Drum on the Romney’s Continued Willingness to Lie about His Tax Plan

Kevin Drum: Lies, Damn Lies, and Mitt Romney’s Tax Plan.

We all struggle trying to explain why Mitt Romney’s tax plan is….inconsistent with reality. Here’s another crack at unpacking the basics behind the famous TPC study that originally made this point. It’s actually pretty simple:

[snip basic arithmetic]

Needless to say, Romney knows all this. The guy ran Bain Capital for years. If there’s anything he knows his way around, it’s a spreadsheet. So is it fair to say flat-out that he’s lying about his tax plan? I guess reasonable people can disagree, but I’d say it is. There really aren’t any reasonable assumptions under which his plan can work, and he obviously knows it. But he keeps saying it anyway. If that’s not a lie, what is?

I’m not sure I see any way around the “L” word here. It’s a knowing falsehood, spoken with the hope of deceiving. shcb? You’ve been pretty limber in the past at construing things I call “lies” as being some other sort of thing notquiteactuallyalie. Is there a better word for what Romney’s doing here?

23 Responses to “Drum on the Romney’s Continued Willingness to Lie about His Tax Plan”

  1. knarlyknight Says:

    “The Romney/Ryan platform makes sense, and is not laughable, in only one context: if you’re a multi-millionaire and you recognize that this is the only way to sell your agenda to mass audiences. But if you’re not one of those rooting gazillionaires, you should laugh, you should roll your eyes, and it doesn’t matter if you’re the Vice President or an ABC reporter or a toll operator. You should laugh, because this stuff is a joke, and we shouldn’t take it seriously.” – Matt Taibbi

    http://www.rollingstone.com/politics/blogs/taibblog/the-vice-presidential-debate-joe-biden-was-right-to-laugh-20121012?stop_mobi=yes

    Read more: http://www.rollingstone.com/politics/blogs/taibblog/the-vice-presidential-debate-joe-biden-was-right-to-laugh-20121012#ixzz298hpPryB

  2. shcb Says:

    It’s easy to explain, Drum is lying. No surprise there. “Harvey Rosen gave it a shot, but succeeded only by assuming wildly implausible growth estimates.” I just read Rosen’s report, he is assuming 3% growth rates, not wildly Implausible.

    Liberals, as usual, are using a basically static model, the TPC report does have some dynamics built into it but assumes people “people work the same amount, save the same amount, and invest the same amount,” whatever the tax rate, according to Rosen. Another item pointed out by the Weekly Standard is “it assumes tax reform must pay for repealing Obamacare’s tax hikes, rather than assuming that the repeal of Obamacare’s spending will pay for repealing the tax hikes.”

    Drum says “But wait! What about the economic growth this will unleash? That’s mostly mythical” really? Mythical? It worked when JFK and Reagan tried it, was that mythical?

  3. jbc Says:

    Actually, I’d consider it extremely surprising if Drum is lying. I’ve been reading all his public blog posts for some time now (averaging several posts a day since at least 2003), and he’s always struck me as extraordinarily honest. I’ve never seen him post about something where I actually feel like I have a good grasp already of what he’s talking about without feeling like yeah, he did a really honest job of summing up that issue.

    During that same time I’ve pretty regularly seen you say things that I’m reasonably certain are, if not knowingly dishonest, at least ill-informed and wrong to the point of negligence.

    So, if I’ve got a situation where Drum says one thing (“Rosen made implausible growth assumptions”) and you say another (“Rosen is assuming 3% growth rates, not wildly implausible”), I think Drum’s credibility outweighs yours by a substantial amount.

    Also, this gets back to the whole notion of relevant expertise that we’ve discussed before. You reading Rosen’s paper does not qualify you as an expert on whether Rosen’s assumptions are plausible. Think about the standards employed at Wikipedia: It isn’t enough that you, shcb, find Rosen’s assumptions plausible. The question is, are there people with relevant expertise in the field of economics and tax policy who find Rosen’s assumptions plausible? Drum is not only saying that Rosen is bonkers because he (Drum) thinks he is. He also is willing to cite others, including others with relevant expertise, who go into detail about why Rosen’s argument is bonkers. See for example this article by Josh Barro:

    http://www.bloomberg.com/news/2012-10-12/the-final-word-on-mitt-romney-s-tax-plan.html

    Barro makes some specific criticisms of Rosen’s paper. What do you think of those criticisms? Are you willing to engage with them in an intellectually honest way? Are you willing to find public writings by people with recognized expertise who articulate the positions you hold about why Barro is wrong and Rosen is right, and give us those sources so we can investigate for ourselves?

    You’re correct in one sense, at least: It is easy to explain this by asserting that Drum is lying. It’s super easy. I would offer that in fact, it’s the ease of that explanation that makes it so appealing to you. It’s way, way easier to believe that you are correct, and someone who disagrees with you is wrong, and just go cherrypick some evidence that seems to support that, than it is to actually try to reach an objective, informed, quasi-judicial judgement.

    But here’s the thing: The easy approach also makes it easy to be, and remain, wrong. I believe that’s what you’re doing here.

  4. shcb Says:

    Drum is lying, or at least to the degree it is considered lying here. If drum says (as he did) that the the rate of growth would have to be at an implausible rate versus the rate of growth would have to be at the implausible rate of 3% a rational person would say the first statement is at least deceptive. Here that seems to be good enough to be called a lie.

    Read Rosen’s paper, it’s only 17 pages, you’ve probably read 3 times that reading other people’s critiques.

    There are enough variables in Rosen’s paper (justifiable variables) that if you are talking to an uninformed audience you can turn it around any way you want, but Drum lied, it doesn’t matter how much of a man crush you have on him

    I read the Barro piece, but alas I’m not qualified to comment on it, I would offer experts to rebut Barro, but I’m not qualified to understand what they have to say either. I wish I were qualified to understand what I read in the Rosen paper but since I don’t have a degree in economics I’m not. It is a good thing Drum’s journalism degree makes him qualified to comment on economics. I wonder how professor Rosen teaches his students since they don’t yet have economics degrees, without that degree they aren’t qualified to understand any papers written by Rosen, that’s gotta be tough. I wonder how Rosen got his degree since once upon a time he wasn’t qualified to understand economics or papers written on the subject even though he was only days away from earning a degree.

  5. shcb Says:

    You say you have always found Drum credible and yet you won’t read a 17 page paper to see if the author was using a 3% growth rate. Exactly what did you do to establish Drum’s credibility?

  6. jbc Says:

    I answered that question above: I established Drum’s credibility by reading his copious online output for the last 9 years. And while I didn’t read the whole thing closely, I did at least dip into the Rosen paper.

    But it’s important to recognize that reading Rosen’s paper is insufficient to evaluate its claims. Of COURSE the paper itself is going to sound internally self-consistent, and for someone without relevant expertise who looks only at the paper itself (especially someone motivated to find it credible, by virtue of his identification with Team Romney) it’s going to seem compelling. That’s the whole point of the paper: To make its argument appear to be internally self-consistent and compelling.

    It reminds me of a profile I read of Whitfield Diffie in Wired back when that magazine was cool. (In 1994, I just discovered, after googling up the article.) Diffie is walking through a security products tradeshow with the Wired reporter:

    “At another booth he is offered a chance to try out an encryption-equipped walkie-talkie. ‘Presumably, we’ll discover it works just fine,” says Diffie, refusing the demo.’”

    If you really want to buy a particular type of car, walking onto the showroom floor and asking a salesman to explain its features is not a particularly good way to evaluate buying it. It’s the same thing with economic arguments. I guess you could make the case that reading Rosen’s paper is more like taking the car for an actual test drive, which probably is something you should do at some point before buying. But if you’re not also test-driving other cars for comparison, you’re still not being a very smart consumer.

    And yeah, reading the reviews written by people with a vested interest in nudging your choice this way or that (like, reading car magazines that are going to shill for whichever car manufacturer is buying their back cover ad) is perilous, too. Which is why it’s important to identify people whom you believe have intelligence and integrity, and whose opinions you’ve evaluated over time to get a sense of their relative authority.

  7. shcb Says:

    Just reading someone doesn’t establish credibility, have you periodically, independently verified his facts or assertions? Now Drum isn’t any more qualified to offer his opinion than you or I about anything but journalism according to the required qualifications you’ve stated for me so why would you find him credible for anything but journalism? That is all he has a degree in. for that matter do we even know he read Rosen’s paper? Or has he just taken the word of someone that wrote about someone that wrote about someone that read it, like you just did?

    But it’s important to recognize that reading Rosen’s paper is insufficient to evaluate its claims. Of COURSE the paper itself is going to sound internally self-consistent, and for someone without relevant expertise who looks only at the paper itself (especially someone motivated to find it credible, by virtue of his identification with Team Romney) it’s going to seem compelling.

    The issue here is simply is Drum lying, is seems all Drum has done is read Rosen’s paper, or read what someone else said about it. If you haven’t studied it yourself aren’t you doing the same thing with Drum’s assessment of the paper?

    You want me to provide a list of experts that agree with Rosen, what would that prove? If we can’t understand the paper enough to see if he based his analysis on 3% growth then how are we going to know that we can trust others on either side? I’ve never understood this mentality that I can’t do it myself, only someone better than me can do it, how do you ever get better yourself with that attitude?

    Rosen seems to believe the most important factor in determining if the Romney plan is viable is if tax rates are kept at the Bush rates or revert back to Clinton rates, since, quite sensibly the more efficient way of promoting an increase of economic growth is the lowering of taxes and the lower the starting point the more effective the program will be. It isn’t much of a savings if the store raises process of the product 10% the day before it lowers them 8%.

    He uses 3% because the Diamond study used 5%, so Rosen figures that if the 2012 law is replaced with the 2013 law the 3% will offset some of those gains, pretty conservative in my estimation. Here’s one of his footnotes

    Don’t read this footnote unless you are an economist. Seriously, you’ll find it impenetrable. Okay, I warned you. Here goes: the literature surveyed by Viard [2009]suggests that for high income individuals, a reasonable estimate of the elasticity of taxable income with respect to one minus the tax rate is 0.4. to be on the conservative side I assume a value of .25. Some research suggests that the responsiveness of high-income taxpayers may well be much higher. For example, Heim [2008] reports an elasticity exceeding one for high income taxpayers

    Okay, I’m not an economist, I was warned, and indeed I only vaguely understand what he is talking about. But, I sure feel he is more credible than Drum. Rosen has stuck his neck out, he has offered his sources, someone can look it up and call his bluff it that is what it is. Drum just said the rate of growth was unreasonable but didn’t say how or why. He just hopes we don’t ask those questions, and why should we? He’s Drum, and quite credible, he’s been writing for years.

    But back to Drum’s assertion that Rosen needs unreasonable growth to justify Romney’s plan (the lie) it sure seems .25 where others have suggested the number should be almost twice that or maybe even 4 times is not unreasonable by any stretch of the imagination.

    So show me in Rosen’s paper where he is using unrealistic growth to validate his conclusion, or show me where Drum has shown Rosen to use unrealistic growth in anything more than an unsubstantiated assertion.

    At some point you are going to have to realize your man crush has been sleeping around behind your back and lying about it.

  8. jbc Says:

    See, this kind of response is why I don’t find you credible. You’re playing a game here, pretending to be addressing the issue, but actually just trying to score points that you think are clever. It’s boring, because for someone who isn’t as emotionally invested as you are in your being correct, it’s obvious what you’re doing.

  9. shcb Says:

    I’m addressing the issue it just isn’t an issue you are comfortable with because it might cause you to have to rethink a relationship you have had with Drum for 9 years. You said Romney is lying about his plan, you are basing this on an analysis of Drum, I am saying his analysis is wrong and have given my reasons. In this case my point is fairly well defined, is Rosen overestimating growth. If I am right it shows Drum is lying, or he didn’t bother to read a fairly short report before he made some pretty harsh criticisms. Either doesn’t bode well for someone you quote on a regular basis.

    I’m not being cute other than to add a little levity for the sake of levity. Enkidu misquotes me, you constantly bring up this idea that if a person doesn’t have a degree in a subject they aren’t qualified to analyze it (except it doesn’t seem to apply to you or anyone that agrees with you), you want to talk about games! Those are the games you guys play, and it sucks.

    You don’t want to play games? Fine, tell me where Rosen is over estimating growth, as Drum is asserting, call Drum, ask him, see what his response is, dime to a dollar he has none. Drum made the statement, I think he is wrong, prove me wrong. Short, non boring, prove me wrong.

  10. knarlyknight Says:

    :-)

  11. jbc Says:

    Why? What’s in it for me to attempt to “prove you wrong”? Especially given your evident unwillingness to ever subject yourself to falsifiability?

    Actually, set that aside. Let’s pretend you actually were willing to subject your beliefs to being falsified by evidence I might be able to accumulate and present to you. Why should I bother to do that? How do I benefit from the expenditure of effort required to have a chance of changing your mind?

  12. shcb Says:

    You’re absolutely correct, there is nothing for you to gain by taking on my challenge. If I’m right and Drum is lying you loose respect for someone you have respected for almost a decade. If I’m wrong Drum has done nothing to increase his standing and I’m pretty low on your respect list to start with so dropping me much more than a notch or two is all that is possible.

    I routinely do these little tests on both the people I agree with and those I disagree with, I don’t know a better way to weed out undesirables on either side. It is just part of due diligence. I saw how hard it was for you with the Gleick incident, you’re better off not knowing.

  13. jbc Says:

    Heh. It’s still a game, but that move wasn’t bad. Well played, sir!

  14. shcb Says:

    Of course it’s a game, everything in life is a game. Marriage, war, raising children, business, politics, they are all games, with games played inside those games. Some are just more important than others. Our little game is about as important as two old friends playing checkers down by the lake, but even those can get heated and seem the most important game in the world in the moment. To be continued I’m sure…

  15. enkidu Says:

    Just to point out the facts again, shcb… but I usually quote you verbatim, provide the link and just point and laugh (it’s a hobby).

    I read the bloomburg piece when it came out, then the MJ piece when jbc linked to it. So Rmoney’s big tax bamboozle keeps citing these “6 studies” (not use of quotes, it is an exact quote, not a paraphrase, often denoting a ‘loose’ interpretation of the source material). Those six ‘studies’ are:

    1) a blog post from the AEI (a right wing ‘think’ tank)
    2) a blog post
    3) WSJournal op ed
    4) a blog post
    5) a thin paper from the the Heritage Foundation (a right wing ‘think’ tank)
    6) yet another blog post (which actually turns out to be the most substantial treatment of the issues and claims)

    Forgive me for seeming cynical and posting this on a blog, but are we really sure US tax policy ‘studies’ should be this paper thin and transparently partisan? Most analysis says Rmoney’s tax plan is a pig in a poke. Smart shoppers aren’t buying their mystery meat. The math just doesn’t add up without taxamagical growth fairy pixie dust. It hasn’t worked in the past and sure isn’t going to work now.

    They’ll blow up the New Deal and explode the deficit at the same time. Maybe that war in Iran will be treated as some sort of super-duper-stimulus. Hey, catching a bullet for the homeland is a job ya know.

    Here let’s just listen to Mitt in his own words:

    http://www.youtube.com/watch?feature=player_embedded&v=bZfXvFAeHVo

    The Rmoney Plan: Say Anything (the gullible and the malinformed will lap it up)

  16. enkidu Says:

    When even Chris Wallace is calling this bullshit, you have to start to wonder…

    http://crooksandliars.com/john-amato/chris-wallace-got-my-memo-six-bogus-stu

  17. shcb Says:

    Are you saying Romney is citing these 6 blog posts/studies on some official Romney web site? US tax policy will be decided in congress not a blog, but really what is the difference if a qualified person gives his opinion in a blog or a more formal paper? At this point anyway. I mean you are basing your opinion on a Mother Jones piece, right? Isn’t that a left wing blog/magazine? Doesn’t mean they are wrong does it?

  18. enkidu Says:

    As another wag put it: Mitt Romney has a secret plan to end the deficit!

    Do we, really need to roll the tape of the Romney campaign using this exact phrase? Really? Would you, say, believe they used the phrase if, say, the vice presidential candidate says it? Would that be a spokesperson that could possibly change your mind? No.

    As usual your sequencing is wrong (at least for me) I read the Bloomberg piece before the Mother Jones blog post. I am fully aware that MJ has a agenda and they are proud to say so (unlike, say, fox ‘news’, which I linked to up above btw)

    jbc, you know the way this ends don’t you Charlie Brown?

    Let me know if you need me to find that video of the Romney/Ryan campaign talking about those Six Very Serious Studies! only some of which we paid for…

    in the mean time enjoy these videos

    http://talkingpointsmemo.com/archives/2012/10/wow_so_funny.php?ref=fpblg

    http://videocafe.crooksandliars.com/david/mark-sanford-obama-will-throw-lot-spears-nex

    har har har!

  19. shcb Says:

    Since you read the Bloomberg article I assume you followed the links in it and read all the documents it is criticizing.

  20. shcb Says:

    I wonder why Barro didn’t state what economic growth rate Brill used to turn Romney’s plan from a deficit to a surplus was, and where that information came from, in case you missed it:

    Even modest economic growth makes a difference. And finally, the important factor that I discussed above. Based on Table 3-1 of the “Analytical Perspectives” report by the president’s Office of Management and Budget, I compute that if the economy were to grow just 0.1 percentage point faster per year as a result of the reform, the additional revenue in 2015 would be approximately $13 billion. The result: A $12 billion tax increase on the middle class actually becomes a tax cut.

    I also wonder why the links on the Bloomberg site just go back to a Bloomberg site, not to the original documents, probably just my tablet.

  21. enkidu Says:

    I read most of the links, at least the bits that weren’t behind the paywall

    Sounds like you skipped the TPC ‘study’

    Bottom line, iirc, to make Rmoney’s 20% cut for everyone work, you have to remove all deductions from everyone making over $100,000. All. Think that is going to happen? Not on your life.

    magical confidence fairy makes tax cuts pay for themselves!
    malarkey

    If tax cuts pay for themselves why did bush double the US debt (yes yes, almost)
    Obama came in with a real deficit of around $1.4 Trillion (once we got the two off-the-books wars in the budget, etc [*note, that is a pretty big etc, remember 2008? hmmm?]) The budget deficit is down to less than $1.1 Trillion. Gov growth under Obama is slower than almost every President of the modern era. Gov jobs are down, not up. Down. Up is not flat, down is not taxamagical. 2+2≠ purple

    Most analysis finds the Rmoney tax plan to be full of candy, but no spinach. Just ask Chris Wallace, or is he in the tank for Obama as well?

  22. shcb Says:

    Yes I’ve read the TPS report (little Office Space humor) and no, most economists don’t think it is hokum, most left wing pundits and economists think it is hokum because they are using static models. As Brill points out static really only works for small changes to tax law, it really doesn’t work there either, but the difference between static and dynamic are so small it doesn’t make much difference. But when you are talking about a major change as we are here static just doesn’t work. Professor Rosen reminds us in his paper of Phil Gramm asking the Joint Committee on Taxation to produce an estimate of the revenue consequences of a 100% tax on income. The JCT said there would be a huge increase in revenue because they figured people would continue to work without pay… okay.

  23. __j__ Says:

    As far as the subject of the article goes, to me it seems prima facie that Romney lies about most everything, because that’s his role. (Obama doesn’t strike me as any better unfortunately.) @jcb, to save me the nine years of work, do you have any examples on tap where Drum actually made an economic prediction, with specifics, such as “if bill X passes by April then by December the unemployment rate will be no more than Y unless we have unrelated problem Z over in Japan” …or, somesuch specific future-thing. shcb is theorizing that Drum is a journalist, who reports on stuff, but doesn’t really know econ (i.e. the theory thereof), and you are saying that Drum seems to be pretty darn smart and honest. But to my mind, if he’s good on econ, he ought to be reporting testable predictions.

    Off-topic somwhat: shcb and jcb and anybody else that cares to jump in, what sort of policy *does* lead to more-rapid economic growth? You may stipulate other conditions if needed, e.g. that our policy must be tuned to be competitive relative to the policies in other countries, or that the size of the workforce must exceed the size of the kids & retirees & unemployed (or fall within some kind of parameters or whatever). Point being….

    Most of the people who are repubs say that the way to solve the 20 trillion in debt we’re gonna have in 2016 is to cut spending and boost growth, from the 1.5% we’ve seen the past three years to more like 3% assumed here. Most of the people who are repubs say to also cut spending (but they pick different places) while raising taxes — Obama mainly targets the wealthy with his oh-so-classy style of class warfare based on nebulous fairness-is-what-I-say-it-is dogma, but other dems are less divisive and say we need to raise taxes in general, usually with an eye to keeping the tax-structure progressive-slash-liberal and to reducing corporate loopholes and such. The banter between jcb and shcb pretty much blows past what I think is the key question: how *do* we get from 2% up to 4% annual growth? Drum says it’s impossible (or at least — impossible under the Mitt plan). Rosen asserts it’s easy (or at least — easy under some specific assumptions).

    But please note that I’m *not* trying to reopen the discussion of Rosen/Drum/Barro, or even Romney/Obama. That’s been covered, above. I’m trying to ask what *is* the sort of policies that folks here consider likely to work, if the goal is boosting economic growth (which tends to be, but is not always, also a decrease in unemployment). Feel free to cite your favorite econ authorities, or not, as you wish.

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