Friday, January 10, 2003
LET’S TAKE A CHILL PILL
My goodness. We conservatives are a grumpy bunch, aren’t we? (I include myself in that.) Bush hasn’t started the war against Saddam, the U.N. inspectors can’t find any weapons, and so the War on Terrorism is turning into a fiasco. For example, Mark Steyn writes
Every month that passes without the Americans using force against Iraq increases North Korea’s potential client list. That’s the linkage, and the deterioration in perception this last year is at least as damaging as any actual capability in Pyongyang’s arsenal. If Saddam’s still in power by May, the world’s in big trouble.
Over at NRO, Michael Ledeen has already drafted a scenario by which the U.S. loses the War on Terrorism:
The current debacle resembles the final phase of the Gulf War in more ways than the presence of the same failed personalities. In 1991 the Middle East seemed on the verge of an American-led democratic revolution that would have been catalyzed by the liberation of Iraq from Saddam.
(Thanks to Bill Quick, who is getting a bit grouchy too.)
My friends, let’s relax a little bit. Recall that toward the end of last summer Bush seemed like he was drifting and wobbly. A bunch of us got our undies in a bunch. Then in September, Bush stuck it to the Democrats and the United Nations, all in one fell swoop. Given how well that turned out, we should give some benefit of the doubt to Bush this time.
The impetus for our grumpy demeanor is encapsulated by Steve Chapman who states that
Iraq has been cooperating with United Nations weapons inspectors, and they apparently haven't found anything. This is not how things were supposed to play out. If you want a pretext for war, as President Bush does, no news is bad news.
This sentiment relies on the premise that Bush’s war plans are contingent on the weapons inspectors finding something. That would imply poor planning on the part of Bush and his Administration.
Let’s give them more credit than that. Bush did not go to the U.N. unless he and his Administration had figured that it was a likely no-lose situation. If the inspectors find something, then Bush can say "Ah-ha! Saddam is lying. Time to go to war."
What if they don’t find anything? Then the Administration releases some damning intelligence it has that Hussein is building weapons of mass destruction. Bush can then say that Saddam is lying, and hint that the U.N.—because it couldn’t find anything—is an ineffective tool for resolving the situation. Time to go to war.
Does the Administration have such intelligence? This story in the Washington Post from yesterday suggests that it does:
Powell said in an interview that the Bush administration was still holding back some of its most sensitive information, waiting to see if inspectors "are able to handle it and exploit it. . . . It is not a matter of opening up every door that we have." Much of the intelligence is said to involve alleged sites of Iraqi weapons development and storage.
The inspections are not going well. And that will play right into the Bushies' hands. So let's stop giving ourselves ulcers, okay?
. . .
HOW BUSH BEATS THE DEMOCRATS
My new article at the American Prowler.
. . .
Thursday, January 09, 2003
OKAY, THAT’S LONG ENOUGH
Well, I was hoping to hold out until next week when the Iowa Legislature returned, but this silly editorial in the Des Moines Register demands a response now. There has been no shortage of dimwitted stuff on the Register opinion page while I’ve been off. What prompted me to respond to this one is that it is about tax cuts—specifically the Bush tax cut. Tax cuts are probably my favorite policy topic, and so like Pavlov’s dog I must respond. (By the way, if you need a laugh, go see my review of "Signs" at Blogcritics. See the post below this one.)
The editorialists think they’re being clever by using standards set by Iowa Republican Senator Chuck Grassley in evaluating the Bush proposal. It begins thus:
President Bush's $674 billion economic-stimulus package rolled out on Tuesday disproportionately favors the rich. It will do next to nothing for the average American. It's a budget buster that will plunge the nation deeper into debt.
But enough of that old rant favored by liberals.
Now, for the new rant favored by liberals:
Most bang for the buck? Nope. Tax cuts are generally the most inefficient way to stimulate the economy. That's especially true of Bush's centerpiece, the proposed elimination of the tax on dividends. The wealthy who will get most of the benefit will not rush out to spend the money and stimulate the economy. They'll reinvest the money, which might in a roundabout way lead to more job creation down the road, but it won't create many jobs right now when they're needed.
Could someone please show me where in the economic literature it says that "tax cuts are generally the most inefficient way to stimulate the economy"? And since when does investment lead to job creation "in a roundabout way"? If companies and entrepreneurs invest in business expansion, new technologies and the like, that means that new jobs will be created rather quickly.
Work right away? Clearly, no. Only $98 billion of the $674 billion program will go into effect in the first 16 months. Except perhaps for some small-business spending and unemployment compensation, there will be little immediate stimulation. More problematic, future tax cuts set in motion with the plan could come at exactly the wrong time. If the tax cuts should happen to kick in after recovery has already occurred, that would be a time when the best medicine for the economy would be to pay down the debt instead of cutting taxes.
First, the Register editorialist are just plain wrong that the Bush plan won’t provide the type of consumer-based stimulation that they favor. The income tax cuts apply to all earners, not just the wealthy. Furthermore, Bush wants to make them retroactive to Jan.1 of this year. That means that workers will have more take-home pay to spend.
Yet that’s not the main problem with their argument. Note how they think economic stimulation comes from "small-business (read government subsidy) spending and unemployment compensation." The underlying premise here is that the economy is stimulated by demand, or more specifically, lots of new consumer spending. If this were true, then the rebate checks sent out in mid to late 2001 should have given a big boost to the economy. But they didn’t; a look at the unemployment rate shows that new jobs were not created. If you need more proof, look to Japan, which has been trying to stimulate its economy with lots of new government spending for quite some time now. It’s mired in a decade long slump.
Even if it were generally true, it’s not the case right now. Consumer spending has been strong, even during the actual recession. The problem has been investment, which is down 5% since 2001. The income-tax cuts for the top earners and the elimination of the tax on dividends is what will spur investment.
Bipartisan support? Yeah, right. Democratic leaders responded immediately with intense criticism. Unless the public rises up and demands one more tax cut for the rich, it's doubtful Democrats will cave in. Even some Republicans such as Senator John McCain have reservations.
I suppose it depends on what the definition of "bipartisan." If it is the standard liberal definition which means Republicans give into Democrats, then I guess it isn't. But if it means some Democrats will eventually vote for it, then yes it is. Last time around, 12 Senate Democrats voted in favor of it, and only three of them—Carnahan, Cleland, and Toricelli—are no longer in the Senate. And John McCain? Come on. If he isn't griping about something that President Bush is doing, then it's not a normal day in Washington.
Is it fiscally responsible? The federal budget is already deep in the red, and the administration is poised to wage war in Iraq at untold cost. At such a moment, to even contemplate another round of tax cuts for those who need them the least is unconscionable.
In fact, speaking of Iraq, perhaps the best real "economic stimulus" would be to eliminate the war talk that's scaring investors in the first place.
Uh sorry, but there is no demonstable connection between deficits and economic growth. We had low ones during the economic growth of the 1990s, and high ones during the 1980s. As for Iraq, the Register just couldn't resist getting in that last little dig. Perhaps the better plan is to end this charade that is U.N. Weapons Inspections and get on with the war.
Ah, now I feel much better.
. . .
SIGNS
I have a review of M. Night Shyamalan's "Signs" at Blogcritics.
. . .
|
. . .
|
