Ye Olde Rocket Forum - Reagan's economist Bruce Bartlett speaks out

From Moyers and Company

BRUCE BARTLETT BIO - ".....the conservative economist Bruce Bartlett, the supply-side champion who wrote the manifesto for the Reagan Revolution. Bartlett became a senior policy analyst in the Reagan White House and a top official at the Treasury Department under the first George Bush. Yet for all those credentials, he is today an outcast from the very conservative ranks where he was once so influential. That’s because Bruce Bartlett dared to write a book criticizing the second George Bush as a pretend conservative who slashed taxes but still spent with wild abandon. The subtitle says it all: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy.

For his heresy Bartlett was sacked by the conservative think tank where he worked. Undaunted, this card-carrying advocate of free markets and small government has been a prolific writer for popular and academic journals and has just published a new book: The Benefit and the Burden: Tax Reform - Why We Need It and What It Will Take. It’s a layman’s guide through the jungle of a tax system that, thanks to rented politicians and anti-tax ideologues like Grover Norquist, enable the one percent to make off like bandits while our national debt soars sky-high. I talked to Bruce Bartlett soon after he had finished his new book."

Except from interview

Quote:

BILL MOYERS: You've made it clear that the Bush cuts were worth little to those making $150,000, but a huge amount to those making five, ten, 15, $25 million. Do those folks in the Tea Party get that?

BRUCE BARTLETT: I'm not sure. I'm not sure if they really know very much about taxation. Back when the Tea Party first came into existence, back in 2009 they had a big demonstration in Washington. And we went around and we surveyed a good percentage of the people in this demonstration about what they knew about taxes, what they thought the top rate was, what they thought their tax rate was. You know, questions of just straight factual knowledge, not opinion.

And it turned out that these people all thought taxes were vastly higher than they really are, and that they were paying exorbitantly high tax rates that would be impossible for them to pay. And so, I think that this is part of what's going on here, is simple misinformation.

And there have been other polls and things that are showing the same thing. I mean, if you really thought, if you're a typical middle class person, you really believe the government was taking half your income, you'd be out demonstrating. But the fact of the matter is that the vast majority of people pay less than 10 percent federal income taxes. So they simply have a wrong understanding of what they pay.

BILL MOYERS: Well, there are all the other taxes, of course. State taxes, sales taxes, toll fees and all of that.

BRUCE BARTLETT: That's true. But all taxes taken together as a share of GDP is only about a third, or even less. More -- it's like 30 percent. That's all federal, state and local taxes all put together. So that you're not going to have taxes being much higher than that for anybody.

BILL MOYERS: You remind me that ideology is a worldview that can be believed despite all the evidence to the contrary.

BRUCE BARTLETT: Well, it's very much like religion. And I think that it's not a surprise that so many very, you know, devout Christians are a part of the Republican Party and accept a lot of this. Because the nature of deep religious belief is faith, which means you accept things for which there is no proof.

And so, I think it's not that hard to shift that faith over to believe a lot other things that you've been told are true so many times that you just accept that on faith as well. That if you cut taxes, revenues will go up, you know, and things of this sort. That all tax cuts are good and all spending cuts are good, and all government is bad.

BILL MOYERS: Are you pessimistic?

BRUCE BARTLETT: Oh, absolutely. I'm very pessimistic.

BILL MOYERS: What makes you most pessimistic right now?

BRUCE BARTLETT: The gridlock in Congress. Or I don't know. It's the lack of willingness to discuss issues in a reality-based way. We just seem to live in a zone in which people no longer really seem to care about facts or analysis. And we talk in sound bites.

And the media of course contribute to this. The decline of the major media. People don't want to read magazines. They don't even want to read a newspaper article if it's more than a couple of inches. And if it doesn't mention Lindsay Lohan, they move on.

Clearly people don't seem to know as much. And they don't seem to care that they don't know as much about public policy or just the basic facts of, you know, how much does the government tax, how much does the government spend? What does the government spend money on? I've seen more than one poll that shows people believe that 20 percent of government spending goes to foreign aid.

20 percent. It's actually one percent. But of course if you believe a huge percentage of government spending is going to just giveaways to foreigners then why not cut taxes and slash spending? It's not coming out of anything that matters to you. People have to be given the factual information they need to make decisions. And they're not getting it. And they may not even want it.

BILL MOYERS: I just read a summary of a study done at the University of Michigan that over a period of time shows that people have confronted with facts they believe to be true will reject them nonetheless if they offend or undermine their belief system. That their beliefs -- our beliefs are more important to us than the facts.

BRUCE BARTLETT: Oh, I think we need some -- instead of talking to economists like me, we need to be talking to psychologists and sociologists to try to get at the root of this problem.

BILL MOYERS: You wrote in the Washington Post, "The growing inequality of wealth and income distribution is both a moral and economic problem." How do you see it as a moral problem?

BRUCE BARTLETT: Well, I think it's wrong to have people with such extraordinary wealth that pass it down from one generation to another, with people not having to work for a living, being able to have control perhaps over government. Clearly wealth and power are interrelated at least to some extent. And, of course you see members of both parties now going hat in hand to the exact same group of people on Wall Street.

And it's naïve to think that they're not getting something for their contributions. I don't think it means that politicians are being bought. But when the class of people that they spend all of their time with, talking to and so on, they're bound to pick up part of their point of view, their attitude. And, of course, many politicians these days hope to be able to join those groups of people.

BILL MOYERS: When they leave office--

BRUCE BARTLETT: When they leave office, that's right.

BILL MOYERS: 300 former members of Congress are now lobbying in Washington.

BRUCE BARTLETT: Yes indeed. But it’s more, I don't know, class consciousness is the only word I can think of, but it doesn't really get quite at what I'm talking about. It's the community of shared interests.

But we have public policy problems. For example, we have a large budget deficit that many people, myself included, believe will require higher taxes to deal with at some point. But -- and so, if the wealthy don't contribute more, then the rest of us are going to have to contribute more.

If the wealthy are unwilling to pay more taxes, then this is going to lead to spending cuts. And if you put off the table things like national defense, then you're going to end up cutting more and more out of programs that aid the poor. So, I think there are consequences to this idea that tolerance for inequality requires us to -- to just do nothing to make the wealthy contribute a higher share of resources to fund the government.

BILL MOYERS: Here's some data from the nonpartisan Congressional Budget Office. Let me see what you think about this.

Between 1979 and 2007, about 30 years there, roughly 40 percent of all income growth, post-tax, post-benefit, accrued to the upper one percent. And in just the five years between 2002 and 2007, over half went to the top one percent. What do you make of that?

BRUCE BARTLETT: It's extraordinary. But I think it's even worse than the data show because if you disaggregate the one percent, you find out that the vast bulk of the gains made by the one percent were by the top 0.1 percent. So -- and this also makes another point, which is that if you ignore the top one percent, the increase in inequality is not that great.

The income classes of the bottom 99 percent have moved more or less together. It's the top one percent that has just skyrocketed up out of proportion to everybody else. So, in other words, there's a huge difference between being in the ninety-eighth percentile and being in the ninety-ninth percentile. And it's important not to lump in people who merely make, you know, a couple hundred thousand dollars a year with people who are making millions upon millions, and even billions of dollars a year.

And that's something that I think is not -- doesn't always come through in the context of the debate. We're talking about a really small number of people, in the hundreds, who have really acquired a huge outsized share of all of the gains that this country has made in terms of income and wealth over the last few years.

BILL MOYERS: More than any other group, the tax rates for the wealthiest Americans have been coming down these last 30 years. This couldn't have happened without a bipartisan consensus that it's a good thing.

BRUCE BARTLETT: Yes.