GOPCons: Governing by Hostage Taking

The Legislative Path to Keystone XL

What it would look like if we weren't in denial about the US House

The most recent -- and most convenient -- example presenting the point of this posting can be seen in the "poison pill" inclusion of the Canadian pipeline authorization which is added to the House proposal.  By insinuating this otherwise un-associated provision into the legislation as a condition for the extension of the middle class tax cuts and unemployment insurance benefits, we can hardly miss another glaring repetition of similar, past, bad behavior.

We've seen it before.

And, we have not only seen it before, we have seen it quite recently and quite frequently from both the tea bags and the even more grotesque "nova Republicans" who are now imitating their bad example.

["Nova Republicans?"  These would be the latest, opportunistic, hybrid spawn of traditional "old school" GOPCons, a heavily soiled mix of the old corporate "bite and grab" crooks with the more modern,  truly thuggy tea bag ideological gangsters.].

A bill like the one authorizing the pipeline would normally be authored by sympathetic Congressmen with constituent districts which could, presumably, benefit from the project.  Also, some of the "forward defensive tackling" would have been handled well before such a bill took its final shape.

For example, US agency opinions would have been investigated.  The domestic market would have been analyzed.  Price impacts would have been calculated.  Environmental impact difficulties would have been anticipated.  Perhaps, a few of the farmers with fields which would have suffered when the thing plowed its Juggernaut style easement would have been interviewed.

MeanMesa calls such a process a "causal vector swarm."  To visualize such a concept, just imagine a cork with thousands of needles stuck into it.  Each needle is another one of the predictable "multiple constraints" inherent in such an undertaking, that is, each needle amounts to another "ox to be gored." The final conclusion about the workability of such a project would amount to totalling up all the "pro's and con's" to see how many -- and whose -- oxen were still standing.

When one has the ambition to create a gigantic, multi-billion dollar result, it's usually a good idea to have hammered out a "good idea" before one begins spending the money, much less, pissing off voters.

However, when political realism is added to the mix, you have to make sure you have enough needles, that you have examined each one carefully and that you are ready to hand over all the dead oxen to your election opponent.  More and more gaseous, essentially irrelevant tests will be added as you watch in horror, yet, in a Republic like ours, this torturous route remains the map of the journey.

In the end, the final product will be far from the purity of its engineers' original dream, but it will make sense.  This highly modified new design will have successfully merged individual interests with corporate interests in a way which, more or less, satisfies both parties.  Lyndon Johnson famously said that if a bill passed with more than one vote, too much had been negotiated away during the process.

The Nature of GOPCon Hostage Taking

The American people have spoken. The legislation has wide popular support. (image source)

The Keystone XL pipeline project is only the latest "burning question of the day" so far as hostage taking examples go.  Let's look at a conveniently short list of other recent examples.

A well-informed MeanMesa visitor might, at this point, simply sigh and lament "So, what's new?"  However, let's try to glimpse the "big picture" of what's actually going on here.

Normal governance would suggest that each of these expenditures would be debated, run through the process of Congressional "ox goring" and, finally, either fail or be passed.  Part of each plan adopted would be figuring out a way to pay for the expenditure without further increases to the national debt.

Americans understand that we have to pay for things we need or things we want.

Paying for things which we need or want includes collecting the taxes when necessary.  Raising taxes is part of the package -- unless you can slip by this step by holding something desirable or necessary hostage.  When the "hostage" course is taken, the "ransom will be paid" by lowering the expenditures on something else

The scheme can best be described as watching a kidnapper "holding a knife to your daughter's throat" while demanding that you turn over your house's heater.  At the moment, saving your daughter is paramount, but after she is returned, both of you are sitting through the winter in a cold house.

Why not just govern the regular way?  Collect taxes for what is needed and then buy it?  

If you are a Congressman, this would make perfect sense if raising taxes were a choice you could actually make.  However, when that prospect is "off the table," you have to take the heater in payment.

Americans are getting close to a point where they have no more heaters to sacrifice.  1/6 of the population is now below the poverty line.  1/5 of the population is unemployed.  1/4 of American children are food challenged.

Meanwhile, there is the matter of debt coming due.  To avoid taxes during the Bush autocracy, more and more money was borrowed -- from anyone stupid enough to lend it to us.  The daughter was returned, but, since the parents borrowed the ransom money, the house's heater remained in place.

This worked great for a little while, but plans like this one have a habit of falling apart as time runs along.

Obama, again in the "big picture" view, is now trying to lead the nation back to the regular scheme.  His proposals connect the revenue derived from increased taxes to the urgent necessities now facing the nation, urgent necessities such as jobs, infrastructure challenges and economic recovery.

Where Do Spending Cuts Go
When They "Grow Up?"

Okay then, where does the hostage ransom go 

after the daughter comes back home?

Spending cuts, according to the prevailing myth, become tax cuts.  Spending cuts mean, ridiculously, that less money will need to be borrowed.  The "ridiculously" part enters the equation due to the very, very flimsy reasons that most money is borrowed in the first place.  These reasons become flimsy when they are joined with comments and pledges about not "wanting to drown our children in debt."

The more the national debt is reduced in this way, the lower the interest payments required to service that debt will become.  If the flow of tax money is sustained at the same levels it flowed before the spending cuts, the debt is repaid with the surplus.  The "foot of brass" foundation of the entire Spending Cuts - Lower Debt - Lower Interest - Lower Taxes scam might have actually worked, theoretically, at some point in the distant past, but those days are long gone now.

The tax reductions which are the constant, atmospheric promise of modern spending cuts are. of course, mostly described by the old adage: "To the victor go the spoils."

Further, all spending cuts are not exactly the same.  In fact the motivation behind any specific tax cut separates them into categories.  Needless to say, the motivation in many cases is sheer opportunistic looting, but the other choices are also interesting.

As we look at the design of the spending cuts now being offered in the legislative process, the  distinctive differences are usually disguised as a "blend" of two or more of the varieties shown in the diagram (above).  However, there are a few fundamental questions about spending cut proposals which "sort them out," making the picture a little clearer.

1.  Will the benefits of spending cuts be benefits to all the tax paying base?

2.  Do the spending cuts actually make any sort of sense when it comes to hard numbers in the budget?

3. Do spending cuts target the relaxation of regulations which have been previously generally accepted by the electorate?

4. Can the spending cuts be classed as either "demand side" or "supply side" benefits?

5.  Are the increased "profits" made possible by spending cuts actually taxable themselves?

A Reminder About Exactly Who
Is An "Expert" On Spending

A Reminder About Job Creation

A MeanMesa Christmas Gift Suggestion

For Your Republican Relatives

MeanMesa's compliments to the President.

Who Likes Paying Ransom?

The recent tax bill was passed with an estimated cost of $858 Bn.  Some of that figure is from the actual costs -- either money to be paid out for a variety of things.   Some of that figure is from reductions in the revenue -- and taxes -- which would have been collected had the bill not been "negotiated," often referred to as "tax specialties."

Don't be mistaken.  MeanMesa is firmly on the side supporting passage of the bill.  However, that support doesn't include a "warm, fuzzy feeling" with respect to the amount of money the billionaires and their dancing puppets in the Senate were able to "charge" the country for the privilege of governing responsibly.

Believe it or not, MeanMesa has found it rather difficult to isolate many particularly credible numbers in the present tax model -- especially those which can distribute the amount of tax dollars coming from payments of specific marginal tax brackets.  Nonetheless, enough data has been retrieved to support a rough accounting.

If we wish to include the "estate tax" reductions included in the flurry of legislative compromise actions, we will have to add an additional $30 Bn in revenues lost from not collecting these taxes.  Because the estimated number of returns involved in this $30 Bn revenue loss is so small -- usually cited at fewer than 7,000 filings -- the number of beneficiaries of the policy has no statistical relevance to the main thread here.  With respect to the estate taxes, an additional complication arises from the fact that, while the revenue cost of the tax cuts is for a two year extension period, the term of the costs for the estate tax changes is spread over ten years.

(image source)

The "mathematics" of the tax cuts -

Here we can size up the results, again, "roughly," by driving the numbers through some generally available demographic data.

2 year Tax cuts -- middle class ("middle" and "lower" classes) -- $127 Bn

2 year Tax cuts -- top 2% ("ruling" class) $61 Bn 

Total Americans filing tax returns = 135 Mn = 135,000,000

Percentage of Americans in "the top 2%" = of course, 2%

135,000,000 total X .02 =  the "population" of  the  "top 2%"  =  2,700,000

135,000,000 total X .98 =  the "population" of the other 98% = 132,300,000

making our rough estimate of actual tax reductions look something like this

$61 Bn   /     2,700,000 =  $22,600 average tax cut per tax payer

$127 Bn / 132,300,000 =        $960 average tax cut per tax payer

MeanMesa realizes that "rough accounting" can lead to misunderstandings, but the true scope of the extortion remains, somewhat, interesting.  Don't be confused.  Consider this to be no more than simply "the cost of doing business with the Republicans."  You know, nothing personal.


For any MeanMesa visitor wishing to explore the numbers a little further, 

http://taxes.about.com/od/2009taxes/a/obama_tax_proposals_2.htm

http://www.insurancejournal.com/news/national/2010/12/17/115772.htm

However, now that we've trotted out some numbers, MeanMesa understands that the entire affair must also be placed into a more "personal" perspective.  Because the middle and lower class taxpayers are resting after a hard day's work, and because none of the billionaires in the "top 2%" we asked for an interview were at all interested, MeanMesa (MM) will have to fall back to the following fictional interviews with a middle class tax payer (MCTP) and a friendly billionaire ($FB$).

MeanMesa's Interview with a Middle Class Tax Payer

MM:  Thanks for taking the time to talk with me.  I'd like to ask you  a couple of questions about your feelings concerning the tax bill which has been negotiated in the lame duck session of the Congress.

MCTP:  Sure, no problem.  I was glad to see that they were able to do something to keep the tax rates from increasing.  I'm having a pretty rough time right now, and higher taxes would have been a real pain.  Probably bad for the economy, too.

MM:  Were you aware of the extension of the giant tax breaks for the "top 25" highest paid Americans included in the package?  What are your thoughts about that?

MCTP:  Well, they've got to eat, too.  Plus, the rich people are the ones who create small businesses and jobs.  They need a tax break so they will have enough money to get the economy fixed.

MM:  Were you aware that the history of cutting taxes for the highest income brackets shows that it doesn't actually result in more job creation?

MCTP:  I'm not sure I understand that, but I know that the Congress wouldn't have extended their tax cuts if it didn't work.  We're lucky that the Republicans figured out some way to do that without raising the national debt, and I'm glad that everyone on both sides was patriotic enough to act together to recover the economy.  We all have to be willing to sacrifice to get out of this mess.

MM:  Uh, okay.  Thanks for taking the time to talk about it.

(image source)

MeanMesa's Interview with a Friendly Billionaire

MM:  I want to thank you for taking the time to talk with me.  I'm sorry that I'm late, but I had a bit of a delay trying to get through security at the main gate to your home here.

$FB$: 

MM:  Of course.  I am here to ask you how you are feeling about the extension of the tax cuts for folks in your bracket.  Have you been following the compromise negotiations?

$FB$:  First of all, the people who pay taxes in my bracket are not "folks."  The "folks" are the ones who ram rodded the $127 Bn through.  All of us on my side wound up with almost nothing compared to that, something like $60 Bn or so.  Of course we were disappointed, but we've always been completely ready to sacrifice whatever it may take for the good of the country.  I always say "The business of America is business!"

MM:  Do you think that the $60 Bn tax cut extension going to your bracket will help create jobs and restore the economy?

$FB$:  Well, I suppose so, but not nearly as much as if the economic situation in this country were a little more "business friendly," if you know what I mean.  Unlike the lower classes who got a "$127 Bn payoff," those of us trying to make ends meet with our paltry little tax cut won't really have enough extra cash to hire people of invest in our businesses.

MM:  Actually, corporate business profits are up almost 30%.  They are higher now than they've ever been in the history of the country.  What would you mean by "friendlier" to business beyond than that?

$FB$:  Sure, those are good profits, but a lot of that came from the  low interest  capital that got shoved down our throats with the TARP.  Who' wouldn't expect us to make money with all that extra cash?  The "unfriendly" part of this last legislation comes from the fact that it pays a lot of poor people not to work.  When those "folks" don't get a pay check, they can't borrow the money to buy all of my corporation's Chinese imports.  We had to instruct our Senators to go ahead and vote for the thing or no one would have gotten a tax cut.  It was like paying a ransom.

MM:  A lot of Americans consider the $60 Bn that your bracket got as little more than ransom.  Your corporate Senators wouldn't have voted for the extension of unemployment benefits if your $60 Bn hadn't been included.  What do you think about that sentiment?

$FB$:  Well, first of all, it costs a lot of money to keep those Senators ready to, uh, vote to, uh, rebuild American prosperity.  Beyond that, the White House was pushing us in a very unfriendly way.  Our plan for the economic collapse, although it was off to a good start, was not yet ready to procure all the assets we had in mind when we started.  There are some very big cash expenditures looming out ahead for us.

MM:  I'm not sure I understand.  What's blocking your "plan?"

$FB$:  Well, we wanted to reduce our costs here in the US.  Of course, we've moved everything we could -- our plants, warehouses, factories, even our call centers -- to far more advantageous places with low labor rates, governments who know how to do business with us and lots of incentives, but most of the people in my bracket would like to gradually move all that back here after conditions improve.

MM:  That sounds like it would be good for the recovery.  I'd like to think that you would want to do that as soon as possible, and as far as waiting for better economic conditions here, wouldn't it be a case of the sooner the better?

$FB$:  Not really.  Our economic collapse plan has already filled up our capital reserves with the TARP money quite nicely, but we have to wait for prices to fall  even more before we move on from here.  The price we will have to pay to acquire big target assets like hotels, railroads and utilities has to collapse just a little more before we go ahead and buy everything we want.   Haven't you ever played Monopoly? The $60 Bn tax cut was nothing more than a sort of "peace offering," the way I see it.

After we buy all the houses, factories and other businesses for a dime on the dollar, we plan to let the economy start to recover.  If the Congress doesn't cooperate, we'll just wreck it again, you know, wreck whatever is left after last time.  Sooner or later, they will give us what we deserve.

We don't like being extorted for unemployment benefits and health care and the like.  We've, uh, worked hard for our money, and the lower classes are just trying to bully us into giving it to them. If there are going to be tax cut extensions, most of them should come to us.

I'm late for tennis.  My house security will show you out.

In Memoriam: The Republicans

A glimpse from the MeanMesa "Future History" Series:

House Tea Bags in all their glory.  ca: 2011

Tea Bag base voters in all their glory.  ca: 2011

 

Republican Party becomes regional, rural.  ca: 2011

An excerpt from the Condensed History of the World, 413th edition, “Glossary of Contemporary Terms and Titles Throughout History.” Date of original publication 2954, [P.O.E.]. Date of 413th edition 3418, [P.O.E.].

Republican Party (Republican, -s [proper n.]; Republican [proper adj.], republican [common adj.])

The term Republican or republican was used intermittently as a title [“brand”] for a variety of political parties and other less well defined bodies of political philosophy throughout classical times [“ancient Greek, Roman, etc.”] to roughly the first years P.O.E. [Post Obama Emergence]. The self-imposed extinction of the last modern form of “Republican Party” [see: “GOP”] in the final days of the American Imperium [2,000 - 2,008 C.E. {“Common Era”}] is widely considered a formative factor in shaping modern civilization.

One contemporary account: (circa 2009, C.E.) "It was amazing and unexpected. Every Republican in the House simply surrendered at once. Clearly, the aging party leadership had imposed its will in favor of one last, symbolic gesture as a monument to the purity of the party's dedication to old style obstructionism. Although many at the time considered the action to be no more than 'sour grapes' at a spending bill moving through its legislative process too fast for traditional Republican looting, the unanimous self-destruction of the Party itself caught everyone by surprise. True to the end, Republicans still willing to speak publicly, continued to promote the Party's ancient mantra: "The entire purpose of the creation of the human race is to cut taxes."

Many historical observers, writing at the time, consider the Republican Party’s [GOP] attempt at the obstruction of the initial Obama economic rescue plan the most idealistic case of voluntary self-dissolution of any political entity, an estimate made especially pungent by the Republican Party’s remarkable domination of all power systems only one or two years prior. The self-sacrificing bravery of those ancient Republicans [GOP] to take such a historically unlikely action attests to strong nationalistic patriotism, long a hallmark claimed by the group.

The event set a precedent followed by many similar political entities in the years since. Numerous “old style” dictators, theocracies and war lords, seeing the historic similarity of their various failed positions of violently imposed autocracy to the last Republicans, followed the example of the Republican Party's [GOP] self-dissolution to peacefully end their periods of control. Although condemned as ruthlessly opportunistic and corrupt at the time of its final dissolution, contemporary criticism of the Republican Party [GOP] has faded in favor of recognition of the new model of social order implied by this remarkable action of peaceful, voluntary self-extinction.

The term “Republican Solution” is now widely used to suggest to troubled autocracies around the globe that it is “Time to go quietly into the night.” Although widely hated at the time of its voluntary self-destruction, the modern evaluation of the ancient Republican Party's honorable embrace of its terminal destiny has rehabilitated the reputation of the name in modern times.

For a more contemporary account of the historic House vote:
http://money.cnn.com/2009/01/28/news/economy/house_vote_wednesday/index.htm?postversion=2009012818