On Friday, Dylan Matthews wrote an article that mostly just included the following graph. The first line is what would happen if we just allow the taxes to go back to their Clinton levels. That would be a very regressive tax increase! But really, the only one that is really progressive and—given the growth of income inequality over the last three decades—the only one that is at all just is the Obama Budget. And it shows that this is not about class warfare: no one really expects those who are doing well but not great to pay that much extra. We would just like those who have seen their incomes soar pay back a little. That isn’t because we hate them. It is because it is only fair.

Today, Jonathan Chait wrote his only article about the shooting thus far, The Bracing Political Reality of Gun Control. He notes that there is one good thing to come out of this tragedy: we woke up to the fact that the conservative appeal that we not politicize mass shootings is itself politicization. And so people are talking.

But he continues on to argue that we are fooling ourselves if we think that this event will lead to a big change in gun laws. I agree with him. This goes back to an argument I have long made: politicians will at best listen to their constituencies. Why should a representative from a deep red district in Mississippi change his stance on guns just because people are screaming in New York? And Chait isn’t being cynical. Quite the contrary, actually. He says that if we want to change gun laws, we have to work at it: step by step. We can’t just wait for a tragedy and think that the President will make it all right.

Over on You Tube, WhoIsWillo posted this very striking video that compares how the last three presidents have reacted to similar tragedies. Spoiler: it is all the same—down to the exact words, in many cases. It is not from the top that we change:

As regular readers know, I used to be a libertarian. But I was never that comfortable with it. A good example is how I used to bristle at a phrase that Ayn Rand used quite a lot, “enlightened self interest.” So she would say something like, “Sure it is in your best interest to kill everyone and take their property, but you can see that this is a bad idea blah, blah, blah… Enlightened self interest!” This concept is a philosophical black hole: you can stuff anything inside it. What’s more, without it, libertarianism descends into barbarism: might makes right.[1]

There is probably no part of our world that has been so poisoned by the notion of self interest as corporate law. The common belief in our society is that corporations must always do whatever it takes to improve their stock prices. Whenever someone points out that CEOs only care about short-term profits because their bonuses are based upon them, they are slapped down with this canard: they are legally mandated to do that! But as the video below with legal scholar Lynn Stout and David Cay Johnston shows: this is not actually true.

Corporations are supposed to do what is in their own enlightened self interest. Whereas in a philosophy, this is just a bunch of rubbish, it means something here. The interests of a corporation is not necessarily to increase profits. This should not come as a shock. Young people all over the world decide to forgo immediate profits in order to get an education that will increase their profits later. It just makes sense that corporations would do the same. But it seems increasingly that they do not. It is well know that corporations are sitting on huge piles of money rather than invest it. They know the economy will improve over time, but instead of looking to the future they do nothing. Last week, I pointed out how someone who really cared about his company would act:

So we really should expect CEOs to run their companies better. In fact, the law demands it. But in general, we are stuck with simple minded, short term self interest. We don’t even get the somewhat slippery “enlightened self interest” we should expect.

Here’s the video. It is only ten minutes long and it is very educational:

[1] Libertarianism is explicitly based upon the idea that success makes right. If you are making money off something it is good, if you aren’t, not so much. So it shouldn’t come as a great surprise that without a few philosophical tricks libertarianism is nothing more than social Darwinism.

You probably remember Dr. Evil of the Austin Powers films. Both characters had been frozen (or something) in the 60s and so they are a little out of touch. So when Dr. Evil hatches his evil plan he says that he will ask the United Nations for, “One million dollars!” Then he does his evil little finger thing so we know that he thinks he is being very evil indeed. Number 2 kills his buzz, “Don’t you think we should maybe ask for more than a million dollars? A million dollars isn’t exactly a lot of money these days.”[1]

Paul Krugman says that the deficit scolds remind him of Dr. Evil. They try to end budget arguments by saying, “The deficit is one trillion dollars!” I assume they then laugh maniacally, do the pinky finger thing, or engage in some other action that gets across the importance of their statement. I’ve long had two reactions to these kinds of people. First, everyone knows the deficit is on the tall side of a trillion dollars. Second, the deficit keeps coming down—it will be less than a trillion dollars this year and was as high as $1.4 trillion in 2009.

Krugman offers up some very straightforward math in his column today, That Terrible Trillion. Let’s assume that the deficit is $1 trillion, even though it is actually supposed to be about $100 billion less than that this year. If we had a deficit of $400 billion, the total debt (as a percentage of GDP, which is what is important) would be declining. So we don’t worry about that. That puts the deficit we should worry about at $600 billion. If the economy were not in recession, that would bring in an extra $450 billion in tax revenue. That gets us to a $150 billion deficit. In addition, if we were out of recession, lots of people now on assistance would have jobs. This would save at least $150 billion. Therefore: no long term budget problem as long as we fix the economy.

Well, that’s not exactly true. We currently pay twice as much per person for healthcare as most OECD countries. In the long run, this is going to bankrupt us. (Sadly, this is usually presented as a Medicare problem, but it is not: it is a general healthcare problem that simply affects Medicare.) The ACA (Obamacare) is going to help in this regard. Hopefully, we will be able to do other things to improve the situation. But note: the budget scolds not only don’t care about the real problem, they want to use the current budget deficit to cut benefits to poor and middle class citizens.

The “one trillion dollars” argument is not an argument. It is a mirage. Don’t let people use it to justify dismantling our social contract.

Update (17 December 2012 5:03 pm)

Jonathan Chait wrote an article this afternoon, Krugman’s Deficit Calm Perhaps a Tad Too Calm, in which he takes Krugman’s case to task for being too lackadaisical about deficits. It is much ado about nothing, as he makes clear in the last paragraph:

So what’s he whining about? I don’t know. Just needed to publish something, I guess.

[1] Here is the clip in all 16 seconds of its glory: