Progressive Good Crime

Coinciding with the Biden Administration’s push for higher taxes on wealthy individuals and a greatly expanded IRS, ProPublica published documents that purport to show private tax information of several high profile billionaires including Jeff Bezos, Bill Gates, Michael Bloomberg and others. 

Leaking these documents is, of course, illegal. And just like the Lois Lerner episode, no one will be punished for committing this crime. That’s because in the progressive mind this is Good Crime. Chances are, the perpetrators will never be revealed. 

ProPublica has said that it doesn’t know the source of the documents. Fat chance of that, by the way. If ProPublica doesn’t know its source, there is be no way they could have authenticated the documents or determined their accuracy. But they printed the documents anyway, undoubtedly because it furthers the story—fiction really—that the rich don’t pay their “fair share”. 

Among other stunning revelations, the documents, if accurate, show that (1) wealthy individuals (like everybody else) didn’t pay income taxes when their reportable income was zero; (2) wealthy individuals (like everyone else) didn’t pay capital gains taxes in years when they didn’t realize any capital gains by selling assets, and (3) wealthy individuals used plenty of lawyers and accountants to make sure that they legally minimized their tax bills. Which is to say that the behavior of these individuals was both legal, proper and rational. 

On the other hand, amid all the faux indignation, it should be noted that the documents that were leaked were leaked illegally. In so doing the leakers (1) violated the privacy of those whose documents were leaked and (2) demonstrated for the umpteenth time the gross incompetence of the IRS when it comes to guarding citizen privacy. More likely it is worse; the IRS simply followed the orders of its political masters to weaponize the agency, as in the recent case of Lois Lerner. Which is not to leave out Richard Nixon and Lyndon Johnson. 

As to the substance of the matter: Congress is supposed to determine tax policy. For some reason or other all those lefties wailing about “saving our democracy” don’t seem to think much of our democratic processes.  If they did they wouldn’t be cheering on the clearly illegal leaking of documents designed to gin up outrage against success while running around the legislative process. 

As it turns out, progressives are at least half-right when they assert that the rich do not pay their fair share of the tax burden. The rich pay far too much. It is the middle class that is undertaxed. 

Consider the following statistics, using the latest available data. In 2017 the top 50% of taxpayers paid 97% of all federal income taxes. They bottom 50% paid the remaining 3%. The top 1% paid 38.5% of individual income taxes; the bottom 90% paid only 29.9%. The top 5% paid 59%; the top 10% paid 70%. As these numbers make clear, the tax income burden is shouldered by the wealthy, not by the middle class. These data are available in greater detail here

The middle class, as it turns out, is by far the greater net beneficiary of federal largesse. Lower income Americans on balance receive net cash benefits from the government. That is offset by the junky schools they have to put up with and inadequate police protection in poor neighborhoods. All the cash payments do is create a permanent dependent class. This is the vote buying operation that is the hallmark of progressive politics (tax, spend and vote). It remains firmly in place, and has so since the days when it was instituted by FDR. 

If progressives were truly interested in tax fairness, which they manifestly are not, they would specify ahead of time what tax shares would constitute fairness for the different deciles of the income distribution. But of course they never do that. Moreover, there is a simple way to ensure that everybody pays the same tax rate. The tax code could be amended so that everyone earning $25,000 per year or more would be required to pay 17% of their income in tax. No exemptions, no deductions. Period.

The mere hint of a flat tax where everybody pays the same rate would have progressives screaming bloody murder along with tax lawyers, accountants and lobbyists. I should say other lobbyists. The reason is simple. Progressives are not interested in either tax fairness or tax efficiency. What they are really interested in is command-and-control of the nation’s economy. Progressives want to use the police power of the federal government to commandeer private resources so that they can regulate and transform America into a little socialist utopia. No matter how long they have to goose-step their way toward the goal.  

JFB

Peak Biden?

When President Biden released his budget proposal this past Friday he listed his priorities in the following statement. (The budget document can be found here.)

Biden’s list of priorities is typical in that it studiously avoids talking about trade-offs. Everything is a priority. Not only that, the priorities are expressed in focus group tested aspirational language meant to please the progressive base while remaining vague enough to avoid measurable results. Biden will for instance, take action, control, provide, tackle, advance, reform and restore. From a policy perspective this is meaningless blather. 

Which begs the question: Why did the Administration decide to release this on the Friday afternoon before Memorial day when it would receive minimal coverage? Larry Kudlow provides a plausible explanation. The accompanying numbers in the tables of the OMB budget release give away the game. 

In its own budget documents the Biden Administration admits (1) that it is planning for an increase of $14.5 trillion in accumulated debt by the year 2031; (2) it assumes that federal government outlays will increase to 24.5% of GDP through 2031 versus a long term average of about 19.3%, and (3) after a Covid re-opening spurt, real GDP growth will range from 1.8% to 2% from 2023 through 2031. 

Let’s think about the implications of all this. The Biden Administration intends to spend gargantuan amounts of money, in the process greatly expand the size and scope of both the federal government and the national debt. For its efforts the Biden Administration projects that it will match the Obama Administration recovery. So how does the Obama record stack up?

1.Measured by real GDP growth, job creation or wage expansion, the Obama record was somewhere between subpar and pretty miserable. 

2. From the expansion that began in June 2009, real GDP grew at only 2.1% per annum, the slowest growth rate during an expansion since 1949. 

3. Net job creation grew by 8.6% during the Obama years.  Total employment grew by more than that, and sometimes substantially more, in 5 of the prior 10 expansions since 1949. 

4. Similarly, inflation-adjusted wages increased by more in 5 of 10 prior recoveries since 1949. More detailed data is available here. 

So here we have a situation in which the Biden Administration intends to upend much of American society by (1) significantly  raising marginal tax rates, (2) substantially re-regulating great swaths of the economy, (3) launching new fronts in the culture wars and (4) using federal power in an attempt to equalize outcomes across groups defined by race and sex rather than by effort and opportunity in complete contravention of the bedrock Constitutional principle of equality before the law. 

And for all this, by its own admission, the Biden Administration expects the results to be mediocre at best. Actually, the Administration’s policy agenda virtually guarantees poor results if the Congress is foolish enough to pass it.  

The likely result of all this is that economic performance will fall short of even the low expectations of the Administration. Add to that a widening gap between promises and results and the stage is set for rising populist discontent, increased racial tensions, decreasing civility and further erosions of individual freedom. 

But think of the bright side. This could be Peak Biden.

JFB

Magical Thinking

Republicans complain that Democrats are hypocrites. Democrats reply that Republicans are hypocrites. They are, of course, both correct in a generic sense. All politicians routinely say things they know or suspect to be false, especially if they think it affords tactical advantage. In that sense, both parties are drenched in hypocrisy.

When all is said and done, it is reasonably clear that the Republicans don’t believe a word they are saying. So with respect to hypocrisy, they are guilty as charged; egregiously so. On the other hand, the Democrats appear to actually believe their talking points. If so, they are not the hypocrites that Republicans make them out to be. They are simply guilty of magical thinking. Unfortunately, magical thinking can be very expensive.

Consider for instance the Democratic outrage on display over the prospect that the Republican engineered tax cuts of 2017 would add $1.5 trillion to the national debt over 10 years. The proposed budget that the allegedly centrist President Joe Biden just released projects a deficit of $1.8 trillion this year and after that about $1.3 trillion every year for the next decade. This, by the way, from a President who vowed that he would not increase the deficit “by one penny”.  

This amounts to a proposed $15 trillion in deficit spending over the next 10 years. But now we suddenly discover this is not deficit spending at all—it is investment. And all this “investment” will drive publicly held debt from 79% of GDP in (pre-pandemic) 2019 to 110% in 2021 to 117% by 2031. By the end of the decade, debt service will more than double to 11% of GDP and that assumes that interest rates remain fairly stable. 

The Administration projects that revenues will average 19.3% of GDP even though historically revenues have averaged about 17.3% since the 1970s. Spending, which averaged 19.4% in the post-War pre-Covid era is projected to increase and remain just under an astounding 25% of GDP. Which begs the question: How can the Administration claim that it will collect revenues of 19% of GDP and spend 25% of same and not increase deficit spending? 

Even if the Biden Administration believed its own propaganda about tax collections it still wouldn’t bring revenues into line with expenditure—not by a long shot. There still remains a 6 percentage point gap between revenue and expenditure. 

To call this reckless would be an understatement. The Biden Administration is attempting a huge increase in entitlement spending; a large expansion of the regulatory regime, and political subservience of the Fed, both as regulator and as Central Bank, so that the Biden political agenda can be financed and enforced. 

We have seen this movie before and it never ends well. The longer it takes this one to come to an end, the messier it will be. 

JFB

The Unbearable Incompetence of Mr. Biden

During the presidential campaign of 2020 the argument was being made that candidate Joe Biden was at heart a moderate who would guide the ship of state back to normalcy. Biden, who ran as not-Trump, asserted that all the talk about radicalism and “The Squad”was nonsense. He dismissed the idea that his party had become radicalized and sought to reassure voters that he represented the traditional values of his party. “I am the Democratic Party right now” he intoned in a debate with Donal Trump.

Well, how is that working out?

Let us consider what Biden and the Democratic Party have been up to since his election in November of 2020. 

The Democratic Mayor of Chicago, Lori Lightfoot, has announced that she will only grant one-on-one interviews with “black and brown reporters”. In a way this does represent traditional Democratic thinking. Individuals don’t count for very much, only the tribe matters. 

That, and anti-semitism, are very much the drivers of the policy preferences of the Squad and the rest of the increasingly ascendant hard left of the Democratic Party. As Hamas rains rockets down on civilian population centers of Israel, Bernie Sanders, Elizabeth Warren and the Squad are calling on the Biden Administration to halt arms sales to Israel. 

Then we have Representative Jamaal Bowman (D-NY) an acolyte of Alexandria Ocasio-Cortez, who has condemned Israel for the “infringement of human civil rights” of Palestinians. For her part, Ilhan Omar said “Israeli air strikes killing civilians in Gaza is an act of terrorism.” She somehow neglected to mention that if a nominally civilian structure is targeted by Israel, they are given warning to evacuate before the attack is launched. On the other hand, Hamas, an arm of Iran, deliberately targets Israeli civilians. And as for human rights in Palestine, pace Rep. Bowman, compliments of Mahmoud Abbas and his government, there aren’t any. 

For his part, President Biden, only reluctantly defended Israel’s right to defend itself from attack, presumably out of deference to his Party’s left wing, increasingly the only wing the Party has.  And let’s not forget that the aggressor here is Iran acting through its proxy Hamas, with the stated intention of wiping Israel off the map. 

President Biden does have an ally here—the mainstream press, which covers virtually every story through the lens of Trump hatred. It reduces to Biden good, Trump bad. And so every story is either framed in that light or simply ignored in order to keep the Biden ship and its progressive allies afloat. 

Consider the recent NY Times column by David Brooks, the thrust of which is that, since his election, Biden hasn’t changed at all. He has always been a progressive, he is just bolder now because the times demand it. Brooks is correct about the first part; Biden always has been a progressive albeit with his finger in the air to see which way the wind is blowing. But his policy agenda has  nothing to do with what the times demand; it’s what his party demands. 

In short, the Biden campaign was a scam, another example of bait-and-switch, designed to suck in moderate voters blinded by Trump loathing. 

That’s what explains why Biden and his allies in the press have gone quiet on the border situation in which the number of minors held in detention by the Federal Government is about double what it was at is highest point during the Trump years. The same deplorable conditions in which they were being held still prevail. Not a peep from the usual suspects though. 

The same can be said about why public schools, owned by the Teachers Unions, have remained largely closed to in-person teaching in urban areas, especially in blue states.  It explains why elected Democrats are, at best, quiet about urban rioting and calls to defund the police even as crime rates skyrocket.  

It explains why, through executive order, climate risk is being added to the remit of supposedly independent regulators like the Federal Reserve. It explains why the Administration is pushing for the PRO-Act which seeks to force people to join unions by eliminating right-to-work laws and allowing card check unionization. It explains the constantly shifting mask mandates. 

The same dynamic explains why Governor Ron DeSantis of Florida is routinely excoriated in the press for producing results that range between pretty good and exemplary, but Andrew Cuomo of New York is increasingly handled with kid gloves. This despite his catastrophic handling of the Covid pandemic in nursing homes, his deceit in reporting data, his use of state employees to work on his self-congratulatory book, complete with a $5 million advance fee. 

And, oh yes, remember when Mr. Biden referred to Texas Governor Abbot’s Covid policies as representing “Neanderthal thinking” that would lead to a surge of infections. A surge that, as it turns out, never happened. Or the “impending sense of doom” that CDC Director  Rochelle Walensky warned about a mere 45 days ago? 

We are only 4 months into the full 48 months of a Biden Presidency. Mr Biden is already displaying indications that his  presidency will rival that of Jimmy Carter’s for incompetence. Perhaps before the whole sorry spectacle is over the Republicans will abandon the circular firing squad to which they have become so attached. That would allow them to act as the loyal opposition. With the emphasis on loyal. 

JFB

A Sign of Hope in the Midst of Idiocy

It is unquestionably the case that we live in an era in which abject stupidity has risen to a high art form. However amid all the nonsense a sign of hope has emerged. That sign is in the recent surge in the sale of Dr. Seuss books. The #1 seller on Amazon is “The Cat in the Hat.” In fact the top 6 slots in the Amazon Best Sellers list are occupied by Dr. Seuss books.  

Why is this a cause for hope? It is because the American people en masse decided to go out and buy these books, currently under siege from the Social Justice Warriors, precisely because they are under siege. These buyers are not racist troglodytes celebrating white supremacy. They simply do not buy the argument that childrens’ books published decades ago that expressed then common sentiment should be cancelled for not measuring up to the tender sensibilities of today’s lefty activists. 

No, people want to buy Dr. Seuss books for their children. They refuse to be intimidated and they are not about to let the book burners get their way. That represents a glimmer of hope, however slim. But there remains a long, long way to go. 

Consider for instance the behavior of the bureaucrats in in ever-so-woke Loudon County in Northern Virginia.  County school administrators “… have instructed employees to disassociate Read Across America Day from Dr. Seuss’ birthday.” During “… the past couple of years… LCPS Public Information Officer Wayde Byard added that teachers dressing in Seussian garb for Read Across America Day — for instance, the Cat in the Hat’s iconic headpiece — is discouraged but “not prohibited.”

How encouraging. 

Then there is the National Education Association (NEA). The NEA partnered with Dr. Seuss Enterprises for over 20 years as part of a program to get kids to read. But then the Social Justice Warriors made an appearance and published a “study” entitled  “The Cat is Out of the Bag: Orientalism, Anti-Blackness, and White Supremacy in Dr. Seuss’s Children’s Books.” 

And guess what? Dr. Seuss is now off the reading list. And not surprisingly, President Joe Biden, whose literary history includes several instances of plagiarism, one of which got him suspended from law school, conspicuously left Dr. Seuss books out of the White House message for Read Across America Day. 

But—and here is the good news—the campaign against Dr. Seuss seems to be failing, mostly because everyday people are revolting against the high-handed stupidity (there is no other word for it) of the Social Justice keyboard warriors. 

Unfortunately, the insanity of the era is not restricted to the juvenile behavior of affluent university students who want to be protected from the world of ideas. It also includes the bureaucrats who run various public agencies. For an example, let’s turn our attention to the World Health Organization (WHO) for a moment.  

The Director-General of WHO, Tedros Adhanom Ghebreyesus, actually said that the Covid-19 pandemic has caused more “mass trauma” than World War II. When you think about it for a moment you realize it would take a great deal of effort to come up with something to match that for idiocy. 

World War II was the deadliest military conflict in history. Estimates are that as many as 70 to 85 million people died as a result of that conflict. That amounts to about 3% of the population of the world at that time. About 50 – 55 million of the deaths were directly caused by the war. Another 20 or 30 million were the result of disease or famine. 

Six million Jews were murdered in places like Auschwitz as part of the Nazi war effort, which had as one of its goals the extermination of Jews. Some would consider that a bit traumatizing. Which is not to omit the Polish Officer brigade murdered by the Soviets in Katyn Forest. Or the surprise attack on Pearl Harbor. Or the nuclear bombings at Hiroshima and Nagasaki. Or the siege of Leningrad (now St. Petersburg) where  millions of Russian civilians were systematically starved to death by the German  Army. 

It takes a special kind of stupidity to claim that Covid -19 is more traumatic than World War II was. Just as it takes a special type of idiocy to try to cancel Dr. Seuss, or to rename Mr. Potato Head to just Potato Head in order to deny the existence of sex differences. 

Fortunately, the American people have responded by buying lots of Dr. Seuss books. And Hasbro has backed down and restored Mr. Potato Head’s rightful name. Perhaps this is the beginning of a return to sanity. There is always hope. 

JFB