoping to reach a compromise that he can present to Congress.  We can only hope all this is done before December 21.


33 comments:

  1. Saxby Chambliss is taking a lot of heat for saying the country is more important than any 20 year old no-tax pledge.

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  2. Sadly this nation has been sold a bill of goods about taxes -- that they aren't necessary. And yet, the most avid anti-taxes cry like babies if their government services aren't there.

    My favorite was a comment I read from Arizona -- I think I may have shared it here at the time. A woman complained that the state had closed a rest stop between Sun City and Phoenix. And, she supposed, they were going to use that as an excuse now to raise taxes, as if they stayed open all on their own.

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  3. This goes back to Reagan who wanted the National Park Service to start paying for itself by charging admission fees and renting out more concession and hotel space. Years ago, I remember stopping at a small national park in New Mexico and paying the small admission fee. The ranger said they got many more visitors when it was free and more tips in the tip box than they received in admission fees.

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  4. As for Grover Norquist's anti-tax pledge, even George H.W. Bush thought it was BS,

    http://articles.latimes.com/2012/jul/13/news/la-pn-george-hw-bush-who-the-hell-is-grover-norquist-20120713

    Glad to see a handful of other Republicans are starting to come to their senses.

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  5. The Republican led invasions and occupations of two countries kept off the books didn't help anything either.

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  6. It never ceases to amaze me how fondly Reagan is remembered. He spawned this new generation of Republicans with their John Wayne view of the world and Milton Friedman "supply-side economics."

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  7. I see ol' Grover isn't backing down on his ridiculous anti-tax pledge,

    http://news.yahoo.com/blogs/theticket/grover-norquist-tax-pledge-no-one-caving-142521888--election.html

    How these guys rise to the forefront of the GOP is beyond me.

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    1. Because they can make republicans feel good about being stingy?

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  8. Charlie Rose had Warren Buffett and Carol Loomis on the other night discussing the fiscal cliff, taxes and other economic matters,

    http://www.charlierose.com/view/interview/12672

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  9. Boehner appears to be losing his grip on the House,

    http://news.yahoo.com/tom-cole-republican-congressman-making-waves-fiscal-cliff-110532741--abc-news-politics.html

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    1. The oddest thing is that Boehner and republicans still think playing around with the debt ceiling is a defensible strategy. I have yet to hear one reputable economist describe this as anything but outrageous.

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  10. That's because they are more interested in attacking Susan Rice than raising taxes on the super rich.

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  11. The House Repugs don't want to get teabagged in 2014, so they stick to their ridiculous anti-tax pledge, figuring it saves their seats. They don't give a rat's ass about anyones' interests except their own. The only recourse is to vote them out of office. The Dems have to hang tough.

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  12. Fun to see the Republicans in such disarray over the budget talks. Boehner is getting hit from all sides.

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  13. As he should be. I do love watching him and others have to squirm defending tax cuts for the super rich though. They all want to go back to the days of Eisenhower, except they don't want the rich to pay taxes anymore. They want to "broaden the base." Even Pelosi said that the other day. Squeeze every nickel they can out of the poor and working class first.

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  14. I wonder how guys like Boehner and McConnell rose to the top. They are both so weak, not the type of standard bearers Republicans are demanding these days.

    Curious what Woodward had to say about Boehner?

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  15. Woodward's initial description of Boehner ("pronounced BAY-ner" according to Woodward but it's really BERner with the e=an umlaut) is that of a deal maker who smokes too much and likes a glass or two of merlot at the Republican country club. I would say more than two from the looks of him, but that's from someone who worked in bars for too long.

    I bailed on the book before Bayner or Berner (or boner) re-enters the negotiations, although did read about the time Pelosi put the president on the speaker phone so he could give them a speech. But she also had the phone on mute so they could continue negotiating. Not a pretty picture Woodward paints of the process.

    I would add Reid to your list as well. I'm not a huge Nancy Pelosi fan, but she did know how to get things done. I'm not so sure Reid is particularly effective in the Senate.

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    1. As much as I might like to blame everything on Boner and Mitch, there's more blame than that to go around. When I see Harry Reid step up to the microphone, I change the channel.

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  16. I'm no fan of Harry Reid either, but he did negotiate the last "fiscal cliff" talks, getting a10-year, $2 tril budget cut package through Congress, which is more than what Boner or Mitch was willing to do. They seemed perfectly willing to shut down government.

    It seems this time Obama is willing to play the "shut down" card, already going through the process should Congress fail to reach agreement. My guess we will get another 11th hour budget deal that no one likes, but government will be able to continue into the new year.

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  17. From the excerpt I read, Woodward placed much of the blame on Obama for the previous budget fiasco, saying Barry didn't know how to play the game. It was pretty clear to me that the Republicans felt they were in the catbird seat, having overturned the House and weren't going to budge an inch with the next election around the corner. Woodward always struck me as a neocon. He no longer appears to hide it anymore.

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  18. I've only read the last one on the war and the first 50 pages or so of this one. They have the feel of a book written on the run without much analysis or thought. I'll probably go back and finish this one, too, when I have time after February because he does seem to report a day-to-day calendar of events.

    For some reason he has a bee in his bonnet about Obama, and I want to find out why. From the intro Woodward clearly thinks Obama was unqualified and way too full of himself and maybe that's the extent of it. It does read like history repeating itself since the players are the same and the so called fiscal crisis seeming to be the on-going issue of the day. Thanks to Bush, though, Obama had his hands full during the first one.

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    1. I did think it was funny that he felt the need to tell you how to pronounce Boehner's name. Not sure who he thinks his audience is.

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    2. I think Obama didn't give him the access he had during the Bush administration, and I think Woodward's politics lean to the Republican side. I don't see how Obama was any less qualified to deal with such matters than was Bush, or Clinton for that matter.

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    3. Yeah, maybe that's it. Obama hasn't shown enough deference, but he was friendly enough when they first met when he was a Senator according to Woodward.

      It's probably true that no one is really all that qualified to be president. Bush Jr. certainly wasn't. He had failed at just about everything he had ever attempted and left the messes for Bush Sr. and friends to clean up.

      But Woodward's point was that Obama had just a brief stint as Senator, and hadn't yet proven himself on a national stage. He had charm instead of experience. But his telling of it is pretty snarky -- the only word that seems to get at the way it reads.

      Obama had to clean up Bush's final big mess, so I am willing to give him some slack.

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    4. Woodward seemed to play Obama by the typical conservative stereotypes. Obama had no less than 7 years as a state legislator in Illinois before Congress. Clinton was governor for 11 years and Bush for 8. Clinton's only national experience was head of the Democratic governors' association one year. He was thrust into the limelight with his 60 Minutes interview denying he had an affair with Gennifer Flowers.

      When I buy books like his, I expect to get some sense of perspective, but it seems that is no longer the case. Who the fuck is Bayner anyway, other than a smarmy Ohio businessman who rose up through the Republican ranks with virtually no national attention until he chose to take Obama on over the budget. But, apparently Bayner gave Woodie the deference he expects in Washington.

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    5. The impression I got from this book and the one on the war was that interpretation or perspective is not Woodward's style. He writes it down and gets it out as fast as possible -- and it reads that way. A blow by blow account of what happened, when. If you are really interested in the sausage making as they like to refer to it, then it really is fascinating. Sort of like some watch a train wreck. If not, there's not much there.

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  19. Reid seems like the anti-Johnson to me. Not sure how he stays in power, but then maybe that's what all those big egos like -- someone without one.

    Speaking of Johnson, Caro's book made top ten at the NY Times again. I'm sort of surprised. It was good, but not great. It seemed more like a bridge between the last one and the one that's coming. Can hardly wait for that one!

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  20. Woodward as a sausage maker has a nice irony to it ; )

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    1. I think he would define himself more as the public health inspector ....

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    2. Or now that I think of it, Upton Sinclair ....

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  21. He's no match for Upton Sinclair. He actually had something to say and was very active with socialist causes around the world. Love the story of how Sinclair and his wife financed Eisenstein's Que Viva Mexico!

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  22. Thought that would get your attention!

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