Keynes vs. Marx

Or, "Red State Dems expose Blue State Dems' pink slips":

There's nothing like the prospect of an electoral rout to concentrate the incumbent mind, and so all of a sudden rank-and-file Democrats in Congress are saying maybe they shouldn't let the 2003 tax rates expire after all. Now if they can only persuade their Speaker of the House, the Treasury Secretary and President Obama.

The revelation that tax increases could hurt the economy has recently been heard from Senators Evan Bayh of Indiana, Ben Nelson of Nebraska, and, most surprising, even from Kent Conrad of North Dakota. On a scale of unlikely events, this is like the Pope coming out against celibacy. As Senate Budget Chairman, Mr. Conrad has rarely seen a tax increase he didn't like, but this week he averred that "As a general rule, you don't want to be cutting spending or raising taxes in the midst of a downturn."

Over in the House, Bobby Bright of Alabama even dared to defend the rich Americans who Democrats have been pounding for years. “I don’t care if it’s the wealthiest of the wealthy. You don’t raise their taxes,” he told The Hill newspaper. “In a recession you don’t tax, burden and restrict.” Better don the body armor on your next visit to the Speaker’s office, Bobby…

The reality is that the increase in the top marginal income tax rate to higher than 41% will hit the most profitable small businesses especially hard. That’s because millions of business owners pay individual rates under Subchapter S of the tax code. Today, this means they pay the same top rate as the Fortune 500: 35%. But if the 2003 tax rates expire, they’ll suddenly pay more than Goldman Sachs.

It's an amazing reflection on the twisted times in which we live that what these red-state Donks are saying is headline-worthy.  It's not like any of them have become born-again supply-siders; all they're doing is stating Keynesian economic doctrine, which teaches that in economic downturns you cut taxes and raise spending, and in economic booms you raise taxes and cut spending.  The point is for fiscal policy to be countercyclical, to limit unemployment in the former case, and inflation in the latter.

Newsflash: The Obama/Pelosi/Reid axis is NOT Keynesian.  They're not interested in macroeconomic tinkering to "fine-tune" the existing quasi-capitalist system.  They're intent upon destroying the existing quasi-capitalist system, sweeping away the wreckage, and replacing it with a Soviet socialist system.  Allowing the Bush tax cuts to expire and driving a stake through the heart of American small businesspeople and investors - the laboring heart of U.S. free enterprise, and therefore the engine of the U.S. economy - is fundamental to that end.

It's the difference between continuing to lurch along in a state of more or less permanent recession and collapsing into an unmistakably outright depression - the ultimate exploitable crisis.

It's not difficult to see the White House political angle on this.  They know, and always did know (even if congressional Donks somehow didn't), that ramming through The One's domestic communization agenda was going to cost them control of Congress in the short term.  Allowing a gargantuan automatic tax increase to smash into the mortally wounded economy they sabotaged just as the new, Republican-controlled 112th Congress is sworn will be spun as being direct cause & effect.  Having to deal with another Panic on top of repealing O-Care and FinReg and defunding Hogzilla will, so the thinking doubtless goes, overload the Boehner/McConnell plate, guaranteeing GOP failure while Red Barry can pose as some sort of "defender of the people" by "heroically" thwarting the will of the Congress they elected to carry it out.

If you're looking for Great Depression parallels, we've already got the 1929 stock market crash and the Panic of 2008.  The two principle causes of turning that recession into a depression - the Federal Reserve tightening up credit like a bull's ass in fly season and the Smoot-Hawley tariff - have their contemporary parallels in the just-signed Dodd-Frank FinReg bill and letting the Bush tax cuts go away.  If you think the economy is bad now, a year from now this country will look like 1930s newsreels.

And there will stand Barack Obama, blocking the road back to recovery and national healing, his boot still on our throats as we go down for the third time, blaming the GOP - and us - for what he's done to America, preaching the hopenchange gospel as Rome burns all around him - right according to plan.

This is the horrible truth of what sixty-eight million numbnuts inflicted on us twenty months ago.  It started dawning on most of the public a year ago.  Now that realization is finally cresting among Democrats - and not all from "red" states, either:

Even Jerrold Nadler, a liberal from central casting, is worrying publicly that the tax hike will hit his New York constituents too hard. And he's certainly right given that the combined top state and federal income tax rate will be close to 54% in 2011 in New York City. Mr. Nadler is proposing—seriously—to adjust the income tax brackets based on regional cost of living so fewer New Yorkers pay the rates Mr. Nadler has spent a decade saying "the rich" should pay. How about if we compromise and keep rates lower for both Nebraska and New York?

My 2010 election tote board currently shows GOP gains of seven Senate seats and sixty-one House seats.  I still wonder if the polls are understating the midterm tsunami that's coming - and how many shell-shocked Donk survivors will be pulled along with it.