January 04, 2004

Debatable

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This afternoon I watched the Democratic presidential candidates debate in Iowa. Sharpton and Clark were no-shows, but the rest were there. I found it to be moderately informative. Dean did OK, Lieberman confirmed that his positions are the closest to Bush's, and Kucinich continues to be the furthest left. The transcript is here.

Some of you are interested in the candidates' positions on trade. Check out the first page, about half-way down, for a good back-and-forth on the issue. I for one am glad Gephardt took care of that giant sucking sound from Jordan.

I recently read Al Franken's Lies and the Lying Liars Who Tell Them: A Fair and Balanced Look at the Right. I'll have more to say about in the future, but among (many) other things, Franken takes Bush and others to task for abusing statistics to misrepresent his tax cuts. For example, when discussing who benefited, the amount of the average tax cut is often cited. This figure is arrived at by dividing the total size of the tax cut by the number of individuals or families affected. Because of the disparity in income distribution, this can be misleading. If everybody got a 1 cent tax cut, and I got the rest, the average individual tax cut would be the same. Or, as Franken puts it, "You and Bill Gates probably have an average net worth of $32 billion."

So two weeks ago, former Secretary of Labor Robert Reich and former White House economic adviser Lawrence Lindsey were on ABC News's This Week discussing Bush's economic policies. At one point, Lindsey plays the averages game, but with a twist:

LAWRENCE LINDSEY: What the secretary did not say was that it's actually those average working families that got the tax cut. Senator Lieberman pointed out in New Hampshire, the average working family in New Hampshire benefited $2700 a year from this tax cut. That's a bigger rise in their take-home pay than they got in any year during the 1990s which was supposed to be such a good time. So in fact, that is the reason for the tax cut. Yes, when we had the bubble burst, when we had the crash, we were in for some tough times. The president knew it. That's why he proposed the tax cut. It is that tax cut that's kept working families with their paychecks growing because of they now take home more of what they earn. And that's what's kept the economy growing and now we've got a self-sustaining economy.

ROBERT REICH: Larry, I've heard again and again, the $2700 average, was the average amount that the average family took back. But when you hear this administration talk about averages, watch your wallet. The basketball player Shaquille O'Neal and I have an average height of six feet. That doesn't tell you very much about what is happening to the average person. People at the top did extremely well, but people, average people did not do well at all. That is, the little guy did not do well at all.

LAWRENCE LINDSEY: I was quoting Senator Lieberman. I'm quoting a Democrat, Bob.

Note that Lindsey didn't refute Reich's argument.

During the debate, Lieberman pulled the same trick again. Earlier, Dean had been asked about his position on Bush's tax cuts:

NORRIS: I have a follow-up for Governor Dean.

A hallmark of your campaign has been the pledge to repeal the Bush tax cuts across the board. Does this include tax cuts that are intended to provide some measure of relief for the middle class, the child tax credit or the lifting of the marriage penalty?

And specifically, what kind of tax relief are you proposing for middle class and working-class families?

DEAN: Well, we've got to look at the big picture. If you make over $1 million, you've got a $112,000 tax cut. Sixty percent of us got a $304 tax cut.

And the question I have for Americans is, did your college tuition go up more than $304 because the president cut Pell Grants in order to finance his tax cuts for his millionaire friends? How about your property taxes, did they go up more than $304 because the president wouldn't fund special ed, wouldn't fund No Child Left Behind, wouldn't fund COPS and -- how about your health care payments? Did they go up more than $304 because the president cut thousands of people all over America off health care because he wouldn't fund the states' share that they needed to continue to insure people, and that was shifted to insurance and the health care premiums?

Middle-class people did not see a tax cut. There was no middle-class tax cut. There was a Bush tax increase with tuitions, with property taxes, with health care premiums, and most middle-class people in this country are worse off because of President Bush's so- called tax cut than they are better off.

Without doing some digging it's hard to know just how the numbers work out, but it seems like a reasonable point.

The next time Lieberman gets asked a question, though, he responds so:

ANGER: Senator Lieberman, many health-care workers are paid so little that they cannot afford insurance for their own families. How can you address this problem without adding to the already-steep cost of health care?

LIEBERMAN: Yes, I'll tell you one way we could do it -- and I want to respond to Howard Dean's outrageous statement on middle-class tax cuts -- that is to protect the middle-class tax cuts that he wants to repeal and that a lot of us Democrats fought for in Congress over the last three years.

I don't know which is worse, that he wants to repeal the tax cuts, or that he won't admit that they ever existed.

You ask the average middle-class person -- here in Iowa, average family of four saved $1,800 a year under those tax cuts. They need that money to help pay for their insurance. ...

I know what you're thinking: "Anger" is the coolest last name ever. And you're right. But what about Lieberman's response?

I suspect that they're both correct. It's quite possible that 60% of "us" (I doubt Dean is one of them) got a $304 tax cut. And it's probably true that the average Iowa family of four saved $1,800. But you can't represent any sufficiently complex policy decision with a single number like this. The question is: do most people have the time or the inclination to research what's really going on? I doubt it.

Posted by cradle at January 4, 2004 11:07 PM
Comments

This kind of thing frustrates the hell out of me. It reminds me of my idea to end war when I was eight: Throw all the guns in the ocean. Now I'm educated, and I know that such things are more complicated than that.

Like you said, David, most people are too lazy to do the research on their own, so the only numbers they are getting are from the media, who likes to simplify things to the "average." Would the median be a better and accessible indicator here?

Posted by: Maureen at January 5, 2004 12:07 PM

[From http://usgovinfo.about.com/library/weekly/aa010201b.htm]

Married - 2 Children - 2nd Earner Income = 50%
Income
$ 26,000 Current tax: $ 170 New tax: $ 0 Savings: $ 170
$ 36,000 Current tax: $ 1670 New tax: $ 0 Savings: $ 1670
$ 50,000 Current tax: $ 3770 New tax: $ 1795 Savings: $ 1975
$ 76,000 Current tax: $ 9587 New tax: $ 6795 Savings: $ 2792
$ 100,000 Current Tax: $ 16307 New tax: $ 12795 Savings: $ 3512

My impression is that these numbers don't include any of the dividend tax cut (now to capital gain rates), and the capital gain rate (cut in half), both of which increase long-term investment savings for retirees.

Processing the numbers from [http://www.cbpp.org/7-21-03tax2.htm], we see that the US households break into four groups of nearly equal size, the $0 tax cut, the $0-$500 tax cut, the $500-$1433 tax cut, and the $1433 and up tax cut.

Posted by: Thomas at January 6, 2004 12:31 AM

[Your job is to figure out where the quote ends, and the parody begins...]

EDWARDS: First of all, I didn't vote for NAFTA. I campaigned against NAFTA. I voted against the Chilean trade agreement, against the Caribbean trade agreement, against the Singapore trade agreement, against final passage of fast track for this president. I don't even support trading players in the NFL.

My state has one of the largest biotech campuses on the planet in Research Triangle, but I think it is important to have a massive trade war so our textile mills that require less skills than a sixth-grader has can employee North Carolina union workers, or else I might not get re-elected. Oh crap, Pillowtex just closed, I guess those textile quotas didn't work after all.

MOSELEY BRAUN: We can't afford to go the route of just protectionism that will jump-start a depression in this country, but you white men aren't going to listen to me anyway. Condoleeza Rice and I are going to start our own party, and kick your mercantilist butts!

DEAN: The way to support American farmers is to change the American farm bill so that big corporations don't get the majority of the money that goes out of the farm bill.

We can support small family farms, and we should. But the money ought to go to the farmers, not the big corporations. After all, China has a hundred million small family farms, and their GDP per capita is under $5000. We should aim for that!

Plus, buggy whip makers are in real trouble in this country. If there was an "even playing field" for buggy whips, we would have the most competitive buggy whip industry on the planet. Americans can compete in any field.

LIEBERMAN: But we can't create jobs by building up walls of protectionism. I looked at the stats in Iowa. One-fifth of the manufacturing jobs in this state. By the number I saw, more than 100,000 are dependent on trade.

The top two and three markets for goods from Iowa, both agricultural-grown goods and manufactured -- Canada and Mexico, the countries we're in NAFTA with. You break NAFTA, you're going to cut out tens of thousands of jobs here in Iowa.

Obviously, I am too reasonable for the Democratic nomination. Give it to Dean over there, because he can flip-flop faster than Bill Clinton. Bush will win anyway as the economy recovers.

Posted by: Thomas (again) at January 6, 2004 12:54 AM

Hmmm. "The examples above were generated by the George Bush Tax Calculator" located at http://www.georgewbush.com/TaxCalculator.asp

Posted by: David at January 6, 2004 12:08 PM

Would George Bush lie?

Er...

Would a politician lie?

Posted by: Thomas at January 7, 2004 01:47 AM

Believe it or not, it happens.

A friend of mine who works for a think tank is looking into Dean's claim, but it sounds dubious. This doesn't provide a definitive answer, still:

http://www.taxpolicycenter.org/commentary/families/table1.pdf

Posted by: David at January 7, 2004 10:04 AM

For a Better Tomorrow...Today.

Posted by: Durffwurzle For President at November 8, 2004 06:43 PM
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