Tag Archives: Krugman

Laws Are For The ‘Little People’

I don’t know about all of you, but I’m getting tired of daily news items that leave me both mystified and angry. One of the most recent causes of that combination was news that, during the Republicans’ “negotiation” (note quotes) on the infrastructure bill, they insisted on removing the measure’s additional funding for the IRS.

Please note, this wasn’t a provision allowing the government to raise taxes. This money would have provided the agency with more resources to go after tax evasion. In a sane world (which we clearly don’t inhabit), the party of “law and order” might be expected to support the notion that government should crack down on the crime of tax evasion.

Plus, we are talking about a lot of money. The Treasury Department has estimated that what they call the “tax gap,”–that is, taxes owed under current rates but not paid– amounts to more than $500 billion every year. According to Paul Krugman, some estimates put the number much higher. The Biden administration has simply proposed additional resources that the I.R.S. needs to reduce that gap.

I also want to emphasize that we aren’t talking about the obscene amounts of money sheltered by obscenely rich people in various tax havens, or monies not payable thanks to  the operation of various tax loopholes. We are talking about money people owe after their tax advisors have helped them take advantage of these handy  little mechanisms.

When people who owe taxes don’t pay them, the rest of us have to make up the difference. Given the economics of what constitutes today’s GOP base, why wouldn’t Republican officeholders want to spread the burden–in this case, the costs of repairing America’s crumbling infrastructure–to the citizenry as a whole?

In his column, Krugman shares my mystification–although he’s a bit more cynical.

Just to be clear, I’m not surprised to learn that a significant number of senators are sympathetic to the interests of wealthy tax cheats, that they are objectively pro-tax evasion. I am, however, surprised that they are willing to be so open about their sympathies.

There is, after all, a big difference between arguing for low taxes on the rich and arguing, in effect, that rich people who don’t pay what they legally owe should be allowed to get away with it.

Just to be equally clear, I was surprised that  even these Senators would be “objectively pro-tax evasion.”

For one thing, I don’t think even right-wingers would dare make the usual arguments for low tax rates, dubious as those arguments are, on behalf of tax evasion. Who would seriously claim that the only thing keeping “job creators” going is their belief that they can dodge the taxes the law says they should pay?

 Krugman asks the question that I also ponder: who are the constituents for this startling position? Granted, a bigger budget deficit might cut into the social spending Republicans detest, but–as he points out– it also leaves less room for legal tax cuts.

Tax evasion certainly isn’t limited to the rich–Krugman reminds us that when plumbers or handymen ask for payment in cash, we can pretty much figure out why–but it is definitely concentrated among the well-do-do.

Opportunities to hide income are concentrated at the top; one recent estimate is that more than 20 percent of the income of the top 1 percent goes unreported.

It’s certainly possible that big political donors are among the biggest tax cheats. Krugman thinks that their clout within the G.O.P. “has actually increased as the party has gotten crazier.”

There have always been wealthy Americans who dislike the right’s embrace of racial hostility and culture wars but have been willing to swallow their distaste as long as Republicans keep their taxes low. But as the G.O.P. has become more extreme — as it has become the party of election lies and violent insurrection — who among the wealthy is still willing to make that trade-off?

Some rich Americans have always been right-wing radicals. But as for the rest, the party’s base within the donor class presumably consists increasingly of those among the wealthy with the fewest scruples and the least concern for their reputations — who are precisely the kind of people most likely to engage in blatant tax evasion.

This seems like a stretch. On the other hand, I have no better explanation.

 

 

Loyalty Signaling

I’ve posted before about “virtue signaling”-a way of publicly expressing a moral viewpoint with the intent of communicating one’s connection to people of similar, virtuous sentiments. (When I first purchased a Prius, a colleague asked if the purchase was prompted by a desire to “signal” my concerns for the environment to those who would be sympathetic. I guiltily wondered if he was on to something..)

However, I had never heard of “loyalty signaling” until I read a recent column by Paul Krugman.Krugman was  referencing scholarship on the development of cults, and he was particularly impressed by a paper by a New Zealand-based researcher, Xavier Márquez.

“The Mechanisms of Cult Production” compares the behavior of political elites across a wide range of dictatorial regimes, from Caligula’s Rome to the Kim family’s North Korea, and finds striking similarities. Despite vast differences in culture and material circumstances, elites in all such regimes engage in pretty much the same behavior, especially what the paper dubs “loyalty signaling” and “flattery inflation.”

Krugman defines signaling as a concept originally drawn from economics; it describes costly, often pointless behaviors engaged in by people trying  to demonstrate that they have attributes that others value.

In the context of dictatorial regimes, signaling typically involves making absurd claims on behalf of the Leader and his agenda, often including “nauseating displays of loyalty.” If the claims are obvious nonsense and destructive in their effects, if making those claims humiliates the person who makes them, these are features, not bugs. I mean, how does the Leader know if you’re truly loyal unless you’re willing to demonstrate your loyalty by inflicting harm both on others and on your own reputation?

And once this kind of signaling becomes the norm, those trying to prove their loyalty have to go to ever greater extremes to differentiate themselves from the pack. Hence “flattery inflation”: The Leader isn’t just brave and wise, he’s a perfect physical specimen, a brilliant health expert, a Nobel-level economic analyst, and more. The fact that he’s obviously none of these things only enhances the effectiveness of the flattery as a demonstration of loyalty.

Does all of this sound familiar? Of course it does, at least to anyone who has been tracking Fox News or the utterances of political figures like Lindsey Graham or Kevin McCarthy.

Krugman repeats his often-communicated belief that the G.O.P. is no longer a normal political party. (As he says, it sure doesn’t look anything like the party of Dwight Eisenhower). But as he and a number of other observers have pointed out, it does bear a distinct and growing resemblance to the ruling parties of autocratic regimes.

In the U.S., of course, the Trump Party doesn’t (yet) exercise complete control– so Republican politicians suspected of insufficient loyalty to Donald Trump aren’t sent to the gulag. “At most, they stand to lose intraparty offices and, possibly, future primaries.” Yet–as Krugman says, these threats are seemingly sufficient to turn them into modern-day versions of Caligula’s courtiers.

Unfortunately, all this loyalty signaling is putting the whole nation at risk. In fact, it will almost surely kill large numbers of Americans in the next few months….

Republican politicians and Republican-oriented influencers have driven much of the opposition to Covid-19 vaccines, in some cases engaging in what amounts to outright sabotage. And there is a stunning negative correlation between Trump’s share of a county’s vote in 2020 and its current vaccination rate.

Krugman says that hostility to vaccines has become a form of loyalty signaling–which, if accurate, answers a question about vaccine refusal that has confounded most sane Americans. As he says, the G.O.P. has become something having no precedent in American history (although there have been many precedents abroad.)

Republicans have created for themselves a political realm in which costly demonstrations of loyalty transcend considerations of good policy or even basic logic. And all of us may pay the price.

When cult members “drink the Kool Aid,” they typically only kill themselves. Unfortunately, the cult that has replaced the once-Grand-Old-Party threatens to kill us all.

 

Krugman Nails It

Paul Krugman wants to know how many of their fellow Americans Republicans are willing to kill in order to “own the libs.” In the wake of actions by Governors in  Texas and Mississippi–essentially eliminating anti-COVID requirements– it’s a fair question.

Krugman also points out–graphically–why mask edicts are not an abrogation of American freedom.

Relieving yourself in public is illegal in every state. I assume that few readers are surprised to hear this; I also assume that many readers wonder why I feel the need to bring up this distasteful subject. But bear with me: There’s a moral here, and it’s one that has disturbing implications for our nation’s future.

Although we take these restrictions for granted, they can sometimes be inconvenient, as anyone out and about after having had too many cups of coffee can attest. But the inconvenience is trivial, and the case for such rules is compelling, both in terms of protecting public health and as a way to avoid causing public offense. And as far as I know there aren’t angry political activists, let alone armed protesters, demanding the right to do their business wherever they want.

As Krugman goes on to point out, the dangerous posturing by self-described defenders of “liberty” is the essence of identity politics.  Although Republicans politicians like to accuse Democrats of playing that game, they limit the definition of “identity” to issues of race and religion–it’s their way of reminding their White Supremicist base that Democrats represent   a citizenry that includes “those people.”

What is motivating this rush to unmask isn’t economics–Krugman points out that the costs of mask-wearing are trivial, and that controlling externalities–taking into account  costs being imposed on others–is Econ 101. As he says,  “if potentially exposing those you meet to a deadly disease isn’t an “externality,” I don’t know what is.”

Of course, we know what’s actually going on here: politics. Refusing to wear a mask has become a badge of political identity, a barefaced declaration that you reject liberal values like civic responsibility and belief in science. (Those didn’t used to be liberal values, but that’s what they are in America 2021.)

This medical version of identity politics seems to trump everything, up to and including belief in the sacred rights of property owners. When organizers at the recent Conservative Political Action Conference asked attendees to wear masks — not as a matter of policy, but simply to abide by the rules of the hotel hosting the meeting — they were met by boos and cries of “Freedom!” Do people shriek about rights when they see a shop sign declaring, “No shoes, no shirt, no service”?

But arguably we shouldn’t be surprised. These days conservatives don’t seem to care about anything except identity politics, often expressed over the pettiest of issues.

There are plenty of problems with mischaracterizing mask wearing as a “freedom” issue, and one of those problems ties back into my constant rants about the country’s low levels of civic literacy.

The United States Constitution does not give anti-maskers the “liberty” they claim.

I will readily admit to being a hard-core civil libertarian.  (I ran Indiana’s ACLU for six years and was routinely criticized when our affiliate sued to protect citizens’ rights to pursue their own moral or personal ends.) But as Krugman’s introductory paragraphs illustrate, and the ACLU has always acknowledged, government retains considerable authority to require or prohibit certain behaviors. We can’t urinate (or worse) in public, or  run around our neighborhoods nude. We can be ticketed for failing to buckle our seatbelts. We can be prohibited from exposing others to the passive smoke emitted by our cigarettes. Governments not only have the right but the affirmative obligation to impose quarantines to protect public health, and they have done so historically to control the spread of diseases like smallpox.

I agree with Krugman that the anti-maskers are playing identity politics. I wonder if they realize that the identity they are claiming is “selfish and ignorant.”

 

Fear Itself

Paul Krugman’s column on August 24th really, really hit the proverbial nail on the head.  It was titled “QAnon is Trump’s Last, Best Chance,” and it homed in on the nature of the snake oil that Trump and the GOP are peddling.

Last week’s Democratic National Convention was mainly about decency — about portraying Joe Biden and his party as good people who will do their best to heal a nation afflicted by a pandemic and a depression. There were plenty of dire warnings about the threat of Trumpism; there was frank acknowledgment of the toll taken by disease and unemployment; but on the whole the message was surprisingly upbeat.

This week’s Republican National Convention, by contrast, however positive its official theme, is going to be QAnon all the way.

I don’t mean that there will be featured speeches claiming that Donald Trump is protecting us from an imaginary cabal of liberal pedophiles, although anything is possible. But it’s safe to predict that the next few days will be filled with QAnon-type warnings about terrible events that aren’t actually happening and evil conspiracies that don’t actually exist.

Think about that last line: terrible events that aren’t actually happening and evil conspiracies that don’t actually exist. Inculcating fear–of Black people, Jews, immigrants, socialists–has been a Republican staple since Nixon’s “Southern Strategy,” but until recently, it was only a portion of that strategy.

Now, the once-Grand-old-Party has nothing else.

As Krugman points out, the messaging employed by this administration has focused on efforts to panic Americans over nonexistent threats.

If you get your information from administration officials or Fox News, you probably believe that millions of undocumented immigrants cast fraudulent votes, even though actual voter fraud hardly ever happens; that Black Lives Matter protests, which with some exceptions have been remarkably nonviolent, have turned major cities into smoking ruins; and more.

It has been a constant barrage of Kellyanne Conway’s “alternative facts.”

Krugman says that much of this focus on imaginary threats is a defense mechanism from people who have no clue how to do policy, or to cope with real threats.

Covid-19, of course, has been the. all-too-visible example of that inability. In the face of massive American deaths, Trump has offered quack remedies (drink bleach!), and little else other than blaming China. and denying the severity and extent of the pandemic.

Trump, in other words, can’t devise policies that respond to the nation’s actual needs, nor is he willing to listen to those who can. He won’t even try. And at some level both he and those around him seem aware of his basic inadequacy for the job of being president.

What he and they can do, however, is conjure up imaginary threats that play into his supporters’ prejudices, coupled with conspiracy theories that resonate with their fear and envy of know-it-all “elites.” QAnon is only the most ludicrous example of this genre, all of which portrays Trump as the hero defending us from invisible evil.

If all of this sounds crazy, that’s because it is. And it’s almost certainly not a political tactic that can win over a majority of American voters.

Trump’s base is terrified. They are afraid most of all of demographic change, of losing their white, Christian, masculine privilege, but they are also deeply uncomfortable with the increasing ambiguities of modern life. They  want desperately to “return” to a world that never was.

Real-world policies–the kind that would appear in a party platform, or be embraced by competent grownups–can’t soothe those fears. The Republican Party has retreated to the only thing it has left: fantasy.

So they are ramping up the fear and telling us “those people” are to blame.

“Those People”

If there is any lesson to be learned from the current pandemic, it is that the U.S. population has suffered unnecessarily because we have stubbornly refused to do what every other modern Western nation has long done: provide universal health care.

Not only have we resisted any version of a single-payer system, we’ve thrown five million plus people off health insurance during this pandemic. And the “very stable genius”–our idiot President–has weighed in on a Supreme Court case challenging the Affordable Care Act, asking the Supreme Court to strike down a measure that provides health insurance to some twenty-three million Americans.

During a global pandemic.

So what accounts for America’s outlier status? For decades, the accepted answer to that question was some form of our individualism or our devotion to a market economy. But that excuse never really held water, because–as most of the world’s market economies understand–some areas of the economy are simply not suited to market transactions, which require a willing buyer and a willing seller, both of whom are in possession of all information relevant to the proposed transaction.

That clearly does not describe medical services.

The real answer–the real reason American government has been so unwilling to provide universal health coverage–is the same reason the rest of our social safety net is both inadequate and deliberately punitive, constructed to “weed out” anyone who can’t adequately demonstrate both need and moral worth.

I receive Paul Krugman’s newsletter (no URL of which I am aware) and awhile back, he addressed the real reason for our disinclination to offer medical care and basic sustenance to all our citizens:

Non-American friends sometimes ask me why the world’s richest major nation doesn’t have universal health care. The answer is race: we almost got universal coverage in 1947, but segregationists blocked it out of fear that it would lead to integrated hospitals (which Medicare actually did do in the 1960s.) Most of the states that have refused to expand Medicaid coverage under the Affordable Care Act, even though the federal government would bear the great bulk of the cost, are former slave states.

The Italian-American economist Alberto Alesina suddenly died on March 23; among his best work was a joint paper that examined the reasons America doesn’t have a European-style welfare state. The answer, documented at length, was racial division: in America, too many of us think of the beneficiaries of support as Those People, not like us.

There’s a significant body of social science research that confirms Alesina’s thesis.

Americans are finally grappling with the institutional racism that has distorted our society. Unlike the civil unrest of the 60s, we’ve seen significant white participation in the Black Lives Matter protests. There is finally widespread–although certainly not universal– acknowledgment of America’s “Original Sin.”

It is also finally dawning on the “chattering classes” that America’s social problems are interrelated–that the reason Grandma doesn’t have health insurance might have something to do with the fact that Grandpa and his friends have always believed they are intrinsically superior to “those people”–people who definitely don’t deserve access to services funded by Grandpa’s tax dollars.

They’re willing to forego health insurance and other benefits of a social safety net if that’s what it takes to ensure that “those people” can’t take advantage of them.

America: where we cut off our noses to spite our faces–and call it “freedom.”