Are Moderates Spineless?

Moderates have often accused of being spineless and without principle. There was a time when I would have wholeheartedly agreed. In light of my conversion away from libertarianism I no longer agree with those, on left or right, who agree with that sentiment. Case in point Grover Norquist. Grover Norquist is the writer of "The Pledge" that we are hearing about so much lately. "The Pledge" is a pledge signed by most Republican members of Congress to not increase taxes under any circumstances and not to remove tax credits or deductions unless accompanied by lower tax rates overall. I saw Norquist on Hardball with Chris Matthews last night. Matthews asked him if the United States were to go into default would his position on revenues remain the same? Norquist kept repeating the old line Republicans repeat time and again, "We do not have a revenue problem, we have a spending problem." There is an old joke about a group of Marxists at a political meeting. One Marxist proposed a policy to which another Marxist vigorously disagreed. The Marxist replied, "Everybody knows my idea works in practice," to which the other Marxist replied, "I know it works in practice, but does it work in theory." Republicans and Marxists have much in common these days.

After the Great Depression the economist Keynes, whose programs are credited with bringing us out of the Depression, was asked why he had abandoned his earlier positions on monetary policy. Keynes replied, "When the facts change I change my opinion, what do you do sir?" Thus the question that must be asked of any ideologue at any time in history, thus precisely why I am a moderate and not a liberal or conservative. In the book of Ecclesiastes, the Teacher says, "There is a time for everything under the sun." So there is. Tax cuts are not the correct course of action all the time, nor are new programs. There is a time for everything under the sun, a time for tax cuts and a time for tax increases, a time for more regulation and a time for less, a time to create new programs and a time to abolish others, a time when management is right and a time when labor is right. Liberals and conservatives often act as if one of the two is always the correct course of action no matter what. If only there were another program we could usher in the New Jerusalem, say the liberals. If only we raised taxes enough all our problems would be solved. Conservatives say the opposite, we lower taxes and the economy doesn't get any better. The problem is "job killing taxes," so we lower taxes some more and the problem is still, "job killing taxes." The problem will always be taxes and the solution will always be to cut them. That is not how the world works though, even if some blogger or talk radio host tells you so.

I am a student of history and I can tell you this. In the 1970s America was an overtaxed and too regulated economy. The government under Carter began to deregulate utilities, trucking, and airlines among other industries and the results were generally a good thing. In the 1980s Reagan lowered the top income tax rate from 70% down to the 30s where it has fluctuated to this day. America experienced a two decade economic boom as a result of the investment incentive that was created. In this case small government won the day and was the right course of action to take. It is not about being liberal or conservative, it is about the fact that we were overtaxed and there were too many regulations and the right thing to do was to cut them. Fast forward to the present day. Tax revenues are the lowest they have been in sixty years at only 16% of GDP. The size of government as a percentage of GDP is 24% so somehow we have to come up with that gap in order to cure the deficit. So even as the Tea Party moans and groans about being overtaxed taxes are the lowest they have been in sixty years. Where was the Tea Party all those sixty years? Also let us not forget that Obama has only proposed a meager 4% increase in the top tax rate on the top earners. Examine this chart and see if Obama is proposing to crush us with taxation. As you can see with the exception of the 1988-1992 period where the top rate was 28% to 31% taxes are the lowest they have been since 1931. If you figure in the fact that Bush greatly decreased the capital gains tax which largely impacted high earners you can make the case that taxes on the top earners are in fact the lowest they have been since 1931 period.

In the 1980s lowering the top tax bracket was the right thing to do but it is not always the right thing to do. We have a massive deficit and the wealth gap between rich and poor has grown and grown. Sociologically a society cannot remain stable on this course. In 1980 it was time for lower taxes. In 2011 it is time for higher taxes, particularly on the wealthy. Conservatives often repeat the mantra that we need to get back to Reagan, yet Reagan was a pragmatist. Reagan was not averse to closing loopholes which Grover Norquist calls a tax increase. In today's GOP Reagan would be considered a moderate. Reagan became a conservative at a time when the upper income tax was 90% but the debate has shifted further and further to the right. Would Reagan, raised as a Democrat, a lifelong admirer of FDR and the New Deal, and a union member have become a conservative in the 1960s if we had had tax rates like we did today? I wonder. Reagan was a conservative for his time, but he was not a conservative for this time. It is no wonder many conservatives make the case that moderates are just liberals in sheep's clothing, On the basis of how far they have shifted the debate on tax policy, we essentially are.

In the 1980s I would have agreed with Reagan that we needed to decrease taxes in order to stimulate the economy. In 2011 I agree with Obama that we need to increase taxes to close this deficit. It does not make me spineless. It simply means that different times provide us with different circumstances and different circumstances call for different solutions. Sometimes something that doesn't make sense in a particular year might be right in another and vice versa. That is not being spineless, it is being pragmatic. If you agree with that you are probably a moderate too.