The Tax Bill and Freud's Narcissism of Small Differences
Our friends at The New Yorker -- who once delighted us with witty authors like James Thurber and S. J. Perelman but of late have been non-stop purveyors of doom and gloom - now inform us "The Final Version of the G.O.P. Tax Bill Is a Corrupt, Cruel, Budget-Busting Hairball."
Imagine for a moment if the exact same bill had been proposed by the Democrats, not entirely impossible since by far its most dramatic feature, the substantial lowering of the corporate tax rate, was recently proposed by Barack Obama himself. Would The New Yorker have written about it in remotely the same manner? As it might have been phrased during the magazine's glory days: Pshaw!
What we have here is what Freud referred to as the "narcissism of small differences." But before I get into that, let me address the accusation in The New Yorker's headline, that the tax bill is a "budget-buster," i.e. will explode the already mammoth deficit. Besides the obvious that The New Yorker -- and similar institutions like the New York Times, etc. -- were not at all that concerned with the deficit during the Obama years when it really did explode, there is the larger point: no one knows.
Various economists, interest groups, and committees have weighed in on it one way or the other, but I suspect their views were heavily endowed with wish-fulfillment on both sides. It wasn't that long ago, after all (Nov. 9, 2016) -- speaking of wish-fulfillment -- that economics Nobelist Paul Krugman predicted in the aforementioned New York Times not only that the stock market would crash on Trump's election, but that it would never recover. (He actually used the word "never." It would be interesting to know if Krugman followed up on his Armageddon-like prediction, er, monumental blunder, in his personal investments. I suspect not. The number of Trump's worst critics currently making an unprecedented killing in the market is, shall we say, yuuuge.)
So you will excuse me if I cock a somewhat jaundiced eye on John Cassidy's (The New Yorker writer) view that the bill is a budget-buster. What the Republicans have done is take the position from the Laffer Curve that lowering taxes will stimulate the economy to such a degree that more revenue will ultimately be brought into the government at the same time the people get to keep more -- exactly what JFK and Reagan did before them. Those presidents were proven right. Booms occurred for all levels of society. Does that mean that it will happen again? Not necessarily. But JFK and Reagan were optimistic men, just as Trump is. And their optimism ignited things.
Economics, it is often argued, is as much emotional as scientific. Most of us, I hope, would like to be on the optimistic side. The Democrats, however, have a problem with this. For them to root for the success of the economy is to root against themselves. They know this full well because it was one of them who invented the famous phrase "It's the economy, stupid."