Analytics

Sunday, March 8, 2009

Matt Miller on Obama's Center-Left America: A Response

Matt Miller ran an interesting 2/24 op-ed piece in The Wall Street Journal entitled "Obama Wants to Move the Center Left".  Matt Miller is a "progressive", a euphemism liberals typically choose to describe themselves. Of course, one might never know, given his current book The Tyranny of Dead Ideas, which includes "dead" ideas such as: taxes should be low and globally competitive; free trade is good; and public education should be locally controlled.

In essence, Miller portrays Obama as a perceptive leader in the mode of Reagan, synthesizing the social justice and public investment values of the Democrats with the economic efficiency and growth values of the Republicans in a new political dialectic, ultimately aimed at shifting the country center-left. 

Miller's message is really targeted at disgruntled liberals, whom are unhappy that Obama seems to be unduly deferring to Republicans with his bipartisan rhetoric, blowing his opportunity of completing a trifecta of Democratic parliamentary-style progressive program accomplishments, including FDR's New Deal and LBJ's Great Society. He points out that FDR and LBJ both had larger Congressional majorities to work with. But more importantly, he notes some of these issues, in particular the health care and education with large amounts of inefficiency and limited resources, requires a new paradigm of socially-relevant capitalism, including the fusion of certain traditional Republican values. Miller is recognizing that fixing today's social problems, not to mention the almost certain escalation of health care costs as baby boomers transition into retirement, is not as simple as steamrolling the Republicans, which they can't do without the magic number of 60 in the Senate. He's also seeming to imply there will be a political backlash if Democrats enact an ineffective agenda with runaway costs.

Miller saves his harshest fire for Congressional Republicans, whom he accuses of "bogus grandstanding" on (his quotes) "spending" and "pork", not interested in offering constructive ways for liberals to accomplish social justice goals.

Response

First of all, I reject the partisan charge that the GOP is engaging in mere grandstanding vs. matters of principle. It is true that earmarks by themselves are fairly small as a percentage of the total federal budget, but I believe they are also indicative of a pervasive, larger-scale problem of inefficient federal spending. McCain's failed amendment went beyond just earmarks, cutting into the rate of federal budget increases for certain areas as well, and he has also focused on Defense Department contracts. Moreover, the GOP is reminding the nation that candidate Obama had promised no earmarks during the Presidential debates, but he did little to pressure Democratic leadership to rule out earmarks through the remainder of this fiscal year. This goes to Obama's own credibility as a partner in good faith and with the American people.

Second, I do not believe Obama's bipartisan/post-partisan rhetoric is legitimate. Pelosi and Reid essentially froze the Republicans out of the stimulus process; Obama's response was that he should have used Alternate Minimum Tax reform as a bargaining chip for GOP votes, rather than have given it away. (This implies Obama was against the reform, which is meant to address the fact that some middle-class taxpayers find themselves subject to a tax, initially intended to catch higher-income individuals able to use tax shelters and deductions to mostly evade paying taxes.)  Peeling off a bare minimum 3 liberal Republicans in the Senate and refusing to let the bill be read on the floor of the Congress do not constitute good faith negotiations. Symbolic acts, like dinner with certain conservative jouralists, a Super Bowl party mixer, and naming a couple of Republicans (one who dropped out) to the cabinet, don't prove anything.

Third, Miller's claim of Obama representing a fusion of social justice liberalism with economic efficiency requires a suspension of disbelief. In fact, Obama sold a nearly $800B so-called stimulus package BEFORE it was finalized, using outdated Keynesian multiplier concepts to sell the package based on infrastructure development, only a fraction of which is actionable over the short term. He is specifically engaging in class warfare rhetoric, he's increasing several areas of federal spending by about 8% (on top of up to 100% increases earlier for certain agency budgets) as a time when state and local governments and private industry have had to cut spending, and he claims he can fund spending simply by raising taxes on the top 5% income workers by restoring the Clinton high-end tax brackets. In fact, the numbers don't add up--even if Obama was to tax high earners at 100%.

In fact, Obama looks to increase the number of households without net income tax to nearly 50%; that is, almost half share none of the cost burden of the national budget and hence have no vested interest in efficiently spending tax revenues. He talks about creating jobs--not in terms of marketing goods and services or creating conditions for business growth by lowering globally uncompetitive business tax brackets, lowering investment taxes, reducing unnecessary business regulations and reporting requirements, etc., but punishing companies attempting to outsource jobs no longer economically feasible or trying to bribe companies in retaining or increasing their labor force. Miller also conveniently forgets that the JFK/LBJ administrations did cut business and investment taxes.

Finally, I would like to  point out some really "dead" ideas to Matt Miller:
  • Labor unions work in the best interests of American businesses, educaton and job growth
  • Alternative energy will become a significant economically viable substitute for foreign or domestic energy supplies within the near future
  • Increasing the national debt as a percentage of GNP doesn't matter
  • Liberal social spending initiatives have not succeeded primarily because of a lack of money
  • Trade protectionism works
  • Tax hikes don't hurt job growth
  • Government monopolies are highly efficient and effective