Trump’s 35 percent tariff wouldn’t keep jobs in the U.S. Here’s why.


Author:Joshua Tucker

Emphasis Mine

In a series of tweets on Dec. 4, Donald Trump proposed punishing American companies that move production overseas with an import tariff of as much as 35 percent on the sale of goods back into the United States. The justification for these measures was to keep U.S. companies from moving overseas.

But is this argument justified? Would such a tariff — even if Trump could overcome expected Republican resistance — keep companies from leaving the United States? What other effects might it have?

With these questions in mind, I reached out to my colleague at the NYU School of Law, Professor Mitchell Kane, an expert in international tax law. What follows is a lightly edited version of our conversation.

Joshua Tucker (JT): Trump’s proposal seems like it would be an effective deterrent to moving production offshore. So why are people concerned with it?

Mitchell Kane (MK): Imprisoning CEOs who moved jobs offshore would also be an effective deterrent. Absent evidence of some corruption (as might be reached by the Foreign Corrupt Practice Act), we would reject such a proposal out of hand. So the question is not whether we can imagine laws that would have the effect of keeping production in the United States. The question is whether we are willing to accept the trade-offs.

JT: What are the trade-offs in this case? Isn’t an import tariff just a fair leveling of the playing field since countries like Mexico impose a VAT (value-added tax) rebate at the border?

MK: The problem is that there are two outcomes we like: more rather than fewer U.S. manufacturing jobs and lower rather than higher prices on manufactured goods that we consume here. We need to accept that so long as labor costs are higher in the United States than in other countries, these two objectives will have to be traded off one another.

If we write rules to channel companies into higher cost structures, this will ultimately show up in consumer prices. That’s true regardless of whether Mexico rebates its VAT upon export of goods. When companies move production offshore it lowers their cost structure. Those cost savings will be passed along to consumers back in the United States eventually.

Not immediately, of course, or there’d be no incentive to offshore. But eventually American consumers are the beneficiaries of reduced costs. One way of viewing an import tariff is as an instrument that takes cost savings away from consumers and transfers them to the government.

JT: That would explain why many Republicans are hostile to the proposal. But how would this actually transfer funds to the government? It seems like the whole point is to get companies not to move. So if they don’t move the government wouldn’t actually be collecting any revenue from the tariff, right?

MK: There are two possibilities.

Suppose the tariff is set at an amount that is lower than the labor cost savings from moving offshore. For example, say the tariff captures half of the cost savings. In that case it could still be profitable to move offshore. The cost savings that are collected through the tariff are in a sense taken off the table. They cannot be passed along to the consumer because from the company’s standpoint they are no longer savings. They are costs paid to the government.

The second possibility is that the tariff is set so high that it fully absorbs any potential savings from reduced labor costs. Then there’d be no reason to move. But it would also become increasingly difficult for U.S. companies to compete with foreign companies that could use lower cost inputs and sell into the United States.

To complicate matters, we may not know which possibility we are facing. The problem is a dynamic one. The amount of tariff a company can absorb and still see profit will decrease over time as cost savings are passed forward to consumers.

Also, Trump has talked about an import tariff at a single rate. This will affect different sectors differently based on labor intensity in the sector. 

JT: Isn’t the answer to the foreign competitors problem to impose a tariff on those companies as well?

MK: That did not seem to be the original Trump proposal captured in the tweet sequence above, but it has been suggested by a number of Republicans, including Newt Gingrich. Once the tariff is extended to apply to foreign firms, however, this would almost certainly lead to countervailing measures such as trade penalties imposed on U.S. exporters.

JT: It sounds like a preferable option might be to reform the corporate tax system as suggested by House Majority Leader Kevin McCarthy in his response to the Trump tariff proposal when he said he did not believe in starting a trade war. Would that prevent companies from leaving the U.S.?

MK: McCarthy clearly favors the “Better Way” tax reform blueprint put forward by House Republicans over the Trump tariff idea. Among other things, the House Republicans want to lower the U.S. corporate tax rate from 35 percent to 20 percent and adopt a “destination basis” principle that would tax imports but exempt exports in the spirit of a border-adjusted VAT.

There are many problems with our international tax system, which is sorely in need of reform. A reduction in the explicit statutory rate is almost certainly a good idea compared to the current system in which companies often plan aggressively to reduce their effective rates in any event.

But the idea that the proposals advanced by House Republicans would preserve U.S. jobs makes no sense. Their basic premise is that at least for goods sold into the United States, companies should be taxed the same whether they have domestic or foreign production.

The problem, of course, is that the underlying economics favor foreign production. If the tax system is neutral, companies will move the jobs overseas. Even worse, for products destined for foreign consumers the proposals under the Better Way blueprint will actually favor foreign production by exempting profits from U.S. tax altogether.

Joshua Tucker is a Professor of Politics at New York University. He specializes in voting, partisanship, public opinion, and protest, as well as the relationship of social media usage to all of these forms of behavior, with a focus on Eastern Europe and the former Soviet Union.




Trump Offers Huge Favors to Billionaires, and Calls It a Big Economic Speech

GOP presidential pick’s policy paves way for Wall Street looting of economy.

Source: AlterNet

Author: Adele M. Stan

Emphasis Mine

If it came out of the mouth of any other politician, the speech delivered Monday by the Republican presidential candidate at the Detroit Economic Club would have been stunning in its mendacity. But issuing forth from the pie-hole of Donald J. Trump, it was, sadly, to be expected.

The lies were almost too many to count: Point to a sentence, find a lie. There was the lie about his opponent’s policy on taxing the middle class; Hillary Clinton clearly said she wouldn’t, and Trump is using her dropping of a consonant on a single word to say she did. (Just to be sure, PolitiFact had academics run audio of Clinton’s tax statement through a machine that analyzes such things.)

He claimed “the terrible Obama-Clinton judgment” destroyed Detroit’s manufacturing sector, when the Obama administration twisted Republican arms to get the funding to save the American auto industry

There were also lies of omission. The U.S., he said, has the highest corporate tax rates in the developed world, without mentioning the fact that many of the nation’s largest corporations pay no taxes at all. In fact, some, such as Verizon and General Electric, actually pay a negative tax rate, meaning they actually get rebates back from the Treasury.

I could go on and on, but “Trump lies” is pretty much a dog-bites-human story. Yawn.

More telling is who Trump named to his economic team—the very sort of people who stand to gain from his Main Street-looting economic policies. For starters, they are 13 rich white men. But they’re rich white men whose riches were mostly gained by preying on the weak. And most, Politico’s Shane Goldmacher reports, are major donors to the Trump campaign.

Take John Paulson, whose Paulson & Co. hedge fund, according to Forbes, “is famed for betting against subprime mortgages at the peak of the 2007 credit bubble.” Paulson, the magazine reports, is worth $9.8 billion.

Then here’s Harold Hamm, founder of the oil firm Continental Resources, who is known to frequent the big donor confabs convened by the Koch brothers (but who is now at odds with the scions of Koch Industries over the brothers’ refusal to back Trump). Hamm is a backer of the climate-science deniers in Congress, according to the Energy and Policy Institute, and is said to be shaping Trump’s energy policy. If you don’t see climate-science deniers as preying on the weak, think about the people who got hurt in Hurricane Katrina. Think about the people who can’t sell their homes in Norfolk, Virginia because of sea-level rise.

And let’s not forget Steve Feinberg, the CEO of something called Ceberus Capital Management, which Evan Popp and Josh Israel of Think Progress describe as “a private investment firm which specializes in ‘distressed investing.’” Among the “distressed” properties acquired by Ceberus is Remington, the manufacturer of the AR-15-style rifle—the kind that was used in the Sandy Hook massacre and other mass shootings.

My personal favorite among the men at Trump’s economic table is probably the least wealthy but perhaps the most disingenuous: Stephen Moore, former member of the Wall Street Journal editorial board and late of the Heritage Foundation. Known for his insanely inaccurate economic predictions, Moore has been the toady of billionaires for decades, allowing him to fall ever-upward.

In 2011, while reporting for AlterNet and the Investigative Fund on the Koch brothers’ fomenting of the Tea Party movement, I found Moore wrapped up in a for-profit scheme apparently designed to scare the employees of companies hired by him into voting for Republicans. The scheme was called Prosperity 101 and was helmed by Mark Bloch, then the state chairman of the Wisconsin chapter of the Koch brothers’ Americans for Prosperity political astroturf group. Moore was often a paid speaker at the ostensibly voluntary seminars employees at firms in the Koch network were invited to attend. He was also often a paid speaker at Americans for Prosperity events, even as he sat on the editorial board of one of the nation’s major newspapers.

Moore’s contribution to the seminar textbook was illustrative of his willingness to simply make stuff up. From AlterNet’s 2011 report:

In “The Keys to Prosperity,” Moore’s chapter in the Prosperity 101 textbook, he offers up a series of charts, some of them indecipherable, including a pie chart called “Where Your Federal Tax Dollar Goes.” (Apparently derived from an earlier presentation Moore made at an AFP Foundation event, the same charts can be found here; scroll to slide no. 16 for this one.) Citing such official sources as the Internal Revenue Service, the Government Accountability Office and the Bureau of Labor Statistics, it features eight slices labeled “Flushed Down a Toilet, “Pissed Away,” “Down a Rat Hole,” “Sleaze,” “Corruption,” “Given to ‘Supporters,'” “Tossed Down the Drain,” and “Postage Stamps.” (The latter, Moore baselessly contends, accounts for 6 percent of your tax dollars—which is, incidentally, six times the allotment for non-military foreign aid). 

In psychology, there’s a concept known as projection, the term for when a patient ascribes to his nemesis the very motive or behavior that animates the patient. 

In his nearly hour-long speech at the Detroit Economic Club, Donald Trump accused his opponent of being “bought, controlled and paid for by her donors and special interests.” 

Look at the men on Trump’s own economic team, and you’ll get a very clear idea of just who his policies aim to benefit.

 Adele M. Stan is AlterNet’s senior Washington editor. Follow her on Twitter @addiestan.


Hedge Fund Billionaires Are Desperately Spending Money to Attack Bernie Sanders

A new advertisement released by Future 45 criticizes Sanders’ proposed minimum wage increase and health care for all.

Source: AlterNet

Author: Susan Lazare

Emphasis Mine

It is no surprise that hedge fund billionaires oppose Bernie Sanders, the U.S. senator and 2016 presidential hopeful who has proposed a .5 percent speculation tax and pledged to tackle wealth inequality.

A new article in the Intercept finds that hedge fund managers have banded together to form their own super PAC, called Future 45, and it has started launching attacks on the Sanders campaign. In a new advertisement circulating this week, Future 45 goes beyond the individual, taking aim at the very tenets of Sanders’ candidacy: a $15 minimum wage, free college and health care for all.

(N.B.: go to link to see video)

Reporter Zaid Jilani notes that the super PAC has some well-heeled backers:

Future 45 is run by Brian O. Walsh, a longtime Republican operative who has in the past served as political director for the National Republican Congressional Committee. Most recently, he was president of the American Action Network, a dark money group that was the second-largest outside spender in 2010.

Over the last year, Future 45 has been funded primarily by hedge fund managers. It has received $250,000 each from two billionaire Rubio-backers: Paul Singer, who runs Elliott Management, and Ken Griffin, who runs Citadel.

The Future 45 advertisement, released in the lead-up to the South Carolina primary, is the super PAC’s first to go after Sanders. The organization has produced at least five advertisements since October 2015 criticizing Hillary Clinton.

Meanwhile, Future 45 is not the only super PAC spending large sums this month. According to the Washington Post, the biggest super PAC backing Hillary Clinton, Priorities USA Action, “is making its first significant foray into the 2016 primary, launching a radio campaign in South Carolina and spearheading a $4.5 million effort to drive early turnout of African American, Latino and female voters in states that hold contests in March.”

Sarah Lazare is a staff writer for AlterNet. A former staff writer for Common Dreams, Sarah co-edited the book About Face: Military Resisters Turn Against War. Follow her on Twitter at @sarahlazare.


Marco Rubio’s $12 Trillion Problem

Author: Charles Pierce

Emphasis Mine

Probably because he has rocketed within sniffing distance of double-digits in the latest polls, people are talking seriously about the threat that Marco Rubio, a lost child in a wilderness of rakes, could be president of the United States. That’s why we’re hearing all this stuff about his personal finances, and about the Florida Republican party and its credit cards. (Senator Professor Warren made the only point worth making about this subject last night on Chris Hayes’s electric teevee show. She wondered why someone who’s had the problems with his personal finances that Rubio has had could be so oblivious to the plight of families struggling with debt. That’s a question he should be made to answer in specifics.) But I am less concerned with what’s in Rubio’s wallet, and more concerned with his plans for the public purse because, based on what he’s released so far, this country’s going to be selling apples on the sidewalk by his second State of the Union address.

First, there’s his tax plan, which is a massive shove of wealth upwards.  Estimates have suggested that Rubio’s tax cut would increase deficits by anywhere from $4 trillion to $12 trillion over 10 years, depending on how you count. Either way, it’d be a staggering amount of money — so staggering that even prominent conservatives have blanched at the price tag. But according to the CTJ analysis, the poorest one-fifth of the country would keep just 6 percent of the money while the bottom 60 percent, as a whole, would get just 22 percent. By contrast, the richest 5 percent of Americans would pocket nearly half of the tax cut while the richest 1 percent alone would receive more than one-third.


Trump Tax “plan”


Author:Bryce Covert

Emphasis Mine

On Monday, Republican presidential candidate Donald Trump will unveil a detailed tax reform plan — and he is already positioning it as a populist proposal. In a press alert about the plan, the campaign states, “Essentially, the plan is a major tax reduction for almost all citizens and corporations, in particular, those in the middle and lower income classes.”

And already, the portion of the plan that affects low-income Americans, which would impose a zero percent tax rate on individuals who make less than $25,000 and married couples who make less than $50,000, is generating headlines. “Trump promises a ZERO per cent tax rate for millions: He plans to cut tax for the poor, middle classes and corporations, soak the rich,” the Daily Mail headline reads. “Mr. Trump’s plan appears designed to help him, as the GOP front-runner, cement his standing as a populist,” the Wall Street Journal article previewing the details states.

But the plan has a number of provisions that will overwhelmingly help the already well off.

Lower taxes for corporations

Trump proposes the lowest corporate tax rate of the entire Republican presidential field so far. He would reduce the rate to just 15 percent; by contrast, Sen. Marco Rubio (FL) would reduce it to 25 percent, while Jeb Bush would impose a top 20 percent corporate rate. That would be the on-paper tax rate; American companies already pay relatively low tax rates in reality, however. Thanks to their ability to take advantage of loopholes, tax breaks, and aggressive accounting schemes, the effective rate they pay is already under 20 percent. Meanwhile, although Trump says his tax reform plan will “create jobs and incentives of all kinds while simultaneously growing the economy,” lower corporate taxes don’t tend to go hand in hand with higher growth. There is no evidence that high rates hurt the economy; rather, those that pay the highest effective rates actually create more jobs than those that find ways to pay less.

And he would also impose a one-time, mandatory 10 percent tax on the profits American corporations hold overseas, which could be paid over a few years, to entice them to bring them back here and in theory create more jobs. A similar although slightly different plan, called a “repatriation holiday,” has been tried before, where corporations were offered a low, temporary tax rate on offshore profits to bring them home. When it was imposed in 2004, companies largely used the profits they brought back to give money to shareholders, rather than invest it in hiring or equipment, and many laid off large number of workers at the same time.

Lower taxes for the rich

It’s not just the poorest who would get a tax cut under Trump’s plan. The wealthy would get a hefty reduction too. The highest individual tax bracket, which would apply to married couples who make more than $300,000, would be lowered from the current 39.6 percent rate to 25 percent. That’s an even lower top tax rate than under Bush’s plan, which proposes a top 28 percent on income; yet analysis of Bush’s plan found that the top 1 percent of earners would get the overwhelming benefit of his tax cuts, with an 11.6 percent increase in after-tax income compared to 1.8 percent more for the poorest and between 2.3 and 3.1 percent for the middle class. As with lowering the top corporate tax rate, there’s little evidence that lower income taxes help spur job growth, as it’s historically been stronger under higher rates. Some economists have found that the optimal tax rate for the wealthiest is closer to 90 percent.

Giveaways to the wealthiest

Trump’s plan would also get rid of the estate tax, which only affects the wealthiest 0.14 percent of Americans. Thanks to reductions in the rate over the years and creative methods of getting around it, those who owe it only pay an effective 16.6 percent rate, and less than 10 percent of the $60 trillion that will get passed down to wealthy heirs and charities over the next half century will be paid in estate tax. Nevertheless, it is a significant and progressive source of government revenue, since it only impacts those most able to pay yet will generate $246 billion over the next decade.

And while Trump would follow through with his rhetoric calling out the lower tax rate hedge fund managers pay on the income they earn from doing their jobs by ending the carried interest loophole, he would also cut the top capital gains tax rate to 20 percent. The current code already means that income made from investments enjoys a much lower 23.8 percent rate than income made from work, which is taxed at a top 39.6 rate. And those who enjoy the benefits of a lower capital gains rate are mostly the rich: 70 percent of the money saved through a lower rate goes to the top 1 percent of earners, while just 7 percent goes to the bottom 80 percent. The lower capital gains tax rate is one of the biggest contributors to growing income inequality.


Ohio Journalists On The Real John Kasich: Anti-Union, Anti-Choice, Anti-Marriage Equality

Source: Media Matters

Author: Joe Strupp

Emphasis Mine

Ohio Gov. John Kasich, who announced his campaign for the Republican presidential nomination this week, may appear moderate. But according to reporters who cover him regularly, the former Fox News host’s tenure in the statehouse has included efforts to reduce collective bargaining, limit abortion rights, and fight marriage equality.

Ohio reporters who have covered Kasich closely raise several areas of interest for national media that have less experience covering him.

His efforts to cut state spending and balance the budget did reduce taxes, but put more of a burden on local governments, Ohio journalists point out. They also note his off-the-cuff style can lead to wandering speeches and incidents like the revelation that he called a police officer an “idiot” during a 2008 traffic stop.

“He can be quite a character sometimes, the national press doesn’t know how to take him,” said Shane Stegmiller of Hannah News Service and president of the Ohio Legislative Correspondents Association. “You never know what he’s going to say.”

Stegmiller cited the “idiot” incident, which occurred before Kasich’s 2010 election, but became public in 2011: “It blew up on him pretty big.”

Then there are his often-forgotten fights against abortion and gay rights, according to Chrissie Thompson, a Cincinnati Enquirer state government reporter since 2013.

The recent U.S. Supreme Court decision legalizing same-sex marriage nationwide stemmed from the Ohio-based Obergefell vs. Hodges case, in which plaintiff Jim Obergefell sued to be listed on his spouse’s death certificate as the surviving spouse. Defendant Richard Hodges, the Ohio director of public health, is a Kasich appointee.

“The department of health was the lead defendant in Obergefell vs. Hodges in the gay marriage debate,” Thompson said. “Kasich opposed same-sex marriage and he authorized the fight to protect our gay marriage ban.”

Since he took office, Kasich has also signed restrictive abortion bills that have led to half of the state’s 16 abortion clinics closing, with the potential for more to close in the near future.

He had signed some abortion restrictions and those have resulted in the closure of some of our abortion clinics in Ohio,” Thompson said. “He does not like to talk about it a lot.”

Another issue that occurred during his first year in office was the proposal known as Senate Bill 5, Kasich’s effort to clamp down on collective bargaining rights for public employee unions. Similar to Wisconsin Gov. Scott Walker’s more publicized union fight, the Kasich measure was passed and signed into law, but drew harsh criticism. It was eventually voted down overwhelmingly via a ballot referendum later that year.

“Senate Bill 5 was hugely controversial,” recalls Laura Bischoff, a 14-year statehouse reporter with the Dayton Daily News. “They wanted to really gut collective bargaining rights for public employees and it sparked huge protests at the statehouse, bigger than I’ve ever seen.”

Marc Kovac, statehouse bureau chief for Dix Newspapers and The Vindicator of Youngstown, agreed.

“Kasich was a staunch supporter of public employee collective bargaining reform, signing the former Senate Bill 5 into law and setting off a massive referendum effort that blocked that law from taking effect,” he said.

Bischoff also pointed to Kasich’s privatizing of some prisons, a move that drew corrections officer complaints about conditions and resulted in an audit that found 47 violations in one private institution.

“There is a question as to whether it saved money more than projected, the union that represents corrections officers said it was bad,” Bischoff said. “There was one audit report that was really bad about conditions the inmates were living in.”

Kasich’s economic stimulus program, JobsOhio, is another point of contention, according to reporters. The private, non-profit agency was created to help spark job growth, but in a secretive fashion that exempts it from state open public record laws and limits state audit oversight.

“People didn’t like the fact that it’s now somewhat shrouded in secrecy with public money,” said Jim Siegel, a Columbus Dispatch statehouse reporter since 1998. “There are concerns it could be used for cronyism. He believes in the private sector and letting the private sector do as much as possible on things. He’s made efforts to privatize as much as he can.”

And the job growth has been less than successful, Stegmiller says, noting the state’s job growth rate for the past 32 months is at 1.73%, below the national average of 2.09%.

“While Ohio had gained back a lot of jobs, it lags a lot of states in job recovery,” he said.

The state budget, meanwhile, is something Kasich touts as a success, journalists say. But the impact may be less positive than he lets on.

Reporters cite the claim that Kasich eliminated an $8 billion deficit and shored up the state’s “rainy day” surplus fund. But in reality, he cut funding to local governments and school districts, forcing many to increase their own taxes and fees.

“By reducing their funding, now they are having to go to voters and ask for local levies to help make that up,” said Jackie Borchardt of The Plain Dealer in Cleveland. “The local government or school district is having to raise more revenue that way. In his first budget, he did slash spending for education. He cut it and local governments have said they continue to chip away at their funding.”

And the $8 billion deficit Kasich touts wasn’t really a deficit, according to the Enquirer’s Thompson: “We never actually had a deficit, he used the word deficit and it was a projected shortfall.”

Kasich supporters also brag about his big re-election victory in 2014, in which he beat Democratic challenger Ed FitzGerald nearly 2 to 1. But what is often lost is that FitzGerald, then the Cuyahoga County Executive, was hit with a very public scandal after it was revealed the married candidate was found by police in a parking lot at 4:30 a.m. with another woman.

The circumstances of that incident remain unclear. But things got worse when it was found he had been driving without a license for about 10 years.

“He won 86 out of 88 counties in 2014, but he was running against a very weak opponent,” Thompson said about Kasich’s last election.



Republican Budget Makes Rich Richer, Hurts Families

Source: RSN

Author: Elizabeth Warren

Emphasis Mine

A budget is a building plan for the future. It’s about what it takes for our families, our businesses, and our economy to thrive.

What do we need? Our kids need a good, affordable education. Our workers need good wages, good benefits, and good jobs here in America, jobs built on 21st century innovation and technology. Our businesses and workers need transit, roads, and bridges that are safe enough, strong enough, and fast enough to get us to work and to keep goods and services moving. And everyone needs to know that we’re in this together. That’s how we build a strong future.

Republicans in Congress have a different vision. The Republicans’ partisan budget, jammed through the Senate last month, will make the rich richer and the powerful more powerful, while leaving our kids, our college students, our seniors, our workers, and our families to fall further and further behind.

If the drastic cuts in the Republican budget are applied proportionately, it could cut transportation funding over the next decade by 40 percent. So if you think we already have a crumbling infrastructure, if you’re already worried about old buses and whether the T can struggle through another winter, remember that Republicans want to slash support for transportation.

Cutting construction and repair also means cutting jobs. Economists estimate that the Republican budget would mean about 56,000 fewer jobs in Massachusetts alone.

The Republican budget also takes aim at our kids. Over the next decade, it could eliminate Head Start for 400,000 children across the country, including about 5,000 kids here in Massachusetts. The budget could make college more expensive for over 130,000 Massachusetts students who receive Pell grants. And cuts in the student loan interest rates? Forget it. The Republican budget keeps sucking down billions of dollars in profits off student loans.

The Republican budget puts Massachusetts seniors’ health at risk too. Thanks to the Affordable Care Act, the days when seniors had to choose between filling a prescription and paying the rent were over. But under the Republican budget, nearly 80,000 seniors in Massachusetts could pay an average of $920 more per year for prescription drugs. About 900,000 seniors in Massachusetts could lose free preventative Medicare health services, and over 25,000 Massachusetts nursing home residents who rely on Medicaid could face cuts to their care and an uncertain future.

And what about medical research and technology—the kind of work we’re proud to do in Massachusetts? For over 10 years, Congress has decimated medical research funding, choking offsupport for projects that could lead to the next major breakthrough against cancer, heart disease, ALS, diabetes, or autism.

With more and more families desperate for those breakthroughs, what’s the Republican solution? Cut the National Institutes of Health budget. Cut medical research. In fact, compared to the President’s budget, the Republican budget could mean 1,400 fewer NIH grants a year.

The Republican budget also cuts $600 billion from programs like nutrition assistance, putting at risk food stamps for thousands of Massachusetts families that depend on this program to put food on the table. And the Republican budget could cut funding for heating assistance, funding that helped over 180,000 Massachusetts families stay warm in the winter.

We know who this budget would hurt – millions of hard-working families in Massachusetts and all over this country who are trying to make ends meet; people who work hard and play by the rules, but who are seeing opportunity slip away.

Why? Why billions of dollars in cuts for education and medical research, for heating assistance and highways? Because the Republicans want to give billions of dollars in new tax cuts to the wealthiest Americans—and they expect everyone else to pay for it. The Republicans have planned $269 billion in tax cuts that would go to just a few thousand of the richest families. That’s not just irresponsible. It is just plain wrong.

A budget is about values, and this budget puts Congressional Republicans’ values on vivid display. This budget is about making sure that a tilted playing field tilts even more, while everyone else gets left further and further behind.

Those aren’t Massachusetts’ values and they are not America’s values. We believe in opportunity, and that means fighting for a budget where everyone—not just the rich—has a fighting chance to build a better life for themselves and their children.



A Practical Vision of a More Equal Society

the spectacular lowering of top income tax rates has sharply contributed to the rise of inequality since the 1980s, without bringing adequate corresponding benefits to society at large

Source/Author: Thomas Piketty, The New York Review of Books

Emphasis Mine

Anthony Atkinson occupies a unique place among economists. During the past half-century, in defiance of prevailing trends, he managed to place the question of inequality at the center of his work while demonstrating that economics is first and foremost a social and moral science. In his new book, Inequality: What Can Be Done?—more personal than his previous ones and wholly focused on a plan of action—he provides us with the broad outlines of a new radical reformism.

There’s something reminiscent of the progressive British social reformer William Beveridge in Atkinson’s reformism, and the reader ought to enjoy his way of presenting his ideas. The legendarily cautious English scholar reveals a more human side, plunges into controversy, and sets forth a list of concrete, innovative, and persuasive proposals meant to show that alternatives still exist, that the battle for social progress and equality must reclaim its legitimacy, here and now. He proposes universal family benefits financed by a return to progressive taxation—together, they are intended to reduce British inequality and poverty from American levels to European ones.

He also argues for guaranteed public-sector jobs at a minimum wage for the unemployed, and democratization of access to property ownership via an innovative national savings system, with guaranteed returns for the depositors. There will be inheritance for all, achieved by a capital endowment at age eighteen, financed by a more robust estate tax; an end to the English poll tax—a flat-rate tax for local governments—and the effective abandonment of Thatcherism. The effect is exhilarating. Witty, elegant, profound, this book should be read: it brings us the finest blend of what political economy and British progressivism have to offer.

To fully appreciate this book and its proposals, we should first place it in the larger setting of Atkinson’s career, for he has mainly produced the work of an infinitely cautious and rigorous scholar. Between 1966 and 2015, Atkinson published fifty or so books and more than 350 scholarly articles. They have brought about a profound transformation in the broader field of international studies of the distribution of wealth, inequality, and poverty. Since the 1970s, he has also written major theoretical papers, devoted in particular to the theory of optimal taxation, and these contributions alone would justify several Nobel Prizes. But Atkinson’s most important and profound work has to do with the historical and empirical analysis of inequality, carried out with respect to theoretical models that he deploys with impeccable mastery and utilizes with caution and moderation. With his distinctive approach, at once historical, empirical, and theoretical; with his extreme rigor and his unquestioned probity; with his ethical reconciliation of his roles as researcher in the social sciences and citizen of, respectively, the United Kingdom, Europe, and the world, Atkinson has himself for decades been a model for generations of students and young researchers.

Together with Simon Kuznets, Atkinson more or less single-handedly originated a new discipline within the social sciences and political economy: the study of historical trends in the distribution of income and property. Of course, the question of distribution and long-term trends already lay at the heart of nineteenth-century political economy, particularly in the work of Thomas Malthus, David Ricardo, and Karl Marx. But these writers could draw only on limited data, and were frequently obliged to limit themselves to purely theoretical speculation.

It was not until the second half of the twentieth century and the research of Kuznets and Atkinson that analyses of distribution of income and property could actually be based on historical sources. In his 1953 masterwork, Shares of Upper Income Groups in Income and Savings, Kuznets combined the first systematic records of American national income and property (records that he himself had helped to create) and the data produced by the federal income tax (established in 1913, in the aftermath of a prolonged political battle), to establish the very first historical account of year-by-year income distribution. While he was at it, he produced a piece of good news: that there had been a decline in inequality.

In 1978, in Distribution of Personal Wealth in Britain, a fundamental book (cowritten with Allan Harrison), Atkinson outstripped and overtook Kuznets: he made systematic use of British probate records from the 1910s to the 1970s to analyze in magisterial fashion the extent to which different economic, social, and political forces can help us understand the developments observed in the distribution of income, a distribution that was particularly under scrutiny during this period of exceptional turbulence.

All subsequent work on historic trends in income and property inequality to a certain extent follow in the wake of Kuznets’s and Atkinson’s groundbreaking studies. Leaving aside his historic and pioneering writings, Atkinson has been for decades one of the leading international specialists doing comparative investigations on the measurement of inequality and poverty in contemporary society. He has also been the tireless architect of projects for international cooperation on these subjects.

An Engaged and Mordant Book

In Inequality: What Can Be Done?, Atkinson leaves the terrain of scholarly research and ventures into the realm of action and public intervention. By so doing, he returns to the role of public intellectual that he has never really abandoned since the beginning of his career. Before his historic work in 1978 on the distribution of wealth in Britain, he had already written several other books that in their way were public interventions. In particular, we can mention Poverty in Britain and the Reform of Social Security (1969) and Unequal Shares—Wealth in Britain (1972). With Atkinson, the dividing lines between history, economics, and politics have never been strict: he has always tried to reconcile the scholar with the citizen, often discreetly, occasionally in a more forthright manner.

All the same, Inequality: What Can Be Done? goes much further in that direction than any of his earlier books. Atkinson takes risks and sets forth a genuine plan of action. In it we find his customary stylish prose, his distinctive way of offering a fair hearing to every argument and author, presenting them all in the best light, with simplicity and clarity. But in this book Atkinson makes distinctions and takes positions in a far more drastic way than his natural caution generally inclines him to do. While he has not written a funny book, we find in it the mordant irony that his students and colleagues know so well, an irony that does not always appear with such clarity in his more academic publications.

One such case is the section in which he evokes the historic events of 1988, when Nigel Lawson, Margaret Thatcher’s chancellor of the exchequer, led the British Parliament in voting for a reduction of the top marginal income tax rate to 40 percent (that rate was 83 percent when the Iron Lady first came to power in 1979). One Conservative MP got so carried away that he is reported to have said that “he did not have enough zeroes on his calculator” to measure the size of the tax cut that he had just helped to approve for himself. It was a grim moment and fully merits the use of Atkinson’s sharp talons.

This break with a half-century of progressive tax policy in the United Kingdom was Thatcherism’s distinctive achievement (just as the Tax Reform Act of 1986, which cut the upper tax rate in the US to 28 percent, was the distinctive achievement of Reaganism). It would never really be called into question by New Labour during the years of Tony Blair (for whom Atkinson has no special fondness), any more than Reagan’s tax cuts were by the Democrats during the Clinton or Obama years. Nor can we expect that the rate will be seriously called into question under the newly elected Tory government.

Another telling story, which may surprise many of his students and colleagues: on the occasion of that historic vote in 1988, Atkinson himself was in the House of Commons, busily working away on his PC and his tax microsimulator in the Shadow Cabinet Room. With the aid of his colleague Holly Sutherland, he was in fact able to finish calculating the proposed budget before the chancellor of the exchequer was able to complete his speech—wry evidence that scientific research and computer codes can give rise to new forms of participatory democracy.

The Battle for Fiscal Progressivity and National Insurance

The idea of going back to a more progressive tax structure clearly has a major part in the plan of action that Atkinson sets forth. The British economist leaves no doubt about it: the spectacular lowering of top income tax rates has sharply contributed to the rise of inequality since the 1980s, without bringing adequate corresponding benefits to society at large. We must therefore waste no time discarding the taboo that says marginal tax rates must never rise above 50 percent. Atkinson proposes a far-reaching reformation of the British income tax, with top tax rates raised to 55 percent for annual income above £100,000 and 65 percent for annual income above £200,000, as well as a hike in the cap on contributions to national insurance.

All of which would make it possible to finance a significant expansion of the British social security and income redistribution system, notably with a sharp increase in family benefits (doubling and even quadrupling them in one of the variants proposed), as well as a rise in retirement and unemployment benefits for people with lower resources.* Atkinson presents a series of variants of these measures and scenarios for reform, while advocating those measures that make it possible to return to a policy of universal social safety nets (i.e., that would be open to everyone), as opposed to conditional transfers of resources.

If these proposals, statistically accounted for and fully financed from taxes, were to be adopted, there would be a significant drop in British levels of inequality and poverty. According to the simulations done by Atkinson and Sutherland, those levels would fall from their current quasi-American levels to the point where they would come close to European and OECD averages. This is the central goal of Atkinson’s first set of proposals: you can’t expect everything from fiscal redistribution, but that nonetheless is where you have to begin.

Radical Reformism: A New Philosophy of Rights

But Atkinson’s plan of action hardly stops there. At the core of his program is a series of proposals that aim to transform the very operation of the markets for labor and capital, introducing new rights for those who now have the fewest rights. His proposals include guaranteed minimum-wage public jobs for the unemployed, new rights for organized labor, public regulation of technological change, and democratization of access to capital. This is only a sampling of the many reforms he recommends.

Instead of saying more in detail about these proposals, I’d like to focus particularly on the question of wider access to capital and ownership. Atkinson here makes two especially innovative suggestions. On the one hand, he calls for the establishment of a national savings program allowing each depositor to receive a guaranteed return on her capital (below a certain threshold of individual capital). Given the drastic inequality of access to fair financial returns, particularly as a consequence of the scale of the investment with which one begins (a situation that has in all likelihood been aggravated by the financial deregulation of the last few decades), this proposal strikes me as particularly sound. In Atkinson’s view, it is intimately bound up with the larger issue of a new approach to public property and the possible development of a new form of sovereign wealth fund. The public authority cannot resign itself merely to go on piling up debt and endlessly privatizing everything it possesses.

On the other hand, alongside this national guaranteed and insured savings program, Atkinson proposes establishing an “inheritance for all” program. This would take the form of a capital endowment assigned to each young citizen as he or she reached adulthood, at the age of eighteen. All such endowments would be financed by estate taxes and a more progressive tax structure. In concrete terms, Atkinson estimates that, with current revenue from the British estate tax, it would be possible to finance a capital endowment of slightly more than £5,000 for each young adult. He calls for a far-reaching reform of the system of inheritance taxation, and especially for greater progressivity with regard to the larger estates. (He proposes an upper rate of 65 percent, as with the income tax.) These reforms would make it possible to finance a capital endowment on the order of £10,000 per young adult.

Personally speaking, I must say that I’ve always had certain reservations about the idea of an individual financial endowment. I’ve generally preferred a focus on guaranteed access to certain fundamental goods—education, health, culture among them. But whichever approach you may prefer, the idea of directly linking the estate tax to the allocation of rights that would be underwritten by such a tax seems to me extremely pertinent. The immense advantage of the solution set forth by Atkinson is that it makes it possible to clearly express the notion that the purpose of the estate tax is to underwrite “inheritance for all.” By directly linking the sum given to each person with estate tax rates, we may perhaps hope to change the terms of the democratic debate on this subject.

The Return of the Poll Tax and the Question of a Wealth Tax

One of the most interesting sections of the book focuses on the British debate over the poll tax. This is a notoriously forfeitary tax, or lump-sum tax, as economists say it—one pays the same sum in pounds sterling whether one is rich or poor. It was imposed by Margaret Thatcher in 1989–1990 in place of the old rates tax, which was a proportional tax levied on housing, with the sum due increasing in rough proportion to the value of one’s home. The poll tax therefore resulted in a sharp tax hike for the poorest taxpayers, and a drastic drop for the richest ones. To say that this reform was unpopular is to put it mildly: urban rioting and parliamentary insurrection ensued, while the Iron Lady stubbornly dug in her heels until she was finally voted out of power by the Conservative MPs in November 1990 and quickly replaced by John Major, who promptly abolished the poll tax. It was a clearly unacceptable reform.

What is less widely known is that the new local “council tax” that replaced the poll tax in 1993 and is still in effect today is actually almost as regressive as the poll tax. Here the data gathered by Atkinson are particularly striking. Individuals whose real estate holdings are worth about £100,000 pay on average a council tax of some £1,000, while those whose property is worth about £1,000,000 pay approximately £2,000–2,500. While this is evidently a less harshly regressive system than the one envisioned by Thatcher, it still remains extremely regressive. In fact, the tax rate drops from 1 percent for the poorest taxpayers to 0.2–0.25 percent for the richest ones, with an average tax rate of 0.54 percent for the United Kingdom as a whole in 2014–2015. In most European countries, as well as in the United States, local taxes are generally proportional to the value of real estate property.

Quite reasonably, Atkinson proposes that the same approach be introduced in the United Kingdom. Such a reform, carried out consistently, might be a first step toward the establishment of a progressive tax on real estate, and even, eventually, toward a progressive tax on net wealth (including financial assets and debts). In this regard, it is striking to note that the tax on real estate transactions in the UK (“stamp duty”) is already quite progressive, and that it has become even more so over the last few years. The rate paid on a transaction is currently 0 percent if the property is worth less than £125,000, and 1 percent if the property is worth between £125,000 and £250,000, rising thereafter to 3 percent between £250,000 and £500,000, 4 percent between £500,000 and £1,000,000, 5 percent between one and two million pounds (a new rate introduced in 2011), and 7 percent on properties worth more than two million pounds (introduced in 2012).

It’s worth noting that the 5 percent rate, introduced by a Labour government, was at first strongly criticized by the Conservatives. Once they came to power, however, they introduced the 7 percent rate. This makes it clear that in a larger national situation of growing inequality, and especially of upward concentration of wealth and the steep challenges facing younger generations in gaining access to property, the need for a more progressive system for taxing wealth is being felt above and beyond partisan political affiliations. This likewise points to the need, advocated by Atkinson, to rethink the overall system of taxes on property in a coherent manner: it’s hard to see why the tax on transactions should be so sharply progressive if the annual property tax is going to be regressive.

The United Kingdom, Europe, the World

The only criticism that can be brought to bear on Atkinson’s plan of action is its excessive concentration on Great Britain. All of his social, fiscal, and budgetary proposals are conceived for a British government, and the space devoted to international matters is relatively limited. For instance, he briefly brings up the idea of a minimum tax on large multinational corporations but then the possibility of such a tax is remanded to the category of “ideas to pursue,” not solid proposals. In view of the central part played by the United Kingdom in European tax competition, as well as on the world map of tax havens, one might expect a more prominent treatment of proposals for the establishment of common taxation on profits, or the development of a worldwide registry—or at least a Euro-American one—of financial securities. Atkinson clearly alludes to such issues as well as the creation of a “World Tax Authority,” and the possible increase of international aid to 1 percent of GDP. But they are given less attention than the strictly British proposals.

This same criticism, however, also constitutes the book’s main strength. Basically, Atkinson is telling us that timorous governments have no real excuse for inaction, because it’s still possible to act on a national basis. The heart of the plan of action that Atkinson sets forth could be implemented in Britain without bothering to wait for elusive prospects of international cooperation. For that matter, they could also be adapted and applied to other countries.

No doubt, reading between the lines, we can glimpse a certain disenchantment on Atkinson’s part with the European Union, though he reminds us that he has been a longtime supporter of that institution, especially when the United Kingdom joined in 1973. In that era, he reminds us, many member states called into question the financing of the British welfare state (especially the National Health Service) through taxes. This was seen as an unacceptable form of competition by those countries where the cost of the welfare state rested on employers. A substantial proportion of the British left at the time saw in Europe and its obsession with “pure and perfect” competition a force that was hostile to social justice and the politics of equality. “At the time, these suspicions were not justified,” Atkinson tells us. He seems to want to add that they might be more so nowadays, but he never quite goes that far, because he wants to keep the flame of hope for the European Union alive. This is a book written by an optimist and a citizen of the United Kingdom, Europe, and the world: the broad sense it conveys of a more just economy is one of its many appealing qualities. It will stand as a model whatever the outcome of one election or another.

—Translated from the French by Antony Shugaar



The Simple Truth: President Obama is Too Intelligent for Republicans to Understand

source: Forward Progressives

author:Allen Clifton

Emphasis Mine

A few years back I worked with a guy who was probably a genius. In fact, he often struggled in life interacting with people because his brain simply performed at a higher level than the average person. I remember asking him what his biggest belief was in making life decisions and he always, without fail, told me “think of the bigger picture.” And while I’ve always tried to be a big picture thinker, knowing him when I did helped me understand it a little better.
He always told me the biggest issue he faced when dealing with people was that he’d see things in a bigger scope that most people simply couldn’t follow. While many people tend to not see beyond a particular moment, day, week or even month, he operated with a sense of “is what I’m doing now the best course of action to set me up for success not just now, but later on.” He used to tell me people would come to him for advice every once in a while and often walk away angry because what they wanted to hear wasn’t usually what they needed to hear. He was actually one of the first people who made me aware of the fairly obvious (though I was young and had never really thought about it) human characteristic of adoring people who tell them what they want to hear, or what they understand, while condemning those who don’t. Most people really just want to be assured of what they hope will happen rather than take a good long look at what’s best for themselves in the long run. And while he wasn’t right about everything, he was fairly brilliant when it came to a lot of things. I will say as a young person at the time, this person – who I haven’t spoken to in years – made a profound impact on how I viewed life going forward. Which brings me to President Obama.
While I’m not calling him a genius, I do think he’s extremely intelligent. I also believe that his tendency to use “big picture” thinking while drafting policy is something most Republican voters simply can’t understand. Take “Obamacare” for instance. It’s not a “fix health care today” law. In fact, the law itself is made to grow and evolve over time. But, as it is now, it’s a long-term outlook on our health care. While many Republicans want to look at the “now” aspect of the Affordable Care Act, they seem unable to grasp the reality that as more Americans get health insurance, giving them access to preventable care, this lowers expenses down the road for everyone. If people can prevent very costly heart attacks, strokes or other debilitating health issues now, that’s an overall savings for practically everyone from consumers to health insurers to doctors who now have more patients. Quite literally, improving the overall health of Americans will improve the health of this country. It even makes sense for our economy. If workers are healthier, because they have access to quality health care, that means there will be fewer people calling in sick to work, showing up sick to work (putting other employees at risk) or relying on government programs because their health conditions (that were preventable) render them unable to work at all. But to see all of that requires “big picture” thinking and Republicans seem unable to understand anything beyond the spoon-fed bumper sticker talking points they’re given by the GOP and the conservative media.
Minimum wage is similar issue. Republicans constantly paint it as a “job killer” (it’s not) while also rallying against the millions of people who are on government assistance. A good portion of the Americans who are on government assistance have jobs. If we made sure that no American working full-time had to rely on government programs just to survive, instantly we would save our country hundreds of billions of dollars over the years. Not only that, but when Americans have more money, they have more to spend. And what’s the biggest driver of economic growth? Consumer spending. More consumer spending means higher profits and higher demand, which means – more jobs. But once again, when it comes to Republicans and explaining job creation, anything outside of “tax cuts create jobs” is often too complex for many of them to understand. The same goes for war. When it comes to ISIS, Republicans just want to send in troops and “crush the terrorists.” They’ve hammered President Obama relentlessly about how he’s handled the entire situation. To many of them, they want to go in guns blazing because that’s what sounds good. But as we’ve learned by our previous war in Iraq, going into these situations haphazardly without a plan leads to absolute chaos. Remember, the existence of the ISIS we see today is a direct result of Bush’s Iraq War. When it comes right down to it, I really do believe a huge part about why so many of the non-racist Republicans are against President Obama is because many of them are simply unable to grasp his “big picture” thinking that drives a lot of his policies. That requires intelligence and far too many conservative would rather just be told what to think by Fox News. They want their policies to be so simplified and catchy that they fit on bumper stickers. It’s like I’ve often said, Democrats are trying to use science, math, reality, history and education to reason with people who deny science, don’t trust math, create their own reality, distort history and often devalue quality education.  That’s a big reason why we’re not getting anywhere in this country.



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When it comes to trickle-down economics, everyone’s got a right to their own opinion but not their own facts

Source: WashPost

Author: jared Bernstein

(Jared Bernstein, a former chief economist to Vice President Biden, is a senior fellow at the Center on Budget and Policy Priorities and author of “Crunch: Why Do I Feel So Squeezed?” among other books.)

Emphasis Mine

When evaluating economic policies, the value of fact-based argument cannot be overstated. If we’re arguing about our favorite film or restaurant, by all means, let’s hear your opinions. But if we’re evaluating the impact of Kansas Gov. Sam Brownback’s deep tax cuts on economic outcomes in the state, it’s critical to get the facts right.

That’s why parts of this radio show debate on the “To the Point” show last week were intensely frustrating. Myself, my CBPP colleagues and various journalists/editorialists have looked at the claims that Brownback’s strong pivot to trickle-down tax cuts have benefited the state and found them wanting.

So I was struck by this exchange on the show between guests Amity Shlaes and Thomas Frank.

Shlaes: [referencing BLS data] “Kansas has unusually low unemployment – its neighbors have higher unemployment. That’s a good sign – it says there’s some sun shining in Kansas.”

Frank, responding: “I’m at my desk looking at [presumably] the same BLS page … and Missouri has growth year over year ending in August of 1.6% and Kansas only 1.1%.”

The moderator then pivots to whether Brownback can garner support on cultural issues, leaving listeners in that all too familiar position of having no idea who’s right about an important fact: Is there or is there not evidence that the Kansas tax cuts boosted their employment outcomes?

A moment’s thought should lead one to reject the unemployment level cited by Shlaes as not relevant. Listeners don’t know whether that level is higher or lower than that which prevailed before the cuts were in place, and, more importantly, how the Kansan unemployment trend compares to that of neighboring states that share similar economic trends but didn’t pursue the same tax-cutting agenda. In fact, since the tax cuts went into effect, unemployment is down 0.7 percentage points (ppts) in Kansas (since the cuts went into effect in January 2013, this comparison is from December 2012 until the most recent data point, August of this year). Looking at surrounding states, that’s the same decline as Oklahoma, worse than Colorado, and a little better than Missouri and Nebraska. Combining those four states that surround Kansas, unemployment fell 1.1 ppts compared to Kansas’s 0.7. The national decline over this period was 1.8 ppts.

In other words, unemployment fell less in Kansas than in the combined neighboring states, and a lot less than in the nation.

Employment growth over this period has been 1.8 percent in Kansas, 2.9 percent in the surrounding states, the latter of which is about the same for the nation — 3.1 percent — suggesting Kansas to be a negative outlier.

And nobody, including Shlaes, denies that tax revenue is down sharply in the state as the result of the tax cuts, both in absolute terms and relative to other states, as shown in the figure below.

In regard to the state’s revenue losses, Shlaes argued that it takes time for an experiment like this to work. What went unmentioned was that states have to balance their budget deficits every year, meaning they have to cut services, most notably education, while waiting for the experiment to bear fruit. And based on the history of supply-side, trickle-down tax cuts, Kansans are likely to be waiting a long time for the bars in the above figure to realign.

That’s not the extent of the false claims that went unanswered during the show. Steve Moore from the Heritage Foundation, after noting that it was he and Art Laffer who lobbied Brownback to try this experiment, argued that state tax cuts were a good way to lure people to move to your state: “You’re seeing a pretty massive change in migration, especially the states like Texas and Tennessee and Florida and other states that have low taxes … and that’s kind of the pitch we made to Sam Brownback, and he bought into it.”

Again, my CBPP colleagues have taken a deep, substantive dive into this question, and found little relationship between tax cuts and migration. Mike Mazerov concludes, for example, that “differences in tax levels among states have little to no effect on whether and where people move, contrary to claims by some conservative economists and elected officials.” In fact, using the same data on which Moore and Laffer base their claims, Mazerov finds that “the raw data — confirmed by a series of careful academic studies — show that for the vast majority of people — including the vast majority of the rich — tax levels are a minor consideration [in relocation decisions] or completely irrelevant.”

This makes sense if you think about the Kansas case for a moment. As Frank notes in the interview, many Kansans highly value their system of public education, and as the revenue losses are felt in the schools, they’re expressing great discontent with the trickle-down experiment. Mazerov’s findings likely stem from the fact that there are many people

who don’t want to move to places with deteriorating public services.

Full disclosure: I’ve been on the “To the Point” show and it’s usually a smart and engaging discussion. And a good debate requires the representation of different viewpoints. Moreover, aside from the revenue results which really are dispositive, I’m not claiming that these differences in employment outcomes over relatively short periods are the final word.

They are, however, relevant factoids to add to the debate, and it is essential to get them right. The punchline here goes well beyond one show where a few numbers were abused. When, regarding hard facts, listeners hear one person say “A” and the other say “not A,” and the difference remains unresolved, they justly conclude, “Oh well, who knows? I might as well make my political choices based on stuff that doesn’t involve an intermediary, like: Would this be someone with whom I’d like to go out for a beer?”

What can be done? Newspapers have fact checkers. While they, too, make mistakes, on net they’ve been a real positive when it comes to these sorts of straightforward claims. Of course, neither radio hosts nor their staffs can do real time fact-checking.

So I’ve got a proposal. When there’s a disagreement about a basic fact, like the one regarding job growth between Frank and Shlaes, the moderator should flag it and tell listeners that they’ll check the sources and post the result on their Web site shortly after the show.

Furthermore, if someone is a serial offender who constantly makes up “facts” to support their case, it should be noted that they won’t be invited back. We all make mistakes, myself at the top of the list, so I’m not suggesting the banishment of anyone who cites an incorrect number on occasion. I talking about those who consistently reveal a disregard for facts.

My strong sense is that while this will require some time and resources — though less than you’d think as it’s not that often that you have such clear-cut, factual disagreements — it will pay off in a boost in credibility that will benefit these shows and maybe even grow their audience.

And I’m sure it will help our other big experiment, the one involving democracy.