I tell you, Dr. Paul Krugman is an absolute master of writing things that are incredibly misleading, but are technically not lies. The following actually took my breath away:
Just to be clear, you can, if you choose, make moral arguments to the effect that it’s wrong to seize the rightful earnings of the wealthy for other purposes; I would disagree, and argue that the real immorality is letting so many of our fellow citizens suffer. But that’s all a different kind of discourse. What the right is claiming is that there’s a straight economic, not moral, argument for low taxes on the rich, that going back to Herbert-Hoover-level taxes at the top makes everyone richer. [Bold added.]
That is truly impressive. Sure, Krugman doesn’t actually say it, but you certainly get the implication that Herbert Hoover was a right-wing laissez-faire guy, who tried slashing tax rates to jumpstart growth and then–oops–it plunged us into the Great Depression. Hey folks, we tried the free market, first under Hoover and then again under George W. Bush, and look what it got us!
Here’s what actually happened with the top marginal income tax rate. And note, I’m grabbing the chart from a left-leaning site that is trying to make fun of the right’s horror at Obama’s plan:
So the “Herbert-Hoover-level taxes at the top” were that way because of the massive Harding-Coolidge tax cuts (spearheaded by Treasury Secretary Andrew Mellon). (There was also a dinky Hoover tax cut after the stock market crash.) Yet it would have taken away from Krugman’s rhetorical punch to say, “Republicans want to give us the same tax rates that prevailed during the Roaring 20s, as if that will shower prosperity on us!”
If you really want to see what Herbert Hoover did with tax rates, and the effect it had on the economy, you can see that he jacked the top rate from 25 percent to 63 percent in a single year in 1932. (In fact tax rates went up across the board, as this history shows.) And then we had the absolute worst economic performance in U.S. history.
Correlation isn’t causation, but if anything the tax evidence from the 1920s and 1930s paints the exact opposite picture Krugman is trying to tell here. And remember, this is the guy who routinely complains that people who disagree with him are a bunch of idiots and/or liars.