Lies and liars

The frustration of Democrats as the November elections approach arises in part from the effectiveness of the lies being told by the other side. Like children at recess screaming in the school yard, “not so!” “is, too,” neither side is accomplishing anything useful . But the liars are winning.

 The best example, of course, is the lie that President Obama is a Muslim. The effectiveness of this lie is remarkable for at least two reasons: No one in power believes it, and in saying “not so,” the truth tellers appear to be besmirching a prominent religion.

In terms of digging America out of the Great Recession, the liars hold a similar position. No one in power wants the U.S. economy not to rebound, if for no other reason than the risk that the size of political contribution checks might diminish, and the truth-tellers seem to be denying a conventional tenet of economic wisdom. Since the recession was caused by a global debt binge (driven more by lenders than by borrowers), advocating more debt financed economic activity seems absurd.

 President Obama, who used a Labor Day speech in Milwaukee to address U.S. infrastructure needs, at long last seems to be focusing on the primary issue of his first term – the U.S. economy.  In the spirit of better late than never, Obama needs to confront the lies about economic growth head on, even while recognizing that the liars will have the same advantage as they do in lying about his religion.

The softest and therefore most pernicious lie is that Obama administration policies have created “uncertainty” among business owners and managers, who thereby are frozen in place and unable or unwilling to make normal business decisions.

 This lie falls easily off the tongue, especially among supposedly objective reporters, because it seems commonsensical. But it’s a lie, nonetheless, for four reasons.

First, there is never a moment, except in a theoretical arbitrage situation, in which business owners and managers enjoy certainty. The shares of stock you own would plunge in value if that were true.

Second, there is no evidence that businesses, especially the much glorified small business sector, make decisions based on speculation about possible future tax and spending policies from Washington.  The driver of business is real-time consumer demand, not political posturing about future economic policies by the left or right.

 Third, evidence points to the Republican Party under President George W. Bush as shifting economic policy from a focus on national interest and economic stability to a focus on the narrow, short-term greed of a political base, in this case the extremely wealthy. This shift generated more uncertainty about national economic policy than anything Obama has done. That's because Republicans aren't always in power, and a volatile, tit-for-tat tax regime responding to the last election would be ruinous.

As New York University law professor Daniel Shavior remarks in his terrific book, Decoding the U.S. Corporate Tax (The Urban Institute Press):

“Sometimes we hear of a solution in search of a problem, which someone offers to a baffled world despite the lack of any discernible need for it. Examples include the George W. Bush administration’s endless advocacy of tax cuts, interminable concert tours by the Rolling Stones when they are past age 60, and the live-action theatrical movie version of Scoobey-Doo.”

Fourth and perhaps most important, there is no evidence that Obama wants to increase taxes, except to correct the outrageous and destructive windfall Bush handed the super-rich – a move that not only would generate needed revenue but, as Shavior suggests, start the process of purging broad national tax policy-making from cynical, destabilizing appeals to a political party’s base.

 

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