Obama Embraces 'Buffett Rule'

The Republicans are crying "class warfare," but the president is pledging to fight for Warren Buffett’s proposal that millionaires should pay higher taxes—and he just might win.

by Zachary Karabell

With the end of summer, the air is again humming with the dulcet tones of Washington partisan warfare. Soon, the “debt panel” will begin its deliberations on reducing the deficit, but President Obama has already fired the first salvo. He is calling for the introduction of a “Buffett Rule,” named in honor of Warren Buffett’s call for higher taxes on the very wealthy

Under this new rule, individuals with incomes in excess of $1 million would be required to pay a minimum amount of tax no less in percentage terms than the average middle-class taxpayer. Buffett famously complained that the tax code is unfair. With his stratospheric income, he pays less than 20 percent because of various deductions and lower rates applied to certain types of investment income, whereas his secretary earning $60,000 pays 29 percent. Obama’s proposal would establish a minimum rate presumably above 20 percent that would still be less than the 35 percent marginal rate applied to income above $379,000 but would be more than many millionaires currently pay. The total number of filers affected? About 450,000 out of more than 144 million tax returns filed last year, or about 0.3 percent of taxpayers. And even that 450,000 somewhat overstates the number of individuals affected, given that the number includes small businesses as well as wealthy individuals.

But much like the earlier firestorms over the estate tax, the Republicans were quick to denounce the proposal as a naked act of class warfare. Rep. Paul Ryan (/videos/2011/09/18/ryan-obama-creating-class-warfare.html) said on Fox News yesterday that the plan “adds further instability to our system, more uncertainty, and it punishes job creation.” The best line came from the ever-snarky, always-spinning Senate Republican leader Mitch McConnell. “If [Buffett] is feeling guilty about [his tax rate], I think he should send in a check … But we don’t want to stagnate this economy by raising taxes.”

This fight, however modest, is one that Obama stands a good chance of winning.

The Republican counter is that any increase in taxes penalizes the prosperous, impedes growth, and creates incentives to do less work or earn less money. That argument has always had a hollow, bizarre ring. Does anyone really assess their tax burden and decide that they would prefer to earn less in order to avoid paying a higher marginal rate? Yes, in a country of more than 300 million people, the statistical likelihood is that there are a few who would indeed say, “I would rather earn $378,000 a year and stay under the threshold of 35 percent taxes than earn $500,000 and pay a few thousand dollars more in taxes.” But there is also a statistical likelihood that about the same number of people believe that there is a secret NASA base on Mars. We live with outliers; we don’t construct national policy on the foundation of their delusions.

As for the charge of class warfare, clearly the bar has been lowered and the term debased. If championing the relatively modest proposal that those earning more than a million dollars at a minimum are taxed at an average rate is class warfare, what would today’s Republicans do if Obama got up and said the following: “For too many of us the political equality we once had won is meaningless in the face of economic inequality. A small group had concentrated into their own hands an almost complete control over other people's property, other people's money, other people's labor—other people's lives. For too many of us life is no longer free; liberty no longer real; men can no longer follow the pursuit of happiness.” Those are fighting words, but they aren’t, of course, Obama’s fighting words. They are Franklin Delano Roosevelt’s, uttered at the Democratic National Convention in 1936 as FDR accepted his party’s nomination for a second term as president.

 

It is inconceivable that Obama could be nearly as partisan or nearly as unapologetic in his rhetoric, yet today’s Republicans respond to even lukewarm suggestions that the rich pay a tad more as tantamount to class warfare and socialism. Unacknowledged is that in tandem with the millionaire’s tax, Obama will also propose cuts and reforms to Medicare and Medicaid, a concession that FDR never made or thought of making.

This fight, however modest, is one that Obama stands a good chance of winning. The audacity of the current incarnation of the Republican Party will be sorely tested by this proposal. When Democrats called for tax increases for those making more than $250,000, Republicans were able to twist that into an attack on entrepreneurs and ambitious small-business owners. It will be much harder to do that with the $1 million hurdle. And while tens of millions who would never be affected adamantly opposed a change to the estate tax, it will be a harder sell to hold the line against a minimum payment for millionaires.

As a result, Obama has at last arrived at something that has political traction and widespread appeal, which in turn puts the Republicans in the problematic position of opposing something that a significant majority support. It is an effective political salvo for a White House that has been increasingly neutered.

Not to spoil that party, however, but the economic benefits are much more limited. The “Buffett Rule” does not materially reduce mounting deficits, though it does enshrine notions of fairness in the tax code. Championing it is politically astute heading into the presidential election, but it is not the act of economic stewardship and innovative policy that the country needs. Combined with a “jobs” bill that consists mostly of extended tax breaks and unemployment insurance, we have an energized president who shows every sign of running an effective re-election campaign and every indication of being unable to respond dynamically to a troubled economy and a confused, angry middle class. The Buffett Rule is fair, politically powerful, and eminently defensible. At best, it will expose the Republicans as tax ideologues with a soft spot for extreme wealth. But it will still leave the millions who are struggling with no light, no tunnel, and no way forward.

Netanyahu’s Partners, Democracy’s Enemies
By CARLO STRENGER

ISRAEL is at a fascinating, and frightening, crossroads. In the last two years the Knesset has proposed and passed laws that seriously endanger Israel’s identity as a liberal democracy.

It began with a law forbidding public commemoration of the Palestinian refugee crisis of 1948, known as the Nakba; it continued with the demand for all new Israeli citizens to swear a loyalty oath to a Jewish and democratic country, and recently culminated in a bill outlawing calls to boycott any Israeli group or product — including those from the occupied territories.

On the other hand, in the last two months, Israel’s democracy has come dramatically alive after a long period of hibernation. Protests for social justice have mobilized hundreds of thousands in demonstrations that have the support of 87 percent of the country, according to a Haaretz poll. These protests have become an exercise in direct democracy, forcing Prime Minister Benjamin Netanyahu to move beyond party politics and listen directly to the grievances of Israel’s disenfranchised middle classes.

Existential fears have pushed Israelis to the right; only when it comes to social questions are they willing to listen to the largely liberal middle class. Who, then, represents the real Israel? Is Israel an open-minded, liberal country with a developed sense of justice, or is it an ethnocracy with theocratic leanings?

Mr. Netanyahu believes that he can avoid agreeing to a viable Palestinian state, in the face of fierce international criticism, because he is certain that America’s heartland, as opposed to its liberal elites, is tied to Israel on ideological and theological grounds. The ovations he received in Congress earlier this year only strengthened this belief. Convinced that Obama won’t win a second term, he simply wants to hang on until a Republican president is sworn in.

His foreign minister, Avigdor Lieberman, has a very different worldview. Mr. Lieberman’s open disdain for European leaders and diplomats is not a failure of diplomacy; he is a shrewd man, who first and foremost seeks to cultivate an image of a strong leader for his right-wing constituency. He believes that the West’s hegemony has come to an end, and that the future lies with autocratic governments like those ruling Russia and China. Hence he believes that Israel has no reason to pander to the West’s values.

To him, liberal democracy represents weakness and he contends that Israel should evolve into a stronger state with less individual freedom. At the same time, he is completely secular: his constituency is primarily of Russian origin, and many of its members are not accepted as Jewish by Israel’s Orthodox rabbinical establishment.

The national-religious parties in the governing coalition, meanwhile, are based on the belief that the Jewish people have a God-given right to what they call the Greater Land of Israel. In the long run, they want Israel to be a theocracy based on biblical law. Their participation in the democratic game is based on the prediction that Israel’s demography will inevitably lead to an Orthodox Jewish majority, and that they simply need to make sure that Israel doesn’t give up the West Bank before they rule the country.

The ultra-Orthodox parties, Shas and Yahadut Hatorah, also want Israel to become a theocracy in the long run. Until a decade ago, they did not necessarily claim that Israel should hold on to the occupied territories, but they realized that their electorate is right-leaning, and they need space for the rapidly expanding families of their constituency. They see liberal elites as their primary enemies.

The paradox, of course, is that Mr. Lieberman and the religious parties are on opposing ends of the spectrum in other ways. Mr. Lieberman wants a secular state; the religious parties want a theocracy. What unites them is that, for completely different reasons, they have no investment in the values of liberal democracy, which are one of the major stumbling blocks for Israel’s annexation of the West Bank. As Israeli liberals have repeated ad nauseam, such annexation will either lead to a binational state without a Jewish majority, or to an apartheid regime.

The coalition partners have found a modus vivendi primarily by uniting in their hatred for the institutions that uphold liberal democratic values: Israel’s Supreme Court, its largely liberal academic community and its human rights organizations.

Israel’s recent falling out with Turkey is just the latest example: Mr. Lieberman made it impossible for Mr. Netanyahu to apologize for the killing of nine people by Israeli commandos on the Turkish ship Mavi Marmara last year by insisting that it would undermine Israel’s national pride. When Turkey retaliated with trade sanctions and threats of an increased naval presence in the Mediterranean, Mr. Lieberman called on Israel to support Kurdish militants. Mr. Lieberman keeps upping the ante for being a patriotic Israeli, pulling Mr. Netanyahu along with him.

The staying power of Israel’s governing coalition is primarily the result of the trauma Israelis sustained during the second Palestinian intifada and subsequent rocket attacks. Israelis have trouble trusting anybody but a hard-liner for fear that, once again, they will become targets of terror attacks.

Mr. Netanyahu’s coalition may seem incoherent in its core values, but it has created a potentially explosive mix that has brought considerable damage to Israel, pushing it into unprecedented isolation that is only likely to deepen if a sizable majority of the United Nations General Assembly recognizes Palestine as a state later this month. This would be especially challenging when relations are already strained with historic regional allies like Egypt and Turkey.

The irony is that Mr. Netanyahu himself is not opposed to liberal democracy. But the only way for him to prevent an independent Palestinian state based on the 1967 borders is to hold his right-wing coalition together.

Mr. Lieberman has outflanked him and challenged his leadership of the Israeli right. Mr. Netanyahu needs to keep up with the right-wing Joneses and show that he is no less of a strong leader. The only common denominator of his major coalition partners is enmity to the core values of liberal democracy, and, for lack of choice, he has so far pandered to their wishes.

Carlo Strenger, a professor of psychology at Tel Aviv University, is a columnist for Haaretz and the author of “The Fear of Insignificance.”

Did Osama Win?

Bin Laden hoped to provoke a civilizational war between Islam and the West. And we took the bait.

by Andrew Sullivan NEWSWEEK

There was a perfunctory knock on my door before a friend rushed in to wake me up. “They’ve attacked the World Trade Center,” he yelled, looming suddenly above my bed. “They already did that,” I groggily responded. “You’ve got to get up!” he shouted as he rushed back out the door. And I actually went back to sleep. An hour later, rousing myself, I made my way to the laptop and saw a photo of a flash of fire near the top of one of the Twin Towers on AOL’s welcome screen. I suddenly realized it had not been a bomb but a plane. No: two planes. I ran over to my friend’s. And as I watched his television, video footage of the second plane, entering the tower like a diver slipping ripple-free into a pool, kept playing. It dawned on me that the first plane had been partly a way to get the whole world watching as the second mass murder took place. What kind of evil is this? A silence fell over the room. We were all standing, or pacing. After a while, I walked outside and heard the eerie quiet of a sky without planes, and saw people walking about in a daze. And a little later, I saw the towers fall, one after the other, imploding, like my psyche.

Images matter. Within a few hours of going back to sleep after hearing mere words, I was in an utterly different world. As a way of generating pure, unalloyed terror, this was demonically perfect. I was terrified by the thought of the mayhem in the buildings. I was immobilized watching a live, instantaneous mass death. I was traumatized by the huge wall of dust that spread like a CGI wave through the streets of lower Manhattan. I was, like most of us, simply terrorized. And it’s only now, a decade later, that I’ve come to see how significant that feeling was, how transformative it would become. We often talk about terror in terms of the terrorist. We do so less in terms of the terrorized. But it was how this act changed those of us who were bystanders that made this event more awful than a mere mass murder. It was mass murder as theater and as threat.

It took months for this initial trauma to ebb, years for my psyche to regain its equilibrium. And it took me close to a decade to realize just how slickly Osama bin Laden had done his evil work, how insidiously his despicable performance art had reached into my mind and altered it, how carefully he had set the trap and how guilelessly I—we—had walked right into it.

We need to understand that 9/11 worked. It worked as a tactic to induce American self-destruction, even if it failed spectacularly as a strategy to advance Al Qaeda—and its heretical message of suicidal warfare—across the globe. It worked because this was not just another terror attack. The emblems were clear: the looming towers of Western capitalism in New York, the cradle of Western democracy in Washington. When the third plane crashed into the Pentagon and the fourth (United 93) was brought down by its passengers, the drama didn’t cease. We saw the symbol of America’s military preeminence lying with its side opened like a tin can. And we imagined the panic and courage in the air over Pennsylvania as people just like us finally found their bearings and fought back.

Yes, there had been Pearl Harbor. But that was in Hawaii against an air base, not in Manhattan against ordinary people going about their day. Yes, there had been Oklahoma City. But that was not as iconic as an image of the World Trade Center falling to the ground, and it was accomplished by a coterie of domestic maniacs (we already knew the type) with a mass of fertilizer and a truck. This, in contrast, was a suicide attack by cultural aliens. And a suicide attack is one of the most terrorizing, because you know that the will behind it is beyond the usual parameters of human nature. Like kamikaze missions, the tactic was a sign that these men were operating on a different matrix from the rest of us. And nothing is as frightening as violence waged by those who do so in the name of God.

The simplicity of the plot made it even scarier. On that day the West’s own airplanes, which had taken off peacefully, were transformed into makeshift weapons of mass destruction; the only actual weapons deployed were a handful of box cutters you could find in any office-supply store. The rest was merely human will and the advantage of surprise. More to the point, the people murdered that day, charred in the remains of the towers or jumping from windows in the sky only to thud onto the pavement below, had only that morning been just like us: settled complacently in airline seats or beginning their day at the office. At some point some of them must have looked out a window—in the plane or the World Trade Center—and saw what seemed like the apocalypse coming. There are times when I think of those people who saw, in their final seconds of life, the nose of an airplane hurtling toward them at inhuman speed. Their terror ended quickly. Ours had just begun.

I remember watching the towers fall, and feeling something deeper fall as well. This was the end of American innocence, the end of the American century when the New World could really understand itself as immune to the theocratic barbarism of the Old. We saw an emblem of our entire civilization tumble to the ground in the middle of the city that had once brought the skyscraper confidently and brashly to the world. We also saw the mighty Pentagon violated by a few religious fanatics living in caves. The skies were silent. Nobody seemed to know if this was the end or just the beginning. But what we did know was that only one word really sufficed to define the scale and gravity of what had taken place: war.

And in that very formulation, in the depths of our psyches and souls, we took the bait.

The bait was meant to entice the United States into ruinous, polarizing religious warfare against the Muslim world, so that the Islamist fringe could seize power in failing Muslim and Arab dictatorships. The 9/11 attacks were conceived as a way to radicalize a young Muslim population through a ginned-up war of civilization against the Great Satan on the Islamist home turf of Afghanistan and, then, Iraq. It looks obvious now. It wasn’t then. We were seized with righteous rage, every ounce of which was justified. But the victim of a rape is not the best person to initiate the strategy to bring the rapist to justice. And we, alas, were all we had. Our president, meaning well, did his best, and it was more than good, at the beginning. But in retrospect, he never mastered the fear or the moment either. Instead of calming the populace over the coming months, he further terrified us with drastic measures that only seemed to confirm the unprecedented gravity of the threat.

As mysterious envelopes containing anthrax began to appear in mailboxes, as our airports shut down and reopened as police states, as terror-advisory color codes were produced, as the vast new bureaucratic behemoth of the Department of Homeland Security was set up, as a system of torture prisons (beginning with Guantánamo Bay) was constructed ... many concluded the threat must be grave enough to justify shredding some of the Constitution’s noblest principles and precedents. This handful of fanatics was supposedly a greater threat than the Nazis and the Soviets. And so much of our inherited moral wisdom—such as the absolute stricture against torture and the ideal of habeas corpus—were tossed aside. Dick Cheney, the man elected vice president as a calming father figure, became the most terrified of them all. And so we joined him in fearing that Al Qaeda was on the cusp of arming itself with WMDs that could be used to end our civilization.

Hence the turn to Iraq. Without the psychic terror of 9/11, and its swamping of reason in our frontal cortex, the Iraq War would never have happened. In our panic, fear kept spiraling upward. Under what other circumstances would the U.S. -really have decided to launch a war to destroy and then rebuild a notorious, divisive failed dictatorship like Iraq? If our minds had not been flooded with dread, many of us would never have believed that 9/11 was just a dummy run for a much bigger strike with weapons of mass destruction, provided by Saddam Hussein. But that was what our government told us, in tones that certainly sounded sincere.

Yes, I know many were not fooled. I tip my hat to them. I am ashamed my own panic overwhelmed my own judgment. But that is an explanation, not an excuse: I cannot imagine any other circumstance in which I would simply trust the government, period. But, as fear dominated my being, trust I did—as did a majority of Americans who supported the war that handed bin Laden exactly what he wanted.

What he wanted, it seems obvious now, was central relevance to the power shifts in the Middle East, and U.S. troops in lands they could never understand and never fully win over. History has proved him right on that. Even the finest soldiers in the world, with the finest leadership in the world, were not capable of miracles. And so Iraq is now a pseudo-democracy whose current regional stance is alignment with Iran and Syria, America’s direst enemies in the region. And the war in Afghanistan will, at best, have decimated the ranks of Al -Qaeda and killed bin Laden (after nearly 10 years of trying, thanks to Obama, not Bush). But the threat from radical Islamism in Pakistan remains real, and the Taliban can wait till our last troops leave. And that was always true.

The fiscal costs of our actions are one reason we find ourselves today in a lost, jobless, debt-driven decade. About $2.6 trillion was spent in a decade of war—approaching some of the most ambitious spending cuts now being proposed. The human cost—in lives, limbs, and loves—is incalculable. And not just for us. Millions of Iraqis lived through the closest human equivalent to hell for years as the incompetent occupation tore Iraq apart. That trauma, wrought in children as well as adults, will not end, and will reverberate for decades, rendering the country even more vulnerable to sectarian blandishments or a new dictatorship if civil war breaks out again.

Part of any military’s strength is its deterrent effect. That was blown apart in Iraq as the U.S. struggled to control a country it could never fully commit to. The CIA, meanwhile, was revealed before the world first as incompetent and then as capable of evil. The approval of sickening torture techniques by the president and vice president destroyed American moral standing in the world, eviscerated our soft power, and became the prime recruitment tool for the Islamist thugs. Neoconservatives alone can call this “victory.”

So did bin Laden succeed? Not at all. On most fronts, he spectacularly failed—down to the amazing end to his pathetic, deranged life. He didn’t banish American influence or occupation in the Middle East; he temporarily intensified it. His dream of a caliphate is more remote than ever. But in this, it wasn’t the U.S. who defeated him; it was his own brutality and nihilism. From the streets of Tehran to Cairo, it appears that the young Muslim generation does not want to withdraw from the modern world into a cultural and intellectual blind alley forever. They are too busy on Twitter. That’s why after 9/11, Al Qaeda saw its popularity in the Arab world plummet, resuscitated only by American floundering in a newly anarchic Iraq.

The American people, moreover, eventually responded by electing Barack Hussein Obama as their president, committed to stepping back from what bin Laden had always longed for, a civilizational war, while quietly trying new methods like drone warfare to target jihadists from a distance with ever-increasing accuracy. The political model Al Qaeda celebrates—of stultifying premodern, brain-dead oppression—has no serious global appeal compared with Western or Asian models of capitalism. Instead, Turkey’s and Indonesia’s evolutions have shown a different way forward for Islamist democratic politics. It’s time we fessed up: the madmen of 9/11 were not the Soviets; they were not the Nazis. If we had seen them in that calm perspective a decade ago, we would be living in a very different America today.

Bin Laden and his henchmen failed, in other words. But our own fear won. Fear stopped us, overwhelmed us, as our ra-tion-al-ity deserted us. Yes, it was understandable, given what we endured that September morning. But we need to admit that our response was close to fatal. A bankrupted America that tortured innocents and disregarded its own Constitution is barely recognizable as America.

We have survived and endured as a civilization because we have recognized our errors and corrected most of them. That capacity is proof that our democracy still lives. But fear is a tougher enemy than mere mistakes. It can only be overcome by hope. And hope is a choice, not a fate.

Until we decide to grasp hope again, the war will live on. Within us all. Waiting for resolution.