More Right Wing Lies – Now As In The Roaring 20’s
Amity Shlaes, the disinformation bunny, is still going. In the latest issue of Imprimus, a publication of Hillsdale College, is a transcript adapted from a recent talk she gave there during a conference on the Income Tax, sponsored by Hillsdale’s own Center for Constructive Alternatives and the Ludwig von Mises Lecture Series. Right away, you know this is going to be good. The Title of her contribution is Calvin Coolidge and the Moral Case for Economy. Of course, by economy, she means austerity.
There is so much wrong here it’s both impressive and depressing. Rather than give her the full FJM treatment, which would take more time and energy than she deserves, I’ll just hit on a couple of the lowlights. Here is her opening paragraph.
With the Federal debt spiraling out of control, many Americans sense an urgent need to find a political leader who is able to say “no” to spending.
Here we go. Her first sentence is an exercise in made-up right-wing talking point mythology. I’ve already exploded the ‘Obama is a profligate spender” myth, here, here, and here. Further, we have just lived through three years when federal spending was close to flat line, as Graph 1 shows.
There is only one comparable period in post WW II history, 1953-56, during Eisenhower’s first term, as shown in Graph 2. Still, over Ike’s full term, spending grew by about 30%.
To suggest that federal dept is now “spiraling out of control” due to excessive spending is not merely disingenuous. It is a sign that either Shlaes has no earthly idea what she’s talking about, which in an alleged journalist, is unforgivable, or it’s a bare-faced lie, which is unforgivable for anybody. And if many Americans are feeling the urgent need to curtail government spending, it’s because they have been lied to so repeatedly and often that they have no idea what the truth is. As Krugman recently put it: “And I have to say, it’s extremely telling that conservative Republicans don’t seem able to make their case without resorting, right from the beginning, to obviously dumb fallacies.” The truth is that if we have a debt problem, it is due to a shortfall in revenues.
Yet they fear that finding such a leader is impossible.
Its not clear who made Shlaes the spokesperson for this sorry, disenfranchised segment of the population, nor that this is indeed what they fear. Perhaps we should introduce Shlaes and the rest of these Real Americans to the real President B. Hoover Obama.
Conservatives long for another Ronald Reagan.
This is probably correct, though as Shlaes goes on to demonstrate, conservatives in this way – and, alas, right-wingers almost always – are rather badly disconnected from reality.
He was of course a tax cutter, reducing the top marginal rate from 70 to 28 percent. But his tax cuts – which vindicated supply side economics by vastly increasing federal revenue – were bought partly through a bargain with Democrats who were eager to spend that revenue.
Wrong again. The reality is that Revenue growth under Reagan was the worst of any 20th century President, post Eisenhower, except for the unfortunate Bush, Sr. under who’s recession plagued regime Reagan’s buzzards came home to roost. And was it really the Democrats who spent that anemic revenue stream, or did it go to Reagan’s Star Wars fantasy?
Reagan was no budget cutter. In fact, the federal budget grew over a third during his administration.
Here, she finally gets something right, if by “federal budget” she means Total Outlays, and by “over a third” she means over 80% [as measured from 1980 to 1988.]
Things get really egregious further on in the section titled “The Purpose of Tax Cuts.” She informs us that President Coolidge and Treasury Secretary Andrew Mellon campaigned to lower top rates from the 50’s to the 20’s.
Mellon and Coolidge did not win all they sought. The top rate of the final law was in the forties. But even this reduction yielded results – more money flowing into the treasury – suggesting that “scientific taxation” worked. By 1926, Coolidge was able to sign legislation that brought the top marginal rate down to 25%, and do so retroactively.
I was surprised to learn that Coolidge and Mellon had anticipated the Laffer curve by 6 decades. Let’s have a look at how more money flowed into the treasury. In 1922 and ’23, with a top marginal rate of 56%, tax revenues were $2.23 and 1.69 billion respectively. [Per FRED, 1923 was a recession year] In 1924, with a top rate of 46%, total revenues were $1.79 billion. This is what Shleas calls “more money flowing into the treasury.” Here’s a bigger picture look. In 1920, when the top marginal rate was 73%, receipts were slightly over $4 billion. In 1925, when the top marginal rate was 25%, receipts were $1.7 billion, less than half of the 1920 value, and by 1929 had only increased to 2.23 billion. Graph 3 shows revenues per year [Coolidge’s term highlighted in red,] and belies Shlaes’ assertion.
Graph 4 shows a scatter plot of this same data, with revenues as a function of top marginal rate, Coolidge years are again highlighted in red.
A best fit straight line is included. There’s lots of scatter, for a variety of reasons, but the upward trend – the exact opposite of Shleas’ assertion, is obvious.
So here’s the reality. A decade of tax cutting and deregulation led us into the Great Depression, the worst economic collapse of the 20th century. [You might note that the following decades of high tax rates and robust regulation were free of these horrible events.] And what happened most recently? A decade of tax cuts and deregulation – the end game of three decades of this supply-side approach – led to the greatest economic collapse since the Great Depression. Significantly, the major deregulations of big finance, including the repeal of Glass-Steagall came at the end of Clinton’s term, less than a decade prior to the financial melt down. Last Friday on his radio show, Thom Hartmann pointed out that prior to the regulations put in place in the 30’s, the U.S. had never gone for more than 15 years without a major financial collapse. So this result should have been expected.
The extraordinary thing isn’t that right wingers lie. The simple reality is that they can’t make their case without lying, because it has no merit. The extraordinary thing is that their lies are so easily rooted out and refuted, in the era of free and easily accessible information, but so few people will take the required few minutes to go ahead and do it. Sadly, whenever the truth comes up against a cascade of lies, the liars have a significant tactical advantage.
Shlaes’ presentation is just one more manifestation of the right wing ploy of denying reality. Sadly, it works, because you really can fool a lot of the people a lot of the time.
Obama’s profligate spending is easily seen by those who saw Bush as profligate. And, really easily me who saw Reagan’s deficits as unacceptable.
The real devilry here belongs to those who change their POV depending upon who is in the White House.
Obama himself was critical of Bush’s deficits. Why the change of POV? Really? There is a question here that needs reflection? Ha!
I voted once for Reagan and then didn’t vote the second time.
I was right. Reagan was without an energy policy, without border control, and had greater trade and budget deficits than ever.
And, Reagan got rid of Volcker the same way Bush II got rid of O’Neill who opposed the second round of tax cuts.
Sobriety be damned!
My point here, if not obvious, is that you are part of the problem if you can’t see past your allegiance to a party, and, clearly, a lot of Angry Bear writers cannot.
Well done. I would love for you to tackle their greatest success story, the mini-depression of 1920-22 and how they use the non-action of the government to prove that doing nothing worked in one depression while doing something in the 30s prolonged the depression. I get this all the time from Beck fans.
Your relatively good points in the middle are sandwiched between the nonsense of your first and last sentences.
I don’t know of any Bear who is a party loyalist. Think about it. We have a two party system in which one of the parties has sailed off the rational political map into a quagmire of lies and insanity, much of which is motivated by hatred. Your options are vote for the other party or stay home.
Don’t make the mistake of thinking that a criticism of the insane party represents allegiance to the other one.
That simply does not follow.
Cheers!
JzB
Wolley –
Your comment snuck in ahead of my response to Cameron.
In a rare moment of lucid prescience, I anticipated your request by about 3 years. Here are the links.
http://jazzbumpa.blogspot.com/2010/03/what-hell-friday-depression-of-1921.html
http://jazzbumpa.blogspot.com/2010/03/more-thoughts-on-depression-of-1920-21.html
http://jazzbumpa.blogspot.com/2010/04/close-look-at-gdp-change-in-1920-21.html
http://jazzbumpa.blogspot.com/2010/04/yet-another-look-at-20s-wealth.html
http://jazzbumpa.blogspot.com/2010/11/more-thoughts-on-1920-21-depression.html
http://jazzbumpa.blogspot.com/2012/02/revisiting-1920-21-depression.html
I started off arguing with Austrian economist Robert Murphy. His blog went down at the time, and my links to it are dead.
Good luck with the Beck crowd. unfortunately, you will probably discover that they are immune to facts and data.
Cheers!
JzB
with regard to the need to lie.
worked for Hitler.
[and here is where i get shot at for “comparing Republicans to Hitler” }
only in the matter of the Big Lie technique.
Amity Schlaes is the Right’s “economics Ann Coulter”, IMO. She used to be one of the revolving commentators on Market Place radio, which I listened to most nights on the drive home from work. She is so disconnected from reality, I don’t understand why she gets air time? But I never understood why Coulter did, either.
dale –
I’s say there’s more than a soupçon of fascism in the modern Rethug party.
Cheers!
JzB
Well, Godwin showed up rather quickly here.
Godwins Law became extinct once the Rove led R messaging machine started pushing Arbitrary Executive, American Century, American Exceptionalism, Homeland and Permanent Majority.
You had to be pretty deaf not to hear echoes of “Ein Volk, Ein Reich, Ein Furhrer’ in 2004 to say nothing of Tausand Jahr Reich (sp?)
Particularly when they tied all that to Family Values, Faith, and Traditional Child Raising, or “Kinder, Kirche, Kuchen”.
And the parallels between Mission Accomplished and Triumph of the Will struck more of us than just Symbolman (Google ‘Triumph of the Wimp”). For example the well known picture of Bush in front of the Mission Accomplished banner was framed in such a way that the shroud around a Phalanx gun in the background appeared as a halo around Bush’s head.
If they didn’t want Godwin they shouldn’t have plagiarized Reifenstahl and Goebbels
Great stuff on the mini-crash. I argued a similar vein but without the commensurate detail you had in your blog. Ever read “Lords of Finance”? Great book and it covered this ground as well. The Austrians really ignore facts in pursuit of an agenda it seems. That is why they are so attractive to modern conservatives apparently. Cheers.
The Statement of Principles of the Project for a New American Century when combined with the signatories of their 1997 Letter to President Clinton urging immediate War on Iraq included the names of every significant foreign policy figure of the Bush Administration and most of their outside advisors (e.g. Three Kagans) including of course Cheney. But not George Bush. Because at the time of the Statement and the Letter the expectation was that the victorious Bush would be JEB. Who DID sign.
The Statement was a clear call to establish the New American Century by unrestrained exercise of U.S. military superiority, with the Letter making it clear that Target Ome was Iraq. The goals and language of the PNAC as seen later in such things as the Office of Special Plans in the Fourth Branch Office of the VP were fascist by any historical definition.
Even as the Right laughed and laughed as they invoked Godwin to squelch any and all attempts to criticize Bush policy from a 20th century perspective.
And it is worth noting there is no equivalent to Godwins Law that would automatically rule out comparisons of Dems to State Socialists and outright Stalinists. No that is just far game.
So fuck Godwin and everyone who road his horse into rhetorical battle. As Symbolman showed in another classic short “Bush No Nazi” it is perfectly true that Bush wasn’t motivated by the sheer hatred of German Nattional Socialists (Nazis), he was no Hitler. Just another wannabe Mussolini or Franco.
Although as noted above both Rove and Cheney spoke with pronounced German accents.
Gee, “Godwin’s Law”?
I guess I need to keep up with the rules of debate.
I take it Godwin said you can’t compare anyone to hitler.
That should make it easy.
Kind of like “fix Social Security just don’t raise taxes.”
The only thing one has to understand in regards to Ms Shlaes is that she is not an expert on anything other than the manipulation of language and communication. She was educated at Yale having received a BA in English with honors. She is, no doubt bright, but that is not a CV for pontification on economic issues unless one is intent on propagandizing the issue. And that is what Amity Shlaes is; one of those “treacherous pens and tongues” who is hired and promoted on the basis of her ability to mislead the people. She could serve as the chairwoman of the Goebbels Institute of Information.
1920-1930: U. S. Federal Debt reduced 36%. Depression began 1929
Oh,excuse me. Is it not appropriate to make a comparison to the last century’s most outstanding propagandist? I’m not referring to Joseph’s participation in the Nazi regime, though the analogy isn’t totally off the wall. I’m only making a comparison to the intention to mislead and obscure the truth. Amity is a front runner.
Dale,
Did I misread your original comment? Or, did your qualification negate comparison? I want to give someone credit for the rest of your comment:
Kind of like “fix Social Security just don’t raise taxes.” The possibilities are endless.
“Obama’s profligate spending is easily seen by those who saw Bush as profligate. And, really easily me who saw Reagan’s deficits as unacceptable.
The real devilry here belongs to those who change their POV depending upon who is in the White House.
Obama himself was critical of Bush’s deficits. Why the change of POV? Really? There is a question here that needs reflection? Ha!”
Perhaps the change in economic circumstances.
And for sure a change in what caused the deficits in the first place.
Bush: tax cuts while embarking on two wars. Can the historians here identify any case ever when a decider has taken his country to war and simultaneously lowered taxes? Is that not a recipe for economic disaster?
Never mind that the Neocon inspired invasion of Iraq could not be justified on any logical basis.
Obama: automatic non-discretionary stabilizers, reduced revenues due to economic collapse, and more freaquin’ tax cuts. Then essentially zero spending growth over three calendar years, which Cameron somehow overlooked.
That, I believe, it all the reflection this issue requires.
JzB
jazz:
First wars fought without a subsequent tax or revenue increase.
The difference between Bush and Obama on deficits is that Bush was handed a projected $4.5 trillion surplus and turned it back onto “deficits as far as the eye can see” just as in his Dad’s administration.
And you can’t blame all of that on the Tech Bust since if anything the people around Bush were more committed to the Washington Consensus than just about anyone. Except of course for the loons would thought we could improve even on those levels of “perma”-growth, low inflation, and high employment by Supply Side Magic.
Now of the effect of Bush policy had simply been to erase those projected surpluses leaving the U.S. in the same nominal debt position that he inherited (which would have still been a drop in Public Debt per GDP) we could have excused him some on the basis of “just give the people back their money”. Instead, and as ‘Shrill’ Krugman pointed out at the time, he proceeded to spend the same $1.5 trillion in two or three different ways. And boom had no room to handle either the Tech Crash or to mitigate the pending Housing Crash.
Bush turned gold into straw. Obama inherited a whole heap of straw and attempted to keep it from growing at the same rate as the pile he was given.
To make the claim that they are both the same because the end product is after all straw just ignores the starting positions.
Gold to straw bad. Reducing the rate of straw growth good. Even if the rate reduction arithmetically has the good guy with a nominally larger pile of straw in the meantime. Because inherited structural straw growth.
nanute
i do not understand your question.
If there is one thing the right has correct, it is that our education system is failing us. At least certain parts of the upper levels of education as shown by having such a lecture.
Let me just add my 2 cents as to the German reference: Homeland.
Coberly,
I get that same response from my wife all the time! You said: Gee, “Godwin’s Law”?
I guess I need to keep up with the rules of debate.
I take it Godwin said you can’t compare anyone to hitler. I assumed that this was your definition of the “law.” Perhaps it is I who has the problem.
“Bush turned gold into straw.” Bruce
Let’s restate that so that the intent is more readily understood. Bush diverted gold from the possession of the general public, via government debt and spending, to the various entities from which the government procures stuff. Whether it be stuff in the form of military hardware or stuff as defined by tax concessions.
What is often not part of the conversation is the fact that all government spending is some entities’ income. That is both good and bad. We know how the right wing propaganda machine defines and evaluates this issue. The only saving grace of the center is that it is a bit more populist in its view of the balance between good and bad diversion of the gold. And if it isn’t clear the Republicans are far to the right of the right wing and the Democrats are near the center though often tacking to the right.
nanute
no. it was a question. i don’t keep up with topical debate all that much. so i don’t know what “godwin’s law” is. i was guessing from context.
nanute
so i looked it up, where else, on the internet.
seems i had the definition about right.
but i still don’t understand your question, or any part of it.
could be my brain is failing. but if your wife doesn’t understand your questions either… maybe more words would help.
Remember what I’ve been saying about the compicity of the news media in creating the illusion of responsible debt and deficit discussion? Now the NY Times takes another step into the morasse of obsuring the debate, of course in what their editors would claim to be an indirect assault on our intelligence. Steven Rattner, of all people, is given editorial space to pander and obscure.
http://opinionator.blogs.nytimes.com/2013/03/14/stop-stealing-from-our-kids/?hp
And he has the audacity to title his tripe-like trope, “Stop Stealing From Our Kids.” If anyone is stealing from future generations it is Mr. Rattner and his cohorts, but of course his kids won’t likely have to worry about their future.
Coberly,
If it’s on the internet it must be true! From wiki: Godwin’s law (also known as Godwin’s Rule of Nazi Analogies or Godwin’s Law of Nazi Analogies[1][2]) is an observation made by Mike Godwin in 1990[2] that has become an Internet adage. It states: “As an online discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches 1.”[2][3] In other words, Godwin observed that, given enough time, in any online discussion—regardless of topic or scope—someone inevitably makes a comparison to Hitler or the Nazis.
In this context, your reference to Hitler came very early in the discussion. That’s all I was trying to communicate, rather ineffectively.
nanute
the internet goes further and complains about the mindless invocation of Godwins law, which was complaining about mindless invocation of Hitler.
i tried to make clear that i was not comparing the Big Lie to the rest of the Hitler program…though others apparently do see other similarities.
It is not mindless to point out the Big Lie technique when it is in fact what our politics and media have become.
As for what I meant about Godwins law and the “fix Social Security, just don’t raise taxes” is the mindless acceptance by everyone of a “rule” that rules out the solution to the problem in advance.
In a conversation, especially one with the characteristics of a debate, a “carom shot” is the use of some irrelevant aspect of a discussion for the purpose of taking the conversation on a tangential path away from the original topic. Nanute-Godwin’s Law-Various Comments-Off the Track. Nice job Nanute.
And now to go back to the topic of right wing lies, especially regarding government debt and deficits. I’m glad to say that my comment in reply to Rattner’s dubious opinion piece in today’s NY Times is tracking #3 amongst Reader’s Picks. So there is some hope that the public understands these issues and it is crucial that we all take the time to reply to such spurious opinion articles as they occur.
jack
“stop stealing from our kids” appears to be the right wing lie of the month. Brooks did a piece using it. Did it badly. but badly doesn’t matter. The trick is to get it into the public mind. or at least get them to think it’s in everyone else’s mind so there is nothing you can do about it.
actually it’s not just this month.
first version of it i heard was david walker’s “truth tour”: every baby born in america is born with 300,000 dollars in debt.
then… well, it’s been forever actually.. it was Peterson’s “staggering debt on our kids” from SS (which causes no debt whatsoever. our kids will pay for their own SS, which they will need, just as we paid for ours.
then there was the “idea” that old people have more “wealth” than young people. who knew? you spend a whole lifetime working and saving and buying a house, even while feeding your kids and paying for their education, and by the time you are 65 you have accumulated more wealth than they have at 25? oh, the injustice of it all.
and of course “we are paying more for old people than for kids.” that is if you count Social Security (which the old paid for themselves) as part of the federal budget (it isn’t), and don’t count “education” (which is mostly a matter of state and local budgets).
the lies are staggering. worse, they imply a level of ignorance among voters…abou their own day to day reality, never mind “economics:… that makes you wonder how they can feed themselves.
one of my favorite right wing lies is
“people get less out of Social Security than they put in”
they don’t go to jail for saying this because the part they don’t tell you …”compared to what they might have gotten from a magic present-value bank.”
that means that for the first time in history the economy is projected to be so bad that people will get back from Social Security a “return on investment” that is just slightly below what they might get IF they could invest their money where they would get back a “real” interest of over 2%.
they also don’t tell you that most people would not even get back enough interest from their “safe investments” to even break even with inflation. and those who get “more” from unsafe investments take a quite real risk of not getting back even the money they put in.
and of course they are not counting the insurance value.
see how long that took to say.
how much easier it is to tell the lie. and all the reporters think they are so clever when they repeat it. after all, they heard it from a Non Partisan Expert.
the “fact” is that everyone gets back something like two or three times what they put in. some of that is just recouping inflation…. but even that is better than most of them would do on their own.
Please,everyone go to the Rattner piece in the Times. Post a comment regarding the misleading character of the piece. Don’t be too harsh and no personal attacks. That’s how the Times keeps out too much criticism of its less than honest opinion pieces, whether from Brooks or a write in liar like Rattner. You might like all the graphs Rattner uses to appear to be “based on the facts.”
When you comment you can’t say that Steve is just another lying rat bastard. They don’t like that at the Times. They don’t mind lies and obfuscation, but calliing out the liar is frowned upon.