Chasing Waterfalls (continued)

I had hope for Trump’s presidency because he promised vast improvements in our infrastructure. I knew that the GOP would block such spending, citing deficits, if a Democrat had been elected, but I thought that perhaps a Republican president could get Republicans to maintain and improve many needed things around the country. That, of course, has not happened. Instead we got more tax cuts and ludicrous promises. We were told that the tax cuts would benefit the middle class more than the rich. False. We were told that tax cuts would pay for themselves because they would turbocharge the economy, windfalling tax receipts. Independent analysts said that would not happen. The Congressional Budget Office said that even with a better economy, tax cuts would add $1.9 trillion to the deficits. Even so, conservatives ignored these expert opinions and maintained that tax cuts would pay for themselves. Instead, deficits are up by nearly 40% over pre-tax-cut days. The conservatives eschewed learning from experience; the deficit increased after Reagan’s tax cuts of 1980s and George W. Bush’s of 2000. This was also true in Kansas when that state slashed taxes a few years ago.

The Trump tax cuts were also supported by arguments that they would lead to increased capital spending by corporations and this would lead to jobs. This, too, was a surprising argument because even before the tax cuts, corporations had been making large profits. They already were sitting on bundles of cash. If they weren’t making capital investments, it was not for the lack of money. Not surprisingly, the tax cuts have not led to a surge in corporate capital expenditures. But now income inequality is greater now than ever recorded before in this country.

Perhaps a trip chasing waterfalls to Mt. Morris and Letchworth State Park is more than just an opportunity to see natural wonders and paintings done several generations ago. Perhaps it was also to be a lesson that the government can improve this country in temporary and lasting ways that might be better than reducing taxes. Our bridges and roads need work. Our broadband needs expansion. Our energy grid is frightening. Our elections need security. If these needed things can’t be done because they will lead to deficits, then perhaps we should think about the wisdom of our tax cuts.

And a recent column about a new book, Triumph of Injustice, by Emmanuel Saez and Gabriel Zucman, professors at Berkeley, reveals something more that is shocking about our tax system. Now the four hundred richest families in this country pay a combined federal, state, and local tax rate lower than any other income group. (See: https://www.nytimes.com/interactive/2019/10/06/opinion/income-tax-rate-wealthy.html) The overall tax rate for this group is only 23 percent. The first half of the twentieth century saw increasingly progressive taxes, and the overall tax rate on the wealthiest Americans was seventy percent in 1950. Since then we have increasingly cut taxes on the rich. Their overall tax rate was forty-seven percent in 1980 and is now half that. The pitch for slashing taxes on the rich has almost always been that the economy as a whole will benefit and everybody will be much better off. (Of course, those who advocate slashing taxes on the wealthy don’t call them rich people. Instead other terms are used, such as “job-creators.”)

The rationale has been hogwash. David Leonhardt, the columnist, states, “The wealthy, and only the wealthy, have done fantastically well over the last decades. G.D.P. growth has been disappointing, and middle-class income growth even worse.” As was true in the years before the Great Depression and now, “The American economy just doesn’t function very well when tax rates on the rich are low and inequality is sky high. . . . Which means that raising high-end taxes isn’t about punishing the rich (who, by the way, will still be rich). It’s about creating an economy that works better for the vast majority of Americans.”

(continued October 21)

Unsolicited Advice for House Democrats

Democrats have the majority in the House of Representatives. They can use this power for investigations of Donald Trump, but these should not be their principal focus, for such hearings will appear to many as acts of revenge or vindictiveness that are primarily aimed at pleasing the Democratic Party’s base. They might be the Democratic equivalent of all those endless and fruitless Benghazi hearings and not much different from demagogic Trump rallies. Investigations and hearings should serve and be seen to serve some broad national purpose, not just as spectacles to rile up or satisfy partisans.

This does not mean that all Trump investigations are unwarranted. We should know whether the president, his family, or those around him have economic and social interests that could be affecting our country’s policies. Could our relationships with Saudi Arabia be colored because of financial links between that country and the president or his family? Does the expansion of certain economic opportunity areas benefit the Kushner family? Is the relaxation of auto fuel standards driven by connections between the oil industry and the administration? Unfortunately, there are many such possible topics for exploration by sober investigations and hearings, and they should be done.

The House Democrats should not, however, enter the new Congress focused on articles of impeachment of Trump. Perhaps information will come to light that would justify the removal of the president, but under the present circumstances the Senate would not convict the president. Much has been made of recent guilty pleas and arrangements with prosecutors that suggest Donald Trump broke campaign finance laws, but even so, those violations by themselves will not bring a conviction in the Senate, for surely violations of campaign finance laws are legion and others are not removed for them. And the campaign finance problems really sound as if the Democrats are going after Trump for lying about sex. Sound familiar?

The Democrats should wait for Mueller to complete his investigation and only then consider strategies. Articles of impeachment may seem satisfying to certain partisans, but if there is no realistic chance of conviction in the Senate, impeachment will only further inflame and divide the country, and probably do the almost impossible: make Trump into a sympathetic figure.

A House impeachment without a solid chance of removal by the Senate would be grandstanding, and Democrats should avoid grandstanding. Instead, they should try to legislate and govern. The House should concentrate on passing good, cogent, well-researched legislation. Okay, okay, I know that that is a radical notion. Congress, whose constitutional purpose is to pass legislation, no longer seems to be much concerned with legislating. More often, a congressional party’s primary goal is to score political points. However, Democrats should realize that legislation that would help the country can be both good for the country and good for politics.

Objections will come that working on substantive legislation is a waste of effort because nothing that the Democrats propose will stand a chance of passage. The Republican-controlled Senate will simply kill any House initiative. But not so fast. What if House Democrats concentrated on legislative measures that President Trump has promised to support. We forget that there are important areas of apparent agreement between the rivals.

On what issues do Democrats agree with Trump? President Trump campaigned on increased infrastructure spending. As with many of his promises, he was not consistent in what he pledged–500 billion dollars, a trillion dollars, 1.5 trillion dollars. Nevertheless, more infrastructure spending was promised. He loudly and proudly pledged that he would “build the next generation of roads, bridges, railways, tunnels, sea ports and airports that our country deserves.”

Democrats agree with that, and the House should pass an infrastructure bill for the needs most obvious to many Americans: roads, bridges, tunnels, and the like—the stuff that Donald Trump said that he was going to improve. Such a law would produce many benefits: It would show actual governing; it would improve the everyday lives of many, it would further commerce and, therefore, the economy. This is a no-brainer–is there anyone who does not think we need such infrastructure improvement?

The House, however, should not stop at the traditional hard-hat areas. Our power grid was largely built fifty or more years ago, and many have said that it is not adequate for the twenty-first century—indeed that it poses national security risks. I don’t know if that is true, but I am willing to bet that many (most?) in Congress don’t know either.

Legislative hearings can serve purposes other than trying to score political points. They can collect information about problems and can suggest workable ideas that can be turned into legislation that would ameliorate the problems. Good hearings about our aging power grid might accomplish such things. At a minimum, the hearings could help educate Congress and the country and have the added political bonus of showing that the Democrats are truly interested in governing and helping the country. From the information and proposals garnered from such hearings, the House should pass a bill that would improve our power grid.

(continued January 4)