Via Progress Mass:

Once again, it must be pointed out that, no, there is not a bar missing from this bar chart.  To date, Republican Scott Brown has received $54,155 from JPMorgan Chase’s PAC, executives, staff, and lobbyists, while Democrat Elizabeth Warren has received $0.

Paul Krugman reminds us of Obama’s remarks during his press conference held last December, to announce his capitulation to the GOP on tax cuts.

Q Mr. President, thank you. How do these negotiations affect negotiations or talks with Republicans about raising the debt limit? Because it would seem that they have a significant amount of leverage over the White House now, going in. Was there ever any attempt by the White House to include raising the debt limit as a part of this package?

THE PRESIDENT: When you say it would seem they’ll have a significant amount of leverage over the White House, what do you mean?

Q Just in the sense that they’ll say essentially we’re not going to raise the — we’re not going to agree to it unless the White House is able to or willing to agree to significant spending cuts across the board that probably go deeper and further than what you’re willing to do. I mean, what leverage would you have –

THE PRESIDENT: Look, here’s my expectation — and I’ll take John Boehner at his word — that nobody, Democrat or Republican, is willing to see the full faith and credit of the United States government collapse, that that would not be a good thing to happen. And so I think that there will be significant discussions about the debt limit vote. That’s something that nobody ever likes to vote on. But once John Boehner is sworn in as Speaker, then he’s going to have responsibilities to govern. You can’t just stand on the sidelines and be a bomb thrower.

And so my expectation is, is that we will have tough negotiations around the budget, but that ultimately we can arrive at a position that is keeping the government open, keeping Social Security checks going out, keeping veterans services being provided, but at the same time is prudent when it comes to taxpayer dollars.

In a blog post titled “Why there is no budget deal,” and Greg Mankiw writes:

Keith Hennessey says that the reason Republicans are rejecting the President’s budget proposal is that it is distinctly to the left of the one recommended by the bipartisan Bowles-Simpson commission.

How can Obama’s budget proposal be “to the left of the one recommended by the bipartisan Bowles-Simpson commission” when the commission never made a recommendation? Joan McCarter has previously debunked this zombie lie.  She explains:

[The] commission did not have recommendations, the chairs did. Because they could not come to agreement on a proposal, there was only a report from Simpson and Bowles, and no commission recommendations. They didn’t get the required votes for an actual set of recommendations. They didn’t meet their deadline for providing those recommendations. They simply did not succeed.

One has to wonder why Mankiw repeated this false statement.  Was it an accident?  Or was Mankiw trying to give more weight to the proposal crafted by Simpson and Bowles — a right-leaning plan that Mankiw has endorsed — by attaching it to the entire commission?

We do know that Mankiw has repeated this zombie lie on more than one occasion.

Or will the president give in to Republican hostage-takers’ demands on the debt limit, just like he did on tax cuts last year?

Paul Krugman writes:

According to Harry Reid, the Senate majority leader, Mr. Obama has told Democrats not to draw any “line in the sand” in debt negotiations. Well, count me among those who find this strategy completely baffling. At some point — and sooner rather than later — the president has to draw a line. Otherwise, he might as well move out of the White House, and hand the keys over to the Tea Party.

Obama’s stance is indeed troubling.

In assessing today’s debt reduction speech by Pres. Obama, Paul Krugman concludes:

Overall, way better than the rumors and trial balloons. I can live with this.

But how likely are we to actually see legislation resembling Obama’s plan?  As I asked Krugman on his blog: practically speaking, isn’t Obama’s plan simply a starting point for negotiations with the GOP?

If Obama’s plan represents the Dem’s position, and Ryan’s plan represents the GOP’s position, wouldn’t one expect that after negotiations, we will end up somewhere in between the Obama and Ryan plans?

Would that be something Krugman could live with?

In my view, the biggest problem with the Obama plan is that it is not a good starting point for negotiations. It is too moderate. When merged with the radical Ryan plan in negotiations, the outcome will be significantly to the right of Obama’s proposal.

I see that Krugman has just updated his blog post with the following:

Update: I should probably say, I could live with this as an end result. If this becomes the left pole, and the center is halfway between this and Ryan, then no — better to pursue the zero option of just doing nothing and letting the Bush tax cuts as a whole expire.

Greg Mankiw

Paul Ryan is a charlatan and a crank.

This assertion is based on the standard outlined by Republican economist Gregory Mankiw, Chairman of George W. Bush’s Council of Economic Advisers, and author of the world’s best-selling economics textbook.

Ryan’s budget proposal relies on economic forecasting from The Heritage Foundation, rather than the CBO. According to the Heritage numbers that Ryan favors, not only will Ryan’s tax cuts pay for themselves, but the cuts will actually increase tax revenue.

Of course, this is nothing new.  The conservative fantasy of revenue-raising tax cuts is one of the cornerstones of supply-side doctrine (derided as “voodoo economics” by George H.W. Bush).

How does supply-side theory play out in the real world? We need look no further than the Reagan years.  Mankiw explains:

An example of fad economics occurred in 1980, when a small group of economists advised Presidential candidate, Ronald Reagan, that an across-the-board cut in income tax rates would raise tax revenue… After Reagan’s election, Congress passed the cut in tax rates that Reagan advocated, but the tax cut did not cause tax revenues to rise.

In the first edition of his textbook, Mankiw went so far as to call Reagan’s supply-side advisers “charlatans and cranks.”  Mankiw explains why:

I used the phrase “charlatans and cranks” in the first edition of my principles textbook to describe some of the economic advisers to Ronald Reagan, who told him that broad-based income tax cuts would have such large supply-side effects that the tax cuts would raise tax revenue. I did not find such a claim credible, based on the available evidence. I never have, and I still don’t.

Just like Reagan’s advisors, Ryan is trying to convince the American people that his tax cuts will raise tax revenues.  Therefore, based on the Mankiw standard, Paul Ryan is both a charlatan and crank.


On a related note…

Greg Mankiw happens to run one of the most popular economics blogs.  Given his strong views on the fallacy of self-financing tax cuts, one would expect Mankiw to be highly critical of Ryan’s budget.

So what has Mankiw written about Ryan’s proposal? Absolutely nothing. I wonder why?

Reich explains one of the (many) disastrous consequences of the Obama tax cut deal: confirming the Republican worldview.

By agreeing to another round of massive tax cuts for the wealthy, the president confirms the Republican story. Cutting taxes on the rich while freezing discretionary spending (which he’s also agreed to do) affirms that the underlying problem is big government, and the solution is to shrink government and expect the extra wealth at the top to trickle down to everyone else.

Obama’s new tax compromise is not only bad economics; it’s also disastrous from the standpoint of educating the public about what has happened and what needs to happen in the future. It reinforces the Republican story and makes mincemeat out of the truthful one Democrats should be telling.

This evening, I received an e-mail from the DNC touting Obama’s capitulation “bipartisan agreement” on the Bush tax cuts extension.

There was nothing special in the message — just the administration’s run-of-the-mill talking points on the deal, which you have probably already heard or read.

Only one line in the DNC’s email caught my eye:

Take a minute to watch the video the President recorded — and then share your thoughts:

[emphasis added]

http://my.democrats.org/TaxCutsVideo

I have absolutely no interest in watching Obama’s video; I’ve already read about the deal, and I don’t need to hear the President’s spin.

However, I did take advantage of the DNC’s invitation to “share my thoughts.” For anyone else that is disgusted with Obama’s tax cut capitulation, I suggest you let the DNC know how you feel at the url below.

http://my.democrats.org/TaxCutsVideo

James K. Galbraith comments on how Bowles-Simpson will increase inequality:

[T]he main Bowles-Simpson proposal is an assault on the middle class, the working class and the poor.

Cuts in Social Security will gradually increase poverty and early death among the old. Cuts in the mortgage interest deduction will further drive down home values while hardly affecting those rich enough to pay cash. Killing the Earned Income Tax Credit will reverse a highly effective anti-poverty program for working people. Meanwhile Bowles and Simpson hold the line on the top rate in the income tax, and they say nothing about a financial transactions tax. This is most revealing.

Budget-balancing is crackpot economics, yet these proposals illustrate clearly the true underlying goal. Increasing inequality, it would appear, is the point.

Thanks again, President Obama, for creating the Bowles-Simpson cat food commission debacle.  Dismantling the social safety net is exactly what the country needs when we are stuck at nearly double-digit unemployment.

The country is saddled with nearly double-digit unemployment, so how does Obama plan to stimulate demand?  By restricting middle-class income via a pay freeze for federal coworkers.  Absolutely brilliant.  Even better, the President continues to promote the right-wing false narrative that says we must cut public spending in the midst of a severe recession.  Obama’s most egregious line during yesterday’s press conference likely made Keynes rollover in his grave:

“After all, small businesses and families are tightening their belts. Their government should, too.”

Herbert Hoover would be proud.

What is Obama thinking?  This is just flat out stupid, both in terms of economics and politics.

Krugman writes:

Yep, that’s exactly what we needed: a transparently cynical policy gesture, trivial in scale but misguided in direction, and in effect conceding that your bitter political opponents have the right idea.