By Michael Corey, September 22nd, 2011 
The public debate about “tax loopholes” is muddled at least in part because “loopholes” and “tax expenditures” have become intertwined. Both are peculiar terms.
“Loopholes” have a history. Some accounts report the term as originally referring to the narrow slits (larger on the inside and smaller on the outside) cut into castles. They made it possible for defenders to peer out and watch with relative safety, and when necessary, fire arrows or other projectiles to protect the castle. Some loopholes in castles were slightly larger and could be used as an escape when necessary. Other explanations of the origin of the term point to alternative Dutch words meaning “to run” and “to watch”. Others refer to an English term, suggesting “to leap.” A number of references cite poet Andrew Marvell (1621-1678) using loopholes to communicate the ability to evade or squeeze through. Today, loophole is a symbolically rich term that is intended to mean that something unseemly is taking place through such evasion and squeezing.
Are tax expenditures an entirely different matter? The Congressional Budget Act of 1974 (Public Law 93-344) defines tax expenditures as, “…revenue losses attributable to provisions of the Federal tax laws which allow a special exclusion, exemption, or deduction from gross income or which provide a special credit, a preferential rate of tax, or a deferral of liability.” That is, in plain English: tax expenditures are lost tax revenues caused by special exceptions to tax laws. By law, a list of “tax expenditures” must be included in the President’s budget in a section titled “Analytical Perspectives,” prepared by the Office of Management and Budget. The list for 2012 includes 173 “tax expenditures (p241 – 251),” which total over one trillion dollars for the fiscal year beginning October 1, 2011. As objective as this may sound, the list and estimates of “cost” is actually quite subjective, because analysts posit the starting point of the tax baseline.
 . . .
Read more: Against “Tax Loopholes”?
By Jeffrey C. Goldfarb, September 20th, 2011 
I am teaching the foundations course in our graduate program this year: “Classical Sociological Theory.” It’s a challenge. The last time I taught such a class was thirty years ago. Yet, it’s a challenge worth taking. Aside from the matters of departmental needs and resources, this is something that I believe will be particularly interesting for me, and also for my students. Over those thirty years, I have actively thought about the events of the day, and about my research, using foundational thinkers (though some more than others), “standing on the shoulders of giants.” It is exciting to revisit old friends, including, among others, Max Weber, Emile Durkheim, Georg Simmel and George Herbert Mead, and spend some time, introducing them to students at the beginning of their professional training.
The first theorist was easy, Alexis de Tocqueville. I have taught an undergraduate class on his masterpiece, Democracy in America, frequently. My new book, Reinventing Political Culture: The Power of Culture versus the Culture of Power, is not only informed by Tocqueville’s approach to culture and democracy. It is in a sense in dialogue with Tocqueville. And as the readers of Deliberately Considered know when I look at current events, I often interpret them using the insights of Tocqueville from understanding the nature of the American party system and for contemporary political debate, such as the struggle over workers’ rights in Wisconsin.
Karl Marx, the second theorist we examined in our class, is another matter. Like many intellectuals since his time, I have a history with Marx. As I told the class in an introduction to our discussions last week, when I was young and especially critical, I thought that to be critical required one to read, know and act through Marx. I remember having a course in high school which I found particularly upsetting, “The Problems of Communism.” The author of the class text was J. Edgar Hoover, the head of the F.B. I. Talk about the state ideological apparatus, as . . .
Read more: Teaching the Classics: Reflections of an Ex-Marxist Wannabe
By William Milberg, September 19th, 2011 
Beyond the 1937-like craze in Congress today over cutting the budget deficit, there is a more serious debate going on in the US over how to stimulate aggregate economic demand in order to spur more rapid job growth. In this debate, there are competing views over whether to raise spending or cut taxes – sometimes referred to as left Keynesians and right Keynesians. Macroeconomists have mainly favored the spending route because the historical evidence is that spending gives more bang for the deficit buck since the initial impact brings a one-for-one boost to demand, while a tax cut initially loses some bang because tax cut recipients initially save a part of their higher disposable income. But there is agreement among those who engage in this debate that tax cuts too will stimulate demand and job growth, especially when they are aimed at lower income Americans who spend more of their disposable income on the margin than do the rich.
In fact, the greatest moment of success of Keynesian policy in the history of the United States is not the New Deal, as is often claimed by proponents of greater deficit spending in the current crisis. The height of the influence and success of Keynesian policy advisers was the Kennedy administration’s income tax cut of $13.5 billion over three years. The policy was strongly urged by President Kennedy’s Council of Economic Advisers, led by the great American Keynesian economists James Tobin, Walter Heller and Arthur Okun. Facing unemployment rates around 7 percent, the economists sought to bring it down to 4 percent. By early 1964 (after Kennedy’s death), the proposal was passed into law. The tax cut is attributed with moving the economy to 4 percent unemployment and a very high rate of capacity utilization. In his history of that era, Michael Bernstein (A Perilous Progress) writes that “by the fall of 1964 the success of the tax cut was so apparent that, in the words of Arthur Okun, ‘economists were riding . . .
Read more: Do the Right Thing: Responding to the Economic Crisis
By Nachman Ben Yehuda, September 16th, 2011 
The Israeli summer: Hundreds of thousands took to the streets in one demonstration after another. Hundreds erected tents in the middle of cities and other public places and lived in them. Protests were not about war and peace, but social concerns, a strong, angry and frustrated cry against the high cost of living and the quality of life. The demonstrators were particularly concerned about the price of housing (both for purchase and rent), low salaries, and the retreat of Israel from its previous social welfare commitments and the transformation of the state into what has become known as a “swine capitalism.” In July and August of this year, the unprecedented happened. Irit Dekel has already reported and appraised at Deliberately Considered earlier developments. Here, I consider a hopeful sign, and suggest how the concerns of the protestors might be addressed, even though I think this is unlikely, given the nature of the present government of the country.
A Hopeful Sign
As the massive civil protests were taking place, supporters were concerned that the sharp edge of this genuine social and political protest may be neutralized if a military threat suddenly erupts. Possible scenarios included President Assad of Syria or Hezbollah in Lebanon igniting Israel’s northern border in order to deflect international attention from Assad’s brutal suppression of the revolt against him. While this did not happen, in mid August, Israel’s southern border was ignited as Israel and the Palestinians in Gaza exchanged fire. This heightened military tension immediately set the agenda for the news. Coverage of the protest by the media all but disappeared. Yet, the protest did not abate.
Given this persistence, the political authorities are under great pressure to respond. Yet, Netanyahu and his government, at best, will try to placate the protestors, making minor changes, merely alleviating some of the despair, stress and misery that fueled the protests. A significant response to the Israeli summer would require changed national priorities. Although I don’t think there is a political will for this by the ruling parties, important changes are possible, practical policy . . .
Read more: Civil Protest in Israel: Reflections of a Science Fiction Fan
By Casey Armstrong, September 14th, 2011 
There is a growing expectation that Washington may address the jobs crisis in a significant way with the possibility of major parts of “The American Jobs Act” becoming law, The New York Times reports today. A key to this could be the supercommittee, officially called the “Joint Select Committee on Deficit Reduction.” Casey Armstrong considers whether it is likely to be up to its bi-partisan tasks. The question of American governability is on the line. -Jeff
Last month, I speculated that the supercommittee had the potential to help drag our legislature into a more authentic form of bipartisanship, a bipartisanship based on principled mutual compromise in the tradition of Henry Clay. I expressed my belief that the makeup of the committee would determine its ability to affect change. In that respect, the prospect of the committee changing the status quo now seems bleak. There is great opportunity but the membership of the committee suggested that the opportunity will be missed.
The Committee on Deficit Reduction is nominally a “joint select committee.” Emphasis should be given to the “joint” nature. Select committees generally suggest, but don’t legislate. In the present supercommittee, I see the spirit of the conference committees that resolve contentions between Senate and House bills. “Going to conference” offers possibilities of compromise that would not have previously existed for the conferees in their respective chambers or standing committees. Conference rules state that “the conferees are given free reign to resolve their differences without formal instructions from their bodies.” Senate scholar Walter Oleszek quoted an anonymous Senate leader opining, “Conferences are marvelous. They’re mystical. They’re alchemy. It’s absolutely dazzling what you can do.”
In the Obama budget talks, posturing was encouraged by heightened visibility. Separate branches of government competed for authority. With the supercommittee, we move to what Erving Goffman called the “backstage.” The individual actors have more agency to shape the outcome than the participants . . .
Read more: Can Washington Matter? The Case Against the Supercommittee
By William Milberg, September 8th, 2011 
The failure of economics in the runup to and aftermath of the Great Recession has generated a lively debate about how to reform economics and more specifically about the renewed relevance of Keynesian economics, which had fallen out of favor since the 1970s. The Keynesian message, so important in this latest round of political wrangling over the increase in the US debt ceiling, is that cutting government spending in a slump will only worsen the unemployment problem. The role of expansionary fiscal policy, according to Keynesianism 101, is to provide demand for goods (and thus for employees to produce those goods) when the main sources of demand in a capitalist economy — households and businesses – are not providing a level of demand necessary to generate a socially acceptable level of unemployment.
Keynesianism 102 is about the multiplier effect of changes in spending. This is the notion that an increase in demand (from any source, not just government but certainly including government) will impact employment and incomes with a ripple effect. This includes a direct impact and then a secondary impact when the direct incomes are then spent (in some fraction) and an additional fraction of that is spent, etc.
There are two corollaries to the lesson of Keynesianism 102 that are worth mentioning because they have been raised in the current policy debate. The first is about the differential multiplier effect of a spending increase compared to a tax cut. Empirical studies show that the multiplier effect of the former is greater than the multiplier effect of the latter. The second is about the differential multiplier effect depending on the income of the recipients. Since the poor are more likely to spend a higher percentage of additional disposable income than the rich, a tax cut that benefits low-income people will have a bigger multiplier effect than a tax cut that benefits the rich.
These lessons have not been integrated into current economic policy in the US, where deficit spending and progressive tax reform and expanded benefits for . . .
Read more: Unemployment Equilibrium: Keynesianism 103
By Jeffrey C. Goldfarb, September 5th, 2011 
Today is Labor Day in the U.S. In practice, for most Americans, the primary significance of the day is as the unofficial last day of summer. I just went for a long swim in my outdoor pool, which closes today.
There are also political and union activities on the labor theme, marking the official reason for the holiday. Thus, President Obama gave a speech today in Detroit to a union gathering, previewing the themes of his long awaited address to a joint session of Congress on Thursday, addressing the concerns of organized labor.
This September date as a workers holiday was originally chosen by the Central Union of New York in 1882. It is strange that the rest of the world celebrates May 1st as the international day of labor, marking the Haymarket Affair of 1886, a scandalous labor conflict in Chicago. During the cold war, the U.S. even officially designated May 1st as “loyalty day.” The contrast with the practice of the Soviet Union and its allies was essential. The American Labor Day, though, has an equally serious origin. It became a national holiday after the violent events surrounding the Pullman Strike of 1894. American indeed has an important and rich labor history.
I think it is unfortunate that American labor’s celebration is out of sync with the rest of the world. We commemorate alone, which weakens the power of the ritual. Nonetheless, especially now, when labor issues are so central, as President Obama indicated in his speech, it is important to take notice. I recall some previous Deliberately Considered posts.
Rachel Sherman’s “Domestic Workers Gain Visibility, Legitimacy” noted an advance in labor legislation in the state of New York. She highlighted the achievements of the Domestic Workers Union to agitate and achieve some fundamental rights in the new legislation, concerning overtime, vacation leave and protections against sexual and racial harassment. As she also observed the place of American domestic workers in the global economy and the connection between class and gender, . . .
Read more: In Review: On Labor Day
By Scott Beck, September 2nd, 2011 
Freedom is an integral part of American consciousness and national identity. Thus, legislation and policy proposals are often debated in terms of their ramifications for freedom. Yet, most Conservatives believe this ideal is their private property and pertains only to private property. They hold a narrow view, which privileges the business class. Freedom for the rest of society will magically flourish so long as corporations have their way. This particular approach to freedom, economic freedom, has been brought up repeatedly by Republican Presidential candidate Mitt Romney, who has warned that economic freedom in the United States is in danger of disappearing. This claim has twice earned Romney a “Pants on Fire” rating from Politifact.com. Of course, this will not deter Romney or other Republican candidates from extoling the virtues of economic freedom, warning us of its impending extinction and the tyranny which will ensue. Because the conservative’s “freedom” has been so politically consequential in recent years, it deserves close scrutiny,
According to the ascendant conservative ideology, the size of a government stands in inverse proportion to the liberties of its people. Hence, more government means less “freedom.” The corollary to this maxim is that the lifeblood of the government is tax revenue. Hence, if you want to limit the size of government, you must keep taxes as low as possible. Add the claim, following Cold War logic, that restrictions on economic freedom lead to a decline in general freedom, and you have “freedom,” which will then somehow trickle down on the rest of us. The case for economic freedom has its appeal. Yet, the implicit claim that economic freedom necessarily leads to other freedoms, political or otherwise, does not stand up to scrutiny, as revealed by two recent reports on freedom: Freedom House’s “Freedom in the World 2011” and the Heritage Foundation’s “2011 Index of Economic Freedom.”
A comparison of the two lists is quite instructive as it undermines claims that economic freedom is the basis of other freedoms, that socialist programs . . .
Read more: Does Freedom Trickle Down?
By Michael Corey, August 26th, 2011 
On Monday, August 22nd, the Martin Luther King, Jr. Memorial on the National Mall in Washington, D. C. was opened for visitors. The official dedication of the memorial was scheduled to take place on Sunday, August 28th (indefinitely posted by Hurricane Irene), the 48th anniversary of Dr. King’s “I Have a Dream” speech, delivered during the March on Washington for Jobs and Freedom before over 200,000 people. The Martin Luther King, Jr. National Memorial Project Foundation notes that this is the first memorial on the National Mall “to honor a man of hope, a man of peace, and a man of color.” The memorial, according to the project’s mission statement, honors Dr. King for “his national and international contributions to world peace through non-violent social change.” A virtual tour of the memorial is available on the Foundation’s website.
The 120 million dollar memorial is located on the Tidal Basin adjacent to the FDR Memorial, and its line of sight connects it with the Jefferson and Lincoln Memorials. The project was launched in 1996 when President Clinton signed a resolution to build a memorial in honor of Dr. King. Groundbreaking for the project took place on November 13, 2006. The origins of the idea for memorial is traceable to January, 1984, when George Sealy met with four fellow Alpha Phi Alpha Fraternity brothers to develop a proposal for building a national King memorial. As with most projects of this type, it origins were small and informal. It then had to proceed through numerous associational and institutional gates as public and private support for the project was developed. The bureaucratic and procedural steps involved were formidable; and the long process had many controversial elements, including its design, the selection of Chinese sculptor Lei Yixin, the use of Chinese granite, and the $800,000 of licensing fees charged to the Foundation by the King family for the use of Dr. King’s words and image in fundraising materials. McKissack & McKissack/Turner/Gilford/ Tompkins are the design-build team. All the principals are American, and many have strong connections with businesses owned . . .
Read more: Dr. Martin Luther King Memorial: “I Have a Dream”
By Vince Carducci, August 19th, 2011 
This post continues the analysis begun in Part I of this series, relating art in Detroit to concepts of the Situationist International. Part I provides an introduction and discussion of the concept of psychogeography. Part II discusses the concepts of derive and detournment. The final part, part III, looks at the gift and potlatch.
A fourth Situationist concept that can be discerned in the art of the commons in Detroit is that of the gift. Working off the research on gift economies of early social scientists such as Franz Boas and Marcel Mauss, and as subsequently interpreted by the renegade Surrealist Georges Bataille, the Situationists envisioned “a new type of human relationship.” This would entail neither the cold calculations of bourgeois exchange nor the asymmetrical obligations of aristocratic bequest, but would instead be based on the egalitarian reciprocity of gifts freely given and received. (See chapter 8, “Exchange and Gift,” in The Revolution of Everyday Life by Raoul Vaneigem for an outline of the Situationist conception of the gift.)
The gift is central to the practice of art in the face of the money economy argues Lewis Hyde in his now famous book of the same name. The gift economy informs many aspects of relational aesthetics, for example in the work of Rikrit Taravanija, who creates installations that are the setting for sharing meals and other types of social interaction. Detroit Soup similarly features monthly sharing of meals as a collaborative situation for building an aesthetic community. Dinners are prepared by volunteers who share their current projects and thoughts with attendees who contribute $5 toward the evening. Others then present ideas which are voted upon. The selected proposals are given the entire proceeds to fund execution. Additional events along the model of Detroit Soup are now proliferating around the city.
Below: Vanessa Miller and Amy Kaherl discussing Detroit Soup at University of Michigan.
The final concept proceeds directly from the gift and that is the notion of potlatch. . . .
Read more: Beneath the Pavement, the Beach! — Detroit from a Situationist Perspective, Part III
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