There was something distinctly amusing about watching Sarah Palin's piece of performance art last week defending the Bush tax cuts. In truth, there were lots of amusing things.
In progressive circles, there are plenty for whom the mere mention of the name "Karl Rove" engenders nothing more than the gnashing of teeth--or perhaps the occasional howl of execration. But his admirers and detractors alike can agree on one thing: he had a rare gift. He could turn his candidate's weakness into a strength, and his opponent's best strength into a devastating weakness. Have a candidate who's afraid of horses? Turn him into a kickass cowboy. Have an opponent who's a bona fide war hero? Turn him into a cowardly Frenchman. Have a vice-presidential candidate who got five deferments to avoid Vietnam? Turn him into the Dark Lord of the Sith. The idea is clear.
Fortunately, Sarah Palin lacks this skill. Her weakness is that she's an overmatched lightweight who has to scribble notes on her hand during interviews. And how does she decide to overcome that? By doing it again and reminding everyone that she did, in fact, scribble notes on her hand during an interview--though admittedly, the attempt to blame it on liberals for actually expecting a potential presidential candidate to have basic math skills deserves some plaudits. Let's just call it an attempt to appeal to the baser elements of her base.
Even more amusingly, the half-term governor managed to take her biggest strength and turn it into a weakness. Chris Wallace did his absolute best to do her a favor: He emphasized the point repeatedly that the tax cuts being defended by the Governor Who Quit were blowing a hole in the budget of around $600 billion per year and that they had benefited only the very wealthiest of Americans. But Mama Grizzly continued unbowed in their defense, repeating the tired talking points of failed Reaganism: that the tax cuts would hurt small businesses. That rich people employ everyone else, so increasing their marginal tax rate would prevent employment. That "raising taxes" will hurt the economy and slow growth.
All of which, of course, is utterly false. But you wouldn't know that from hearing Republicans talk about tax cuts--especially marginal tax cuts for the wealthy--as if they were some sort of panacea, equally effective regardless of the illness.
Conservative tax policy has long been centered on the hypothetical Laffer curve--a parabolic graph demonstrating a presumed relationship between marginal tax rates and total government revenue. At tax rates of zero percent and a hundred percent, government revenue is zero: after all, zero percent of zero is zero, and if the government takes all your income, there is no longer any incentive to work. The idea is that somewhere in the middle of that curve is the "peak"--the ideal rate at which government revenue will be the highest. Here's a basic example.
Now, just to recap: This so-called Laffer Curve underwrites much of the theory behind taxation policy in supply-side economics, because the default assumption is universally that tax rates are on the upward slope of the curve--namely, that tax rates are too high. If tax rates are lowered, that fact simply goes down the memory hole and is forgotten, and the new tax rates, such as they are, become the readjusted baseline. This was precisely the framing that the ex-governor used to promote the extension of the Bush tax cuts: according to Palin, Obama has a "proposal" to end the Bush tax cuts--even though by their nature, they were designed to be temporary and it would take a proposal to continue them, rather than to end them. According to Palin, Obama would be "responsible" for the largest tax increase in history, rather than simply standing by while they reverted to the levels they were at during a period of unrivaled economic prosperity.
The conservative perspective on tax policy is something like a ratchet: it only goes one way. The Laffer Curve is an extremely simplistic way of viewing tax policy, given the inherent complexities of the subject, but it is illustrative of a fundamental point: If conservatives were intellectually honest about their views on tax policy and the existence of a "peak rate" at which government revenues would be maximized, there would be a serious debate about which side of the hypothetical Laffer curve we were on.
It would be especially important to have that debate--especially regarding tax cuts for the wealthy--in light of the history of the top marginal tax rates in this country, which were as high as 77 percent in 1964, and have now decreased to as low as 28 percent during the presidency of George H. W. Bush before settling at the current rate of 35 percent --half of its 1964 level. It would seem even more important to have that debate in light of the deficit we currently face, and the supposed concern that conservatives have about it, especially given the fact that tax cuts for the wealthy are one of the less productive ways of providing economic stimulus.
Intellectual honesty, however, is not the conservative strong suit. Promulgating self-serving policy, on the other hand, is quite a different story. So as the battle over the Bush tax cuts heats up, just remember: The governor who quit isn't seriously interested in reducing the deficit. She's not even intellectually curious about whether the current tax rates are the best for the economy as a whole. Rather, she's very interested in making sure she gets to keep as much of her six-figure speaking fees as she possibly can. And if the people who were forced out of a job by her party's policies can't get unemployment benefits because of that? Tough luck. They just didn't have the drive to spend time giving Rich Lowry starbursts.