Our Nation of Imaginary Cause and Effect

There’s a progression to things. You start out trying to figure out what works – infants learn pretty quickly that crying gets you what you need. Having not yet developed any language skills it’s all hit-and-miss for an infant – you can’t say you’re hungry or frightened or you’ve just pooped your pants, so you cry. Ah, that works. Later, when you’ve mastered the rudiments of language, you continue to futz around with what seems to work, and what doesn’t – so you realize this sort of humble explanation gets you out of trouble, or that sort of white lie, or proud defiance or getting all big-eyed cute, depending on the situation and just who is mad at you at the moment. Later, with guys, it’s which pickup lines work and which have you end up shamed and looking exceptionally foolish. Young women learn when to bat their eyes and play dumb, and when to dismiss a fool with a few carefully chosen ice-cold logical words. You make adjustments. It’s all a process of figuring out what works. You don’t think about it much. It’s all trial-and-error.

Of course because you don’t think about it you can get into a bit of trouble. The young baseball player realizes that every time he’s gotten a hit he had that rabbit’s foot in his pocket, or every time he got a hit, the night before he ate fried chicken with a side of okra. So he doesn’t do anything different. What harm could it do? It might help. You never know. You don’t mess with what works. And of course people borrow these notions from each other – no actor says anything about the current production of Macbeth – it’s always the Scottish Play, as someone broke a leg once, or so they say. And no one walks under ladders. You don’t tempt fate. You rub the Buddha’s belly.

But of course things do go wrong – the ballplayer goes hitless for three weeks, rabbit’s foot and chicken and okra notwithstanding. You rubbed the Buddha’s belly and your cat died. Something is up. It’s time to reconsider things. You move from thinking about what works to thinking about how things work – actual cause and effect. And that’s the rest of your life, trying to figure out how things work. You want to know what causes what. Sure, it’s tedious – but it’s useful.

But some don’t think it’s useful. In our national dialog about economic policy – we’ll soon have an additional three million unemployed Americas whose meager support has been cut off entirely and will have no way at all to live – we seem to be stuck in an argument between those who say they know what works – cut taxes and have the government stop doing things and the economy will suddenly recover – and those who say they know how things work – shutting things down, well, shuts things down, and with many millions more with nothing, demand for anything will collapse, and it’s all over.

But Senator Jon Kyl of Arizona offers this – Extend the Bush Tax Cuts for the Wealthy Even If They Add to the Deficit. In this senator’s mind, if you have to choose between continuing the massive tax cuts and a ballooning deficit it’s best to run a deficit, so long as you keep lots of money in the hands of the movers and shakers who are the key people who keep America thriving. You have to accept certain things – tens of millions left high and dry and starving in the streets – for more important things. Lots of money in the hands of the right people – that’s the ticket. Sure it might be painful to some – you have to cut services to those who aren’t wealthy, so there’s no social safety net for them at all, but they’ll understand. Their pain is for the greater good. And everyone knows what works. Tax cuts create widespread prosperity. That’s what works.

But how does that work? Where’s the proof in terms of cause and effect? Isn’t this fried chicken and okra the night before the big game?

Well, that what-works side says no, there is cause and effect:

“That’s been the majority Republican view for some time,” Minority Leader Mitch McConnell told Talking Points Memo DC this afternoon after the weekly GOP press conference. “That there’s no evidence whatsoever that the Bush tax cuts actually diminished revenue. They increased revenue, because of the vibrancy of these tax cuts in the economy.”

They increased revenue, really? We went from a large surplus to a record deficit – and by the way, the economy collapsed, the Dow ended the decade exactly where it began, and in eight years of Bush we added three million jobs compared to Clinton’s twenty-two million, not enough to keep up with population growth. This is vibrancy compared to what, exactly? And the Bush Tax cuts actually increased revenue, which accounts for this vibrancy of the economy. And there’s no evidence whatsoever that decreasing the revenue of the government by half a trillion or so decreased the revenue of the government by half a trillion or so. Why would you think that?

Of course this is a philosophic question. See Ezra Klein – “There’s an ontological question here about what, exactly, McConnell considers to be ‘evidence.'”

Klein suggests looking at Congressional Budget Office’s estimations – “The new CBO data show that changes in law enacted since January 2001 increased the deficit by $539 billion in 2005. In the absence of such legislation, the nation would have a surplus this year. Tax cuts account for almost half – 48 percent – of this $539 billion in increased costs.”

Or you could look at the Committee for a Responsible Federal Budget – as Klein notes that their budget calculator shows that the tax cuts will cost 3.28 trillion dollars between 2011 and 2018. And there’s George W. Bush’s Council of Economic Advisors chair, Greg Mankiw – he used the term “charlatans and cranks” for people who believed that “broad-based income tax cuts would have such large supply-side effects that the tax cuts would raise tax revenue.” That’s what he said – “I did not find such a claim credible, based on the available evidence. I never have, and I still don’t.”

And Kos – Markos Moulitsas Zúniga – suggests the what-works guys consider their own logic:

There’s also the freakin’ fact that Bush inherited big surpluses from Clinton, and left the nation’s finances in shambles by the time he left. How come Bush’s tax cuts didn’t pay for themselves?

And finally, there was the Obama tax cuts in the stimulus package – the largest in the nation’s history. Somehow, given all the screaming about the deficit, it’s pretty obvious those tax cuts didn’t pay for themselves.

Maybe that’s unfair, but if you say X causes Y, and it hasn’t, and never has – and the data are right there in black and white – you might want to reconsider. That’s not how things work. That’s rabbit’s foot stuff, or as Zúniga says – “Seriously, how can one have a real debate in this country when one of the political parties is so divorced from reality and common sense?”

Steve Benen puts it this way:

Honestly, what’s to be done when an entire political party buys a first class ticket to Bizarro World? It’s one thing when right-wing blogs and Fox News hosts spout such nonsense, but how does our political system function when “virtually every Republican” believes reckless tax cuts for the wealthy that created huge deficits actually “increased revenue”? How can we have an intelligent conversation with those who use the word “vibrancy” when describing the economy in the Bush years?

Republicans aren’t just wrong about this; they’re pathologically confused. The evidence isn’t ambiguous – Bush’s tax cuts led to massive deficits, and if existing policies are left in place those tax policies will be the single biggest factor in our budget deficits for many years to come.

Yes. Look at the evidence – that’s how things work, but as Benen notes, the “how” in all this is being lost:

As far as “virtually every Republican” is concerned, the incontrovertible evidence just isn’t real. They see reality, but prefer to replace it with a fantasy they find more ideologically pleasing. It makes meaningful, substantive debate quite literally impossible – there’s no foundation of reality to build upon. It’s like trying to teach algebra to someone who believes arithmetic is a scam.

It’s also a reminder that, as conservative as Republicans have been in recent years, they’re not done moving off the right-wing cliff. Just a few years ago, the Bush/Cheney Office of Management and Budget and the Bush/Cheney Council of Economic Advisers fundamentally rejected the notion that tax cuts can pay for themselves. Now, “virtually every Republican” accepts as gospel an argument even Bush’s economists found to be devoid of any policy seriousness.

Paul Krugman calls this the Republicans’ invincible ignorance:

In a way you have to wonder what point there even is in trying to argue here. But anyway, look: it’s been a long time since Morning in America. We’ve now been through two two-term administrations, one of which raised taxes, the other of which cut them. Which looks like it presided over a more vibrant economy?

And then he runs the numbers, with charts and graphs and all, as he is an economist with his Nobel Prize and all:

In short, the notion that tax cuts pay for themselves has no empirical support. And yet the GOP leadership – which claims to be oh so worried about the deficit – is willing to stake America’s solvency on its belief that tax cuts are free.

But he’s a how-things-work guy, not a what-seems-to-work-but-we-don’t-know-how kind of guy. And he probably walks under ladders just for the fun of it, because it drives those who don’t much concern themselves with cause and effect quite crazy. They call him a damned theorist, and refer to themselves as realists or something.

For them he adds this:

Also, for those readers who complain that I’m too partisan – that I should admit that there are two sides to the issues – this is a prime example of my problem. How am I supposed to pretend that these are serious people? The facts really do have a well-known liberal bias.

But there really is a bit of don’t-bother-me-with-the-facts kind of thing going on here – like that business with the Scottish Play, they’ve heard how things work somewhere or other, and it will do. And actually they heard it from Ronald Reagan’s key economic theorist, Art Laffer, with his Laffer Curve – the key to supply-side economics. If the government takes in less money it will take in more money, eventually. But Laffer created a curve, not an either-or model – you try to find the sweet spot on the curve, where you balance tax revenue to fund operations against low-tax free-market stimulus, and that spot shifts all the time. These guys turned that curve into a rabbit’s foot.

You might recall that Ronald Reagan made supply-side economics a household phrase, and he promised an across the board reduction in income tax rates and an even larger reduction in capital gains tax rates – and when vying with Reagan for the Republican Party presidential nomination for the 1980 election, George H. W. Bush scoffed at Reagan’s supply-side policies, calling them “voodoo economics.” But he gave in – he had to, to win the Republican nomination in 1988, and lost in his re-election bid in 1992 when after buying it all – Read my lips. No new taxes – he raised taxes. You don’t mess with the rabbit’s foot crowd. You learn voodoo. And then if you practice causality, you’re gone.

And see this:

On January 3, 2007, George W. Bush wrote an article claiming “It is also a fact that our tax cuts have fueled robust economic growth and record revenues.” Andrew Samwick, who was Chief Economist on Bush’s Council of Economic Advisers from 2003-2004 responded to the claim:

“You are smart people. You know that the tax cuts have not fueled record revenues. You know what it takes to establish causality. You know that the first order effect of cutting taxes is to lower tax revenues. We all agree that the ultimate reduction in tax revenues can be less than this first order effect, because lower tax rates encourage greater economic activity and thus expand the tax base. No thoughtful person believes that this possible offset more than compensated for the first effect for these tax cuts. Not a single one.”

Some guys don’t hit-and-miss guess about what works. They know what it takes to establish causality – and causality is how things work. After one’s teenage years one tends to learn that, but some get stuck as best-guess teenagers.

Benen also adds this:

There was a six-year stretch in which the Bush/Cheney administration got most of what it wanted from Congress. It was as explicit an example, perhaps ever, of conservative Republicans governing exactly as they had always wanted to. The results were nearly catastrophic, and the nation learned a valuable lesson – the right’s ideas, when put in practice, don’t work.

And yet, with just four months to go before the midterm elections, Republican candidates seem to seriously believe if we just go back to the policies that didn’t work, we’ll all be better off. Karl Rove wants Republicans to promise to return to Bush’s economic agenda; several conservative candidates want to bring back Bush’s Social Security agenda; and in Florida, Marco Rubio wants to bring back Bush’s tax agenda.

The Rubio thing is interesting – he has a new twelve-point plan to grow the economy – pretty much identical to the agenda of the George W. Bush administration. Eight of the points are either cutting taxes or halting tax increases, and Benen add this:

Bush’s tax policies failed to deliver the robust economic growth the right promised, and led to the weakest decade of job growth in generations. While the right heralded these tax policies as a triumph when they were approved, the results were a disaster – enormous deficits, trillions of dollars in additional debt, an exacerbated gap between the rich and poor, and a devastating recession.

Marco Rubio thinks the policies that produced these results simply need to be brought back, and tried again. Indeed, as Pat Garofalo noted, “The cuts that Rubio proposes would also spend trillions of dollars while overwhelmingly sending the benefits to the very rich. In fact, at the 2009 level, the estate tax only affects the richest 0.2 percent of households in the country. So Rubio would spend billions on the hope that a tiny percentage of the population creates some jobs.”

On a related note, how would Rubio, a self-proclaimed deficit “hawk,” pay for his Bush-inspired tax agenda? He hasn’t said. Imagine that.

But you see, that’s a “how” question, not a “what” question. We’re talking two different ways of dealing with the world here.

But we’re always trying to figure out how things work, and Jonathan Bernstein in this item suggests we don’t even know how democracy works.

He notes the Boston Globe ran that now popular item by Joe Keohane, about cognitive biases that researchers have discovered and how they result in ill-informed citizens, and Bernstein adds this:

So, if voters aren’t very rational, or very good at processing information, or are mostly ignorant about politics and public affairs – what does that tell us about democracy?

Some, in fact, see such information as a threat to democracy. In fact, it’s only really a threat to one version of democracy, a Good Government, League-of-Women-Voters interpretation of democracy. In that version, unattached individuals carefully study The Issues, decide what constitutes good policy, then spend time researching candidates to see what the candidates say about those Issues, and support those candidates with whom they agree. Finding out that most voters do things in reverse order (they generally pick a party, support candidates because they belong to that party, then take issue positions from that party and even believe facts based on what party leaders tell them is true) pretty much destroys the viability of that version of democracy.

Ah, so that’s how things work. No wonder we’re in trouble. Everyone is doing that rabbit’s foot thing.

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About Alan

The editor is a former systems manager for a large California-based HMO, and a former senior systems manager for Northrop, Hughes-Raytheon, Computer Sciences Corporation, Perot Systems and other such organizations. One position was managing the financial and payroll systems for a large hospital chain. And somewhere in there was a two-year stint in Canada running the systems shop at a General Motors locomotive factory - in London, Ontario. That explains Canadian matters scattered through these pages. Otherwise, think large-scale HR, payroll, financial and manufacturing systems. A résumé is available if you wish. The editor has a graduate degree in Eighteenth-Century British Literature from Duke University where he was a National Woodrow Wilson Fellow, and taught English and music in upstate New York in the seventies, and then in the early eighties moved to California and left teaching. The editor currently resides in Hollywood California, a block north of the Sunset Strip.
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