Sense from Frank Rich
By David Henderson
Yes, you read that correctly. Frank Rich, the partisan New York Times columnist, has a good column today. In it, he delves into what he calls “[T]he tsunami of populist rage coursing through America.” Here’s one of the best sections:
In reality, Daschle’s tax shortfall, an apparently honest mistake, was only a red flag for the larger syndrome that much of Washington still doesn’t get. It was the source, not the amount, of his unreported income that did him in. The car and driver advertised his post-Senate immersion in the greedy bipartisan culture of entitlement and crony capitalism that both helped create our economic meltdown (on Wall Street) and failed to police it (in Washington).
There are a few things here I disagree with. I’m quite willing to accept that Daschle’s tax mistake was honest, but it’s too strong to say that it’s “apparently honest.” How would Rich know? Also, I don’t think failure to police was a big issue unless he’s referring to the unwillingness to rein in Fannie Mae and Freddie Mac. But what I think is accurate is the “crony capitalism” part.
Two other good lines:
Obama’s brilliant appointees, we keep being told, are irreplaceable. But as de Gaulle said, “The cemeteries of the world are full of indispensable men.”
Rich also tries to read the tea leaves about the various economic advisors and possible conflicts between them.
He’s way off on a couple of things, though. He writes:
Back then, Summers and Gensler joined hands with Phil Gramm to ward off regulation of the derivative markets that have since brought the banking system to ruin.
Not quite. As Less Antman shows in a forthcoming article in The Freeman, what Summers, Rubin, Gramm, and Greenspan did was block CFTC chair Brooksley Born’s attempt, during the Clinton Administration, to have the minimal regulation that went with having credit default swaps publicly traded. Yes, there would have been regulation, but these credit default swaps would have been allowed to be publicly traded. Instead, Summers et al kept the game with the big boys, with the horrible results that everyone now knows about.
Finally, Rich trots out the old misinformation about Herbert Hoover, writing:
The neo-Hoover Republicans in Congress, who think government can put Americans back to work with corporate tax cuts but without any “spending,” are tone deaf to this rage.
Hoover, of course, more than doubled the income tax rates at every level. This was one of the factors, though not the main one, in making the Great Depression “great.” Because the income tax was paid only by very-high-income people, this was a substantial increase in taxes only on them. Also, Hoover increased corporate income taxes. For all their other faults, which are legion, the Republicans in Congress, as far as I know, are not advocating that income tax rates be increased, let alone doubled. Moreover, as Rich himself points out, some of them are advocating cuts in corporate income taxes.