Really? No? Come on. Shakespeare, people. Anyway, Americans, and probably normal humans, have this thing. Someone dies, and you say nice things about that person. I, however, am me. Now, my standards have been lowered since Donald Trump became the center of the universe. All you have to do is not be the most despicable thing in history, and you're better than the current president. Yay, you! However, I still have some standards, and while everyone else is bemoaning the death of Bush the Elder, I'm going to start typing and trying to figure out how to turn that "Bush the Elder" line into a reference to Pliny the Elder.
Come on, people. Classics!
Let's start with a phrase I hate. There are lots of phrases I hate. One, in particular, comes to mind in reference to George Herbert Walker Bush. "Fiscal conservative." Don't ever use it around me. It doesn't mean a fucking thing. To conserve-- to save. To be cautious. Fiscal. In reference to money. Take the terms at face value, and you arrive at the conclusion that a "fiscal conservative" is a person whose approach to the budget is to be cautious with spending, and/or attempt to balance the budget. You might draw some analogy between household budgets and the federal budget, but you are a moron if you do. No household can either set its own income (the tax rate), nor print its own money. Legally, anyway.* Nor does a government have, as its primary concern, maximizing its surplus. Stupid, stupid analogy used by people who just aren't thinking this through. Anyway, though, if you just take the phrase at face value, you might arrive at the conclusion that a "fiscal conservative" is someone who wants to restrict spending and balance the budget.
Such creatures used to exist in the Republican Party. One of them went by the name of Bob Dole, before he started leering creepily at pop tarts and hawking certain pills. As his eventual running mate in 1996 said of him, he never met a tax he didn't hike. However, by 1996, Dole had decided that taxes were EEEEEVIL!!!!, and he ran his campaign on a flat tax proposal, slashing rates across the board to 17%. What would that do to deficits? Raise them, of course. Unless you are just a denialist, like his running mate, Jack Kemp. And... the entire Republican Party right now.
What happened to turn Bob Dole, and the entire Republican Party into a group of people who can't do basic arithmetic?
George Herbert Walker Bush.
OK, there were other people involved, but I'm burying Bush the Elder today, so let's throw some dirt on that motherfucker's grave. Why? Because I still like math, and I still hate bullshit, and just because you're dead doesn't mean you didn't do what you done did. (That was even more fun to write than you think).
Those other people? Arthur Laffer. The father of supply-side economics. It goes something like this. How much revenue will the government take in at a zero percent tax rate? Bupkis. Why? Any number multiplied by bupkis is bupkis. OK, here's where it gets fun. Suppose the tax rate is 100%. Whatever money you make, the IRS takes ALL of it. How much revenue will the government get? Still bupkis! Why? Nobody works. There's no point. If your take-home pay is zero percent, then why work? Everything shuts down at 100% tax rates, so the government's total revenue is bupkis.
So, the government's revenue at 0% tax rate is 0, and the government's revenue at 100% tax rate is 0. Cool, right? That means somewhere between a 0% tax rate and a 100% tax rate is a tax rate that maximizes revenue. Start at 0%, and then go up. Government revenue first goes up, then goes back down to zero.
That's the Laffer Curve. And mathematically, it has to be true! Arthur Laffer is right.
Yes, Arthur Laffer is right.
In the most basic, abstract way.
But, where is the peak? Where is government revenue maximized? If you are on the left side of the curve, then you increase revenue by raising taxes. If you are on the right side of the curve, you increase revenue by cutting taxes because the tax rate is so high as to be confiscatory. At a 95% tax rate, you aren't at 100%, but the tax rate is still so high that you can probably get more revenue by cutting taxes to a less confiscatory rate. Whether you raise revenue by raising taxes or cutting taxes depends on where you are on the curve relative to the peak. At what point does the tax rate get so high that it is confiscatory to the point that you would raise revenue by cutting the tax rate?
Here's the problem for Laffer. You can't derive that from first principles. You can make some educated guesses, and you can try to measure it, but it isn't something that follows logically from the math.
However, if you just fuckin' hate taxes because you're an Ayn Rand cultist, or some fuckin' shit like that, then a) get some better taste in books because that twit couldn't write her way out of a paper bag, b) she was a sociopath, c) she didn't understand economics, but d) you'll make some interesting assumptions about where you are on the Laffer Curve. You'll latch onto any justification to cut taxes. The assertion that a tax cut will raise revenue will sound awesome to you, so you'll just assert, sans evidence, that we must be on the right-hand side of the Laffer Curve, implying that a tax cut will raise revenue. Hell, let's just chop off the left-hand side altogether.
Fuck it. It's just way easier to say that cutting taxes raises revenue by spurring economic growth. Is that what the Laffer Curve actually says? No, but seeing through that line of bullshit requires understanding math and concept, and these morons aren't even trying to do that. This is all about ex post facto rationalizations for tax cuts among people who just want their fuckin' tax cuts NOW NOW NOW. The Laffer Curve actually says that if you are on the left-hand side of the curve, you raise revenue by raising taxes, and nobody in the supply-side camp will ever even acknowledge the possibility of a tax increase raising revenue, at least among the politicians. The economists get cagier, but they're economists, so...
Anyway, that's supply-side economics. At its core, there is a correct idea that is easily exploited in bad faith by people who just want to cut taxes for the sake of cutting taxes. And I write this as someone who isn't opposed to tax cuts, as a general rule. Do it right, at the right time, and I'm on-board. Bad faith, though, pisses me off. And that brings me to our stabbing victim, Caesar.
I ain't praisin' him. You see, it took some time for the cancer of full-blown supply-siderism to metastasize in the Republican Party. In 1980, Ronald Reagan and Herbie both ran for the Republican nomination for president. Reagan, of course, fully embraced supply-siderism, and since he was a moron, he had no qualms about swallowing the doctrine fully. Tax cuts increase revenue! It wasn't that the tax rate was past the maximizing point on the curve, or anything like that. The left-hand side of the curve just didn't exist for the Reaganites. You know who called bullshit? George Herbert Walker Bush. He was a... I hate to say it... "fiscal conservative," based on how you would interpret the phrase if you had no preconceptions. He was what we now call a "deficit hawk." He didn't like deficits. Why not? Not the point. There are actually times when deficits are fine, according to Keynesian economics, but Bush the Elder was a deficit hawk who thought Laffer was full of shit, and that Reagan was full of shit. Because they were full of shit. Bush called them on it.
Then, Reagan won the nomination, offered Bush the VP slot, and told him to get with the program, on taxes and other issues. Like a good, little automaton, Bushie did. And so begins the GOP's total abandonment of mathematics or any pretense to intellectual honesty. Nice goin', Georgie-poo!
Fast-forward to 1988, and I could write about how horrible his racist campaign against Michael Dukakis was, and how that set the groundwork for what Trump does, but that would be getting off-track. Bush was not a good person. Instead, let's keep this focused on his complete abandonment of principles and the basic tenets of arithmetic in favor of bullshit. In 1988, Bush's campaign is remembered largely for one phrase-- "Read my lips: No new taxes." The perfect demonstration of his Stepford-ification. Principles? What principles? The GOP had gone full-Laffer, so Bush gave up his commitment to the tenets of arithmetic.
And then... 1990 came along. You see, the problem when you try to ignore math is that eventually, math wins. There were a set of budgetary rules in effect. Gramm-Rudman-Hollings. Basically, when the deficit got too big, across-the-board spending cuts would go into effect. "Sequestration." Does that word sound familiar? We'll return to it. Democrats held both houses of Congress, and said that taxes had to go up to avoid sequestration under Gramm-Rudman-Hollings. Bush looked at the sequestration, and decided he'd rather break his no-new-taxes pledge than watch sequestration go into effect. So, he did. Math.
And then he lost his reelection campaign in 1992. Why? Ask a political scientist (hi!), and many of us will tell you that it was a combination of factors like the fact that the GOP had won three terms in a row, lingering concerns over a recession (which had actually ended long before the election), and possibly some spoiler effects from Perot, but mostly, that three-term penalty thing was hard to get around. Ask a Republican today, and they'll tell you it was because Bush broke his no-new-taxes pledge. Perhaps more than anything else, Bush's loss in 1992 solidified the Republican dogma of opposition to taxes, in the context of his 1988 pledge.
Which he had no business making. He knew it was bullshit, and it grabbed him in the ass. Oh, should I not use that phrase for the sexual harasser? You know about that, right? Bury, don't praise.
The next time the GOP faced the prospect of sequestration was after the passage of the 2011 Budget Control Act. The Act created a "supercommittee" to propose deficit reduction measures, and if they failed, sequestration would go into effect. Predictably, the supercommittee failed because the Democrats insisted that a non-zero proportion of the measures consist of tax increases, and the Republicans insisted on zero tax increases. The Republicans decided that sequestration was preferable to tax increases. Read their lips. No more George H.W. Bushes.
Right now, the Republican Party is fully in the grips of supply-siderism and vehemently opposed to the notion of actually performing a task called "math." Or, fine. "Maths," for any of you across the pond. If I'm doing Shakespeare today, I throw the Brits some spelling. Anyway, the GOP has lately insisted on having the Congressional Budget Office use "dynamic scoring" to reduce the cost estimates of their tax cuts, but regardless, they uniformly insist that tax cuts always pay for themselves. It is fascinating how little backlash there has been to Trump for his tax increases (tariffs), and the willingness of the GOP to include some tax increases in their 2018 bill, but on net, they're still a tax-cuts-for-the-sake-of-tax-cuts party, and math is verboten. The deficit is irrelevant to the party, and everyone in it, and yes, they were all full of shit when they were whining about the deficit during Obama's Presidency.
Part of the reason is George H.W. Bush. He knew supply-side economics was bunk. He went along with it anyway for the sake of his own advancement. When it bit him in the ass, that very fact was central to the hardening of the GOP's line against taxes. Now, it's impossible to find a Republican who will even acknowledge the possibility that raising taxes will ever raise revenue, even though that means disregarding the substance of Laffer. That's precisely the kind of anti-intellectual bullshit that gives you Donald Trump.
Someone needs to stand up for math. Or... maths. Whatever. Otherwise, you get Donald Trump, who will just say that he's great at math because his uncle was a professor at MIT. I wish that were a joke. It's only a joke in the existential sense.
So now I circle back to the phrase, "fiscal conservatism." What does it mean? Every single Republican politician supports tax cuts without specifying the spending cuts to balance them out under the premise that tax cuts always pay for themselves, since the left-hand side of the Laffer Curve doesn't exist. That's the set of policies advocated by those who call themselves, "fiscally conservative." Increasing the deficit with tax cuts unbalanced by spending cuts. That's not quite what they say, but I don't give a flying fuck what they say. I care what they do. There are no more deficit hawks in the GOP. Remember "Liddle" Bob Corker, and his cave on the deficit-increasing tax bill? Jeff Flake? There are zero deficit hawks in the Republican Party. Those who describe themselves as "fiscally conservative" aren't actually concerned with reducing the deficit. They just want to cut taxes. That's why I hate the term.
So, I'll end this post with two names. George Wallace and Lester Maddox. Lester Maddox was a Governor of Georgia who was a true believer in segregation. Vile, racist sack of shit. Probably less famous than George Wallace, the long-time governor of Alabama. Here's the thing about Wallace, though. He wasn't as much of a true believer. He was a con artist. He stirred up racist sentiment because that's what the racist voters of Alabama wanted, and Wallace wanted power. He did things he knew to be wrong for the sake of power.
Who was worse-- Maddox or Wallace? Meditate on that, or, like... something.
Supply-side economics is bullshit. If you are on the right-hand side of the Laffer Curve, you raise revenue by cutting taxes, but the entire GOP decided, long ago, that the left-hand side of the curve doesn't even exist. Even by Laffer's standards, that's bullshit. Some tea-bagging idiot like Louis Gohmert? He doesn't know shit from shinola. He believes that tax cuts raise revenue always and forever, but he also believes he's being monitored by the Feds for something... Gohmert is an idiot, but at least he's a true believer.
George H.W. Bush helped supply-siderism metastasize in the Republican Party, even though he knew it was bullshit. Call him the George Wallace of bad economic ideas.
Fuck that. He ran his 1988 campaign on Willie Horton, and even Lee Atwater eventually apologized for that. Just call the old bastard George Wallace.
*I suppose you can start your own cryptocurrency, and hope people are dumb enough to buy it even though stores won't accept it! Come to think of it, that keeps happening...