Paul Krugman, "On Invincible Ignorance": Is Increasing Taxes on the Wealthiest One Percent the Answer?

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Worried by a "looming Trumpocalypse" (I am, too) and railing against Paul Ryan's feeble understanding of economics (too harsh), Paul Krugman writes in a New York Times op-ed entitled "On Invincible Ignorance":

"You might think that Republican thought leaders would be engaged in some soul-searching about their party’s obsession with cutting taxes on the wealthy. Why do candidates who inveigh against the evils of budget deficits and federal debt feel obliged to propose huge high-end tax cuts — much bigger than those of George W. Bush — that would eliminate trillions in revenue?."

Now don't misunderstand me. America's national debt of more than $19 trillion has reached unsustainable proportions under the Obama administration and indeed must be addressed. Moreover, this is hardly the time for high-end tax cuts, but would raising taxes on the wealthiest Americans go a long way toward reducing this debt and promoting income equality?

We learn from the Executive Summary of a September 2015 Brookings Institution article entitled "Would a significant increase in the top income tax rate substantially alter income inequality?" by William G. Gale, Melissa S. Kearney, and Peter R. Orszag (my emphasis in red):

"The high level of income inequality in the United States is at the forefront of policy attention. This paper focuses on one potential policy response: an increase in the top personal income tax rate. We conduct a simulation analysis using the Tax Policy Center (TPC) microsimulation model to determine how much of a reduction in income inequality would be achieved from increasing the top individual tax rate to as much as 50 percent. We calculate the resulting change in income inequality assuming an explicit redistribution of all new revenue to households in the bottom 20 percent of the income distribution. The resulting effects on overall income inequality are exceedingly modest."

The article goes on to explain (my emphasis in red):

"Increasing the top [income tax] rate to 45 percent would bring in an additional $49.4 billion in revenue. Dividing that evenly among the 36.1 million households in the bottom income quintile (defined over households) would give each of those households an additional $1,370 in post-tax income.

Increasing the top rate to 50 percent with the same redistribution scheme would bring in an additional $95.6 billion in revenue, leading to an additional $2,650 in post-tax income for the bottom fifth of households. Applying a new top rate of 50 percent to income above $1 million for married filers and above $750,000 for single filers would bring in an additional $63.5 billion in revenue, which would result in $1,760 in additional post-tax income for households in the lowest quintile."

In short, an increase of taxes on the wealthiest one percent of Americans is not without any benefit whatsoever. However, it is also far from a panacea and comes with the possibility that some affluent Americans will leave for greener pastures. 

Tom Hamburger, "How Elizabeth Warren picked a fight with Brookings — and won": No Mention of Brookings, Indyk, Qatar and Hamas

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In a Washington Post article entitled "How Elizabeth Warren picked a fight with Brookings — and won," Tom Hamburger writes:

"The hero of the country’s liberal movement launched a surprise attack Tuesday against Washington’s most revered Democratic-leaning think tanks — and drew blood.

Sen. Elizabeth Warren, stepping up her crusade against the power of wealthy interests, accused a Brookings Institution scholar of writing a research paper to benefit his corporate patrons.

Warren’s charge prompted a swift response, with Brookings seeking and receiving the resignation of the economist, Robert Litan, whose report criticized a Warren-backed consumer protection rule targeting the financial services industry."

A pity that Warren was not equally incensed by Qatar's $14.8 million donation to Brookings in 2014, which goes unmentioned by Hamburger. As was reported by The Algemeiner in a September 7, 2014 article entitled "Revealed: Hamas-Backing Qatar, Also Funding Brookings Institute, Home of Former U.S. MidEast Envoy Indyk":

"Questions are emerging over possible conflicts-of-interest after The New York Times highlighted Qatari funding for U.S. think tanks, including the Brookings Institute, employer of former U.S. envoy Martin Indyk, who was directly involved in recent negotiations between Israel and the Palestinians.

'Qatar, the small but wealthy Middle East nation, agreed last year to make a $14.8 million, four-year donation to Brookings, which has helped fund a Brookings affiliate in Qatar and a project on United States relations with the Islamic world,' according to The Times.

The report comes just weeks after Israel vociferously voiced objection to Qatar’s funding of its major adversary, terror group Hamas."

And as Lee Smith is quoted in an October 2, 2014 Tablet article entitled "Brookings Responds to Tablet Piece on Qatar Funding":

"The fact that Ambassador Indyk’s employer raised $14.8 million from the same Arab regime that funds Hamas, a mortal enemy of the two parties—Israel and the PA—whose negotiations he was to mediate, should have been enough to tell Secretary of State John Kerry that Dr. Indyk would be, at the least, a questionable choice for the job. This judgment might have been further supported by Mr. Indyk’s strange demeanor in casting Israel, both anonymously in news articles and publicly in hotel bars, as solely responsible for the failure of peace talks.

Why Ambassador Indyk veered so widely from the normal practices of statesmanship is unclear. Perhaps he thought his own behavior to be above reproach, even when others might say it violates commonly accepted norms, and creates the appearance of a conflict-of-interest so glaring that it would be legible to a nine-year-old. Or perhaps one of the most influential think tanks taking money from one of the leading state sponsors of terrorism was taken as a sign that the rules of the Washington DC foreign policy influence-peddling game have changed, and become even more gross and venal?"

You will recall that Obama and Kerry sought to impose Qatari and Turkish mediation upon Israel during its conflict with Hamas during the summer of 2014. As reported in a July 30, 2014 Hudson Institute article entitled "John Kerry Has Hamas’ Back: So, Who Has Israel’s?" by Lee Smith:

"'Qatar and Turkey are the biggest supporters of Hamas,' Netanyahu told President Obama, according to an Israeli transcript of a recording of the phone call. (A transcript the White House and prime minister’s office now claim is false.) 'It’s impossible to rely on them to be fair mediators.' To which Obama snidely responded: 'I trust Qatar and Turkey. Israel is not in the position that it can choose its mediators.' When Netanyahu objected to Obama’s high-school mean-girl treatment—'I protest because Hamas can continue to launch rockets and use tunnels for terror attacks'—the president of the United States simply ignored him: 'The ball’s in Israel’s court, and it must end all its military activities.'"

Personally, I "believe" that the transcript accurately reflected the content of the conversation, although it involved translation back and forth between English and Hebrew.

Robert Kagan, "At what price Netanyahu?": Who Cares If Obama Gives an Atomic Bomb to a Maniacal Regime Intent Upon Israel's Destruction?

In a Washington Post opinion piece entitled "At what price Netanyahu?," Robert Kagan, a senior fellow at the Brookings Institution, again lashes out at Israeli Prime Minister Netanyahu's upcoming speech before Congress. Telling us that enough contrary opinion has already been expressed in America's media, Kagan declares:

"Even the most eloquent speech by Netanyahu will not add more than marginally to what has already been said and heard. But even if the drama of the situation and the prime minister’s eloquence were to highlight the already well-articulated case against a bad deal, the question is: at what price?"

An "already well-articulated case against a bad deal"? Netanyahu has no information concerning the Iranian nuclear development program that has yet to be revealed by the media? If so, why is the Obama administration attempting to orchestrate a boycott of Netanyahu's speech, and why is it so busy attacking his so-called interference with the conduct of American foreign affairs? More to the point, why are Obama and friends so afraid of this speech?

Arguing that Netanyahu's speech is a bad precedent which is apt to damage Israel's relationship with the US, Kagan concludes:

"Those who favor having Netanyahu speak may imagine this is an extraordinary situation requiring extraordinary measures, that one side is so clearly right, the other so clearly wrong. Yet that is often how people feel about the crisis of their time. We can be sure that in the future the urgency will seem just as great. The only difference between then and now is that today, bringing a foreign leader before Congress to challenge a U.S. president’s policies is unprecedented. After next week, it will be just another weapon in our bitter partisan struggle."

Next week, Netanyahu's speech will "be just another weapon in our bitter partisan struggle"? Maybe for Kagan, but not for those who live in Israel. Iran's Supreme Leader Khamenei repeatedly threatens to annihilate Israel, and Obama is about to allow Iran to build its first nuclear weapon - perhaps not during what remains of Obama's second term as president, but certainly during the next decade, when all of the restrictions are removed pursuant to Iran's draft agreement with the P5+1.

Israelis should ignore Iranian threats of annihilation in order to avoiding establishing a bad precedent involving a foreign leader making the case in Washington for his/her country's very existence?
Netanyahu must deliver the speech, and if "progressives" from the Democratic Party such as Betty McCollum decide that they do not wish to learn about a decision that imperils Israel's life, so be it.

[Yesterday, The New York Times published an op-ed written by Robert Einhorn, also a senior fellow at the Brookings Institution, which makes the case for a deal with Khamenei. Interesting . . .]

Robert Einhorn, "Deterring an Iranian Nuclear Breakout": Ignoring Parchin, ICBM Development and Human Rights Abuses

Yesterday, in an editorial entitled "An Emerging Nuclear Deal With Iran," The New York Times claimed that "Iran’s major nuclear installations are already monitored by the International Atomic Energy Agency and watched by the United States." Iran, however, is refusing access to the Parchin military base outside Tehran. I informed Andrew Rosenthal of The Times of this "error" by email, but he didn't bother responding.

Today, Robert Einhorn, serves up more nonsense in a New York Times op-ed entitled "Deterring an Iranian Nuclear Breakout," also intended to persuade us to accept Obama's pending deal with Iran's Supreme Leader Khamenei. Einhorn, who, according the op-ed, is "a senior fellow at the Brookings Institution" and "served on the U.S. delegation to the Iran nuclear negotiations from 2009 to 2013," writes:

"Fortunately, even if an agreement cannot eliminate Iran’s capability to enrich uranium to weapons grade, it can prevent Iran from exercising that capability. It can do so by deterring Iran’s leaders from making the decision to break out of the agreement and produce nuclear weapons. To deter such a decision, a deal should meet three requirements.

First, it should have rigorous monitoring measures to convince Iran that any attempt to violate and break out of the agreement at either declared or covert sites would be detected very quickly. This would require intrusive verification provisions that go beyond the measures contained in the International Atomic Energy Agency’s additional protocol, including frequent access to centrifuge production facilities, detailed reporting of nuclear-related procurement and robust inspection procedures."

Ah, yes, "the rigorous monitoring measures." However, as reported by the IAEA last Thursday, the agency "remains concerned about the possible existence in Iran of undisclosed nuclear-related activities involving military-related organizations, including activities related to the development of a nuclear payload for a missile." And meanwhile, Iran continues to bar the IAEA from inspecting the Parchin military base outside of Iran.

Is Einhorn naive enough to believe that the Iranians will not attempt to circumvent "monitoring measures" and thereby reduce break out time to months or even days? And then, who is going to stop them if they do this? Obama, already famous for his "red line" warning with regard to the use of chemical weapons against civilians by Assad? I don't think so.

Einhorn continues:

"One alternative is to try to ratchet up sanctions dramatically in the hope of pressuring Iran to make concessions it has been unwilling to make. But it may be very difficult to persuade states that have supported sanctions at considerable cost to themselves to adopt much tougher measures, especially if Iran is successful in portraying itself as not to blame for the negotiating impasse. And even if the United States could persuade others to adopt stronger sanctions, it is questionable whether they would produce the desired Iranian flexibility, given Iran’s ability so far to withstand punishing sanctions and the repeated assertions by the country’s supreme leader, Ayatollah Ali Khamenei, that Iran can make do economically without an agreement."

"Iran’s ability so far to withstand punishing sanctions"? This is pure rubbish. With Iran on its knees in 2012, Obama eased the sanctions in order to bring Khamenei to the negotiating table. Now, with the dramatic decline in oil prices over recent months, reinstatement of the sanctions (if this can still be done after Obama let the genie out of the bottle) would severely destabilize the Iranian economy.

"[R]epeated assertions by the country’s supreme leader, Ayatollah Ali Khamenei, that Iran can make do economically without an agreement"? Khamenei is also repeatedly calling for the annihilation of Israel, but I suppose Einhorn believes that these declarations should be ignored.

In a must-read Washington Post opinion piece entitled "The fatal flaw in the Iran deal," Charles Krauthammer observes today:

"News leaked Monday of the elements of a 'sunset clause.' President Obama had accepted the Iranian demand that any restrictions on its program be time-limited. After which, the mullahs can crank up their nuclear program at will and produce as much enriched uranium as they want.

. . . .

Meanwhile, Iran’s intercontinental ballistic missile program is subject to no restrictions at all. It’s not even part of these negotiations."

Apparently, Obama is gambling that Khamenei will not attempt a covert break out under his watch, which ends in two years. From 2017, it becomes someone else's mess. And then, just maybe, Khamenei, who is ill with cancer, might be replaced by someone more "moderate." But given that Iran stones to death women accused of adultery, hangs homosexuals, persecutes Baha'is, oppresses Kurds, abuses Sunni Muslims, and brutally quashes political opposition, this is a gamble that no rational person would accept.