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Trump Administration Continues to Attack the Environmental Projections First Put Into Place by the Nixon Administration

If you, the reader, are uncertain whether to support Trump or whoever the Democratic candidate turns out to be, I urge you to consider the devastating reduction in protections for clean air, clean water, and clean land (thus also clean air/water and food) under the Trump administration's 'hate anything Obama' approach that has put industry blowhards in charge of the Environmental Protection Administration, an agency created on December 2, 1970 to ensure federal research, monitoring, standard-setting and enforcement of environmental protection. 

(Image of Trump at West Virginia campaign rally in August 2017, from CNBC article on Trump rollbacks of regulation, cited below)

Under Trump, we have instead a complete disregard for the environment, a view that harks back to the times when rich owners of factories, mines, or corporate farms exploited and polluted land, waters, and people in their greed for profits. For example, in July 15, 2019, the New York Times reported that the Government Accountability Office found that the administration "did not consistently ensure" that its appointees to EPA panels satisfied federal requirements.  This was during 2017, when the Trump administration dismissed academic scientists from EPA advisory boards in order to replace them with industry-connected appointees.  Panels that had in the past included a very high percentage (more than 80%) of academic scientists were reduced precipitously under Scott Pruitt, Trump's first EPA head.  Pruitt, of course, resigned in scandal (as so many in the Trump adminsitration have done) in 2018 after loading EPA advisory panels with industry hacks .  See, e.g.,  E.P.A. Broke Rules in Shake-Up of Science Panels, Federal Watchdog Says, NY Times, July 15, 2019; Removing Academic Scientists from Science Advisory Panels, Harvard Environmental & Energy Law Program, Feb. 26, 2018 (noting replacement of scientists with industry insiders and consultants, including a climate change skeptic, following Scott Pruitt's October 31, 2017 directive).  Scientists removed from the panels refused often to be silent.  For example, some formed their own air pollution panel after Andrew Wheeler, Trump's next EPA administrator, disbanded the Particulate Matter Review Panel in October 2018.  It had "some of the nation's top scientists, who were tasked with reviewing how soot and other microscopic air pollutants impact human health."  Rebecca Beitsch, Scientists booted from EPA panel form their own group, The Hill (Sept 26, 2019).

The Trump Administration labels environmentalists with the same type of derogatory terms that Trump uses for all of his "enemies"--i.e., almost everybody in the country that isn't loyal to the bully-in chief because they recognize his shallow, egotistical, narcissistic lack of knowledge and caring about the well-being of the country or its citizens--even while he claims with his typical bravado and fluff that his administration makes "the very cleanest air and cleanest water on the planet" a top priority.   Meanwhile, Trump is busy rolling back as many environmental protections as possible.  See, e.g., Emma Newburger, Trump is rolling back over 80 environmental regulations.  Here are five big changes you might have missed in 2019, CNBC (Dec 24, 2019) (rollbacks including fewer protections for endangered species).  Trump and other people of wealth think they can live in a cocoon of luxury that doesn't suffer damage when the earth's species die out from pesticides and pollution, when the earth's climate changes to create fires and storms hostile to life, when the earth's waters are no longer clear and drinkable by plants, animals (and humans), when the earth's land is destroyed by overlumbering, fracking, the rapacious thirst of oil drillers, and the careless destruction of mountains of surface mining.  They are wrong, but they may not recognize it until too late.  Trump's stupidity is thinking that he who doesn't read, hasn't studied, and doesn't care about science or life generally is suited to make decisions about wilderness or any of the myriad environmental issues facing us.   He leads rallies where people become mesmerized by being part of a raving crowd, with little recognition themselves of the way the ultra rich are taking advantage of them in their daily lives.  He knows nothing, and cares even less about what he doesn't know.  Yet his administration continues to move to change environmental policy to favor big corporate interests and disfavor local decisionmaking.  He appoints industry hacks as Interior Secretary--there was Ryan Zinke, and then extraction industry lobbyist David Bernhardt.   See, e.g., Michael Greshko et al,A running list of how Trump is changing environmental policy, National Geographic, May 3, 2019 (pipeline order, David Bernhardt as Interior Secretary, safety regulations rolled back, oil and gas access to Arctic National Wildlife Refuge, Keystone XL pipeline approval, etc.). Preservation of pristine natural areas such as the Arctic Wildlife Refuge or the Big Bear Monument are eroded with no concern, so long as corporate grandees are satisfied.  Trump's final budget plan, released Feb. 10, 2020, is yet another example: steep cuts to the agencies and programs that protect our climate, air, water and wildlife.  See, e.g., Trump's final budget enshrines climate denial, war and cruelty into conservative manifesto, Friends of the Earth, Feb. 10, 2020.

This Trump no-holds-barred war on the environment is devastating for most Americans.  The Flint water crisis, where local and state administrators made stupid decisions about switching to cheaper water without protections against lead poisoning are just an early example of what awaits the entire country under this approach.  It is, as Friends of the Earth policy analyst Lukas Ross notes, "an immense moral disgrace" that is hardest on "our society's most vulnerable".  Id.  Communities of color, unsurprisingly given the GOP's empty rhetoric about caring about equality and justice, are the most harmed by these policies.  See, e.g., Amy Patronella & Saharra Griffin, Communities of Color Bear the Brunt of Trump's Anti-Environmental Agenda, Center for American Progress, Feb. 27, 2020.  That piece notes that systemic racism and segregation (including redlining of residential districts) have resulted in low-income communities and people of color being "disproportionately vulnerable" to climage change impacts of greenhouse gas emissions. The column lists key examples of Trump administration anti-environmental actions, including the following:

• removing protections for one-third of U.S. drinking water sources "by weakening the Clean Water Act, finalizing a so-called dirty water rule, and delaying action to protect against toxic chemicals in drinking water;
• easing regulations surrounding disposal of coal ash to prevent its leaking into groundwater sources, which tends to affect communities of color disproportionately with cancer, low birth-weight babies, and premature deaths;
• proposing a roll-back of standards established in 2011 to protect against mercury and other toxic chemicals, including mercury emissions from coal and oil fired power polants, with a particularly negative impact on those living in close proximity, which tend to be African Americans;
• gutting the Clean Power Plan designed to reduce climate-change inducing pollution and improve public health;
• lowering the standards for nitrogen oxide emissions from coal plans, affecting again people of color who tend to make up a large percentage of those living within 3 miles of such plants;
• deregulating oil refineries by changing two Obama-era rules that were expected to lower cancer risks for 1.4 million people;
• requiring air quality standard reviews to consider economic and other costs rather than the health impacts required under the Clean Air Act (and thus favoring polluters, since any improvement from the status quo always comes with an economic cost);
• limiting the role of public comment under the National Environmental Policy Act (NEPA) enacted 50 years ago, in order to keep communities from having a voice in projects that affect them and handing that voice instead to corporate polluters who profit from pollution;
• proposing slashing funding for Superfund site cleanup, when such sites tend to be located in nonwhite communities (note that Andrew Wheeler as head of EPA is now overseeing sites his clients created when he was a lobbyist for the chemical industry);
• refusing to ban toxic pesticides that are linked to brain damage in children after EPA scientists studied and recommended the ban;
• Reducing EPA's budget by more than 25% to decrease its ability to regulate industry polluters;
• continually rolling back regulations and working against climate change remediation, resulting in increases in greenhouse gas emissions and extreme weather damage ($45 billion in 2019 in the U.S. alone);
• diverting FEMA funding to immigration enforcement (which has included dragging children away from parents seeking asylum).

As the article concludes:

In the midst of this systemic elimination of federal protections and willful inaction on climate, the science is resoundingly clear: We must move to a 100 percent clean energy future with equity at the forefront. The Equitable and Just National Climate Platform, co-authored by the Center for American Progress, 12 environmental justice groups, and seven national environmental organizations, recognizes the importance of justice and equity as “central components of our climate agenda.” Additionally, it calls for “healthy climate and air quality for all” as well as “[s]afe, healthy communities and infrastructure.”  All communities, particularly communities of color, can no longer afford the Trump administration’s attacks on public health and the environment.

So what does this have to do with tax policy?  My friends, our tax money is currently supporting the Trump administration industrial lobbyists in their efforts to undo environmental and natural area protections across the country.  This is class warfare at its heart--the lobbyists and corporate managers of the most polluting firms colluding to ensure that they can freely pollute our world without facing any liability for doing so. Our tax revenues are making it possible for Trump to fly to his own resort in Florida for which the US government pays millions in secret service guest quarters so Trump can spend most of every weekend golfing.  Instead, our tax revenues should be supporting good government programs that protect our land, water and air, as well as endangered species, so that our children can enjoy a healthy life and appreciate the natural beauty of this country.  Ultimately, taxes and spending are intricately entwined.  Bad government--like the corrupt Trump adminsitration--means both are working to the detriment of the American people.

Trump's Cabinet Picks Are A Sorry Lot

As the Friday inauguration date draws near, most ordinary Americans who read, stay informed, pay attention to history and events, and engage in critical thinking are, understandably, aghast at the poor job Mr. Trump has done so far in putting together a workable Cabinet of high-level appointees with the expertise, experience and values that can lead the country. 

We Americans share many values.  Among them has always been a view that those who are better off should help those who are less well off. We've done that in many ways, beginning with private charity (supported by our tax code) but going much beyond the soup kitchens and church support for a sick parishioner to include a progressive income tax, taxation of the estates of the wealthiest among us upon their deaths (since they were generally almost tax free in life), and the provision of many necessary services through public institutions.  The latter includes things that are important to the everyday life of all of us as well as the opportunities for better lives for those of us not born with a silver (or, in Trump's case, golden) spoon:

• a public right to decent health care, made real by the expectation that hospitals (whether for profit or nonprofit) will care for those who enter their emergency rooms in medical emergencies, even if the patients cannot afford to pay the going price for the service needed, and made more substantive by the passage of the Affordable Care Act which provided coverage for pre-existing conditions, allowed young people to remain on their parent's insurance, and made market exchanges available to provide better to understand choices while providing a federal subsidy for those who otherwise couldn't afford insurance;
• public education from kindergarten through college, supported by federal and state funding, with reasonable rules that protect our children, such as not allowing private carrying of guns within protective zones around schools, and --in many states--rules that ensure that public support reaches poor districts as well as wealthy ones;
• protection of the environment, from national monuments and parks to restrictions on dangerous fracking and oil drilling in sensitive areas (consider the Arctic National Wildlife Refuge), from ensuring that communities have clean water to drink through regulation of corporate waste to ensuring that children have safe homes through regulation of lead paint, from protecting the nation's waterways so that individual owners and polluters cannot hoard or harm nationally important resources to protecting creatures large and small that represent the genetic diversity of this Earth
• regulation of commercial enterprises, to ensure that they do not exploit their workers, through fair labor laws and hiring laws and workplace rules that prevent employers from being able to force individuals to work in dangerous conditions or without appropriate rest and meal breaks
• regulation of financial enterprises, to ensure that those sophisticated 'quants' don't take advantage of less sophisticated customers, to prevent discriminatory practices that disadvantage people of color, to ensure open and fair reporting of financial positions
• regulation of the foods and drugs that enter our marketplace, to protect Americans, our children and our pets from the kind of pollution of food products that occurred when China's unregulated marketplace allowed melamine (plastic) to be substituted for protein in pet foods that were exported abroad or the indiscriminate use of toxic pesticides without informing consumers so that we can make good decisions about products that we buy; and on and on

Trump's appointees for many of the important Cabinet positions seem to be primarily wealthy crony capitalists with radical ideologies that are in direct conflict with the agency missions. Consider just the following three:

• Betsy DeVos--Trump's choice as education secretary-- is a billionaire heiress (ie., another one born with a silver spoon in her mouth) who has no experience in running major programs (the student loan portion of the Education portfolio is a trillion-dollar budget with enormous complexity), shows little understanding of the broad issues in education, has never supported public schools, and has wrecked Michigan's education system by funding a multimillion-dollar initiative pushing support of for-profit charter schools that siphon off public dollars  for the private enrichment of corporate managers, provide public dollars for religious education, and remain totally unaccountable to the taxpaying public while performing abysmally in their job of educating students.  Not surprisingly, at her confirmation hearing she refused to support "equal" accountability for private and public schools. She supports the completely discredited "conversion therapy"  for gays and will likely work to reverse the protections won for LGBTQ students based on her personal religious beliefs.  DeVos has never taught, has never served on a school board, and has never even sent her own children to public schools or participated in a PTA meeting.  She showed at her confirmation hearing that she has little or no understanding of educational issues of importance, such as the Federal laws requiring appropriate education for students with disabilities or nondiscriminatory opportunities for female and LGBTQ students. Her answer on whether guns should be allowed on school grounds was--(a paraphrase) Yes, because who knows, it might be necessary to protect children by shooting at a grizzly bear, and acknowledged that she would support Trump's proposal to ban gun-free school zones.  This, in a world where too many toddlers and high-school students have been mown down by guns brought in by students bent on death.  Betsy DeVos is anti-public education, anti-teacher, and anti-union--one of those who blame every problem of our underfunded schools on the teachers rather than on the ideological bureaucrats that have siphoned money away from public schools for vanity projects.  In the confirmation hearing, she refused to say that she would not work to privatize schools,  she thought it would be "premature" to say she would support the rules requiring investigation of college sexual assaults, and she didn't even understand a question from Al Franken dealing with an important educational issue regarding assessment.  Her values, in short, are not the values of a majority of ordinary Americans whose children attend public schools, and who want their children's teachers to be decently paid and respected.  (She hasn't completed her ethics disclosure yet, but she did omit a $125,000 anit-union political donation from her Senate disclosure form.  Not a good indicator of her respect for integrity.)   See, e.g., Betsy DeVos, Trump's education pick, lauded as bold reformed, called unfit for job, Washington Post (Jan 17, 2017); Amy Wang, All the vital questions Trump's pick for education secretary couldn't answer at her confirmation hearing, Quartz (Jan. 18, 2017); Some Colleges Have More Students From the Top 1 Percent than from the Bottom 60. Find Yours, The Upshot, New York Times (Jan. 18, 2017) (providing a clear picture of the way privatization of education at the college level has favored the elite).

 

• Scott Pruitt--Trump's choice for the EPA--is an Oklahoma oil and gas yesman who has fought for years to undermine the regulatory power of the EPA--suing the EPA 14 times alongside the oil companies during his Attorney General stint-- so that the oil and gas industry can pollute at will without fearing the power of the federal government to reign them in.  Fracking in Oklahoma has been clearly connected to a sharp increase in the number of earthquakes near fracking wells, but Scott Pruitt would rather expend state dollars on suing the EPA to try to eliminate regulations meant to protect people, communities, and the environment.  Pruitt is a climate change denier who accepts that human activity affects climate but denies the scientific consensus about the pace of warming, suggesting at his confirmation that the discussion of climate change was too "personalized" and not "precise" enough  to merit vigorous action; he has financial ties to oil and gas companies and so, unsurprisingly, he wants to use his role as EPA head to prevent the EPA from fighting pollution that endangers every American's health as well as the planet we and other species live on.  As pointed out in the confirmation hearing, one of the letters Pruitt sent as A.G. was drafted for him by Devon Energy:  he was serving an oil company, not the public, but he claimed such actions were appropriate. Interestingly, Pruitt claims to be in support of state's rights--except when the state's rights run counter to the interests of oil companies.  So he advocates state rights approach to environmental regulation, but at the same time threatens to undo California's ability to set its own clean-air standards!  Quite hypocritical and demonstrative of his obvious kowtowing to the oil industry.      This obsequiousness to polluting industry is NOT an American value.  It is the way crony capitalists work together to make the rules work in their favor and the public be damned.  The fact that Oklahoma Republican Senator James Inhofe--a person who is notorious;y anti-environmental protection,  a climate change denier, and pro Big Business no matter the cost to the environment--support Pruitt assures the American people that Pruitt does not care at all about the potential harms to the environment from  removing our current protective regulations and allowing business to do to the American natural resources the same thing corrupt industry has done to China's air, water, and land.   See, e.g., Trump's EPA pick casts doubt on California's longtime power to set its own clean-air standards, Los Angeles Times (Jan. 18, 2017) (Pruitt suggests he may not continue the federal waiver that has permitted the state to cut its greenhouse gas emissions from vehicles by about a third in 8 years); Scott Pruitt, Testifying to Lead E.P.A., Criticizes Environmental Rules, New York Times (Jan. 18, 2017) (noting Pruitt's hearing testimony criticizing federal rules protecting air and water and addressing climate change); Earth sets a temperature record for the third straight year, New York Times (Jan. 18, 2017) (take a look at the "How 2016 Became Earth's Hottest Year on Record" graphic showing the rapidly increasing temperatures--it is definitely starting to look much like the "hockey-stick graph" that Republicans] climate-change deniers mocked in Al Gore's "inconvenient truth" documentary, and then type in your city's name in the "How Much Warmer Was Your City in 2016?" graphic to see just how cities are experiencing climate change).

 

• Andy Puzder--Trump's choice for Labor--is a constant friend of Big Business  and an ideological critic of almost any worker protection, from much-needed minimum wage increases to $15 an hour to a national program that provides insurance for minimum wage earners (the Affordable Care Act) to any other business regulations that, in his view, impede Big Business's ability to make big profits for its owners.  Thus, he is directly opposed to the mission of the department he would lead..  As the fast-food executive head of Restaurant Holdings, Inc., the parent company of Carl's Jr., he has demonstrated his view that big companies should be able to use workers however they want to make money for the managers and wealthy shareholders, with little regard for ordinary workers' wellbeing.  For instance, the Carl's chain is known for the kind of scheduling that requires workers to show for a 4 hour shift that might result in the worker being sent home after 1 hour because there is lower demand.  Consider what that means for ordinary Americans working at these low-salaried jobs.  They may have to arrange a babysitter or some other child care every time they go into work.  They may have to travel with inconvenient and expensive public transportation systems, or buy gas for a lengthy car trip that ends up not even earning enough to pay for the round trip and other expenses because of the short day.   Pudzer even claims that workers who aren't paid overtime "gain in stature and sense of accomplishment" even though they are often paid so little that they qualify for food stamps and other public benefits.  See, e.g.,  Trump's Labor Secretary Nominee No Friend to Workers,  Advocate (Dec. 8, 2016)   Further, Puzder's company itself has scoffed at labor laws, running afoul of requirements.  Id. (noting violations of the Fair Labor Standards Act) . This is NOT American values.  Of course, Pudzer has been a donor and adviser to Trump, like many another of Trump's other billionaire crony appointees.

These three appointees illustrate that Donald Trump has no interest in "draining the swamp" of crony capitalism that has at times seemed to be much too important in DC.  He is actively feeding the swamp monster, with selection of billionaire crony capitalists who want to remake the government to smooth the way for Big Business to do whatever it wants, without protective regulations for workers, the environment, or consumer protection.  This is the 4-decade-long Republican attack on ordinary Americans taken to the extreme--deregulation, tax cuts for the wealthy (with hidden tax increases for everybody else), militarization for the military-industrial complex, and privatization of services like education and health care that the government does best because the profit motive ensures corruption and high costs.

I have espoused a view in this blog of what I call "democratic egalitarianism".  It is a philosophy that government should function in a democracy to help ensure that each citizen can participate in opportunities and that the whole protects the most vulnerable amongst us.  I believe that every American w wants our society to move towards a sustainable economy with decent livelihoods for all, good health care for everyone, education that provides opportunities and knowledge that bridges the gap between those born with wealth and the majority of us who are not.  And I am convinced that every American who cares about these things should write or call their Senators and tell them not to approve these unfit candidates for the office they have been nominated for.  Certainly, no candidate should be approved without a clear slate from the ethics office.   Trump himself owes it to the American people to divest himself of his businesses.  Putting them in the charge of his children and claiming that he will remain sufficiently unconnected with them is absurdly insufficient.  But even more, no candidate should be approved to head an agency about which the candidate knows nothing, and for which the candidate's only vision is destruction of the protections the government provides for the American people from the 'stateless' corporatism that allows Big Business to run amok in its search for rent profits above all else, no matter the long term harm done to the American people..

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Both the rich and ordinary Americans misunderstand their economic interests

There is class warfare going on, right now, all across this country.  It's highlighted by the election gimmicks and gambits of those on the right who claim to be supporting ordinary Americans but whose real intentions show in the results. And it is ultimately a sad statement about Americans' understanding of what is required for a sustainable economy that supports decent lifestyles for all.

Let's start by looking at the maps resulting from studies of well-being that identify the states where people are not at all well-off, such as the 2013 survey done by Gallup Healthways, available here.  Those poor states are the reddest of the red belt in Mississippi, Tennessee, Florida and elsewhere across the Deep South--places where I grew up in a decidedly Republican household that bought the GOP economic fallacies hook, line and sinker, and places where today's populations are worse off in terms of the various measures of economic well-being and happiness than the more progressive northeast and west.  

Isn't it likely that the anti-government, low-tax and pro-wealthy/pro-big business policies of the GOP politicos that have run these states for several decades have something to do with these negative results, and that the more progressive policies in the northeast and northwest are reflected in the much more positive results in those areas? 

Yet rural, southern populations continue to proudly proclaim their allegiance, against their own economic interest,  to ill-fated Reaganomics that favors tax cuts (for the wealthy and big business) coupled with  use of  old-time, regressive consumption taxes (toll roads, sales taxes and property taxes),  privatization of public functions (e.g., charter schools managed by for-profit, nontransparent corporations), socialization of losses, militarization, and de-regulation. 

The results are harmful at national and state levels, as those same right-leaning voters suffer from poor K-12 education, low-quality public services including neglected roadways, nonexistent or outdated public transportation systems, inferior safety nets, inferior health results, lower literacy rates, higher teenage birth rates, less access to universities, and, yes, fewer and lower-paying jobs.

Of course, those in the top 5% like to think of themselves as suffering, and therefore see any demands for increased minimum wages (that they consider cutting into their ability to capture more and more (rentier)  profits beyond their already unreasonable percentages) as "class warfare."  See, for instance, this Wall Street Journal video "Do You Make $400,000 a Year But Feel Broke?" from September 5, 2014 depicting the purported hard times for a couple in Chicago making $400,000 a year, buying a $60,000 car every four years, paying a mortgage on a $1.2 million house along with $25,000 a year in maintenance and , entertainment ($10,000 a year) going on vacations ($25,000 a year), club dues ($12,000 a year), and paying for their children's sports ventures ($10,000 a year). These and other  "necessities" and (purportedly reasonable) discretionary expenditures take all of their after-tax money. 

Given that perspective, no wonder those in the top have so little consideration and sympathy for ordinary Americans who have incomes in the $50,000 to $60,000 range, much less for the poor who struggle to put food on the table and heat in the furnace!  They can't even imagine such limited lives. With the growing inequality in this country, the gap between the upper class and the rest of us is increasingly wider.

The broad trend is clear from a diverse set of data. Median household income growth has badly lagged per capita GDP growth, corporate profits as a share of national income have risen, and stock markets have reached record highs.

Outside the sphere of political debate, you also see the real world impact of inequality. Merrill Lynch recommends an investment strategy to its clients based on the growing economic clout of plutocrats, Singapore Airlines is now selling $18,400 first class cabin tickets, and observers think Apple is going to start selling a $10,000 watch. Conversely, Walmart is now primarily worried about competition from dollar stores. The executives at these companies are not hysterical liberals trying to drum up paranoia about inequality, they are trying to respond to real economic conditions — conditions that have entailed very poor wage growth paired with decent returns for those proserous enough to own lots of shares of stock.

 Matt Iglesias, Vox.

The ability to care about those so distant from the well-heeled in-group appears to be diminishing as the gap between the well-heeled and the rest of us widens.  Those super-wealthy corporate managers and CEOs and super-rich shareholders are not likely to recognize in themselves the greed and exploitation of others that their excess returns on capital represent.  As Mitt Romney made so clear, rich folks (i) think of themselves as "meriting" their outsized incomes, in spite of the fact that they often start out with silver spoons and garner greater returns than ordinary folks simply because they have larger capital portfolios to start with and can't possible achieve a level of productivity of 100s times that of ordinary workers, as current CEO pay-levels claim under "free market" theory; and (ii) find it much easier to blame the misfortune of ordinary Americans on their purported laziness and "lack of personal responsibility."  (See earlier Taxing Matter posts on Romney's self-justifying 47% remarks during his presidential campaign.)

But that means the rich (and the GOP most closely aligned with big business and big capital) often support policies that can only lead to greater income and wealth inequality, fewer and fewer Americans able to enjoy a decent, sustainable lifestyle, and the growth of a very small oligarchic elite.  Those policies include making it harder for poor people to vote (justified on the basis of non-existent voter fraud), making it harder for middle class and poor people to go to college (less state monies to universities, less grants and more (profitable-for-big-banks) loans), making it harder to support a family (less public transportation, lower wages, more jobs outsourced, refusal to fund Medicaid expansion, yammering for the repeal of the Affordable Care Act even though the US's market-based health care system is less efficient, more costly, and lower quality than single-payer systems in most other advanced countries), etc.  The long-run result of these pro-elite pro-corporate policies may well be social chaos, as the rich oligarchy faces off against a suffering and shrinking middle class and a grievously disadvantaged lower class.  That may not be so far away as many of us once thought, given the rapidly growing wealth inequality and the more radical right-wing policies that have moved into the GOP mainstream in the form of Rand Paul and other free-marketarian extremists who denigrate government and want to remove the social-economic safety nets put in place under the New Deal.

They denigrate government, that is, except when they recognize that they need it, such as when the ebola crisis erupted.  Suddenly, they want a Center for Disease Control that really functions well, even though they have pushed government spending down. And they want a TSA that can screen arriving passengers, even though they hated the TSA before.  And they wanted the President to appoint an "Ebola Czar", even though they scoffed at the idea of administrative officials appointed to oversee important areas before.  They want a vaccine for ebola, but they have made it much harder to accomplish because of their constant push for "reducing government" and cutting research funding (making one of their pet projects to seek out what they think are silly projects that have been funded by the federal agencies).

The free market, in other words, is claimed to be the be all and end all -- until push comes to shove and it is obvious that market forces require government intervention.

Consider the compaign for governor here in Michigan.  In his ads, current GOP governor Rick Snyder claims to be a hands-on non-partisan fiscally responsible type who cares about everybody in Michigan.  Those ads brag about how Snyder cares about senior citizens and education --using the (meager) increases in "meals on wheels" to claim that Snyder has made life better for senior citizens, and the state's increase in support for purportedly public charter schools.  Behind that facade of political PR is a deeply partisan governor who has consistently supported the elite rich capitalists over the majority of Michiganders who are ordinary salary earners working hard (or working hard to find work).

• Snyder signed a "free rider/right to freeload" bill permitting non-union workers in a unionized environment to free-ride on union contracts without paying their share of the costs of the contracts they benefit from and prohibiting unions from using paycheck deductions to collect union dues.  That kind of legislation, sought by the elite owners of capital who benefit from paying lower non-union wages, is (mis)labelled by the pro-wealthy right as "right to work".  It is really a "right to freeload" law since the union rules it replaces never required anyone to join a union and always allowed workers who benefitted from a collective bargaining agreement to pay only the 'fair share' payment of the considerable costs of negotiating an agreement and supporting workers in grievances rather than support all union activities.  As a result, workers can now pay nothing yet call on the union whenever they have a grievance against their employer.  The goal of such laws is to eliminate union support for workers and thereby increase the power of capital owners, so it is particularly sad to see how many workers are fooled into supporting these "right to freeload" laws.
• Snyder supported Michigan legislation that gave big businesses a huge tax cut, while supporting another bill that gave seniors a huge tax increase by taxing their (often meager) pensions.  No wonder the wealthy who own most of the financial assets in the country and benefit from the decades of lobbying by right-wing propaganda tanks against buinsess and capital taxation think he's a good friend. 
• And of course, much of Snyder's 'support' for education has been cuts to state funding for Michigan universities (especially Wayne State, which serves the predominately Democratic southeastern region of the state) that has affected the state's economy in real ways, as students have to pay more of the cost and universities have less funding for research that directly impacts economic development.  Snyder has also supported an unprecedented increase in charter schools in a system that provides no accountability, doesn't provide improved educational results, and siphons off public dollars for private profits, through the mechanism of private charter management corporations that run the purportedly "public" charter schools.
• Snyder doesn't think we need increases in the minimum wage, and his administration has generally shown little interest in figuing out how to help minimum wage workers revive from the Great Recession.  For example, his administration has done nothing to deal with the myriad fly-by-night companies that cheat workers coming and going on wages. 

ASIDE:   Here's one real-life tale illustrating the problem.   I know personally of a man in Michigan hired by a Michigan-registered cleaning corporation that had contracts with at least  two major national corporations to clean stores in southeast Michigan.  The cleaning company claimed that the man was "in training" and therefore not required to be compensated after two weeks of full-time working for the company, including being locked inside a cavernous store overnight to do a major cleaning job. The company refused to pay for the next two weeks, claiming that "corporate headquarters" had made an error and would straighten it out in the next paycheck a month later.  The man ultimately was paid only  a couple of hundred dollars for that entire month, because the company  produced a purported check stub showing a paycheck even when the man representing the company acknowledge that paycheck had never been issued to the man.  The company paid the man on a "piecework" basis for cleaning stores, claiming that a 30,000 square foot store with public restrooms could and should be cleaned for $25(that's mopping, vacuuming, and cleaning toilets) and that the work could be done in one hour!  The company required the man to pick up cleaning equipment and the company van at the "corporate headquarters" (many miles from his home and many miles from each of the stores to be cleaned) but claimed that it did not have to pay the man for the 3-4 hours per day that he had to spend to drive the company van and equipment to and from various worksites.   The man quit, but has never gotten the company to issue the paycheck that he never received and has never received pay for the many hours spent working for the company moving its van and equipment.  

 

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In Defense of Obama | Rolling Stone

Sore-Losing Doesn't Bode Well for Well-Considered Policy Choices on Taxes...

Romney and Ryan have apparently joined the GOP sore-losers ranks most ably demonstrated by John McCain's bitter post-presidential candidate spin.  Romney betrayed the GOP's disregard for ordinary Americans in a post-election talk with some of his major donors. 

 Like his "47% comment" in which he disparaged those who don't have to pay income tax (but generally pay payroll and other taxes) by asserting that they aren't personally responsible and enjoying being dependents, Romney's comment about the reasons he lost essentially blames the voters for taking bribes from the sitting president.   He suggested that Obama appealed to specific interest groups "the African American community, the Hispanic community and young people" with generous "gifts" like health-care reform, amnesty for children of illegal immigrants.  See  Maeve Reston, Romney attributes loss to 'gifts' Obama gave minorities, LATimes.com (Nov. 15, 2012). 

Young voters, Romney said, were motivated by the administration's plan for partial forgiveness of college loan interest, the extension of health coverage for students up to age 26 on their parents' insurance plans and free contraception coverage under Obama's healthcare plan, which he credited with ushering greater numbers of college-age women into Obama's coalition.

The extended insurance coverage, in particular, was "a big gift to young people," he said, noting that they turned out as a "larger share in this election even than in 2008."  Id.

Similar language was used to describe the reasons African Americans and Latinos voted in large numbers for Obama.

Such willingness to attribute defeat to political bribery goes a long way in demonstrating how out of touch the GOP is with what government should be doing.  There is some obligation for politicians to serve the people--thinking in the long term and not just for the short term, but considering what kinds of programs merit consideration because of the good they do for individuals and in turn for society. Romney's deafness to this issue--and his view that taking care of the wealthy few is the only goal of tax policy (and probably spending policy as well)--justly helped in his defeat.  It is terribly important that federal officials recognize the staggering inequality now existing and growing in this country and its impact on all of our lives and the sustainability of the economy as well as the future of our democratic institutions. Romney didn't get it.  Obama got it imperfectly.  Given a choice, a majority recognized the difference.

It is now time for the GOP to take off its blinders and get a better sense of how their economic policies and in particular their tax policies have been harmful to ordinary Americans and hence to the economy. 

Romney shows he's a "know-it-all" who has no real ideas at all

I missed almost all of the first debate but watched most of this one.  My quick sum-up of the action was the Obama was straightforward, prepared, and much more energetic than in the first debate.  While I don't think he has been a great president, he has nonetheless acted on a number of matters in ways that move us away from the disastrous policies of the Bush years--fairer immigration actions, more interest in the middle class and jobs, wise action to save the auto industry when Romney would have allowed one of the midwest's major industries to rot on the vine, attempting to move the corporate tax debate away from giveaways for the multinationals and towards more reasonable tax policies, movement on health care reform (though still not towards the single-payer option that we must eventually embrace), movement on financial institution reform through Dodd-Frank (though still not sufficient control of the financialization of the economy).

Romney, quite frankly, came across as an arrogant shell who doesn't have any substance underneath the expensive coif of hair and Armani suit.  He constantly blames Obama for the Great Recession that stemmed directly from the failed Bush economic policies favored by the Republican party's right wing, the same policies that Romney and Ryan want to re-install if they take over the White House.  He consistently fails to acknowledge that the deficits under Obama were temporary ones caused by the trillions of dollars of unnecessary Bush individual and corporate tax cuts, the Bush preemptive wars, the class warfare of tax policies that favor the 1%, privatization of education and the militaryh, and the financialization of the economy egged on under Bush by the right's misguided views of "free" trade (meaning business can run over the workers and the environment at will and pay less taxes even while causing more societal harm).  Romney (as Obama noted in the debate tonight) goes George W. Bush even further--he would ruin Medicare by turning it into "voucher-care" that was insufficient to meet vulnerable seniors' needs, and he would destroy Social Security by privatizing it so that seniors are at the whim of the stock market and Wall Street traders for their very livelihood.

Yet this guy born with a silver spoon in his mouth and with a family of connections to power really thinks that he got where he is on his own!  What a laugh.  And then he thinks that he can bamboozle the American people by saying "I know how to do that" about creating jobs, getting rid of the deficit, creating growth, solving immigration, making us "energy dependent in 8 or 5 years" and everything else he can promise us.  But he doesn't think he has to bother to tell us anything about how he will do that.  Often when asked specific questions, he fell back on his "The last four years with Obama have been awful and I feel your pain" absurdity,   His claim of empathy with the ordinary folks asking questions in the audience was absurd because one only has to harken back to that tape of his disdain for the 47%--and his arrogant view that anyone in that group was dependent on government and unwilling to take personal responsibility for themselves--to know that he doesn't really give a damn about ordinary folk like those in the audience tonight.  He'd follow that with another claim that he would fix everything because "I know how to do that", yet in every instance there was nary a specific word about  exactly what he would do.  

 One thing is for sure--Romney's view that cutting tax rates across the board by 20% will jump-start the economy is "nonsense", as even conservative GOP economist Bruce Bartlett acknowledges.  See Bruce Bartlett, Romney's Tax Plan and Economic Growth, Economix Blog, New York Times (Oct. 16, 2012) (statng that "the idea that tax reform will jump-start an economy suffering from the after-effects of a cyclical downturn is nonsense" and concluding that "even if Mr. Romney’s plan is enacted as proposed the growth effect will be small to nonexistent").

On taxes, Romney now claims that he will not cut the amount of taxes paid by the top 5% but will give everybody else a tax cut.  Note that isn't the same that he has said for months on end, when he made clear that everybody would get the same 20% rate reduction (which would give the wealthy a huge dollar cut, and the middle class a piddling cut) and mocked Obama for wanting to hold the upper-crust more accountable for helping reduce the deficit.  He claims he'll not increase the deficit, even though he wants to cut taxes and eliminate the estate tax and increase military spending.  He won't say what deductions he'll cut or what protections for the poor he'll keep.  He claims the numbers add up but won't tell us what the numbers are.   I think it's perfectly clear:  he won't say how he can do that in a revenue-neutral way because it can't be done.  The New York Times editorial yesterday chimed into the growing list of reputable organizations asserting that his numbers simply don't add up, noting "the many deceptions in the campaign’s blue-sky promises of low taxes and instant growth."  See Editorial, Mitt Romney Needs a Working Calculator, New York Times (Oct. 15, 2012). 

[The Joint Committee on Taxation] asked its staff what would happen if Congress repealed the biggest tax deductions and loopholes and used the new revenue to lower tax rates. The staff started adding it up: end all itemized deductions, tax capital gains and dividends as ordinary income, and tax the interest on state and local bonds, along with several other revenue-raisers.

The answer came last week: ending all those deductions would only produce enough revenue to lower tax rates by 4 percent. 

Mitt Romney says he can lower tax rates by 20 percent and pay for it by ending deductions. The joint committee’s math makes it clear that that is impossible. Id.

Note that Romney doesn't intend to tax dividends and capital gains at the same ordinary income rate that us ordinary folks pay on our compensation income, so he wouldn't even get to a 4% reduction in rates with his version of tax "simplification."  He wants to keep allowing people like him to get a tax-advantaged "preferential rate" on carried interest that they get as their compensation in vulture capital "private equity" funds that buy up American businesses and load them with debt and offshore their jobs.  He wants to keep taxing capital gains and dividends at the ridiculously low rates achieved by the Bush tax cuts that were a major factor in driving us from surplus to deficit.  He even wants to cut capital gains and dividend and interest tax rates to zero for those making less than $200,000.  (Of course, that group doesn't have much of that kind of capital income--it is mostly the province of the very rich at the top.  One suspects the rate cut for the upper middle class that would apply to is just a prelude, like most of the Bush-era tax cuts, to a Republican push to eliminate taxes entirely on capital income, which Romney and Ryan have supported in the past.)  He wants to cut taxes for the huge multinational corporations and encourage them to continue moving our jobs offshore.

There is no way that such a tax policy makes sense for America.  It will let the rich get richer, when we are already at a point where the middle class is shrinking because of the way big business has grabbed all the productivity gains for the managers and owners and left ordinary workers hanging out to dry.

Reaganomics--with its push for privatization, tax cuts, militarization, and deregulation--stabbed at the heart of the US economy.  The Bush tax cuts drove us from surplus to deficit in one fell swoop and set the stage for the Republican obstructionist games that have gone on during the four years of the Obama administration, in which the radical right GOP has cared more about pushing for extremist policies beneficial to the wealthy and the big corporations they run rather than considering what is good for the country.  Romneyomics would be even worse--right-wing market fundamentalism at its most extreme, with the rich making off like bandits and the rest of us left to scramble for crumbs. Surely the American folk aren't going to buy this idea of rehashing the very ideas that got us into the Great Recession mess from the guy who says "I know how to run the country because I got rich as a vulture capitalist". 

Romney's Foreign Policy Creds--nonexistent

Warning:  this is not a tax post.  As I sometimes do, I comment here on current affairs that will indirectly impinge on tax law and policies but are not directly related to my ordinary topic.

The assassination of our representative in Libya and several other officials was a tragedy that demonstrates the irrationality of religious fervor on both sides.  Apparently some right- wing Christian fundamentalists created a hate-mongering film about the Islamic religion.  Just as Christians resent attacks on their religion, Muslims resent attacks on theirs.  The film, when it became widely noticed, stirred anger and resentment against the US for harboring groups that spew such hate.  Such anger is understandable, even though we cannot condone it or the violence that grows out of it.  Our embassy in Libya rightly condemned the hatemongering, noting that America is a country that tries to practice tolerance of many religious views without condoning violence towards any.  That was the appropriate response, because it acknowledged the fundamental free-speech right recognized in the United States, which allows people to say stupid and even hateful things about other people and other people's religion, but it nonetheless condemned those stupid and hateful things as stupid and hateful and damaging to the respect that is necessary to a peaceful world.

Regretably, the response in parts of the Arab world to the hatemongering film escalated to violence, and American representatives suffered the brunt of those attacks.  We lost public servants who have made a substantial contribution to building better societies.

But Romney's response only adds to the problem.  With his hastily released statement condemning the President for "apologizing" to terrorists (a lie), he turned a national tragedy into a political moment, making a statement that wrongly described the embassy's statement as a response to the violence The embassy's statement of tolerance is the epitome of what America is all about.  Romney hoped to jumpstart his (nonexistent) foreign policy credentials by criticising his opponent, claiming that the President had issued an apology and implying that Americans should never apologize.

Romney's response demonstrates his incapacity for leadership.  His only thought was how to advance his own personal agenda, not how to help the nation.  He didn't mind mixing fact and fantasy in his claims (the embassy statement was before, not after, the violence, and was a reasonable statement of America's views on freedom of speech and religion).  Obama didn't apologize.  Further, as other writers have noted, there is nothing inately wrong with apologies when they are in order--it would be quite reasonable for an American to say to a Muslim from Libya that they apologize for the ignorance and hatefulness of the right-wing extremists that are fomenting anti-Islamic sentiment in the United States right now. 

Romney revealed himself, yet again, as an opportunist who speaks before he gets his facts straight.  (or, as Obama put it, shoots before taking aim).  He also revealed how ill-equipped he is to deal with the delicate situation in the Middle East, where the outcome of the clash between the desire for democratic rights and the desire for fundamentalist religious hegemony remains undetermined.  Romney is clearly cut from the same cloth as the militarist George W. Bush, who thought he could huff and puff and show the military stuff of the United States and accomplish war with no bloodshed, victory with no taste of agony.  Bush was wrong, and so is Romney.

Romney also showed that the military-industrial complex is at work again, building a drumbeat for more money, more appropriations, more military goodies, more war--no matter the cost to domestic livelihoods.  We do not need to go to war against Iran, but it is seems that the religio-military-plutocratic complex is trying to make such a war inevitable and that Romney is a willing pawn in that endeavor.

The Iraq and Afghanistan wars are a significant cause of our incredible debt burden, not to mention of the maiming of thousands of young Americans.  We will ultimately have to increase taxes--such as by letting the ill-advised Bush tax cuts expire-- to cover the long-term fallout of those wars.  If we were to take on another long-term and unwinnable war with Iran, the cost--in lives and in the blow to our economy--would be enormous.  Let us hope that foolish minds like Romney's don't force us into an untenable position.

Lofgren's Exodus from GOP Politics--a worthy farewell

Mike Lofren, long-time GOP operative, decided it was time to leave the cult.  His farewell, published on Truth Out, is well worth reading:  Goodbye to all that: reflections of a GOP operative who left the cult, Sept. 3, 2011.

First, he acknowledges that both political parties fall short of what they should be ("are rotten"), but that the GOP is so bad because the "Party is full of lunactics."

Both parties are rotten--how could they not be, given the complete infestation of the political system by corporate money on a scale that now requires a presidential candidate to raise upwards of a billion dollars to be competitive in the general election?  Both parties are captives to corporate loot.  The main reason the Democrats' health care bill will be a budget buster once it fully phases in is the Democrats' rank capitulation to corporate interests--no single-payer system, in order to mollify insurers; and no negotiation of drug prices, a craven surrender to Big Pharma.  But both parties are not rotten in quite the same way.....

[I]t may have come as a shock that the Republican Party is so full of lunatics.  ..[T]he crackpot outliersw of two decades ago have become the vital center today:  Steve King, Michele Bachman (now a leading presidential contender as well), Paul Broun, Patrick McHenry, Virginia Foxx, Louie Gohmert, Allen West.   The Congressional directory now reads like a casebook of lunancy. ...

I could see as early as last November that the Republican Party would use the debt limit vote...in order to concoct an entirely artificial fiscal crisis.   They, they would use that fiscal crisis to get what they wanted, by literally holding the US and global economies hostage....It should have been evident to clear-eyed observers that the Republican Party is becoming less and less like a traditional political party in a representative democracy and ... more like an apocalyptic cult, or one of the intensely ideological authoritarian parties of 20th century Europe.  ...

Second, he notes that this new ideological purity means that the democratic institutions cannot function properly, and the GOP is undermining democracy itself by its extremist approach to governance.

During periods of political consensus...the Senate was a 'high functioning' institution: filibusters were rare and the body was legislatively productive.... [Now] virtually every bill, every nominee for Senate confirmation and every routine procedural motion is ... subject to a Republican filibuster. ...As Hannah Arendt observed, a disciplined minority of totalitarians can use the instruments of democratic government to undermine democracy itself. ...[Quoting John P. Judis, the author notes] "If there is an earlier American precedent for today's Republican Party, it is the antebellum Southern Democrats of John Calhoun who threatened to nullify, or disregard, federal legislation they objected to and who later led the fight to secede from the union over slavery."  ....[A] Republican committee staff director told me candidly ...what the method was to all this obstruction...By sabotaging the reputation of an institution of government, the party that is programmatically against government would come out the relative winner.

Third, the reason this sabotage of government by a radical right GOP is working is the ignorance of most US voters.

There are "tens of millions of low-information voters"  whose "confusion over who did what allows them to form the conclusion that 'they are all crooks' and that 'government is no good'.... This ill-informed public cynicism ... further intensifies the long-term decline in public trust in government that has been taking place since the early 1960s--a distrust that has been stoked by Republican rhetoric at every turn. ...

Fourth, the corporatist media "are also complicit in this phenomenon" because they dare not tell the truth or distinguish facts from fiction or even point out when a side is completely in the wrong, for fear of not appearing 'evenhanded.'

Ever since the bifurcation of electronic media into a more or less respectable 'hard news' segment and a rabidly ideological talk radio and cable TV political propaganda arm, the 'respectable' media have been terrified of any criticism for perceived bias.  Hence, they hew to the practice of false evenhandedness.  ...[Discussing Chris Cillizza, the author notes that ] the pundit's ironic depreciation falls like the rain on the just and unjust alike, on those who preciptated the needless [debt ceiling] crisis and those who despaired of it.  He seems oblivious that one side--or a sizable faction of one side--has deliberately attempted to damage the reputation of Congress to achieve its political objectives....

Fifth, as more voters become disillusioned by the GOP's anti-government propaganda and the media's misleading depiction of the parties' actions, it allows the radical fringe to acquire even more power.

And if the uninvolved middle declines to vote, it increases the electoral clout of a minority that is constantly being whipped into a lather by three hours daily of Rush Limbaugh or Fox News.  ...

[T]he deindustrialization and financialization of America since about 1970 has spawned an increasingly downscale white middle class--without job security (or even without jobs), with pensions and health benefits evaporating, and with their principal asset deflating in the collapse of the housing bubble.  Their fears are not imaginary; their standard of living is shrinking.

Sixth, the Republican method is "schizophrenic", in that it claims to be based on reverence of the Constitution yet denigrates  key constitutional principles, including the very federal government that the Constitution was written to create after the failure of the loosely joined states under the Articles of Confederation.

[The party] embodies a "caustic" denigration of the "very federal government that is the material expression of the principles embodied in that document....  [M]ost Republican officeholders seem strangely uninterested in the effective repeal of Fourth Amendment protections by the Patriot Act, the weakening of habeas corpus and self-incrimination protections in the public hysteria following 9/11 or the unpalatable fact that the United States has the largest incarcerated population of any country on earth.  If anything, they would probably opt for more incarcerated persons, as imprisonment is a profit center for the prison privatization industry, which is itself a growth center for political contributions to these same politicians.  Instead, they prefer to rail against those government programs trhat actually help people.  And when a program is too popular to attack directly, like Medicare or Social Security, they prefer to undermine it by feigning an agonized concern about the deficit.  That concern ... is largely fictitious.

Seventh, the Democrats cede the ground and fail to combat the Republican madness, and the Republicans succeed with faux populism that hides their destructive agenda.

Democratic Leadership Council-style 'centrist' Democrats were among the biggest promoters of disastrous trade deals in the 1990s that outsourced jobs abroad: NAFTA, World Trade Organization, permanent most-favored-nation status for China.  ...While Democrats temporized, or even dismissed the fears of the white working class as racist or nativist, Republicans went to work.  To be sure, the business wing of the Republican Party consists of the most energetic outsources, wage cutters and hirers of sub-minimum wage immigrant labor to be found anywhere on the globe.  But the faux-populist wing of the party, knowing the mental compartmentalization that occurs in most low-information voters, played on the fears of that same white working class to focus their anger on scapegoats that do no damage to corproations' bottom lines: instead of raising the minimum wage, let's build a wall on the Southern border (then hire a defense contractor to incompetently manage it).  Instead of predatory bankers, it's evil Muslims.  Or evil gays.  Or evil abortionists.

How do they manage to do this?  Because Democrats ceded the field.  Above all, they do not understand language. ...You know that Social Security and Medicare are in jeopardy when even Democrats refer to them as entitlements.  'Entitlement' has a negative sound in colloquial English: somebody who is 'entitled' selfishly claims something he doesn't really deserve.  Why not call them 'earned benefits.' which is what they are because we all contribute payroll taxes to fund them.  ...

It was not always thus.  It would have been hard to find an uneducated farmer during the depression of the 1890s who did not have a very accrurate idea about exactly which economic interests were shafting him. ...  But that is not the case in the present economic crisis. After a riot of unbridled greed such as the world has not seen since the conquistadors' looting expeditions and after an unprecedented broad and rapid transfer of wealth upward by Wall Streeet and its corporate satellites, where is the popular anger directed, at least as depicted in the media?  At 'Washington spending'--which has increased primarily to provide unemployment compensation, food stamps and Medicaid to those economically damaged by the previous decade's corporate saturnalia.  Or the popular rage is harmlessly diverted against pseudo-issues: death panels, birtherism, gay marriage, abortion, and so on, none of which stands to dent the corporate bottom line in the slightest.

Eighth, the GOP has three basic tenents that the party carries out with ideological purity.

A. The GOP cares only about the corporate elite and the rich owners and managers thereof.  That class warfare and corporatism is the reason for their opposition to tax increases, their groundless claims that capital gains preferences are necessary to create jobs, their repetition of myths about small businesses as job creators or American tax rates as so onerous that it chases the jobs away.

"Their caterwauling about deficit and debt is so much eyewash to con the public. ...The GOP refused [Obama's proposed $4 trillion defict reduction package] becdause it could not abide so much as a one-tenth of one percent increase on the tax rates of the Walton family or the Koch brothers, much less a repeal of the carried interest rule that permits billionaire hedge fund managers to pay income tax at a lower effective rate than cops or nurses.  ...

Republicans have attempted to camouflage their amorous solicitude for billionaires with a fog of misleading rhetoric. John Boehner is fond of saying 'we won't raise anyone's taxes' as if the take-home pay of an Olive Garden waitress were inextricably bound up with whether Warren Buffett pays his capital gains as ordinary income or at a lower rate.  Another chestnut is that millionaires and billionaires are 'job creators'.  US corproations have just had their most profitable quarters in history; Apple, for one, is sitting on $76 billion in cash, more than the GDP of most countries.  So, where are the jobs?

Another smokescreen is the 'small business' meme, since standing up for Mom's and Pop's corner store is politically more attractive than to be seen shilling for a megacorporation.  Raising taxes on the wealthy will kill small business' ability to hire: that is the GOP dirge. ...But the number of small businesses that have a net annual income over a million dollars is de minimis. ...And ...small businesses account for only 7.2 percent of total U.S. employment. ...

Likewise, Republicans have assiduously spread the myth that Americans are conspicuously overtaxed.  But compared to other OECD countries, the effective rates of US taxation are among the lowest.  In particular, they point to the top corporate income rate of 35 percent as being confiscatory Bolshevism.  But again, the effective rate is much lower.  Did GE pay 355 percent on 2010 profits of $14 billion?  No, it paid zero.

When pressed, Republicans make up misleading statistics to 'prove' that America's fiscal burden is being borne by the rich and the rest of us are just freeloaders. ...All of these half-truths and outright lies have seeped into popular culture via the corporate-owned business press. ...And when misinformation isn't enough to sustain popular support for the GOP's agenda, concealment is needed. ...

B. The GOP "worship[s] at the altar of Mars" with a "sheer, libidinous enthusiasm for invading other people's countries."

About a month before Republicans began holding a gun to the head of the credit markets to get trillions of dollars of [spending] cuts, these same Republicans passed a defense appropriations bill that increased spending by $17 billion over the prior year's defense appropriation.  ...A cynic might conclude that this militaristic enthusiasm is no more complicated than the fact that Pentagon contractors spread a lot of bribery money around Capitol Hill.  That is true, but there is more to it than that.  It is no neceesarily even the fact that members of Congress feel they are protecting constituents' jobs.  ...Some areas ... are heavily dependent on Department of Defense (DOD) spending.  But there are many more areas of the country whose net balance is negative: the citizenry pays more in taxes to support the Pentagon than it receives back in local contracts.  And the economic justification for Pentagon spending is even more fallacious when one considers that the $700 billion annual DOD budget creates comparatively few jobs. ... [A] disproportionate share is siphoned off into high-cost research and development (from which the civilian economy benefits little); exorbitant management expenditures, overhead and out-and-out padding; and, of course, the money that flows back into the coffers of political campaigns.  A million jobs appropriated for highway construction would create two to three times as many jobs as a million dollars appropriated for Pentagon weapons procurement. ...

The results of the last decade of unbridled militarism and the Democrats' cowardly refusal to reverse it have been disastrous both strategically and fiscally.  It has made the United States less prosperous, less secure and less free. ...

C.  The GOP has merged politics and religious fundamentalism to replace Eisenhower Republicanism with a "system of economic royalism, militarism and fundamentalism"

[The GOP embracing of fundamentalism has had the] "consequent normalizing of formerly reactionary or quaint beliefs", including backward positions on evolution versus creationism, scriptural inerrancy, and the existence of angels and demons, resulting in a "prevailing anti-intellectualism and hostility to science." ...

The Constitution to the contrary notwithstanding, there is now a de facto religious test for the presidency. ... Politicized religion is also the sheet anchor of the culture wars.

[This] rise of politicized religious fundamentalism (which is a subset of the decline of rational problem solving in America) may have been the key ingredient of the takeover of the Republican Party. ...

In summary, the GOP is out to make sure that ordinary Americans suffer and that the elite have everything that they want.

Having gutted private-sector pensions and health benefits as a result of their embrace of outsourcing, union busting, and 'shareholder value', the GOP now thinks it is only fair that public-sector workers give up their pensions and benefits, too.  Hence the intensification of the GOP's decades-long campaign of scorn against government workers. ...They will move heaven and earth to force through tax cuts that will so starve the government of revenue that they will be 'forced' to make 'hard choices'--and that doesn't mean repealing those very same tax cuts, it means cutting the benefits for which you worked.

The attack on public workers and their pensions is particularly galling in light of the way the super-elite have accumulated wealth while paying very low taxes.  See, e.g., this article on Alter.Net regarding Paulson and the carried interest advantage he enjoyes.  Les Leopold, hedge fund gamblers earn the same in one hour as a middle class household makes in over 47 years, AlterNet, April 2011.  As some point, ordinary Americans must claim back their lives and livelihoods from the corporatist/elitist agenda.

Jon Huntsman's Wall St. J. Op-Ed: warmed over Reaganomics

There he goes again.  Huntsman's op-ed ran in the Sept. 6, 2011 Wall St. Journal: Reigniting the Entrepreneurial Spirit.

As though enterpreneurs aren't being entreprenuers right now.  HOw about the group that made the news last night--two young men who realized that they could repai iPhones and other electronic gear for half the amount that the manufacturers charge and still make a cool profit (YoubreakIFix)?  If you have a good idea and you try to make it work, odds are you can make money off it.  That makes you an entrepreneur.

Huntsman seems to think that making the tax code friendly to Google and other Big Corps is the way to encourage entrepreneurialism.  That's like saying that taxing  the wages of partners in private equity funds at capital gains rates encourages entrepreneurialism--it's a big laugh.  Carried interest managers aren't entrepreneurs; they are speculators who buy cheap, breakup, and sell expensive. 

Huntsman wants "tax simplification, regulatory reform, and changes in energy and trade policy."  That's just more of Reaganomics--tax simplification means tax cuts for business and the 'owner' class, regulatory reform means deregulation, and changes in energy and trade policy mean deregulation and opening up of protected areas for exploitation.  None of those things will create jobs, foster entrepreneurialism, or create a sustainable American economy.

Huntsman says he favors a "revenue-neutral tax overhaul modeled after Ronald Reagan's 1986 tax reform package--which will require taking on sacred cows."  So he is willing to eliminate a few carveouts and deductions, that's good.  But he wants to lower rates even more, that's bad.  In fact, he says "flatter" is "fairer"--that's a weird view of fairness in a country that has consistently favored progressive taxation as a way to ensure that the wealthy pay for the many advantages bestowed upon them by government.  The 1986 tax cut worked as well as it did (it was no panacea) because rates could be cut in half and still be at 35%.  Today's rates are already at tax haven lows and can't really be cut any further without decimating important government programs.  Moreover, one of the key 1986 reforms was to eliminate the preferential rate for capital gains and tax the wealthy on their income the same way that the middle class is taxed--all at ordinary income rates.  Huntsman wants to couple rate reduction from all time lows with elimination of all taxes on capital gains!    He of course calls that 'eliminating the double taxation on investments" but as I've explained several times before, that use of "double taxation' is mostly false, especially in respect to investment in companies' stocks.  We already have a special tax code provision that provides for very low taxation on the capital gains an entreprenuer invests in a company directly.  But the preferential capital gains rate goes far beyond that and applies to secondary market capital gains.  That has nothing to do with direct investment.  Moreover, we have accelerated depreciation, bonus depreciation and expensing provisions that essentially make investment in business equipment very close to tax free--there's no 'double taxation' involved. 

 Huntsman repeats his proposed new rate schedule--8%, 14% and 23%--combined with "eliminating deductions and credits".  That means that the poor and middle class would bear an unconsciounable tax burden, while the wealthy would pay even less than most of them do today.  He says he'll "make business tax rates globally competitive"--that should mean RAISING rates, since the US business tax rates is already at tax haven status among the 40 OECD countries.  But of course, he actually intends to lower business taxes even further, for the benefit of wealthy managers and owners.

Huntsman's objections to regulations are equally misleading.  Regulations are the way that government acts to prevent business from passing along costs to taxpayers as 'externalities'--costs that they don't have to take into account to make a profit, but that create real harms for others, such as air pollution,  long term ecological destruction, ruination of mountains (strip mining), ruination of streams (sewage discharge), etc.  Huntsman has already reached judgement on the NLRB's consideration of Boeing's plant relocation to a right-to-work (union destroying) state.  He similarly has decided that the Dodd-Frank financial system overhaul represents "another regulatory sin" because it creates "massive compliance costs."  It appears he'd rather that the too big to fail banks continue to speculate freely in interconnected ways that end up creating a financial crisis like 2007-2008.  After all, the banksters will enjoy that, and the politicians will benefit from the big campaign contributions.  But the rest--ordinary Americans that make up the vast majority of living, breathing 'beneficiariies' of the kind of unsteady, speculative, volatile financial system created by deregulated banks--will suffer.  Huntsman understands taht the regulations that protect ordinary bank customers may face the big banks to "choose between downsizing or facing much higher capital ratios."  He casts this as a parade of horribles resulting from Dodd Frank.  Oddly, because that's actually a desirable result of banking legislation--if only that were a real possibility, it would help to end the 'too big to fail' problem!

Huntsman as president also would favor Reagan's mantra of privatization--he would 'privatize' Fannie and Freddie and "let the housing market clear".  In other words, he would let private companies now garner all the benefit of the federal taxpayer dollars in vested in Fannie and Freddie (he posed no conditions about returning all the benefits of the long-term federal guarantee) and he wouldn't give a damn about ordinary Americans who have underwater mortgages.  There's nothing in his proposal for clawbacks on mortgages in bankruptcy or otherwise.

Huntsman's warmed-over reaganomics proposals for favoring big business over ordinary Americans through a deregulatory regulatory policy, tax cut tax policy, and privatization don't address the right issues, don't promote entrepreneurialism, and are not fair. 

More on Jon Huntsman's Tax Proposals

In my last post, I discussed Jon Huntsman's campaign release of programs that he would push as president. 

Huntsman's tax proposals reflect the same old thinking of the right that capital should earn money tax-free while labor pays for government.  And he adds to that a few twists, in that he doesn't appear to understand how basis works or the difference between a secondary market investment and an investment in an entrepreneurial enterprise.

He proposals zero taxation of capital gains and dividends.  He argues that people should not have to pay 'double tax' when they sell their investments, since they paid tax on the original money that they earned and invested.  And he says that zero taxation of this kind of income will create jobs, by creating more investments in businesses that create jobs.

These arguements ignore much of the reality of the markets.

First, most investments in stock are not direct investments in entrepreneurial enterprises and hence do nothing at all to make it easier for companies to afford to create jobs.  Instead, they are secondary market investments--meaning that the investor is buying stock on the market from an investor who wants to get out of that particular corporate equity.  Those trades between investors add not a penny to the company.  They merely line the pockets of the secondary market seller. 

Second,  zero taxation of gains from such stock investments will especially benefit relatively short-term secondary market traders who buy shares  cheap and sell whenever they have appreciated. Permitting these traders--who often are not invested for the long-term and who may even have ulterior motives (moving the stock in a direction that benefits them for other reasons than the companies' wellbeing)  to have such gains from  secondary market sales be tax free would incentivize shorter-term investment, contributing to market volatility.

Third, Huntsman's rationale for excluding capital gains from taxation is nonsensical.  He says that the investor class paid tax on their income when they earned it and then invested that after-tax income so it is unfair to tax capital gains, since they represent a "double tax" on that earned income.  This is wrong on various counts in itself. 

a) the amount invested is not necessarily 'earned income' (implying income from wages that is taxed)--it is more likely, in fact, that the amount invested is an amount that was invested in something else or income from such an investment or tax-free income earned in a Roth IRA, for example.  (Much of the tax-free benefit of retirement accounts accrues to the wealthiest corporate managers.)  In today's system, the income from the investment would likely be taxed very lightly (at the preferential capital gains rate); once the switch was made to the system Huntsman is proposal, that income wouldn't have been taxed at all.  So nontaxed income would be invested and earn more nontaxed income.

b) gains from investments do not represent the same after-tax income that was used to make the investment, so taxing those gains is not 'double taxation' of the investment amount.  The amount of after-tax income invested creates a tax attribute called "basis".  When the investment is sold, the gain is the amount realized in excess of basis--in other words, the basis is allowed to be returned tax free already under today's tax code, and nobody on the left or right is arguing that the gross proceeds should be taxed rather than the gain in excess of basis.  So Huntsman's 'double tax' argument about after-tax investments being taxed again when realized on disposition is simply wrong.  (There are some more sophisticated arguments that could be made about inflation or deflation adjustments to ensure that all of the gain taxed is a true economic gain, but in a rough-justice tax world we have long concluded that such fine-tuning isn't necessary and would be counter-productive, just as a tax on imputed income, while economically 'accurate', would be counterproductive and merely create arbitrage opportunities of phantom deductions against minimized imputed income.)

Fourth, since many capitalists live exclusively off their capital, zero taxation of capital gains and dividends will essentially leave an entire class who pay no income tax, while workers will be taxed on every dollar they earn because of the elimination of the many deductions that are designed to provide a basic standard of living before taxation sets in.  That's highly burdensom taxation for workers combined with a permanent tax holiday for investors, most of whom are in the wealthy top 20% of the income distribution.  That kind of tax scheme carries the current investor-class hostility to workers to its logical and dangerous conclusion.  Not only would this radical right fringe make unions very difficult to form and make worker rights very difficult to enforce, but they would also place on workers the entire burden of the federal income tax.  That would be a final blow to many ordinary Americans who are barely making it on stagnant wages, even with a standard deduction and personal exemption that protects them from paying income taxes (but not payroll taxes).  (And yes, FICA and FUTA payroll taxes are taxes--they are exactions from the government.  They are taxes with a purpose--to fund Social Security and Medicare programs that ensure (among other things) that older Americans do not live in penury and can have decent health care in their old age.) 

This is somewhat paradoxical, because there is a segment of the radical right that has argued that it is "unpatriotic" for the poorest and lower-income Americans not to have to pay income tax.  (It is not entirely clear whether Huntsman's proposals adopt this position as well: he argues for elimination of deductions and an 8% rate for those at the bottom.  Does he mean to eliminate the standard deduction and personal exemption, the EITC and the child credits and have the poor pay a significant portion (8%) of their inadequate income? )

That argument against zero taxation for the poor doesn't hold water, since clearly there is a reason for providing a  'rough justice' zero taxation rate for those who have very little.  The standard deduction and personal exemption (combined with the Earned Income Tax Credit and Child Credits) achieve this, ensuring that those at the bottom who need every penny for necessities do not have to make a choice between paying their taxes and eating or having shelter. 

But the same ones who argue that the poor should have to 'have some skin in the game' of the income tax system want the wealthy whose income is primarily or even solely derived from their capital (often inherited, or earned as 'carried interest' where compensation was taxed at a much lower rate than a laborer's wages are taxed, or acquired in 'deals' because of family and political connections as in the case of George W. Bush and Richard Perry) to pay no income tax at all.  So in this proposed  regressive tax system, those who can least afford to pay would have to pay and those who can best afford to pay would not have to pay.  That turns the standard notion of tax fairness based on 'ability to pay' upside down.

It might be worth considering why even less obviously radical-right candidates, such as Jon Huntsman, believe they must kowtow to the "investor class" and force the entire burden of the federal government on the working poor and middle class. 

a) It certainly isn't because of a benefits analysis.  Clearly, the investor class wouldn't have much of anything without the federal government--roads, transportation systems generally, air traffic, security, stable legal systems regarding property and contract rights, financial systems (and back up from the federal government), water (imagine this country without the federally funded dams and other projects necessary for fair water distribution), etc. are all necessary items to the investor class's wealth that are attributable in significant part to the federal government.

b) it certainly isn't because of a vulnerability analysis based on ability/inability to pay.  The investor class is a particularly vulnerable and discrete minority that merits special protection.  The wealthiest Americans own most of the financial assets and are the least vulnerable to hard times.  They generally have more than enough for necessities and luxuries and those at the top of the class--the top one-half of 1%--have gotten so much wealthier than everybody else in these Reaganomics decades that they could lose half of what they have and still live privileged lives.

c) It certainly isn't based on a history of success in creating jobs by reducing taxes.  This has been the policy in place since Nixon was president.  It hasn't worked and there's no indication that it will work.  Without broad-based growth that sustains a strong middle class, the economy in this country can't succeed.  Stingy wages for laborers and wealth accrual solely at the top creates increasing inequality.  As laborers garner less of the economy's bounty, they become more frugal and spend even less, in a vicious downward cycle. 

d) It isn't even because that is the way to solve the federal deficit and debt problems.  Taxing the bottom four-fifths of the income distribution while letting the wealthiest and highest income off essentially scott free (a 23% rate on their wages--unless it is paid as 'carried interest'-- and zero taxation of their much larger capital income and their carried interest compensation) would result in fiscal mayhem.  On the contrary, if we taxed all income (from both labor and capital) at the ordinary income rates (as Reagan's 1986 tax reforms did) and had a reasonably strong and progressive estate tax and eliminated the cap for Social Security taxation, we could make a strong showing in reducing the deficit.  Couple that with elimination of wasteful spending--especially the excess military spending and the 'bridges to nowhere' earmark.  Add a dose of sound thinking about the corporate tax and about the multinational corporations' demands for federal government subsidization of their global enterprises, so that Congress eliminates needless corporate tax loopholes like the 'domestic production activities deduction', grossly accelerated depreciation, bonus depreciation, the R&D credit, the active financing exception.  With that, we would be well on the road to fiscal responsibility.

e) It probably is because that is what the wealthy want.  As George W. Bush said, his constituency was the 'have-mores'.  The 'have-mores' are seldom content with just having more--they want it all.  And these radical right policies will give it to them. 

Jon Huntsman's Tax Reform Proposals

The Republican Party seems to have a litmust test for 'good' Republican nominees for party office:

• first, tax cuts:  Republican candidates must have no plan to increase taxes, even if that means that the wealthy pay too little and the poor too much;
• second, deregulation.  Republican candidates must have no plan to have the government regulate the activities of the market (that will not regulate itself) in ways that favor the long-term wellbeing of ordinary Americans; and
• third, militarization:  Republican candidates must have no plan to reign in the exorbitant military/defense/homeland security spending that has been a large part of the reason for our buildup of significant deficits; and
• fourth, privatization:  Republican candidates must not resist privatization of every possible public asset and activity.

Readers will recognize the four-pronged stool of the Reagan administration and the right's agenda since--deregulation, militarization, privatization, and tax cuts.  We've been operating more or less under that agenda most of the time since 1980.  We have not created a sustainable economy that benefits everyone.  Instead, we have created a highly unequal society in which those at the top gain incredibly and those in the middle are squeezed down towards the bottom, while interminable wars get waged and environmental degradation continues at rapid pace.  Ordinary Americans lose out in this 'brute capitalism' endeavor which gives most of the rewards to those already holding most of the wealth and furthers a "corporatist" society in which everything caters to business while ordinary people's needs go unanswered.

Jon Huntsman's so-called "American Jobs Plan" fits the mold. 

On taxes, Huntsman wants to

1) eliminate deductions and lower rates to 8%/14% /23%. 

2)  Eliminate the AMT

3) Eliminate taxes on capital gains and dividends

4) Reduce the corporate tax rate to 25% from the statutory rate of 35%

5) shift from a worldwid system to a territorial one

6) enact a tax repatriation holiday

That scheme represents class warfare on the poor and middle class, for whom a tax bill of 8 or 14% of income, respectively, could be devastating.   You really can't simplify the tax code for the 70% of people who take the standard deduction except by removing provisions that may benefit them if they qualify (medical deductions, etc.).   Eliminating the AMT is extraordinarily costly, and doesn't "penalize ... small businesses" as the Huntsman plan argues.  Meanwhile, the wealthy--who own most of the financial assets (stocks and bonds) and get most of the capital gains and dividend income that Huntsman wants to make tax free, benefit extraordinarily.  Our tax code already favors investment income heavily--we should move in the opposite direction and tax investment income no differently from labor income.  Otherwise, we create an enormous privilege for those who already own capital and have investment income, while disadvantaging those who must earn a living from labor and now become the ones required to carry on their backs the entire federal government enterprise. 

 Huntsman's argument for zero taxation to capitalists' investment gains is on one hand the same old hat of "let's favor capital over labor" based on the failed market theories of the Chicago school that taxing capital gains deters investment.  But that's absurd on its face.  The wealthy who own most of the financial assets do not stop investing in those financial assets because of taxation--if so, they would switch from financial assets to operating assets and stimulate the economy.  Regretably, taxation doesn't have that much of an effect.  They continue right on investing in capital assets. 

Further, Huntsman makes a 'double tax' argument that shows how little he understands about the existing arguments about taxation of capital gains.  He says "[b]ecause dollars invested had to first be earned, they have already been subject to an income tax [and] taxing these same dollars again when capital gains are realized serves to deter productive and much needed investment in our economy." 

But it is not the "same dollars" that are taxed when capital GAINS are realized--tax basis protects the after-tax dollars invested and the amount taxed is the GAIN over that amount that has accrued to the investment.  The 'double taxation argument has a little more heft when made about dividends paid by corporations, but again much of that is based on the starting point.  Once we decide that corporations are persons that are taxpayers, then it is not proper to say that dividend taxation represents 'double' taxation.  Corporations are taxable entities and pay tax on their income.  They may then pay amounts out of that to shareholders who are also taxable entities and the shareholders will pay taxes as well (unless they are corporations, which generally get a 70-80 or 100% dividends received deduction).  But that is not really any different from the fact that I as a professor pay tax on my income and may pay amounts out of that to workers in my household who are also taxable entities and the workers will pay taxes as well.  The only reason it seems that the capital investment is different is because the Code has created a category of capital versus ordinary assets and distinguishes the rate on them.  And because one of the taxpayers in the corporate situation is an artificial entity--but one that we recognize as a 'person' under the Constitution entitled to even free speech rights. 

Furthermore, Investment gains and income earned through non-corporate entities of course have been subject to NO tax at all, since noncorporate entities are not subject to corporate taxation, and the gains beyond the after tax investment would be allowed to escape with zero taxation in Huntsman's scheme.

Huntsman's argument for reducing the corporate tax rate is equally nonfactual.  He states that "The United States cannot compete while burdened with the second-highest corporate tax rate in the developed world."  This is bunk--the statutory rate is not the actual rate paid by corporations.  Most corporations pay no tax, and those that do pay tax already pay a rate of 25% or lower.  So IFF it is really important to help US multinationals compete with other US multinationals and other country multinationals (which is itself a doubtful proposition) and IFF a 25% tax rate makes corporations competitive, the our corporations are already sitting pretty.  The US is in fact a tax haven for corporations, according to the OECD's analysis of developed countries  US corporations pay a very small share of taxes these days-the corporate tax take has shrunk from about 40% of GDP to less than 3%. 

The switch to a territorial system is another element that favors the corporatist agenda, as is the repatriation holiday.  See earlier postings.  Corporations have plenty of money that they can invest in the US right now; Repatriation isn't likely to increase investments but rather to amount to a windfall.  Repatriation didn't do anything to increase jobs in 2004 and it won't again.  Repatriation led the companies that repatriated profits in 2004 to keep even more profits outside the US (expecting a second 'one-time-only repatriation').  There is simply no good reason to do another repatriation tax holiday.

Huntsman then goes on to propose deregulation.  Note that he wants to

• eliminate Dodd-Frank.  We had a near Depression because we eliminated Glass-Steagal, and Huntsman wants to go back to the "banker take all the gains/society take all the losses" mindset of financial speculation that nonregulation of derivatives led us to. 
• undo the baby step towards health care reform.  Sure, we should have enacted Medicare for all, a single-payer system like every other advanced country in the world already has. But deregulating health care got us into the mess we are in--it certainly won't cure the mess.
• "dramatically reign in the EPA".  IN a country where corporate will has destroyed wetlands, denuded forests, and bulldozed mountaintops into creeks, Huntsman wants to let the corporate giants operate with no agency to protect the environment.  He particularly objects to protecting the ozone layer--that 'little' issue of whether we even exist as a planet that supports life or not...
• "curb" independent agencies like the NLRB.  Huntsman says the NLRB "destroys jobs"--in other words, we are supposed to be willing to have sweatshop conditions in order to have any jobs at all in the corporatist culture, rather than having jobs and protecting workers.
• "streamline the FDA". that favors Big Pharma and the investors, who want to be able to foist new drugs on patients without the painstaking clinical trials currently required

Huntsman thinks privatizing Fannie and Freddie will stabilize the housing market.  Allowing modification of mortgage loans in bankruptcy would go much further to doing that.   And "privatization" of Fannie and Freddie would have to be handled correctly to avoid a windfall from the existing public guarantee.  Better to simply wind them down and let them go out of business.  If anybody wants to run a Fannie equivalent, let them start it up themselves from scratch.