tax, spend, win?

Well the details of Obama's plans were not long in coming: the largest deficits and probably the largest tax increases in history, coupled with an aggressive effort to increase spending on areas deemed a priority (predominantly energy and health care) and reduce, or at least control it, in others (Medicare, assorted farm programs, etc.) It is a bold plan which effectively ends any pretense of bipartisanship and launches the Administration in an aggressively liberal direction: a change of priorities, as we used to say in the 60s, and as many around Obama still do. Does it make economic sense, and does it have any chance of working?

The first thing than one needs to do is to keep perspective. While experts talk of reversing the Reagan legacy, the plans is actually closer to a reversal of Bush 43 and a second try, under vastly different circumstances, at the Clinton agenda. This is most obvious in health care, but also visible in the tax proposals. Thus, Obama wants to repeal the Bush tax reductions on upper incomes and, if I understand correctly, allow itemized deductions to be taken only against the 28 percent rate. The latter proposal has been around since at least the 1980s: a limited version of the same cutback already applies under current law, and I think originated as a Republican trick (Bush 41?) to increase taxes while claiming that one was not. To repeal the Reagan legacy, one would need to impose tax rates of 50 or 70 percent, which nobody is proposing, at least not yet.

Other proposals, like pollution credits and changes to student loan programs, have likewise been around for years, although it must be noted that the pollution proposal amounts to an indirect tax increase at a time when the economy is already slow.

The problem is not so much any individual proposal as their aggregate effect. At a time when the country already faces the largest deficits ever--and when most people think we may require one or more additional "stimulus" packages--Obama is proposing vast additional spending that is only marginally related to the current state of the economy. While he has receive a lot of credit for "honesty" in his proposals, the candor goes only so far: even Paul Krugman, in today's Times, admits that he would likely need substantial middle class as well as wealthy tax increases to pay for it all. It must also be recalled that these increases come out a time when investors are already pulling money out of the stock market and when entire sectors of the economy--finance, automobiles, perhaps health care--are effectively being taken out of the private sector and thereby depriving the country of further taxpaying capacity. Even if his proposals pass, Obama thus faces a potential vortex of increasing spending, declining tax receipts, and the imperative to nationalize (directly or indirectly) ever-increasing sectors of the national economy. It must be remembered that all of this is before the proposals even begin the congressional review process, which tends inevitably to augment spending (popular) and reduce or at least delay tax increases (not so popular); and assuming no unanticipated crises.

Against this background, I was amused by the criticism of Gov. Bobby Jindal's response to Obama's speech. The danger to Obama is not from the Republicans, who remain in disarray, although one suspects that will change soon enough. The danger is that his proposals will take a serious but essentially cyclical crisis and turn it into a full-blown economic collapse. Who benefits from this potential disarray--Republicans, left-wing Democrats, maybe even Obama himself--is difficult to predict. But I think it is a very real possibility, and a lot of liberal commentators, if one reads between the lines, share my opinion. I was intrigued, in this context, by Obama's proposal to send an additional 17,000 troops to Afghanistan--for a total of 50,000 plus--and the suggestion that he might, after all, be keeping a similar number in Iraq after our "withdrawal." Lyndon Johnson said we could have both "guns and butter;" Obama's version is "yes we can." Both divorced themselves at some point from reality, and the results of such delusion are never pretty.

the future of newspapers

The Philadelphia Inquirer, our local daily newspaper, recently filed for bankruptcy, although for the time being it is still appearing as usual. Many other newspapers aren't doing much better; even the NY Times has had to make adjustments. What future is there for print journalism, and how can it make a comeback?

I must confess to mixed feelings about the newspaper industry. I stopped reading the Inquirer when it refused to cover my campaign, or for that matter any local Republicans, although we still have a subscription. Coverage remains absurdly biased: the Times shamelessly plugs Obama, suggesting he has higher approval ratings than other first-term presidents (he doesn't), while the Inquirer ran a cartoon today showing Obama carrying a firehose and a Republican elephant trying to chop it with an axe, over the caption, "We just disagree about the tools." Yet a world without newspapers would leave even less room for reasoned, constructive debate, and politics even more polarized.

Still, I am wary of newspapers complaining about reader apathy at a time of record political involvement, and can't help noticing how alternative outlets--notably the better blogs--are attracting larger audiences. This does not necessarily mean that newspapers deserve what is happening to them, but it suggests that they are not entirely helpless, either. A few thoughts:

1. Newspapers need to make better use of new technologies. I read recently that the NY Times, which survives on perhaps one million print subscribers, cannot get enough advertising revenue out of fifteen or twenty times that number of online viewers. Maybe I'm missing something, but that just doesn't make sense. Part of the reason, I think, is that newspapers have adjusted slowly to the online world: the Inquirer, for example, rarely updates its website during the day, and even the Times tends to place online advertisements in much the same way (alongside or between the stories) as it does in the print edition. Many of the newer blogs--not to mention television--make far more creative use of advertising, often in a highly targeted, interactive way; why can't newspapers do the same?

2. Newspapers need to get interesting again. The problem with the Times, Inquirer, etc. is not that they are too liberal but that their content is so predictable. When is the last time that Maureen Dowd took a conservative position, or David Brooks (or Bill Kristol) a liberal one? People read things that surprise or outrage them: it's nice to have your existing ideas confirmed, but not worth spending a lot of money to do so.

3. Newspapers need to start covering what their readers care about rather than what their writers and editors care about. There is a very active politics within the African-American and other ethnic communities of Philadelphia, which gets covered in ethnic and neighborhood papers but rarely in the Inquirer itself (the Times doesn't even pretend to cover local news). Instead, the Inquirer regularly has two or three reporters trailing presidential candidates whose every conceivable utterance is covered by dozens of pool reporters, as well as double or triple covering ongoing corruption trials of already disgraced public figures. This sort of stuff is interesting to a few political junkies, but not to the mass of local readers. I'm not calling for dumbing down, just for doing one's job well, covering news that won't otherwise be covered instead of adding a gloss to what everyone already knows.

Whether all this would "save" daily papers is anyone's guess. But technology marches on, and complaining about the death of print journalism does little to stem the tide. Thinking creatively and intelligently about applying technological changes seems a much better bet.

obama's speech

There is a scene in How to Succeed in Business Without Really Trying, in which the hero learns that he has become vice president in charge of advertising without actually knowing anything about the field. He produces a slide show (the 60s equivalent of PowerPoint) in which he shows years of optimistic projections which result in the president of the company being on the cover of Time, Life, and Sports Illustrated. The presentation is a hit: no one seems to notice that, while describing the positive results of his plan, he has forgotten to actually provide one.

I thought of this scene while watching President Obama's speech, or the media deconstruction of it, last night. Obama described a world in which--undaunted by a collapsing economy, hemorrhaging stock market, and increasing outrage over his previous giveaways--he would proceed to address education, health care, energy independence, and assorted other problems as if none of this had happened. For good measure, he would also fix social security and reduce the budget deficit, without new taxes on anyone earning less than $250,000. In virtually none of these areas did he provide any specifics, or suggest how he would reconcile the contradictions between different goals.

Perhaps it was inevitable, but I must confess to taking an increasingly dim view of the Obama presidency. He was elected because people felt comfortable with his leadership in a time of crisis. But he, and his party, are using the crisis as an excuse for a politically motivated agenda that is actually making the crisis worse, and will have enormous impact when it is long forgotten. Essentially he is calling for the remodeling of the United States on a Western European model: higher taxes; Government domination of one after another field (health care, finance, the automotive industry); and the gradual renunciation of force other than as part of broad, multilateral coalitions. Europe is a nice place to live, and a lot of things (trains, cheese, museums) are better there than here. It is also universally regarded, even by its own people, as a place in slow if graceful decline. It is hard to believe that this is really what most Americans want of their country, and I think that reality will soon or later overtake him. The question is how much damage he will cause in the interim. The answer would appear to be, quite a bit.

a walk back in time

I was early again for the NYU tax seminar last week and decided to take a walk to 6th Street in the East Village, perhaps twenty minutes away. I went to nursery school in the East Village nearly 50 years ago, and have gone there perhaps once in between, to visit one of the Indian restaurants that were reputed to have a common kitchen in the early '80s. Aside from the obvious fact that nothing much changes in the neighborhood, the walk was interesting as an exercise in memory lost and refound.

One point was the vagaries of memory and how it inevitably betrays us. I went to nursery school on East 6th Street--or was it 7th?--just a block (or was it two blocks?) away from what became the Fillmore East, a famous rock venue. The principal was the wife of a well-known realist artist . . . or was his work more abstract? None of this really matters, of course, but if I'm unsure of this how reliable are my other recollections?

The other was how little New York changes, perhaps because it changes so much. I tend to get annoyed at New Yorkers' sense of moral superiority, the assumption that they know everything and anything west of the Holland Tunnel is, well, not very important. Yet I have a distinct memory of my teachers--a veritable caricature of early '60s Jewish liberalism--requiring us to sing We Shall Overcome in the Staten Island ferry terminal before departing on a summer outing. Did we seem equally overbearing to the commuters who heard us back then? And if so, does it mean that we were wrong to sing it? Depending on the year, Barack Obama was either unborn or a toddler in Hawaii at the time. It's a good thing he wasn't there: the inevitable crush of affection might have turned him into a Republican.

arlen specter

Arlen Specter, the senior senator from Pennsylvania, is one of three Senate Republicans who voted for the stimulus bill. That fact has made a lot of people in Pennsylvania angry and perhaps increased the likelihood that Specter, a perennial survivor, will be booted from office this year. It couldn't happen to a nicer guy.

I got a taste of how Specter and his staff operate when I ran for Congress last year. As a moderate Republican running in Specter's home district, I thought I would receive at least symbolic support. Instead I was treated to a rambling discourse from staff members on how Specter was the only Republican who knew how to win in Pennsylvania; how politics was about power and not ideas; and, in essence, that I would have to come up with $100,000 of my own money for the race before the Senator would demonstrate any interest. When it became apparent that I wouldn't do so I was effectively shown the door and none of my later phone calls was returned. No one expressed the slightest interest in my ideas, proposals, or anything else I might offer as a candidate. This treatment is, apparently, par for the course: as one high-ranking Republican put it, "Arlen looks out for Arlen." Specter himself opened a website and scheduled numerous fundraising events, two years ahead of schedule, while McCain and other Republicans remained starved for immediate cash.

It has been suggested that Specter is a "moderate" who voted his convictions in favor of the stimulus bill. The correct term is "opportunist." Specter voted for the 1981 Reagan tax cuts when conservatism was in vogue and for whatever other conservative legislation has suited him. His goal is, was, and always has been to be on the winning side and at the center of power as long and as often as possible. He is as close to a wholly unprincipled politician as there is in Washington, and that is saying an awful lot. He is likely to be removed this year either in a primary (he almost lost last time) or the general election, where few Republicans are likely to lift a finger for him. It's about time.

back to school (part one)

A witty Englishman is supposed to have remarked that, after spending a year in Paris, he learned relatively little about France, but a great deal about England. I felt this way when--seeking an outlet more reflective than politics--I enrolled in a course at a local rabbinical college on modern Jewish philosophy. The first meeting was this morning and, while I hardly an expert on modern Jewish philosophy (at least not yet), I immediately noticed a lot about law school and how it differs from other learning establishments.

One difference was sartorial. Perhaps anticipating a high-paying career, law students (and teachers) tend to look pretty sharp even when they are trying not to. At the rabbinical college, everyone seemed to look dowdy even when they were trying to look sharp. (Or perhaps they weren't trying: the college in question is known as a center of offbeat thinking, its founder having expressed questions about the very existence of God, which is perhaps one reason its courses are so good.)

The other difference was how the class was conducted. Rabbinical students do something I have never observed in twenty years of law teaching: they let the professor talk. My own students will regularly interrupt or berate me even if it is simply to repeat an unclear point or to clarify an illegible item on the blackboard. By contrast, students today tended to speak when spoken to, and even then with great respect, which the instructor merited but still wouldn't have gotten at your average law school. In fairness, the material--essentially the history of western philosophy in two hours--did not lend itself to easy questions, but that wouldn't have stopped my students, anyway.

Perhaps this is one reason that so many presidential candidates--Obama and both the Clintons come to mind--were not only lawyers but at least part-time law professors. Whatever else one can say about law profs, they are used to people disagreeing with them. Posner, MacKinnon, Karl Llewellyn, you name it--everyone has had a good or not-so-good student raise their hand, give them a hard time about some point or other, and live to tell the tale. The experience of George W. Bush, who appears to have been genuinely stunned that Kerry talked back to him in the 2004 debates, is simply not part of our collective experience. Whether this makes lawyers (or law professors) better politicians is anyone's guess. But at least they come prepared.

the stimulus plan, republicans, and the obama presidency

Very good op-ed by Frank Rich today on the dangers facing Obama as a result of the stimulus and bail-out plans. His basic point is that the Administration has underestimated the potential populist backlash as a result of its symbolic (the Geithner and Daschle tax scandals) and substantive (the use of bail-out funds) insensitivity to distributional issues. According to Rich, Obama believes that he will get a pass on this issue because of his overall progressive inclinations, but may not succeed in doing so.

I agree with Rich but would take it a good bit further. I think Obama has basically been taken for a ride by congressional Democrats and associated lobbyists in supporting a bill which has relatively little in the way of real stimulus and a great deal in terms of liberal programs that the Democrats would have supported regardless of economic circumstances. The odd mix of partisan and nonpartisan rhetoric--Obama continues to court Senate Republicans while his supporters launch increasingly shrill attacks on the "obstructionist," backward-looking, they-just-don't-get-it Republicans--contributes further to this impression. It is as if the Democrats themselves sense that they are walking off a cliff, and are angry and frustrated that everyone doesn't want to go with them.

I want very much to like Obama. He's smart, hard-working, has a great public image, and is more intellectually honest than his predecessors. (You've got to admire any President who admits that he took every drug he could get a hold of, and would have taken more except he was scared to.) But his Presidency is taking on a disturbing air of entitlement, as if his positions (which frequently change) are so intuitive that only a fool could disagree with them, his advisors so pure that they need not comply with ordinary ethical rules. Like Bush before him, he is trying to leverage a huge change in policy on what remains, in historic terms, a relatively modest and conditional election victory. One newspaper this week ran a picture of Obama smiling at a portrait of Lincoln while a portrait of Lyndon Johnson tried to get his attention from behind. They were talking about Afghanistan, but there was a broader point to be made, as well.

super replay bowl

I thought Springsteen was great, the game was exciting, but ruined by excessive penalties and endless official reviews. The business of "challenging" the referees' calls, follows by long delays that distract attention and disturb the flow of the game, seems especially out of hand. If the calls that really matter are going to be decided in a television booth, why have referees at all?

Re: Springsteen. It's hard to overstate how important he was to people attending college in the mid-1970s. Every day of our lives we heard how wonderful the 60's were and how their spirit would perhaps, someday, return. But Springsteen was ours, and we made the most of it. It is interesting, in this respect, how Springsteen's brand of politics--a strong, if largely symbolic, identification with the working class and a large dose of religious spirit in his later albums--has outlasted that of most of the 60's icons, who with a few notable exceptions (e.g., Joan Baez) seemed to turn inward at some point, away from real-world concerns. To be sure, The Boss lives in a nice house in a nice neighborhood, and he wasn't above using the Super Bowl to pump his new album. But he works hard and sings about real people; can you really ask more of him?