State of the Union

You’ve really got to read Paul O’Neill’s book.

But let me mention just two features of the speech that rankled.

One, the notion that massive tax cuts for the best off (which the President insists must now be made permanent) are what account for this great Bush economy, in which we’ve lost fewer than 3 million jobs.

Yes, maybe zero percent interest rates have helped a little, and maybe tax cuts for the first $100,000 in income have helped a little (does anyone really earn that little?). But it’s the tax cuts on income between $100,000 and, say, $250 million, that really got the economy sizzling – or so they would have us believe. (As if there would have been a full-scale Depression last year had Congress not eliminated the estate tax for the year 2010.)

Think of it this way. Roughly half the benefit went to folks making more than $250,000 a year. If those folks had gotten no tax cut . . . on the theory that the gap between rich and poor has been growing ever wider and in the long run does not a healthy society make . . . or on the even simpler theory that they were making more than a quarter million dollars a year . . . and if, instead, that half of the tax cut had gone to folks earning less than $250,000 a year . . . then, guess what? Folks in the bottom 98% or so would have gotten twice the tax reduction! (The half they got plus the half that went to people making more.) And, lacking things, they might have been even more assiduous in spending it and/or shoring up their badly stretched finances.

At first blush, such a scheme may appear to be terribly unfair to, for example, someone earning $86 million a year – which was the minimum you had to earn to be among the 400 top income-reporters in 2000.

But I would argue this way: those 400 folks (almost all of whom made more than $86 million; that was the minimum) were paying only 22.3% of their income in federal tax. A lot of actual dollars, to be sure (and we are grateful to them for every one of them), but a relatively bearable proportion.

Was it really necessary to adjust things such that, in the same circumstances, their tax burden would have fallen to 17.5%?

Or how about this? What if, instead of doubling the tax cut for those in the bottom 98%, you had used that dough to help states keep from laying people off and reducing services? What if you even used some of it to pay for the war?

Anyway, I guess my point is that in his speech, the President made it sound as if his tax cuts were actually good economics or good social policy.

The second thing about the speech that rankled (you will have your own list) was the sense that it had been vetted by Pat Robertson and Jerry Falwell.

With that in mind, although she sent it to me before last night’s speech, Sue Hoell hopes you saw this essay, by Jim Wallis. These two paragraphs sum it up:

How a candidate deals with poverty is a religious issue, and the Bush administration’s failure to support poor working families should be named as a religious failure. Neglect of the environment is a religious issue. Fighting pre-emptive and unilateral wars based on false claims is a religious issue . . .

Rather than suggesting that we not talk about ‘God,” Democrats should be arguing on moral and even religious grounds that all Americans should have economic security, health care and educational opportunity, and that true faith results in a compassionate concern for those on the margins.

Be that as it may, if you’re interested in money, and how your country’s economic policy is being set, let me finish up where I started: you’ve really got to read Paul O’Neill’s book.

[Bad enough that I blamed yesterday’s sloth on Martin Luther King, Jr. Worse that I misremembered his actual birth date (January 15). To compensate, the publisher is adding three days to your subscription.]