More Audaciousness

by publius

The good news is that it's pretty much official -- health care reform is ON this year.  Obama is carving out a big chunk of money for it -- and we wouldn't be reading these stories if they weren't serious about it.

There will of course be many posts to come as that debate unfolds.  But what's fascinating to me is how politically ambitious the proposed funding allocation is.  He's not merely trying to pay for health care -- he's trying to drive a stake through the heart of the Reagan coalition by isolating the wealthy.

I first saw this argument in the excellent NYT Magazine article by David Leonhardt (which I posted on a few months ago).  Essentially, Leonhardt argues that "Obamanomics" aims to break the Reagan coalition by severing the rich from the lower-income classes.  To achieve this goal, Obama is cutting taxes for everyone but the top 5%, and then using those tax hikes to pay for ambitious progressive legislation.  Here's Leonhardt:

Dating back to Reagan, Republicans have packaged tax cuts on high earners with more modest middle-class tax cuts and then maneuvered the Democrats into an unwinnable choice: are you for tax cuts or against them? Obama, however, argues that this is the moment when the politics of taxes can be changed.

To do this, he is proposing tax cuts for most families that are significantly larger than those McCain is offering, along with major tax increases for families making more than $250,000 a year. “That’s essentially a major part of our economic plan,” Obama said. “But it’s also a political message.” Economically, he is trying to use the tax code to spread the bounty from the market-based American economy to a far wider group of families. Politically, he is trying to drive a wedge through the great Reagan tax gambit.

And that's exactly what he's doing here with the proposed health care funding.  Obama is pushing for national health care reform -- the crown jewel of the progressive legislative agenda -- while simultaneously trying to break down the modern political coalitions that Nixon and Reagan built.

This guy is swinging for the fences -- and swinging hard.

Comments

[d'd'd'dave]

JL, KCinDC

I can explain it for you but I can't understand it for you.

[liberal japonicus]

Nice try at a comeback, but if you don't understand Obama's suggestion about creating green industries as a basis for the recovery, it's you who is having the problems understanding.

[John Spragge]

To "d'd'd'dave":

A very wise person (and a relatively wealthy small business person and former associate of mine) once made a point to me: the clearest evidence for airframe icing, that bane of pilots everywhere, comes from... ice. You can get the forecast, look at the cloud cover, look up the temperature to dew-point spread and make a guess, but if you see ice on a wing, then you know the ice exists.

Likewise, you can talk about investment and incentives and trickle down and multipliers all you like, but the real test of an economic policy comes from the results. For at least eight years, the American government tried to shore up the economy by cutting taxes and claiming to hold the line on spending, not caring about the inequality between rich and poor, and what happened? A trillion plus dollar train wreck happened. You can't use theories to argue against the facts. Your government, your society tried the low tax, low regulation route, and it failed catastrophically. All of the discussion of the current economic policies needs to happen with that simple fact firmly in mind. President Obama would not now occupy the White House, and his policies would not stand a chance in the Congress American voters would have elected if the Republican policies had succeeded. Forget that, and you can easily drift off in a discussion based on fanciful theories about what should work.

On the fairness of a progressive taxation system, I have two related comments. First, money exists at least partly as a way of apportioning labour. Someone who figures out a way to provide a good or a service without labour will generally do so, and undercut the competition. So a person with more money has, in general, the ability to command the labour of other people. This raises the first argument; if you choose to accumulate the resources to control the labour of other people, should you not also make some contribution on their behalf to the common resources (infrastructure, defence, etc.) that we all need to live? The second comment flows out of that: the market does not have the moral competence to judge human beings, because the market judges commodities, and that word does not apply to human beings.

[Anny]

There are so many interesting comments here. Personally, I can hardly wait til I have the "option" to buy health insurance at an "affordable" cost... or, heh... since we are going to have guarenteed approval, maybe I should just wait until I am ill and require critical care... and use the money until then to buy nice vacations, and cool stuff!

yeah... I don't think this will work well... sorry. I would like for it to work well, but I really don't see it.