Relevant and even prescient commentary on news, politics and the economy.

No, Mr. Trump, nothing made you smart. To illustrate: You think a VAT tax is a trade tariff.

Nick Confessore


9:20 PM ET

Just to pull back for a second here, you can see a part of Clinton’s strategy. She is not campaigning against him as a crazy man. She is campaigning against him as a traditional and, in her argument, flawed conservative Republican.

First Clinton and Trump Debate: Analysis, New York Times, live blogging of debate


Okay, all you regular Bear readers won’t be surprised that my most favoritist lines in the entire debate were, “We settled the suit with zero — with no admission of guilt. It was very easy to do.”  And, “I settled that lawsuit with no admission of guilt, but that was a lawsuit brought against many real estate firms, and it’s just one of those things.”

He settled that lawsuit with no admission of guilt.  Which is how lawsuits traditionally are settled.  It’s also why lawsuits of certain types are settled for more money than they otherwise would be; an admission of guilt gets you a settlement discount.

This particular type of lawsuit normally is settled with no admission of guilt–just a court decree in which the defendants promise to stop doing what they were not guilty of doing.  An admission of guilt would defeat the main purpose of settling: minimizing harm to the reputation of the business and its owners or executives.

Those lines of Trump’s last night, stupifyingly stupid as they were, did have some tough competition for my designation of The Best.  After all, there was that protestation by Trump that his cheering for the housing-bubble collapse is “called business, by the way.”  And that an architect Clinton mentioned who was among the thousands of workers and small-business owners whom Trump has refused to pay after they’s completed the work for him “maybe” “didn’t do a good job and [Trump] was unsatisfied with his work.”

And that Trump’s never paying any federal income taxes “makes [him] smart.”

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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.

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