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Denmark, the VAT Tax and Paul Krugman

So Sanders and Clinton are arguing about soda taxes — Clinton for, as a way to raise money for good stuff while discouraging self­-destructive behavior, Sanders against, because regressive. I have no illusions that rational argument will make much difference in the short run; we’re in that stage where anything Clinton supports is ipso facto evil. It’s like that point in 2008 when Obama supporters hated, hated the individual mandate that eventually became, as it had to, a central piece of Obamacare.

But anyway, it does seem worth pointing out that progressivity of taxes is not the most important thing, even when your concern is inequality. Notably, Nordic countries — very much including Denmark, which Sanders has praised as a model — rely heavily on the VAT, which is a regressive tax; but they use that revenue to pay for a strong social safety net, which is much more important.

If we add in the reality that heavy soda consumption really is destructive, with the consequences falling most heavily on low-­income children, I’d say that Sanders is very much on the wrong side here. In fact, I very much doubt that he’d be raising the issue at all if he weren’t still hoping to pull off some kind of political Hail Mary pass.

A Note on the Soda Tax Controversy, Paul Krugman, yesterday

One of the hallmarks of this Democratic primary season is the extent to which high-profile liberal baby-boomer political journalists and pundits have been willing to make what are, at least to me, transparently illogical arguments in support of Hillary Clinton.

One particularly annoying canard, offered originally by Jill Abramson in an op-ed published in The Guardian last month, is that Politifact found Clinton to be the most honest of the candidates.  Specifically, Abramson wrote:

As for her statements on issues, Politifact, a Pulitzer prize-winning fact-checking organization, gives Clinton the best truth-telling record of any of the 2016 presidential candidates. She beats Sanders and Kasich and crushes Cruz and Trump, who has the biggest “pants on fire” rating and has told whoppers about basic economics that are embarrassing for anyone aiming to be president. (He falsely claimed GDP has dropped the last two quarters and claimed the national unemployment rate was as high as 35%).

Referencing both the Abramson op-ed and the Politifact statistic that Abramson used, but dropping the qualifier “on issues” that Abramson had used, Nicholas Kristof wrote in his column last Sunday titled “Is Hillary Clinton Dishonest?”:

One basic test of a politician’s honesty is whether that person tells the truth when on the campaign trail, and by that standard Clinton does well. PolitiFact, the Pulitzer Prize­winning fact­checking site, calculates that of the Clinton statements it has examined, 50 percent are either true or mostly true. That compares to 49 percent for Bernie Sanders’s, 9 percent for Trump’s, 22 percent for Ted Cruz’s and 52 percent for John Kasich’s. Here we have a rare metric of integrity among candidates, and it suggests that contrary to popular impressions, Clinton is relatively honest — by politician standards.

Apparently it didn’t occur to either of these writers that the statistic was a mathematical function of the high number of statements of Clinton’s that fact-checking websites, including PolitiFact, are asked to and do fact check.  And that a high percentage of those statements are ones citing statistics of one type or another.

A review of a number of Clinton’s statements that PolitiFact examined shows that she usually is accurate when stating simple statistics but often misrepresents her opponent’s—Sanders’s—policies, statements or positions, sometimes explicitly, sometimes by clearly-intended inference.  An example of both in a single sentence was one I’ve mentioned in earlier posts: her recent statement that she “couldn’t believe” that Sanders opposes the Paris climate change agreement.  The express falsehood was that Sanders opposes the agreement.  The intended inference, clearly false, was that he opposes it because he thinks it goes too far.  Sanders supports the Paris climate agreement but thinks it doesn’t go far enough and believes much more is necessary.

A favorite tactic of Clinton’s in this primary campaign has been to rely upon the public’s presumption that her statements support (or at least are relevant to) the claim she’s clearly trying to make, in order to mislead by stating something that may be true—e.g., Sanders complained about the Paris agreement—but is irrelevant to her presumed point.  In that instance, Clinton slyly told her listeners that Sanders opposes the agreement because it goes too far.  These pundit apologists for Clinton fool mainly themselves with their obliviousness.  They get neither the substantive policy reasons for the strength and durability of the Sanders movement nor the nature of the distaste for Clinton herself among progressives.  Sleight-of-hand-as-prime-modus-operandi tends not to instill confidence about the general veracity of the hand-sleighter.  People do catch on when it’s a habit.

But Krugman’s Clinton-vs.-Sanders writings stake out a territory all their own.  They are rants notable less for their Clinton puffery than for their vitriol toward Sanders and his supporters, and sometimes include what seems to me real intellectual dishonesty.  That’s how I read his VAT tax remark in the excerpted post above.

It is, as Krugman says, worth pointing out that progressivity of taxes is not the most important thing, even when your concern is inequality.  And the Nordic countries’ strong social safety net, I agree, is much more important than the progressivity of the tax to fund it.*

But the Nordic VAT taxes are on all, or at least most, types of products.  The social safety net, or any one part of it, is not funded mainly by lower-income people by applying the tax only to a product or products favored more by lower-income people.  And since the gap there between lower and higher income people is tiny compared with the gap in this country, and since lower-income people have access to a full panoply of safety-net and other government programs and therefore can better afford to contribute substantially to the funding of the safety net, Krugman’s invocation of Denmark as a slam against Sanders for voicing objection to the soda tax proposed by Philadelphia’s mayor is a real sleight of hand.

Krugman links to a blog post from last Friday in the New York Times by Margot Sanger-Katz titled “A New Policy Disagreement Between Clinton and Sanders: Soda Taxes,” which reports:

Last week, Mrs. Clinton became the first presidential candidate to explicitly endorse a tax on sugary drinks. At a Philadelphia event Wednesday, she said a proposal there to use a soda tax to fund universal prekindergarten was a good idea.

“It starts early with working with families, working with kids, building up community resources,” Mrs. Clinton said, according to a CNN report. “I’m very supportive of the mayor’s proposal to tax soda to get universal preschool for kids. I mean, we need universal preschool. And if that’s a way to do it, that’s how we should do it.”

Yes, that’s a way to do it.  But of course there are other ways to do it, too.  One would be a small across-the-board sales tax increase, rather than a large one on this one product.  Another, albeit not one available to city mayors, of course is a slight income tax increase or a securities-transaction tax.

Clinton’s statement that “[i]t starts early with working with families, working with kids, building up community resources” strikes me as really troubling.  She’s running for president.  Does she really think the best way to fund universal preschool is to build up community resources?   How about building up federal resources, via a more progressive tax code, and funding universal preschool universally?  A municipal soda tax may be okay as a stopgap funding method.  But beyond that?  That’s it?

The issue of whether or not to tax soda pop as a way to discourage its use, especially by kids from lower-income families, is separate.  I think there are better ways to try to accomplish that goal, just as I think there are better ways to fund universal preschool.  But my concern here about Krugman’s post is his disingenuous use of Northern European VAT taxes in the service of another of his gratuitous attacks on Sanders and Sanders’ supporters.  Including me.

*Sentence rewritten for clarity and typo correction. 4/26 at 11:25 p.m.

A question looming before the debate last night was: Which of two mutually exclusive positions Clinton has taken recently on Dodd-Frank’s too-big-to-fail provision would she repeat in the debate? The answer: Both. [Updated 4/16]

As for Clinton herself, her bandwagon-jumping nature is a big reason why so many people dislike her.  But in this instance there was the additional element of dishonesty: she knew that Sanders rather than the editorial board members had it right about what Dodd-Frank provides. She had said so publicly, recently, in a statement in which she also said she had said that before.

ForExTraderProfits.com, linking to my Apr. 13 post here

Which in turn was excerpted from a post of mine from Apr. 10.

The instance I was referring to was Clinton’s decision a day after the New York Daily News published online its editorial board’s interview of Bernie Sanders—a truly weird interview in which the board members asked questions based upon their inaccurate factual beliefs across a panoply of issues, including that Dodd-Frank does not include a provision that allows the Fed together with the Treasury Dept. to designate a financial institution systemically important and dangerously large and order the institution to pare down.

And including that most experts, including those from the finance industry, believe that the best mechanism by which a financial institution would be pared down would be for the government to give them parameters such as a cap-size and permit the institutions to determine for themselves how to accomplish it.

This, while also demanding that Sanders comment on a lengthy opinion, issued four days earlier and reported about and analyzed in the media three days earlier, in which a single federal trial-level judge ruled unconstitutional the Dodd-Frank provision that allows the Fed together with the Treasury Dept. to designate a financial institution systemically important and dangerously large and order the institution to pare down—the Dodd-Frank provision that the Daily News editorial board said doesn’t exist.  The opinion also was based partly on the judge’s erroneous belief that that provision requires something that it actually does not: a cost-benefit analysis, which, Paul Krugman notes, would be absurd.

And also while repeatedly conflating legislation that Sanders has proposed to augment and clarify that provision of Dodd-Frank with Dodd-Frank itself, making it impossible for Sanders to follow what even was being asked.

Nonetheless, the political—but curiously, not the finance-law pundits and experts nor economists (including the ones who double as pundits, with the exception of Paul Krugman)—put out word that Sanders’s answers indicated that he has no understanding of this seminal issue of his campaign: current law on breaking up the banks as too big too fail, and the mechanism by which this would be decided either under current law (Dodd-Frank) or Sanders’s proposed legislation.  (Krugman subtlely walked back his take three days after he included that take in a column published three days after the interview transcript was released.)

Clinton, in an interview the morning after the transcript was released, characteristically parroted the take of the in mainstream political pundits and journalists that it was Sanders rather than the editorial board members who lacked knowledge and understanding of that relevant part of Dodd-Frank and of what the consensus mechanism to pare down the financial institutions would be—that the institutions themselves, like MetLife in the case in which the new court ruling was issued, would be allowed to determine themselves how to comply with the cap order.  Sanders, Clinton said, hadn’t done his homework.

But if so, then neither had she, since, as a couple of dismayed non-household-name journalists quickly noted, she had said at the February debate, repeating what, as she herself pointed out, she had said earlier in the campaign: that Dodd-Frank indeed authorizes a forced breakup of too-big-to-fail financial institutions and that she as president would have her administration invoke the provision.

So a question looming before the debate last night was, which of these mutually exclusive positions would she take?  The answer: Both.  This is, after all, Hillary Clinton we’re talking about.

A few minutes after she reiterated her position of February, December, November, and October that her administration would invoke the now-you-see-it-now-you-don’t-now-you-see-it-again Dodd-Frank provision that authorizes the compelled paring of huge financial institutions, she turned to Sanders and repeated her parrot line that Sanders’s answers to the New York Daily News editorial board indicated that he didn’t even know much about his own signature policy: break up the big banks.  But this time (if I recall correctly), Clinton being Clinton, she phrased as something like, “The New York Daily News editorial board said Sanders ….”  Because a cool way to mislead is to note that you’re repeating (and thus adopting) a claim made by someone else.

I have no idea why neither Sanders nor the debate questioners didn’t ask her why she claims Sanders was wrong and that editorial board right while repeatedly saying, before that Sanders interview and now after it, exactly what Sanders said in that interview.  And why they didn’t ask her why, if Dodd-Frank doesn’t authorize the too-big-to-fail designations and a mandate to pare down, she nonetheless keeps saying, when asked, that her administration would invoke the provision.

And I have no idea why neither Sanders nor the questioners asked her why she thought it was a bad idea to allow the banks themselves to decide how to pare down in compliance with the Dodd-Frank order.  Other than, y’know, that the editorial board thought it indicated incompetence and unpreparedness on Sanders’s part and that lots of pundits agreed.  In fact, some still do; this is a meme that is proving particularly resistent to actual fact, especially among big-name baby-boomer and Gen-X major-media writers who themselves are clueless about, say, Dodd-Frank.

What the questioners did do, though, is ask Sanders questions that gave him the opportunity to in essence respond to the punditry’s sheep stampede, such as why he would prefer to allow the banks to decide for themselves what path to take to comply with a pare-down order.  Which he did, beautifully, although Nicholas Kristof (probably among others) didn’t notice.

I don’t want to continue to beat this horse, which I’d hoped and expected would have been explicitly killed last night but instead was merely wounded: Not just about Clinton’s shamelessly snakelike handling of this particular matter but that it is part and parcel of who she is, at least as a candidate.

My concern–obsession, really–with this isn’t so much because I support Sanders, who mostly is defending himself just fine, but because I expect that Clinton will win the nomination, and then I will switch my allegiance (without enthusiasm) to her.  Clinton clearly does not get how much this type of thing hurts her as a candidate; presumably, she thinks it helps her, which itself indicates a problem with her perception.  So it is part of her regular repertoire.

As I’ve said before, it probably won’t matter in the outcome of the election.  She will be opposing (almost certainly) a pathological liar who (absolutely certainly) will be pushing most of the same fiscal-policy snake oil, dictated by the donors and their puppets and fellow travelers who comprise the Republican establishment, as the folks who unabashedly are part of that establishment have been pushing for decades now.

But Clinton has a dangerously weird thought process in some key respects, and her failure to recognize that her incessant sleight-of-hand misrepresentations, or outright misrepresentations, confirm what so many people already think about her: that she’s dishonest, that she’s untrustworthy, that you can’t simply accept at face value what she says.

Another example of this, albeit of a slightly different nature, is the ridiculous claim, repeated again last night, that she‘s not part of the establishment.  The very last thing the Democrats need in this particular election is a nominee at the very top of their ticket who is the very definition of “establishment” but doesn’t know it because she doesn’t know what voters mean by “establishment” and therefore why the word matters.  I have no idea whether Clinton is feigning that she doesn’t know what is meant by “establishment” or whether instead she actually misunderstands the term.  I suspect the former**, but will take her at her word.  And I don’t know which is worse.  It’s a fielder’s choice, I think.

Sanders is by no means a perfect candidate, and I have to say that Krugman finally made a criticism of Sanders that I agree with, in his column today.*  But Democrats fail at their own peril to reckon with Clinton’s inability to understand that some of her tactics and gimmicks are counterproductive.

—-

*Krugman does think that only Sanders among the Democratic primary candidates misrepresents things.  Guess he doesn’t follow the Clinton campaign as closely as he follows the Sanders campaign.  Or at all.  He just shills for it.

Added 4/15 at 5:42 p.m.

**Originally and erroneously said “latter”.  Corrected 4/17 at 10:08 a.m.

____

UPDATE: In response to criticisms of this post in the Comments thread, which insist that Sanders really, really doesn’t understand the relevant Dodd-Frank provisions and that Clinton was right to say last week that he didn’t do his homework and that he doesn’t understand this key issue of his and hint that this means he’s unqualified to be president—and that it’s fine for Clinton to talk out of both sides of her mouth, one the side that says Sanders is clueless about a key issue, the other the side that agrees completely with Sanders on the issue and expands upon it, going further than Sanders does—I wrote:

NYT The Upshot blogger Peter Eavis, who actually specializes in coverage of Dodd-Frank and related finance-industry matters, begs to differ with you.

His post, which is lengthy and detailed, is titled, “At Debate, Hillary Clinton Leaves Questions About Approach to Banks.” It’s theme, which it establishes damn clearly: That Sanders knows more that Clinton does about the relevant provisions of Dodd-Frank, and wayyyy more than the Daily News editorial board members or any of the mainstream political pundits who bought the editorial board’s line, know.

The subtext is that Clinton is either truly confused or being deliberately misleading. And that either way she well knows that it was the Daily News editorial board members and the political pundits who jumped on their bandwagon, rather than Sanders, who actually is clueless about what is a really complex and not precisely clear statutory provision, but a provision that the editorial board members had no understanding of at all.

Clinton’s invoking of that editorial board’s belief that Sanders is confused and clueless—he didn’t do his homework!—is necessarily also a statement that Clinton too is confused and clueless. Either those editorial board members and all the pundits who adopted their line are wrong or both Sanders and Clinton are wrong; she knows this. And Eavis makes clear that what Clinton said about her intentions under Dodd-Frank are seriously weird, implying that she didn’t do her homework or that her homework reading assignment included a suggestion that she repeat the editorial board’s bogus claim that Sanders doesn’t understand this key premise of his campaign.

All the way back on April 5 the day that that interview transcript was released, Eavis in blog post at The Upshot deconstructed the claim that it was Sanders rather than his interviewers that was clueless about Dodd-Frank.  Most pundits, including those at the Times, who commented on the interview presumably didn’t read (and at least one, Nicholas Kristof, still hasn’t read) Eavis’s April 5 post.

Ditto for some straight-news reporters covering the campaigns.  Politico’s Annie Karni, who covers the Clinton campaign but who I mistakenly said in a recent post, covers the Sanders campaign, is a case in point.

Which is understandable, I suppose, since The Upshot is just a blog, and The Times hides Eavis’s work there.

But the real purpose of my post was to highlight a major problem with Clinton’s candidacy that Democrats need to recognize: That the fairly widely held view of her as less-than-honest, less-than-trustworthy, and not particularly admirable in character, is not solely the result of relentless, decades-long Republican efforts to portray her that way, nor mainly because of her asinine email mess.  It also is because she consistently goes for the misleading cheap shot in an effort to con voters about, in this campaign, Sanders’ policy proposals or Sanders himself. And that she has no idea that this tactic is counterproductive rather than productive.

I was delighted that one of the questioners at the debate Thursday night—Dana Bash, if I remember right—pointed out her attempt to mislead last week that Vermont is the state from which the most guns come from that are used in crimes in New York state.  That claim is emblematic of the dual problem here that Clinton does this kind of thing regularly and that she thinks it helps her.

The Times today has an editorial online that will be published in tomorrow’s paper that I think pretty clearly is a quickly revised, post-debate draft of what originally was written as an endorsement of Clinton and instead endorses neither Clinton nor Sanders.  Here are the last two paragraphs of it:

Too often, Mrs. Clinton appears defensive in answering legitimate inquiries, for which she should have sound answers. This tendency has led to some errors and has prevented her from correcting others. Her decision to use a private server for her government emails was a lapse in judgment that she has yet to explain convincingly. Criticism of her lucrative speeches to Wall Street is also legitimate. She could easily deprive Mr. Sanders of one of his strongest points if she simply released the transcripts, instead of concocting absurd reasons not to. [Link in original.]

The breadth of experience that Mrs. Clinton — former first lady, senator from New York and secretary of state — would bring to the presidency is impressive and rare. But as tough as this long fight with Mr. Sanders has been, a tougher challenge could lie ahead: appealing to younger Democrats and resolving doubts about her forthrightness and her policies. She will need to do both if she is to stake a clear claim to the White House.

Watching that debate Thursday night, a majority of the Times editorial board members finally got the essence of the problem with Clinton’s campaign: It’s Clinton herself.  My hope, since she almost certainly will be the nominee, is that someone high up in her campaign also gets it and gets that maybe if it is explained to her and illustrated to her that her misrepresentations and incessant sleight-of-hand gimmicks in addressing Sanders and things related to him are reinforcing the belief among so many voters that she’s slimy and that she will say almost anything to win an election, she will finally get this herself.

Democrats are fooling themselves if they think this is trivial.

Added 4/16 at 1:35 p.m.  Addition re Karni inserted 4/16 at 2:15 p.m.