Perceptive observers will remember that the Tea Party as we know it today was started by an interview from the trading floor, given by CNBC’s Rick Santelli, and only later did the “grassroots”- apologies for the scare quotes, but no better time- come on board. What we had with that movement, which has since been co-opted by a host of interests, was organized money sticking it’s tongue out at Obama’s supposedly progressive agenda.
Fast forward almost 2 years- another election cycle has been completed, and organized money has again gotten its way. Well, kind of. The fruits of there gains, already borne out to a large degree by general lobbying money, will only be truly realized in January when the House switches to the GOP (although I harbor no illusions that much of our policy in the last ten years has not been directed by the same forces). What will they do in the meantime? Well, via Matt Drudge, US News is reporting “Washington Whispers”-sorry, it’s a scare quote kind of night here- that the stock market will plummet if we don’t have certainty on universal tax cuts by December 15th.
“Capital gains tax rate will increase from 15 to 20 percent if the tax cuts are not extended. The last time the capital gains tax rate increased–on Jan. 1, 1987 from 20 to 28 percent–investors realized their gains at the lower tax rate,” said Daniel Clifton at a Washington partner at Strategas Research Partners…
Worse, talk that Congress will simply pass retroactive fixes to the tax system won’t help, since investors will take the sure thing and sell rather than rely on Capitol Hill. “Fixing the issue next year will not negate these negative impacts,” said Clifton.
Now, there is a valid debate to be had over whether any taxes should be raised during a recession. However, it’s likely that the same folks who are demanding continued cuts for high earners and for capital gains also oppose extending benefits to the unworthy unemployed. What’s strikingly dissonant to me is that in American culture, it’s news when organized money threatens to go on strike. However, there’s no coherent mechanism for organized labor or organized people to do the same. Obviously I’m probing at larger questions about the decline of labor and civil society, but it’s undoubtedly true that the power dynamic in the status quo will continue to produce these dissonant stories, and the unjust desserts to which they are attached.