disconnect

I was reading this article on the NY Times just now about how America's most profitable corporations are paying less in corporate income taxes even as their profits go up. The article was spurred by a report put out today by the Citizens for Tax Justice, a self-proclaimed "non-partisan" but apparently left-leaning (from the articles on their website) organization about taxation. The actual press release that the article is almost entirely based on is on their site here, and it contains a link to the actual report as well in case anyone actually wants to read it. The NY Times apparently agrees with my categorization of CTJ as "left-leaning", as they quote someone from the obviously right-leaning Heritage Foundation, William W. Beach, as a dissenting opinion here.

I mention all this because at the end of the article there's a bit about the Bush tax policy and how it's affected capital investment that I found curious:

The current study attributed lower corporate payments in part to legislation supported by President Bush and enacted by Congress in 2002 that increased accelerated depreciation, an accounting move that allows profitable companies to write off capital investments and claim tax deferrals. Accelerated depreciation was intended in part to encourage capital investment, but the study argued that it had done the opposite. Capital investment by corporations dropped 12 percent in 2002 and 3 percent in 2003, the years when Congress enacted the new accelerated depreciation rules.

As a result, Mr. McIntyre concluded, "the $175 billion in revenues lost to the 2002- and 2003-enacted tax breaks appears to have been exceedingly poorly spent."

Mr. Beach disagreed, saying that rates of capital investment were at historic highs. "We're seeing an investment surge that's so strong that you have to go back to the 1960's before you see a comparable one."

So on the one hand you have McIntyre saying that capital investment has dropped and that the tax breaks meant to spur it obviously did not. His above quote is directly from the press release, which also happens to have a large chart showing the top 25 corporations with the largest tax breaks, the amount of tax breaks they got, and their change in capital investment. In the actual report itself there appears to be very detailed statistics showing individual corporations, their tax breaks, and their investment changes. I'm going to have to accept these statistics as true (at least until some right-wing blogger points out that they're actually forgeries).

On the other hand, Beach asserts, "We're seeing an investment surge that's so strong that you have to go back to the 1960's before you see a comparable one", basically contradicting everything we just read. That's how the article ends, "By the way, this guy disagrees with everything we just reported." Well... why does he disagree? Are the numbers flawed? Is he referring to "capital investment" or investment as a whole, like investing in the stock market? It can't be both ways - one of these guys is either misinformed or lying his ass off. Actual reporting would try to find which one of them was right, since presumably capital investment has either increased, decreased or stayed the same, and this information should be out there, somewhere. If this report is actually correct, that would be a pretty strong criticism of Bush tax policy.

Given that Citizens for Tax Justice did put this information together in great detail, I have to give them the benefit of the doubt that they're right and Beach is wrong. Plus I seem to remember a huge amount of investment in the late 90's, what with the bubble and all, including the only concrete capital investment example I can think of, which would be telecommunications companies laying out billions of dollars of fiber and other infrastructure for the Internet boom. I would have trouble believing that today's level of investment is stronger than that, or any level since the 60's. I can only guess that Beach was talking about overall investment (stock market, retirement, capital and other sources), and even then who knows if that's actually right.

I'm left to guessing because of journalism nowadays having degraded to the point where nothing is presented as fact, just one side and the other side. As you see here, the other side doesn't even have to make sense or be talking about the same thing that the first side is talking about. They just get their quote in and anyone reading is left to wonder which side is right. And it's not just something as bland as capital appreciation, the same thing's going on with Iraq. One side says it's real bad, but here's a quote from Bush saying he's "optimistic" and things are looking better. Who's right? Who knows! But America's the "can-do nation" so what the hell, let's choose the sound bite that sounds hopeful and upbeat. Who cares what things are actually like in the real world, this is politics and news media, where the facts don't matter.

Donald Rumsfeld, strategic mastermind:

At some point the Iraqis will get tired of getting killed and we’ll have enough of the Iraqi security forces that they can take over responsibility for governing that country and we’ll be able to pare down the coalition security forces in the country.

(emphasis mine)

With this guy heading the face of America in Iraq right now it's no wonder our troops are being greeted by rose petals and chocolates.

Lately the topic of Iraq has been going the same way in the presidential campaigns. Bush offers some glowing, optimistic assessment of how things are going in Iraq, John Kerry offers a dose of reality as to how things are actually going in Iraq, and Bush counters by calling Kerry a flip-flopper. Today, John Kerry offered a plan for the future of Iraq, in so much as any plan could actually be viable and have any hope the way things are now, much less the way things are in January when he would hopefully take office. In discussing this, the NY Times article contained the following point and counter-point from Kerry and Bush respectively that sums up the bizarro world the Bush campaign is living in:

Mr. Kerry argued that Mr. Bush had put the country in peril by confusing the war on terror with the war on Iraq, and he vowed not to make the same mistake.

"Saddam Hussein was a brutal dictator who deserves his own special place in hell," Mr. Kerry said. "But that was not, in itself, a reason to go to war. The satisfaction we take in his downfall does not hide this fact: we have traded a dictator for a chaos that has left America less secure."

The Bush campaign responded by saying that Mr. Kerry's comments reflect an attitude of defeat and pessimism that voters do not want.

"John Kerry's latest position on Iraq is to advocate retreat and defeat in the face of terror," said Steve Schmidt, spokesman for the Bush campaign said in a statement. "This sends the wrong signal to our troops, our allies and our enemies."

Mr. Schmidt said the president "has made it clear that we will complete this mission and has made it clear that the status quo is unacceptable in a region that can produce killers capable of flying planes into buildings."

As far as confusing the war on terror with the war in Iraq is concerned, few sentences could be more carefully crafted to create confusion than that last one by Bush spokesman Steve Schmidt: "[T]he status quo is unacceptable in a region that can produce killers capable of flying planes into buildings." This one contains so many fallacies it's hard to know where to even start. First of all, there's the small fact that none of the people who flew planes into buildings were produced in Iraq. Second, there's the deliberate meshing of 9/11 into dialogue about the war in Iraq, something so common that it's hard to remember that Iraq was no involved in the 9/11 attacks at all. Finally, there's the implication that we could either leave the status quo in place in "the region", meaning the Middle East, or we can invade Iraq, leaving out the myriad of options that existed in 2002/2003 which didn't involve reducing a country which didn't threaten us with terrorism to rubble and setting the whole region against us.

Now, maybe I read that article wrong, but nowhere in there did I hear Kerry advocating "retreat and defeat". I swear I could have dinner at Bush's house (prepared by a chef, of course, Bush wouldn't bother to cook himself) consisting of the foulest tasting rotten food imaginable, and when I mention how sick I am and that Bush should find himself a new chef, his spokesman would offer the statement, "Dan's latest position on dinner is to advocate starvation among tonight's guests. This sends the wrong signal to our stomach, our farmers, and America's hungry children."

According to the argument the administration is pushing on the American public right now, our two choices are to abandon Iraq, surrender to Al Qaeda and tell the terrorists they've won, or continue Bush's approach as-is. The idea of doing anything differently simply isn't an option, apparently. The simple plan of firing everyone who's screwed things up so far and replacing them with competent people simply can't be contemplated, since that would lead to the firing of the Bush administration.

So that leads to the President saying that if we don't follow his leadership in Iraq (which has led to so many successes) we declare defeat, and the idea to anyone who dares say that things in Iraq aren't going well being branded a pessimist and a defeatist. Of course, this means that anyone that dares bring bad news forward is pushed to the sidelines and marginalized, or subjected to the kind of character assassination we saw unleashed on Richard Clarke and Joseph Wilson. The only people whose opinions are legitimate are the ones telling us how great everything is going. This kind of attitude gets you the outcome of Vietnam, or the inflated statistics and results of a communist five-year plan or Great Leap Forward. Sooner or later the viewpoints of a regime in its own idealized world come face to face with reality. It happened to the Iraqi Information Minister, Mohammed Saeed al-Sahaf, and now it's happening to Bush. In fact, some see similarities between the two already.

Apparently our options were and are the "status quo" or a quagmire of a war costing us billions of dollars, thousands of lives and all of our international respect without actually improving anything in Iraq or the Middle East at all. The option of "success" doesn't exist, and don't listen to Kerry tell you that it does, he's simply offering pessimism and defeat. Just continue your "long, hard slog" doing what we've been doing for the last three years, and hopefully those Iraqis will wake up one day and finally welcome all the freedom we've been dropping with pinpoint precision in their neighborhoods.