Linkage

by Henry on October 20, 2004

Two must read pieces by David Glenn and Mark Schmitt (discussion below fold).

First, David Glenn turns a book review at Dissent of Jason DeParle’s The American Dream into an extended meditation on welfare reform and the left. It’s one of the richest and most thought-provoking short articles I’ve read this year.

DeParle’s thick description of one extended family’s life is worth careful reflection precisely because it does not map neatly onto left-liberals’ usual arguments about jobs, wages, and caregiving. There is nothing here that could be distilled into a policy tract. DeParle offers a highly complex response to the welfare debates that tore apart the Democratic Party a decade ago.

The second reason why leftists should reflect on the social crisis is that it occupies so much of the psychic energy of the poor themselves. When I reported on a campaign to unionize home-health-care workers in Milwaukee in 2001, accompanying workers as they knocked on one another’s doors, I noticed how quickly conversations would move from anxiety about wages to anxiety about crime.

Second, Mark Schmitt tells us why the American conservative tradition is “shattered and bankrupt.”

Tax cuts are not conservatism. They are not a coherent worldview. They were a part of the conservative philosophy, but not an end in themselves. Stripped out of the larger framework of smaller government, of modesty about the possibilities of change, of respect for tradition and history, and of the sense that central government can be oppressive as easily as it can be liberating, tax cuts amount to nothing more than a material benefit for a few, and a long-term liability for everyone else. Put another way, imagine that the animating ideas of liberalism were reduced to this promise: “We will create a new cabinet-level agency every single year.” That’s not a vision that can attract deep loyalty, and neither is the promise of a tax cut every year.

When Schmitt notes that

Bush-DeLayism’s greatest betrayal of conservatism is in its rejection of this modesty about social scheming. Because of its corruption and incompetence, their practice has consisted of ever more complicated schemes of incentives and penalties to change behavior

he’s articulating a point that I tried to make myself recently (but expressing it much better).

Like Schmitt, I don’t think that the decay of conservatism is any cause for celebration. The American conservative tradition has been linked to some deeply unpleasant causes (most notably the defence of institutionalized racism), but the conservative temperament, the “urging to be modest about the degree to which human behavior can be modified by law or other collective decisions, and to be respectful of the role that tradition, custom, religion, greed, etc. play in all of human life” has something real to contribute. It’s a shame that this has degenerated into rampant political hackery.

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{ 7 comments }

1

George 10.20.04 at 9:09 pm

A couple comments on that Schmitt piece (or rather your excerpts; will read the full article when work permits):

Speaking as more-or-less a fiscal conservative, I think Schmitt may be missing two big things. First, according to the theory behind Bush’s radical tax cutting, increased economic growth will make up for all or most of the loss of tax revenues over the long term, due to the structural (as opposed to merely fiscal) stimulative effect of cutting the marginal tax rate. Whether this is true or not I don’t know; I’m neither an economist nor a statistician, but I have seen pretty graphs (usually in the WSJ) that purport to show that this happened after major tax cuts by Reagan and Kennedy. And the evidence (published in the Detroit paper, I believe) that the upper tax brackets now contribute an even larger share of total tax revenues, even though they received the bulk of the cuts, suggests that this phenomenon is already at work – although even if true, it obviously hasn’t made up the difference yet.

Second, there is reason to believe that Bush would approach economic policy from two other directions in his second term: by cutting the major cost items in the Federal budget (Social Security and Medicare) and by reforming (not just slashing) the tax code. Admittedly this is mostly my own speculation and wishful thinking, but there are signs. For one thing, Social Security reform is inherently a second-term activity due to the political risks involved – and it’s been part of the Bush economic platform (particularly means testing and partial privatization) at least since 2000. Moreover, Bush would have the great advantage of being able to frame Social Security reform as a deficit reduction package. As for tax code simplification, that’s not so politically risky, but it’s not an obvious winner either – yet Bush made a point of mentioning it in his convention speech, as if to lay the groundwork for a second-term mandate.

Together, these two factors (structural reform of the tax code and the intent to attack spending at the most important front) make the Bush tax cuts look less like “political hackery” and more like a genuine effort to make our economic system both more efficient and more fair.

Caveat: this is putting a lot of faith in the Bush Administration, which obviously a lot of people do not have. I’m not sure I do either. While I think Bush himself is sincere (the question of whether he is a dope is discrete) I deeply distrust the Republican leadership in Congress. Much of what they’ve done in Bush’s first term (that thuggish and dishonest Medicare bill, the thickly-larded corporate tax cut) can safely be filed under “political hackery.” If I had to vote for Bush or Kerry on purely economic grounds, I’m not sure where I’d come out. But I don’t think his signature first-term economic reform – the tax cuts – is a complete departure from the conservative worldview. Yet.

2

Rob 10.21.04 at 12:32 am

George–the Reagan tax cut leading to higher revenue is a myth. It depends upon taking tax revenue at the depth of the 81 recession and moving forawrd, ignoring the tax increase Reagan authored. As to why the welthy pay a higher percentage its becuase they are the ones seeing income growth.

As to Social Security reform, it will cost not save money to change Social Security.

3

Doug 10.21.04 at 2:33 pm

Ditto rob on tax cuts. Spend a little time with Brad DeLong for details. If the graphs George mentions come from the editorial page of the WSJ they’re better suited for fish wrap than policy making. Even from the reporting side, I’d be very careful.

Reform of the tax code is a coming thing. Happens every 15 years or so in the US. Like taking a ship into drydock and scraping off as many barnacles as possible. (Last done in 86.) It’s overdue, and it’s a vote-getter, as people see the special breaks that lobbies have gotten. K/E are getting a little mileage from this with the line about no tax breaks for outsourcing. There’s more popular acclaim to be had there and a ready-made issue for 2006 mid-terms.

On the Dissent piece, I was surprised that the author was surprised about how concerned poor people, esp poor black people were about crime and security. Had they never had contact with poor people before? Never been in the “bad” neighborhoods? Gracious me, apparently not. Well, at least some eyes were opened.

4

Henry 10.21.04 at 3:46 pm

Doug – where exactly does David say, or even hint, that he was surprised at poor people’s concerns with safety? You’re reading a level of bemusement and condescension into the piece that simply isn’t there. He’s reporting on what he saw, and pointing out that it can’t be reconciled with some of the simplifications that left-liberals make about welfare.

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George 10.21.04 at 5:47 pm

Brad DeLong is not generally to my taste, but I’ll take your word that he is against the idea. So like I said, there is educated opinion on both sides. (The WSJ Op-Ed page does publish some amazing crap sometimes, but they also publish plenty of very fine stuff. They get outside contributors, you know.) Just because one diasagrees with the theory doesn’t mean that there IS no theory (which is what the phrase “political hackery” would imply).

6

BadTux 10.22.04 at 2:17 am

George: I actually looked at the real statistics, as published by the U.S. Treasury, for tax receipts after the Reagan tax cuts. Income tax receipts plummetted, as you would expect. Income tax receipts did not reach 1981 levels again until Reagan’s tax hikes of 1987 (“tax reform”) took effect.

What the Wall Street Journal corruptly did was count social security taxes as “tax receipts”. It turns out that in 1982, Alan Greenspan and etc. held a series of conferences regarding “The Future of Social Security”. They decided that in order for Social Security to be secure for the future, a massive hike in social security taxes was needed. Rep. Dick Cheney and others thus voted for a massive hike in Social Security taxes in 1983, hiking them from 9.350% in 1983 to 14% in 1984, then 15% by 1990. And this massive tax hike was strictly on the poor — due to income caps, rich people paid not a single dime more, and there are no (zero) exemptions to payroll taxes, they are a flat tax on earned income period. In short, Reagan managed to transfer a huge chunk of taxation from the rich to the poor. Doh, who woulda thunk it?!

In short: Reagan raised taxes in 1983 by more than he cut taxes in 1981, and that, not any magic “supply side” fairy dust, is why revenue recovered — albeit as IOU’s in the Social Security fund, rather than as actual cash-in-hand. In short, Reagan was the biggest Credit Card President we ever had until George W. Bush took office.

– Badtux the Statistical Penguin

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Doug 10.22.04 at 9:58 am

Caught me skimming a bit; it’s not the author that are surprised so much as unnamed leftists. In reading quickly, I conflated the two.

David says, “It is also the case that no leftist who reads this book attentively will come away with the idea that if only we had better jobs, housing, and health-care subsidies, all would be well.” I’m left wondering if anyone believed that, and if so, whether that belief survived actual contact with poorer neighborhoods.

Further down, “The second reason why leftists should reflect on the social crisis is that it occupies so much of the psychic energy of the poor themselves.” Again, unknown leftists are supposed to hold a position that’s hard to believe was grounded in reality. Is the author constructing straw men for some intra-lefty quarrel?

Then, “A similar point is apparent in DeParle’s book. Caples, Jobe, and Reed tend to see their jobs as background noise; if they lose one low-wage job, they can find another one relatively easily. They’re more inclined to worry about what do to with an alcoholic boyfriend or a recalcitrant son-things over which they exercise at least some control-than about any farfetched scheme to organize a union or to change the labor market to their advantage.” To which I thought, well wouldn’t you, too?

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