Sunday, October 12, 2008

What the Troopergate Report Really Says

Alaska Governor Sarah Palin and Alaska State Trooper Mike Wooten.
Alaska Governor Sarah Palin and Alaska State Trooper Mike Wooten.

Friday's report from special investigator Stephen Branchflower to Alaska's Legislative Council answered some basic questions about the political and personal bog known as Troopergate.

Did Governor Sarah Palin abuse the power of her office in trying to get her former brother-in-law, State Trooper Mike Wooten, fired? Yes.

Was the refusal to fire Mike Wooten the reason Palin fired Commissioner of Public Safety Walt Monegan? Not exclusively, and it was within her rights as the states' chief executive to fire him for just about any reason, even without cause.

Those answers were expected, given that most of the best pieces of evidence have been part of the public record for months. The result is not a mortal wound to Palin, nor does it put her at much risk of being forced to leave the ticket her presence succeeded in energizing.

But the Branchflower report still makes for good reading, if only because it convincingly answers a question nobody had even thought to ask: Is the Palin administration shockingly amateurish? Yes, it is. Disturbingly so.

The 263 pages of the report show a co-ordinated application of pressure on Monegan so transparent and ham-handed that it was almost certain to end in public embarrassment for the governor. The only surprise is that Troopergate is national news, not just a sorry piece of political gristle to be chewed on by Alaska politicos over steaks at Anchorage's Club Paris.

A harsh verdict? Consider the report's findings. Not only did people at almost every level of the Palin administration engage in repeated inappropriate contact with Walt Monegan and other high-ranking officials at the Department of Public Safety, but Monegan and his peers constantly warned these Palin disciples that the contact was inappropriate and probably unlawful. Still, the emails and calls continued — in at least one instance on recorded state trooper phone lines.

The state's head of personnel, Annette Kreitzer, called Monegan and had to be warned that personnel issues were confidential. The state's attorney general, Talis Colberg, called Monegan and had to be reminded that the call was putting both men in legal jeopardy, should Wooten decide to sue. The governor's chief of staff met with Monegan and had to be reminded by Monegan that, "This conversation is discoverable ... You don't want Wooten to own your house, do you?"

Monegan consistently emerges as the adult in these conversations, while the Palin camp displays a childish impetuousness and sense of entitlement.

One telling exchange: Deputy Commissioner John Glass, who worked under Monegan, told Branchflower he was "livid" after a Palin staffer, Frank Bailey, went outside the chain of command and called a state trooper in far-off Ketchikan to complain about Wooten. Why had Bailey called the trooper? Because, Bailey said, this trooper had gone to church with Sarah Palin back in Wasilla, so he felt "comfortable" talking to him about Wooten. Glass, too, tried to sound the warning that continuing to pressure anyone and everyone in the matter would end in "an unbelievable amount of embarrassment for the Governor and everybody else".

Another amateurish sign: Todd Palin's outsize role in the mess. Branchflower said it was out of his jurisdiction to pass judgment on the First Gentleman, but his report paints an extralegal role for Todd Palin that would have made the Hillary Clinton of 1992 blush. In the report, the head of Gov. Palin's security detail says that Todd spent about half of his time in the governor's office — not at a desk (he didn't have one), but at a long conference table on one side of the office, with his own phone to make and receive calls. It became a shadow office, the informal Department of Getting Mike Wooten Fired.

It was at that long table that Todd Palin first scheduled a meeting with Walt Monegan, days after his wife's administration began. He showed Monegan three huge binders of evidence against Wooten, including a picture of a dead moose that had been shot illegally. After Monegan came back saying that there was no new actionable information, Todd began a very visible campaign of stewing and fuming, trying to get access to personnel files, calling up and down the Public Safety org chart.

The report also raises the suggestion that the final incident that led to Monegan's firing was perhaps the most (unintentionally) hilarious part of the whole saga. In the run-up to Alaska's 2008 Police Memorial Day event, Monegan visited Palin in Anchorage and brought along an official portrait of a state trooper in uniform, saluting in front of the police memorial in Anchorage, for Palin to sign and present at the event. The trooper? Mike Wooten.

Palin signed the photo and didn't say anything, according to Monegan's testimony, but later cancelled her attendance at the event, sending Lt. Gov. Sean Parnell in her place. The head of her Anchorage office followed up with a call to Monegan berating him for his insensitivity. (Monegan swears he didn't know it was Wooten in the picture, and that he didn't even know what Wooten looked like.)

Shortly after that incident, Monegan's fate was cast. But even then, Palin's staffers were blithely adding more evidence to Troopergate. When Monegan's potential successor, Chuck Kopp, asked Bailey, the Palin staffer, why Monegan was being fired, he was told simply: "Todd is really upset with Monegan."

So what does this say about the possible Vice-President of the United States? Certainly not as much as her enemies would have hoped. She was only directly involved in a small bit of the pressure campaign — a meeting or two and a couple of emails. She can thank Monegan for not having her hands dirtier; it was he who told her to keep herself at "arm's length" from any Wooten conversations.

But even though she won't likely face any legal repercussions, the amateurism and cronyism of her brief administration hardly leaves Palin sitting pretty. Troopergate's final verdict may be even more damaging than a rebuke: her administration was, at least this regard, just as self-motivated as the Washington fat cats and lobbyists she hopes to unseat.

Original here

Palin Blurs Line Between Church And State As Governor

This photo from the Web site of The Office of the Governor of Alaska, shows, from left, Alaska Lt. Gov. Sean Parnell, Gov. Sarah Palin, and Sen. Lisa Murkowski, R-Alaska, being prayed over by Pastor Ed Kalnins and a congregation made up of nearly 20 different churches and denominations at One Lord Sunday in the Mat-Su Valley, Alaska on June 8, 2008. (AP Photo/Web site of The Office of the Governor of Alaska)

WASILLA, Alaska — The camera closes in on Sarah Palin speaking to young missionaries, vowing from the pulpit to do her part to implement God's will from the governor's office.

What she didn't tell worshippers gathered at the Wasilla Assembly of God church in her hometown was that her appearance that day came courtesy of Alaskan taxpayers, who picked up the $639.50 tab for her airplane tickets and per diem fees.

An Associated Press review of the Republican vice presidential candidate's record as mayor and governor reveals her use of elected office to promote religious causes, sometimes at taxpayer expense and in ways that blur the line between church and state.

Since she took state office in late 2006, the governor and her family have spent more than $13,000 in taxpayer funds to attend at least 10 religious events and meetings with Christian pastors, including Franklin Graham, the son of evangelical preacher Billy Graham, records show.

Palin was baptized Roman Catholic as a newborn and baptized again in a Pentecostal Assemblies of God church when she was a teenager. She has worshipped at a nondenominational Bible church since 2002, opposes abortion even in cases of rape and incest and supports classroom discussions about creationism.

Since she was named as John McCain's running mate, Palin's deep faith and support for traditional moral values have rallied conservative voters who initially appeared reluctant to back his campaign.

On a weekend trip from the capital in June, a minister from the Wasilla Assembly of God blessed Palin and Lt. Gov Sean Parnell before a crowd gathered for the "One Lord Sunday" event at the town's hockey rink. Later in the day, she addressed the budding missionaries at her former church.

"As I'm doing my job, let's strike this deal. Your job is going be to be out there, reaching the people _ (the) hurting people _ throughout Alaska," she told students graduating from the church's Masters Commission program. "We can work together to make sure God's will be done here."

A spokeswoman for the McCain-Palin campaign, Maria Comella, said the state paid for Palin's travel and meals on that trip, and for other meetings with Christian groups, because she and her family were invited in their official capacity as Alaska's first family. Parnell did not charge the state a per diem or ask to be reimbursed for travel expenses that day.

"I understand the per diem policy is, I can claim it if I am away from my residence for 12 hours or more. And Anchorage is where my residence is and I'm based from. And this trip took about four hours of driving time and time at the event, so I did not claim per diem for this one," Parnell told the AP.

Palin and her family billed the state $3,022 for the cost of attending Christian gatherings exclusively, including visits to the Assembly of God here and to the congregation they attend in Juneau, according to expense reports reviewed by the AP.

Experts say those trips fall into an ethically gray area, since Democrats and Republicans alike often visit religious venues for personal and official reasons.

J. Brent Walker, who runs a Washington, D.C.-based group that advocates for church-state separation, said based on a reporter's account, Palin's June excursion raised questions.

"Politicians are entitled to freely exercise their religion while in office, but ethically if not legally that part of her trip ought to not be charged to taxpayers," said Walker, executive director of the Baptist Joint Committee for Religious Liberty. "It's still fundamentally a religious and spiritual experience she is having."

The Palins billed the state an additional $10,094 in expenses for other multi-day trips that included worship services or religiously themed events, but also involved substantial state business, including the governor's inaugural ball and an oil and gas conference in New Orleans.

Palin also submitted $998 in expenses for a June trip to Anchorage that included a bill signing at Congregation Beth Shalom synagogue, the only non-Christian house of worship she has visited since taking office, according to the McCain campaign.

In response to an AP request, Comella provided a list showing that since January 2007 the governor had attended 25 "faith-based events," including funerals and community meetings held at churches. Many did not appear on the governor's schedule or her travel records.

Palin has said publicly her personal opinions don't "bleed on over into policies."

Still, after the AP reported the governor had accepted tainted donations during her 2006 campaign, she announced she would donate the $2,100 to three charities, including an Anchorage nonprofit aimed at "sharing God's love" to dissuade young women from having abortions.

An AP review of her time as mayor, from late 1996 to 2002, also reveals a commingling of church and state.

Records of her mayoral correspondence show that Palin worked arduously to organize a day of prayer at city hall. She said that with local ministers' help, Wasilla _ a city of 7,000 an hour's drive north of Anchorage _ could become "a light, or a refuge for others in Alaska and America."

"What a blessing that the Lord has already put into place the Christian leaders, even though I know it's all through the grace of God," she wrote in March 2000 to her former pastor. She thanked him for the loan of a video featuring a Kenyan preacher who later would pray for her protection from witchcraft as she sought higher office.

In that same period, she also joined a grass-roots, faith-based movement to stop the local hospital from performing abortions, a fight that ultimately lost before the Alaska Supreme Court.

Palin's former church and other evangelical denominations were instrumental in ousting members of Valley Hospital's board who supported abortion rights _ including the governor's mother-in-law, Faye Palin.

Alaska Right to Life Director Karen Lewis, who led the campaign, said Palin wasn't a leader in the movement initially. But by 1997, after she had been elected mayor, Palin joined a hospital board to make sure the abortion ban held while the courts considered whether the ban was legal, Lewis said.

"We kept pro-life people like Sarah on the association board to ensure children of the womb would be protected," Lewis said. "She's made up of this great fiber of high morals and godly character, and yet she's fearless. She's someone you can depend on to carry the water."

In November 2007, the Alaska Supreme Court ruled that because the hospital received more than $10 million in public funds it was "quasi-public" and couldn't forbid legal abortions.

Comella said Palin joined the hospital's broader association in the mid-1990s. Records show she was elected to the nonprofit's board in 2000.

Ties among those active at the time still run deep: In November, Palin was a keynote speaker at Lewis' "Proudly Pro-Life Dinner" in Anchorage, and the governor billed taxpayers a $60 per diem fee for her work that day.

Palin also is one of just two governors who channeled federal money to support religious groups through a state agency, Alaska's Office of Faith-Based and Community Initiatives. Palin has made it a priority to unite faith communities, local nonprofits and government to serve the needy, bringing her high marks _ and $500,000 _ from the Bush administration.

In fiscal year 2008, Alaska was one of only four states to receive $500,000 in federal grant money from the national initiative.

"The governor has a healthy appreciation for faith-based groups that serve Alaskans in need," said Jay Hein, who until recently directed national faith-based initiatives at the White House. "The grant speaks to their organizational strength, and the dynamism of Alaska's operation."

Several Catholic and Christian charities received funding, including $20,000 for a Fairbanks homeless shelter that views itself as a "stable door of evangelism and Christian service" and $36,000 for a drop-in center at an Anchorage mall that seeks to demonstrate "the unconditional love of Jesus to teenagers."

The state ensures all faith-based groups keep a strict separation between their work in the community and their prayer services to ensure recipients don't feel coerced, said Tara Horton, a special assistant to the Alaska Department of Health and Social Services. Though staffers reached out to nonprofits and religious groups of many faiths, mostly Christian organizations applied for funding, she said.

In June, when Alaska legislators decided to cut $712,000 in state support for the office, Parnell sent lawmakers an urgent letter asking them to put it back in the budget. A small portion of state funding was later restored.

"Gov. Palin is motivated by the needs out there, and faith-based and community initiatives are a great way to do that," Parnell said. "It matters not to state government what religion people belong to, so long as they are serving the public and the money they receive is used appropriately."

Still, a state worker who directs an Anchorage-based group that advocates for church-state separation, Lloyd Eggan, said Palin's administration hasn't done enough to assure voters that government money doesn't support ministry.

"That sort of thing is exactly what courts have said is barred by the First Amendment," Eggan said.

Original here

Palin E-Mails: Judge Orders State To Preserve

ANCHORAGE, Alaska — A judge has ordered the state of Alaska to preserve any government-related e-mails that Gov. Sarah Palin sent from private accounts.

Anchorage Superior Court Judge Craig Stowers ruled Friday in the lawsuit brought by Anchorage resident Andree McLeod against Palin, the Republican vice presidential nominee.

Palin has occasionally used private e-mail accounts to conduct state business, and her Yahoo accounts were hacked last month. The hacking of Palin's private account was significant because it showed that using private e-mail accounts to conduct state business would be vulnerable to being exposed.

It wasn't widely known that the governor and her staff were using private e-mail accounts until McLeod filed the first of several open records requests earlier this year that yielded some of the e-mail traffic _ much of it redacted for what were deemed privacy reasons.

The judge ordered the attorney general to contact Yahoo and other private carriers to preserve any e-mails sent and received on those accounts. If the e-mails were destroyed when the accounts were deactivated, he directed state officials to have the companies attempt to resurrect the e-mails.

"We shouldn't be in a position where public records have been lost because the governor didn't do what every other state employee knows to do, which is to use an official, secure state e-mail account to conduct state business," McLeod said after the 90-minute hearing.

"It's a dereliction of the governor and her duties," she said.

Assistant Attorney General Mike Mitchell told the court that the governor is no longer using private e-mail to conduct state business.

Stowers ordered e-mails of Palin's staff members who used private accounts to be preserved, as well. Mitchell was unsure if these other employees had also stopped using the private accounts.

Palin's e-mail account with Yahoo Inc. was compromised last month by a hacker who revealed as evidence a few inconsequential personal messages she has received since John McCain selected her as his running mate.

Palin used "gov.sarah" in one of the Yahoo e-mail addresses she sometimes used to conduct state business. The hacker targeted her separate "gov.palin" account. Both have been shut down.

Original here

McCain booed after trying to calm anti-Obama crowd

By PHILIP ELLIOTT and BETH FOUHY, Associated Press Writers

Republican presidential candidate Sen. John McCain, R-Ariz., right, takes back the microphone from Gayle Quinnell who said she read about Sen. Barack Obama and 'that he was an Arab,'  during a question and answer time at a town hall meeting at Lakeville South High School Friday, Oct. 10, 2008 in Lakeville, Minn. (AP Photo/Jim Mone)
AP Photo: Republican presidential candidate Sen. John McCain, R-Ariz., right, takes back the microphone from Gayle Quinnell...

LAKEVILLE, Minn. - The anger is getting raw at Republican rallies and John McCain is acting to tamp it down. McCain was booed by his own supporters Friday when, in an abrupt switch from raising questions about Barack Obama's character, he described the Democrat as a "decent person and a person that you do not have to be scared of as president of the United States."

A sense of grievance spilling into rage has gripped some GOP events this week as McCain supporters see his presidential campaign lag against Obama. Some in the audience are making it personal, against the Democrat. Shouts of "traitor," "terrorist," "treason," "liar," and even "off with his head" have rung from the crowd at McCain and Sarah Palin rallies, and gone unchallenged by them.

McCain changed his tone Friday when supporters at a town hall pressed him to be rougher on Obama. A voter said, "The people here in Minnesota want to see a real fight." Another said Obama would lead the U.S. into socialism. Another said he did not want his unborn child raised in a country led by Obama.

"If you want a fight, we will fight," McCain said. "But we will be respectful. I admire Sen. Obama and his accomplishments." When people booed, he cut them off.

"I don't mean that has to reduce your ferocity," he said. "I just mean to say you have to be respectful."

Presidential candidates are accustomed to raucous rallies this close to Election Day and welcome the enthusiasm. But they are also traditionally monitors of sorts from the stage. Part of their job is to leaven proceedings if tempers run ragged and to rein in an out-of-bounds comment from the crowd.

Not so much this week, at GOP rallies in Pennsylvania, Wisconsin, Florida and other states.

When a visibly angry McCain supporter in Waukesha, Wis., on Thursday told the candidate "I'm really mad" because of "socialists taking over the country," McCain stoked the sentiment. "I think I got the message," he said. "The gentleman is right." He went on to talk about Democrats in control of Congress.

On Friday, McCain rejected the bait.

"I don't trust Obama," a woman said. "I have read about him. He's an Arab."

McCain shook his head in disagreement, and said:

"No, ma'am. He's a decent, family man, a citizen that I just happen to have disagreements with (him) on fundamental issues and that's what this campaign is all about."

He had drawn boos with his comment: "I have to tell you, he is a decent person and a person that you do not have to be scared of as president of the United States."

The anti-Obama taunts and jeers are noticeably louder when McCain appears with Palin, a big draw for GOP social conservatives. She accused Obama this week of "palling around with terrorists" because of his past, loose association with a 1960s radical. If less directly, McCain, too, has sought to exploit Obama's Chicago neighborhood ties to William Ayers, while trying simultaneously to steer voters' attention to his plans for the financial crisis.

The Alaska governor did not campaign with McCain on Friday, and his rally in La Crosse, Wis., earlier Friday was much more subdued than those when the two campaigned together. Still, one woman shouted "traitor" when McCain told voters Obama would raise their taxes.

Volunteers worked up chants from the crowd of "U.S.A." and "John McCain, John McCain," in an apparent attempt to drown out boos and other displays of negative energy.

The Secret Service confirmed Friday that it had investigated an episode reported in The Washington Post in which someone in Palin's crowd in Clearwater, Fla., shouted "kill him," on Monday, meaning Obama. There was "no indication that there was anything directed at Obama," Secret Service spokesman Eric Zahren told AP. "We looked into it because we always operate in an atmosphere of an abundance of caution."

Palin, at a fundraiser in Ohio on Friday, told supporters "it's not negative and it's not mean-spirited" to scrutinize Obama's iffy associations.

But Kathleen Hall Jamieson, director of the Annenberg Public Policy Center at the University of Pennsylvania an author of 15 books on politics, says the vitriol has been encouraged by inflammatory words from the stage.

"Red-meat rhetoric elicits emotional responses in those already disposed by ads using words such as 'dangerous' 'dishonorable' and 'risky' to believe that the country would be endangered by election of the opposing candidate," she said.

Original here

McCain Will Raise Your Taxes, Obama Will Raise Your Income

Americans now pay less in taxes than at any time since WWII. The low tax rate, in effect for eight years now, has not produced anything resembling general prosperity.

Republican economic policy holds that lower taxes will increase government revenues by stimulating economic growth. That has never happened, and we have tried it twice now, with Reagan and Bush 43. The result has been increasing national debt.

The income tax was enacted under the authority of the 16th Amendment in 1913. The progressive rate tax, a system under which higher incomes are taxed at a higher rate, was always a part of the system. Prior to the Great Depression the top rate was 25%. It was raised during the Depression and for the war years and after to the vicinity of 70% - 90%. Over the years the top rate has been as high as 70%-91% for more time than it has been low 25%-39%.

In 1981 Reagan raised the bottom rate from 10% to 15% while lowering the top bracket from 70% to 50%. The top rate was lowered again in 1986 to 28%. The result was a huge run up in the national debt because the theoretical economic growth that would have generated increasing revenues didn't happen.

Bush 41 raised the top tax rate to 35%, the famous "read my lips" tax increase. Clinton managed to balance the budget mostly by raising the top bracket to 39% from 35%. Bush 43 reinstituted the 10% bracket and reduced the top rate to its current rate of 35% from 39%. The result, deficit spending and a burgeoning national debt. The growth it was supposed to generate did not happen.

Nearly all of the legislation passed to lower taxes had titles similar to Economic Recovery Tax Act. In the chart below though, you can see that all of that tax lowering has had no consistent effect on the Gross Domestic Product. The one period, circa 1982, that it does seem to show an effect must be put in the context of hyperinflation. The median tax rate spiked because salaries were indexed to inflation, growing, and taxes were not indexed, adjustments were made. Higher median taxes can't be meaningfully interpreted as a cause for the GDP downturn separate from oil shocks and hyperinflation.

Tax rates and GDP growth - source U.S. Bureau of Economic Analysis


In addition to an increase in national debt, Americans, 80% or so, are so strapped due to declining incomes that the prospect of a tax increase is a serious issue. So retiring the national debt or even balancing the budget seems out of reach without draconian cuts in government services. And making those cuts will not improve the economy. Any substantial curtailments in government programs will only make life harder for a majority of Americans.

Who's debt is it?

When you put a purchase on your credit card and pay over time you end up paying more for the item in the end. Deficit spending then increases the cost of government and is therefore an indirect tax increase. So deficit spending is a tax increase whether you chose to call it that or not.

What is not clear to many is why taxes do not hurt the economy. It seems intuitive enough that they would, but in historical ranges they do not appear to have done so.

The simplest explanation is that when you pay taxes you are buying something, the services of the government, and in order for them to perform those services they, in turn, buy goods and labor from the same market as do you. So taxes are, ideally, immediately recycled into the economy, no different than if you bought the same services from a private company. The only difference then is that buying from the government is compulsory. That fact is what the argument is really all about. The idea that taxation harms the economy has always been baseless and simply a cover for disputing the existence of specific government programs.

So if taxes are economically neutral and deficit spending is just another way of raising taxes then why worry? One problem is that we are increasingly borrowing from foreign sources and when we are paying interest on our debt that money is removed from our economy. The other is the little examined reality that concentrations of wealth effectively remove money from the economy too. Instead of being in circulation, in the form of direct business investment or funding consumer spending, wealth is increasingly chasing into speculative bubbles in stocks, commodities and foreign currency or foreign banks for sheltering. This damages the economy, reducing revenues, leading to more deficit spending.

McCain vs. Obama

Both McCain and Obama will have to raise taxes to pay for programs for which the public is clamoring, whether those programs are universal health insurance, expanding the military, trying to retire the national debt, or simply trying to balance the budget.

McCain proposes to increase your tax exemption for children by something like $125/year. That's it, if you have children you get something, otherwise not. This will increase the deficit.

McCain proposes a $2500-$5000 "refundable" tax credit for the purchase of health insurance while apparently proposing, as I understand it, eliminating the deduction for employer provided health insurance. This is a tax increase for business to pay for a tax benefit to the public. This is, ostensibly deficit neutral.

McCain will cut the corporate tax rate from 35% to 25%. This is proposed to keep American companies on shore and to stimulate the economy. This will not keep companies on shore because the 10% tax savings on profits is miniscule compared to the as much as 80% operating cost savings of exploitation of cheap foreign labor. And since most corporations do not pay any taxes due to loopholes it is ridiculous. All that will happen is that those that are paying taxes domestically will pay less and increase the deficit.

All of this tinkering with tax cuts will result in a net tax increase because a higher percentage of the operation of government will be placed on your credit card.

Obama's plan, a tax cut for the middle class, should be offset by rolling back the Bush 43 tax cuts for the wealthy. Curtailing tax loopholes for companies operating offshore will have far reaching effects including reducing the deficit. As far as funding for new programs goes, there is little doubt that these, like universal healthcare or improving public education and tuition programs, will go on your nation's credit card.

What's in it for me? After all, I'm paying for it.

Your taxes are going to go up with either Obama or McCain. For whom you vote, if that is your issue, depends entirely on how much they will go up and/or what you will get in return.

McCain's plan resolves to further increasing the deficit and putting more on the credit card without any material increase in services from the government. Essentially making government more expensive without any increase in benefit.

Obama's plan balances a modest tax break for the middle class with a upper income tax increase. Our government "credit card" debt will not increase if we do not adopt any sweeping new social programs. Current operations of government will then not be increasing in expense because we are not increasing the financing of them.

Obama's plan to close tax loopholes for companies operating offshore is probably the most important initiative of this era. It would recapture revenues and decrease the deficit, possibly even funding new programs. We shall see.

What is in it for you is this. For thirty years the U.S. government has been pulling the wrong lever in an effort to aid economic growth. Taxes do not make any difference unless and until they are too low to meet expenditures or so high that cash is languishing in government coffers. Debt interest, because it increasingly is paid to foreign holders of our debt, is lost to our economy. So in this global financial climate, taxes are economically neutral if they meet current expenses and economically damaging if they do not.

So what is the right lever to pull?

Raise the top tax rate to more historic norms. Plain and simple, excessive concentrations of wealth tend to remove money from the economy, like interest on foreign debt. We have seen commodity markets being skewed by over speculation and big money chasing the safe/high return investment du jour. Artificially inflated markets do no one any good as the underlying demand will not support unrealistic prices. The money invested in these bubbles will be lost as surely as there is gravity. This is the ultimate tragedy of the "trickle down" philosophy, money that could have put more kids through college or could have funded national healthcare is just going to be lost in a series of speculative bubbles.

Increasing access to higher education and increasing quality in public education are the right levers. A universal healthcare system that would cost the public and industry half of its current burden is the right lever. And if the cost of these programs is put on the credit card then there is some credibility to the argument that the increased cost of financing will have been worth it to the American people. Lowering tax receipts in the face of widening deficits is actually worse than doing nothing.

Finally, getting Americans a raise will help. That is really the only thing that will boost the economy. If Obama thinks doing so by raising taxes on the wealthy to give it to the less fortunate is the only politically acceptable way to do that, then fine, do it. America works just fine when the rich are more heavily taxed. The problem then becomes inducing the rich not to flee.

Original here