A frozen mailbag

Blaming Obama, unifying with Canada, and the trouble with "luxury beliefs"

It’s been an unusually snowy and icy week here in DC — time to warm up with some hot takes!

But I did also want to make two quick recommendations. One is that while Emily Amick’s book “Democracy in Retrograde” is not exactly pitched at Slow Boring’s audience of mostly male, mostly middle-aged, hyper-engaged readers, it is definitely a book that aligns with the values and ideas of our project. If there’s someone in your life who is maybe on the younger, more female side and broadly appalled by Trump but not really sure how to constructively engage with that, this is the thing to read. The other is Jennifer Pahlka and Andrew Greenway have a big new report for Niskanen out on a state capacity agenda for the new year. This is the one I wish everyone working in politics or advocacy professionally would read and the one you should bug your elected officials about.

Paul O’Brien: Happy New Year! What would happen if Trump ordered his Treasury Department to ignore the debt limit? Would the Democrats sue to force the US to default? Would the courts stop interest payments on the debt and precipitate a crisis? Maybe it would all just fade away?

Going back to the Obama-era debt ceiling controversies, my view has always been that an administration that simply ignored the statutory debt limit would almost certainly prevail.

You would argue that it’s impossible to simultaneously comply with valid appropriations laws, the debt ceiling, and America’s obligations to bondholders and that the least-illegal solution is to ignore the limit. If Trump made that argument, it would probably work. But it might not work (courts are somewhat unpredictable), and financial markets don’t like uncertainty, so no administration has wanted to take this route. The best solution is for Congress to eliminate the statutory debt ceiling and make this whole question moot. But if we reach the brink, Trump should order the government to ignore it.

Freddie de Boer: How come Obama doesn't take more criticism for pushing Biden out of the race in 2016? He probably would have beaten Trump and either way it prevents the later Biden age problem.

This is one of these things where it’s hard to assess the baseline. My sense is that a lot of people do criticize him for this — to some extent unfairly.

For starters, I just don’t really think it’s true that Obama pushed him out of the race. It is true, though, that Obama didn’t push Biden into the race, and that lack of affirmative enthusiasm for a Biden candidacy was heard loud and clear in various circles. But more broadly, I don’t think Biden would have won the primary if he’d run. What would have happened is that Bernie Sanders would have gotten closer to his 2020 levels of support than his 2016 levels, and Hillary would have wrapped up the nomination faster and more easily against a divided field.

Eric P: Is republican tax policy (TCJA, IRS-defunding, etc.) purposely meant to mostly exclude high W2 income earners? Seems like the benefits go almost exclusively to the asset wealthy and to business owners. As a SALTy (pun intended) high wage earner, I genuinely do not feel like Republicans are good for my personal bottom line. But maybe since folks like me (professionals) have moved towards democrats anyway, this is all by design. Am I being conspiratorial?

There’s no “conspiracy” here, I think it’s just true that within the domain of high-income people, Republicans prioritize the interests of capital owners over wage owners. This is in part a question of optimal tax theory, which holds that capital taxation is bad for growth in a way that wage taxation isn’t.

The nuance is that per the very important paper “Capitalists in the 21st Century” by Matthew Smith, Danny Yagan, Owen Zidar, and Eric Zwick, a large share of what shows up in IRS records as capital income comes from the owners of small, closely held businesses in skill-intensive fields. Kate and I, for example, earn the bulk of our income as owners of a small business that publishes this newsletter.