If You Have No Logical Defense, Why Not Embarrass Yourself

Douglas Holtz-Eakin, "the president of the American Action Forum, was director of the Congressional Budget Office from 2003 to 2005", signed a letter to the Washington Post that, frankly, I'm amazed he would want associated with his name. Holtz-Eakin led the CBO during the lead-up to the housing bubble, is an economist and was an adviser to John McCain in 2008, so he's not in a position to claim ignorance of the basic facts of how the recession arose or why we presently have large deficits. Yet there he is, refusing to acknowledge basic facts.

Holtz-Eakin is offended by Peter Orszag's criticism of Paul Ryan's budget flimflammery, but rather than attacking Orszag's analysis he... attacks Orszag:

Certainly, it is unsurprising that a leading Democratic thinker such as Mr. Orszag would put forward the particular criticisms of the budget that he did. But Mr. Orszag’s attempt to shellac Mr. Ryan raises eyebrows. It was Mr. Orszag, after all, who, together with his boss, helped saddle the country with four consecutive $1-trillion-plus deficits. With such a record, a little humility would serve Mr. Orszag well.

With his background in the CBO, Holtz-Eakin should be familiar with CBO projections of how various Bush-era policies, such as tax cuts, unfunded entitlement expansions, and two wars of choice, along with the financial industry collapse and economic downturn that arose under Bush, have affected the deficit. For somebody with his background to whine about "" is difficult to regard as anything but a lie by omission. Perhaps even a lie by commission, given that he suggests that something else was possible.

But Holtz-Eakin's abuse of the facts is not offered in defense of Ryan. It's offered as an attack on Orszag, in effect, "Anybody who was part of a White House that ran up large deficits shouldn't be taken seriously." Perhaps Holtz-Eakin would have us turn to Clinton's economic advisors, the ones who left us with a budget surplus? Yeah, right.

The essence of Holtz-Eakin's comment is that nobody who has been associated with the Obama Administration on budget or spending issues should be taken seriously, no matter what they say, no matter what the facts, no matter what the merits of their argument, because of that past association. An unadulterated presentation of the logical fallacy of guilt by association - "Orszag is associated with Obama, I don't like Obama's budget policies, therefore nobody should listen to Orszag".

But hold on a second,

Mr. Orszag contended that “most serious tax analysts don’t think” that the reforms proposed by Mitt Romney and Mr. Ryan “are politically feasible.” He might be right about such experts — although Erskine Bowles, a co-chairman of the president’s own fiscal commission, called the Ryan budget “sensible,” “honest” and “serious.”

The letter is a whopping four paragraphs long - four short paragraphs - yet Holtz-Eakin can't even maintain internal consistency. Why can't we trust Orszag? He's tainted by his association with Obama. Why should we ignore "serious tax analysts", even though they may be right, and listen to Erskine Bowles? Because Bowle's is associated with Obama and is therefore more trustworthy than the experts.

Had Holtz-Eakin wanted to present an actual critique of Orszag's column, he might have taken a different tack on the line about what "most serious tax analysts" think. The use term "serious" is a rhetorical trick often used to diminish those who disagree with you. Your opponent is put immediately on the defensive by the implicit argument that he's not qualified, not serious, or both. The fact that Holtz-Eakin did not challenge Orszag's statement, though, does not suggest to me that he missed the implicit poisoning of the well. It suggests to me that he agrees with the statement and thus, rather than attempting to refute it, instead makes an ad hominem attack against tax analysts and upon the President:

Fortunately experts do not decide what is politically feasible in this country.

American history is replete with instances of strong leaders accomplishing great things that experts deemed impossible. Presumably, President Obama refrained from taking bold steps to address the deficit precisely because he was listening to such experts, including Mr. Orszag.

It is true that policy in our nation is often formed by people with no expertise on the subject matter they're addressing, whether through legislation or regulation. It's also true that sometimes the experts get things wrong. But on the whole, it is a good thing for people who are ignorant of how something works to consult with the experts and form a policy that is more likely to work than something they extract from their posterior. It's not clear why Holtz-Eakin believes that we are better off being governed by political leaders who know nothing of the subject matters they're addressing than it is for those leaders to attempt to first educate themselves before passing legislation and regulations that, if misguided, could have profound, negative effects. But there he is, unambiguously arguing in favor of our being governed by the willfully ignorant.

Since Holtz-Eakin is speaking in defense of Paul Ryan - sure, a weak defense given that he fails to make even a single substantive point that would support Ryan's plan or refute Orszag's criticism - it's worth noting that in addition to the internal inconsistency it creates, his appeal to authority by reference to Erskine Bowles belies his implication that the President has not attempted to address the deficit. After all, if it weren't for Obama's deficit commission, Bowles would not merit mention. And let's note, the only qualification Holtz-Eakins deems worth mentioning is the association with Obama, apparently because he does not believe that Bowles has bona fide expertise that could stand against the positions of the aforementioned experts.

Further, Paul Ryan served on that commission - and voted against its proposals. And when Obama attempted to negotiate a "grand bargain" on the deficit, it seems that Ryan was one of the Republicans who scuttled the deal. Why? In the former case Ryan claims that he didn't want to vote for a plan that didn't slash Medicare, and that seems possible given his barely disguised plan to transform Medicare into an underfunded voucher program. But more realistically, it's because in both cases he would have had to sign on to tax cuts, and he found it better to have huge deficits than to raise taxes.

If Holtz-Eakin has read Ryan's plan, he knows that's one of its biggest failings - even if we assume that the cuts Ryan is afraid to specify become reality, his insistence upon cutting taxes for the wealthy means that his plan will increase the deficit.

Holtz-Eakin is no fool - I find it difficult to believe that he is unaware that his response to Orszag is anything more than a partisan screed. I can only surmise that this is what he believes will lead donors to give money to his organization.

On Budget Issues, Thomas Friedman Misses the Mark

Thomas Friedman laments that as the world suffers at the whim of "the two most merciless forces on earth: the market and Mother Nature", we're not doing enough to balance the budget. His initial point is correct, although obvious: the two political parties prefer to play politics while putting off the hard work involved with fixing, or at least trying to fix, some of our nation's more pressing problems. But let's be honest for a moment: one of the reasons the budget deficit is so large is because of "the market" - thanks to a severe, protracted recession and painfully slow recovery, tax revenues are significantly reduced. I'm not sure if Friedman truly means to make the case that we need to cut the budget to the core to avoid significant deficits, even if that means prolonging, worsening, or triggering a second dip in the recession and jobless recovery, but that appears to be the theory he's pushing.

Friedman also appears to be arguing that, with enough planning, we can anticipate any unexpected development and avoid its least pleasant consequences. So if we create an alternative energy policy and "Saudi Arabia is destabilized", we'll barely feel the impact of $200/bbl oil. Or if Congress passes climate change legislation we'll somehow be able to avoid having "Mother Nature hit[] some internal climate tipping point" that could shake the world's economy (and maybe prevent hurricanes and earthquakes). Real life is, of course, much more complicated.

Friedman believes that the President could do more to define an agenda for the future, push specific proposals and educate the public. And he's correct. Would that cause any legislation to be passed on any of the issues Friedman declares to be urgent? Nope. And while the President's policies and approach to the issues often (and unsurprisingly) do appear to be shaped by opinion polls, it's disingenuous to argue that people "voted for Obama to change the polls not read the polls". First, the polls reflect what people want. Second, when powerful interests align themselves against what the people want (e.g., a public option) people like, dare I say Thomas Friedman, seem more inclined to align themselves with the powerful interests than with the will of the people.

Let's be specific for a moment. Thomas Friedman wants a new energy policy. That policy has been defined in his columns as a gas tax of between 50 cents and $1 per gallon. That appears to be the beginning and end of his conception of policy reform. It won't affect him, because he can easily afford to fill the tank of his Lexus SUV (while patting himself on the back for owning a hybrid, and ignoring the fact that his household energy consumption probably matches that of a number of small towns, even given due consideration to his use of solar panels and geothermal heating in his gargantuan mansion). But it's not his personal consumption that actually bothers me, or even the concept of a higher gas tax. (We should have implemented a higher gas tax decades ago, when the rest of the world was doing so, resulting in adaptation over time rather than a shock to the system.) It's the fact that his proposed cure is a regressive tax, one that would have no meaningful impact on himself or his lavish lifestyle but would create significant hardship for most Americans.

So what does Thomas Friedman want our nation to do? He identifies "things we need to invest more in — like education and infrastructure" and "things we need to reduce, like entitlements and defense spending." How does Friedman propose fixing things? With "serious, sensible, Simpson-Bowles-like budget cuts and tax increases". Um... except the Simpson-Bowles proposal was neither serious nor sensible. It was focused on ideological fixes - like capping revenues - accompanied by the notion that you could cap spending on certain programs and avoid exceeding those caps by means left undefined.

Let's be honest for a moment here. Social Security is not in crisis. It's the target of an ideological war. The long-term budget picture for Social Security can be fixed for additional decades with some relatively modest adjustments to the tax rate, retirement age, and benefits levels. Although it's fun to pretend otherwise, we have to keep in mind that as we push the retirement age up we're likely to push a growing population of older workers into the Social Security disability system years before they qualify for retirement benefits - we need to be careful not to find ourselves rearranging the deck chairs and potentially increasing costs to the taxpayer. But the big hurdle is that it's now a favorite right-wing talking point that the Social Security trust fund "doesn't exist", to put it mildly, making it awkward for the Republicans to sign on to a simple adjustment. Similarly, even if we pretend that Richard "Suck on This" Friedman is interested in meaningful cuts,¹ military budget cuts aren't going to balance the budget.

The other two entitlement programs are, of course, Medicare and Medicaid. The issue with them is much less "can we afford the status quo" and much more, "if health care inflation continues at present levels, these programs will quickly become unaffordable." The measures that we could take to lower present spending, which is absurdly high when you compare both spending and results to other developed nations, could extend the viability of Medicare and Medicaid for a number of years, but inflation will still catch up with us. So how do you tackle inflation?

The Simpson-Bowles approach, again, is to say "We're going to cap spending" and "We're going to impose consequences if the cap is exceeded." That's not "serious" - it's meaningless twaddle. We're not going to wish our way out of inflation, nor are the nation's senior citizens and their families going to sit quietly when the "spending cap" is reached and benefits are cut.

Medical inflation is a difficult issue. It's not going to go away with Simpson-Bowles-style evasions and gimmickry. Nor was Simpson-Bowles particularly concerned with rebuilding the nation's infrastructure² or spending more on education.³ Other than perhaps it's regressive nature, what does Friedman actually like about the Simpson-Bowles approach?
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1. Within the same column, in the context of climate change, political instability and high food and fuel prices, "the world needs a strong America more than ever" - would Friedman have us believe that he's speaking only of economic strength?

2. When asked about their lack of proposed infrastructure investment, Simpson and Bowles explained "infrastructure was indeed a problem in need of upgrade, and... the solution is to reduce the deficit in order to free up the necessary funds to tackle the problem, rather than adding it to existing spending".

3. Simpson and Bowles proposed cutting federal spending on education.

"Nobody Cares" is Not an Excuse for Inaction

Paul Krugman observes that for most votes, regardless of party affiliation, a balanced budget is low on their list of priorities. With due respect to the many deficiencies of the tentative Bowles-Simpson proposal, and to the fact that some issues are presently more pressing than balancing the budget, it actually would be both a good thing and a sign of political maturity to start addressing how to achieve long-term balance. The alternative approach, seemingly preferred by the electorate and politicians alike, is to wait for a crisis. Even if it's not imminent, though, it's difficult to imagine a crisis that compels the balancing of the budget that won't be at least as bad as the financial industry collapse.