Duped and Betrayed (KRUGMAN--NYT--BARF ALERT)

According to The New Republic, Senator Zell Miller — one of a dwindling band of Democrats who still think they can make deals with the Bush administration and its allies — got shafted in the recent tax bill. He supported the bill in part because it contained his personal contribution: a measure requiring chief executives to take personal responsibility for corporate tax declarations. But when the bill emerged from conference, his measure had been stripped out.

Will "moderates" — the people formerly known as "conservatives" — ever learn? Today's "conservatives" — the people formerly known as the "radical right" — don't think of a deal as a deal; they think of it as an opportunity to pull yet another bait and switch.

Most media attention has focused on the child tax credit that wasn't. As in 2001, the administration softened the profile of a tax cut mainly aimed at the wealthy by including a credit for families with children. But at the last minute, a change in wording deprived 12 million children of some or all of that tax credit. "There are a lot of things that are more important than that," declared Tom DeLay, the House majority leader. (Maybe he was thinking of the "Hummer deduction," which stayed in the bill: business owners may now deduct up to $100,000 for the cost of a vehicle, as long as it weighs at least 6,000 pounds.)

Less attention has been paid to fine print that reveals the supposed rationale for the dividend tax cut as a smoke screen. The problem, we were told, is that profits are taxed twice: once when they are earned, a second time when they are paid out as dividends. But as any tax expert will tell you, the corporate tax law is full of loopholes; many profitable corporations pay little or no taxes.

The original Bush plan ensured that dividends from such companies would not get a tax break. But those safeguards vanished from the final bill: dividends will get special treatment regardless of how much tax is paid by the company that issues them.

This little change has two big consequences. First, as Glenn Hubbard, the former chairman of the president's Council of Economic Advisers and the author of the original plan, delicately puts it, "It's hard to get a lot of progressivity at the top."

Translation: wealthy individuals who get most of their income from dividends and capital gains will often end up paying lower tax rates than ordinary Americans who work for a living.

Second, the tax cut — originally billed as a way to reduce abuses — may well usher in a golden age of tax evasion. We can be sure that lawyers and accountants are already figuring out how to disguise income that should be taxed at a 35 percent rate as dividends that are taxed at only 15 percent. Since there's no need to show that tax was ever paid on profits, tax shelters should be easy to construct.

Of course, the big betrayal was George W. Bush's decision to push this tax cut in the first place. There is no longer any doubt that the man who ran as a moderate in the 2000 election is actually a radical who wants to undo much of the Great Society and the New Deal.

Look at it this way: as the Center on Budget and Policy Priorities points out, this latest tax cut reduces federal revenue as a share of G.D.P. to its lowest level since 1959. That is, federal taxes are now back to what they were in an era when Medicare and Medicaid didn't exist, and Social Security was still a minor expense. How can we maintain these programs, which have become essential to scores of millions of Americans, at today's tax rates? We can't.

Grover Norquist, the right-wing ideologue who has become one of the most powerful men in Washington, once declared: "I don't want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub." Mr. Bush has made a pretty good start on that plan.

Which brings us back to Senator Miller, and all those politicians and pundits who still imagine that there is room for compromise, that they can find some bipartisan middle ground. Mr. Norquist was recently quoted in The Denver Post with the answer to that: "Bipartisanship is another name for date rape."

Once again, Krugman misquotes someone.

http://www.freerepublic.com/focus/f-news/923594/posts
IS HE (Paul Krugman) EXAGGERATING?
The Conspiracy to Keep You Poor and Stupid ^ | June 5, 2003 | Don Luskin

Posted on 06/05/2003 8:42 AM EDT by frithguild

IS HE EXAGGERATING? There are some great blogs on Paul Krugman's most recent New York Times column. It's the one in which Krugman asks the rhetorical question,

"Am I exaggerating?"

Here's my non-rhetorical answer: Yes! Ja! Da! Oui! Si! Hai! I always knows exactly when Krugman is exaggerating (that's easy: Tuesdays and Fridays).

This time the exaggerations (and the lies and the distortions and the out-of-context quotes and the bogus statistics and all the rest) are in service of the Times' latest "flood the zone" attack on the President Bush -- trying to make it seem that Bush lied about non-existent weapons of mass destruction in Iraq. Krugman states,

"The public was told that Saddam posed an imminent threat. If that claim was fraudulent, the selling of the war is arguably the worst scandal in American political history — worse than Watergate, worse than Iran-contra."

Was Bush lying when he told the public that Saddam was an imminent threat? David Hogberg says "no" on his blog, Cornfield Commentary -- because Bush never said it!

"I did some checking and found the text of the President's most recent State of the Union address. Here's the exact quote regarding the 'imminent' threat:

"'Some have said we must not act until the threat is imminent. Since when have terrorists and tyrants announced their intentions, politely putting us on notice before they strike?'

"...I did find news articles claiming Bush was saying the Iraqi threat was imminent. For example, one article referred to the State of the Union speech, while another referred to an October 7th address. But... Bush didn’t say the Iraqi threat was imminent in the State of the Union. And Bush never used the term in the October 7th address. The same held true for Bush’s speech last year to the United Nations, his speech/press conference of March 6th, and his speech as the war was beginning. Either Bush didn’t use the word 'imminent,' or he used the word to argue that we should not wait until the threat is imminent."

Robert Musil goes further on his blog, Man Without Qualities:

"...during the entire United Nations dust-up it was always quite clear that the United States was not arguing that Iraq needed to pose 'an imminent threat' in the meaning of that term in international law for its invasion to be justified. ...In fact, much of the public debate over the emerging 'Bush Doctrine' concerned whether the United States was constrained by arguably out-of-date notions of 'imminent threat'... the Administration and Secretary Powell did not argue that Iraq was imminently threatening to use those weapons. That's what the Administration's opponents claimed the Administration had to show. Had Herr Doktorprofessor ...perhaps drunk too much iced tea and left the room while all this was going on?"

James Taranto, on his blog Best of the Web Today, calls this Krugman op-ed "an unusually deranged column even by his standards." And he gets right to the heart of darkness in the Times' -- and the left's -- flood-the-zone strategies to discredit the president:

"...President Bush would have to be judged one of the more honest politicians of our time. He's untouched by scandal, and he keeps his promises. He said he'd cut taxes, and he did. He vowed to liberate Iraq, and he did. But now an argument is developing on the Democratic left that somehow the policies themselves are corrupt--that because Bush doesn't agree with liberal ideas, he is a liar."

Krugman despairs that the media -- which he frequently says is generally conservatively biased (here's an example, and the my refutation of it) -- is siding with Bush:

"Each time the administration comes up with another whopper, partisan supporters — a group that includes a large segment of the news media — obediently insist that black is white and up is down. Meanwhile the 'liberal' media report only that some people say that black is black and up is up. And some Democratic politicians offer the administration invaluable cover by making excuses and playing down the extent of the lies."

Musil read that statement deeply, and concludes that it's a remarkable confession -- an accidental confession, but a confession nevertheless -- that the New York Times is liberally biased:

"Where does the New York Times fall in this peculiar taxonomy? Surely Herr Doktorprofessor doesn't think that the Times 'obediently insist[s] that black is white and up is down'! But is he admitting that the Times is liberal -- or is his employer only 'liberal?' If the Times is only 'liberal' -- but not actually liberal -- then Herr Doktorprofessor says it 'report[s] only that some people say that black is black and up is up.' But the Times does more than that! Why, Herr Doktorprofessor himself is proof! So he must be admitting that the Times is actually liberal - not just 'liberal.'

"My goodness! Who would have thought it would be Paul Krugman, of all people, who would break ranks and admit that the New York Times has a liberal bias?! How will that go down with embattled Times management?"

Krugman continues to present the British press as exemplars of honest political analysis (that is, views that agree with his own). In his May 30 column he quoted a Financial Times Bush-bashing editorial as though it were especially authoritative -- and now he's quoting the Telegraph.

"If this same lack of accountability extends to matters of war and peace, we're in very deep trouble. The British seem to understand this: Max Hastings, the veteran war correspondent — who supported Britain's participation in the war — writes that 'the Prime Minister committed British troops and sacrificed British lives on the basis of a deceit, and it stinks.'"

William Sjostrom notes on his AtlanticBlog, that the Telegraph article containing this quote was posted Monday on the web site of a Brad DeLong (an ultra-liberal UC Berkeley Professor and Krugman wannabe who briefly had a column in the Times several years ago -- Krugman and DeLong are a liberal, Bush-bashing folie a deux, with DeLong linking to Krugman frequently, and always adoringly, and Krugman returning the favor). DeLong introduces the Hastings column by saying it comes from the "genuinely conservative" Telegraph (much as last week Krugman positioned the FT as "normally staid") --

"But he does not bother to mention that Hastings has been opposed to the war from the beginning... So DeLong wants to pass off a column by a war opponent as an 'even the conservatives are now critical of Bush on the war' line. Hastings was hostile from day one... Krugman has pulled the same scam. Is he cribbing from DeLong?"

Cribbing? It's worse than that -- in DeLong's hands, positioning Hastings as "genuinely conservative" is a bit of a flim-flam -- but Krugman turns it into an outright lie: that Hastings "supported Britain's participation in the war." Musil warns of a "Krugman/DeLong rhetorical inflationary cycle" in which,

"Herr Doktorprofessor's rhetoric has already reached Weimarian dimensions, comparable to the benighted German era in which one routinely brought a wheelbarrow of currency to market just to buy a loaf of bread. ...Surely, given the current credibility crisis at the Times, draconian inflation fighting solutions are appropriate. Yes, yes, one could bring in a new columnist and impose some harsh rhetorical conversion ratio (say, 100,000-to-one) between the new rhetorical currency and the outgoing, debased Krugmark, much the way Argentina and those banana republics which Herr Doktorprofessor adores comparing to the United States do repeatedly."

Posted by Donald Luskin at 5:26 AM | link

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