Welcome Back, Carter
Stephen Moore of the Wall Street Journal spent a little time mulling over the Democrats’ proposal for a 3% surtax on income above $1 million, combined it with their fervent desire to repeal the Bush tax cuts, mixed in payroll taxes, and came up with a total top federal and state tax rate of 62%.
“That’s more than double the highest federal marginal rate of 28% when President Reagan left office in 1989,” he writes, noting that Jimmy Carter’s malaise was flavored with an only slightly more toxic 70% top rate. “Welcome back to the 1970s.”
Why does anyone think the effects of such policies will be different this time? Because Obama is smarter than Carter? Because he is nicer?
It sure does look like the 1970s are back in style. Crushing regulations, high unemployment, skyrocketing gas prices, collapsed consumer buying power, price controls (a dash of Nixon to go with your Carter main course), and even the looming return of stagflation.
A new metric of government failure was devised during the Carter Years: the “Misery Index.” It’s the sum of inflation and unemployment. The formulas used to calculate these numbers have been changed, to prevent later presidents and Congressional sessions from being compared to the Carter Epic Fail. In particular, as President Obama’s chief economist Austan Goolsbee accurately pointed out during the Bush years, the method used for calculating the widely distributed figures for unemployment today are a laughable dodge that cooks the numbers to reduce the real rate by a good six percent.
Compute those numbers for Obama using the old methods, as EconomicPolicyJoural.com has done, and you get a Misery Index of over 25. Carter’s highest Misery Index, reached in June 1980, was only 21.98.
Republicans should start posing this question to Democrats at every opportunity: What aspect of Jimmy Carter’s presidency did you dislike? Make them be specific. Precisely which policies did they disagree with? Given that the rest of the world changes beyond our control, we could limit the question to domestic policy.
Mitt Romney has lately been talking about bringing the Misery Index back. It’s a good idea. Let’s hear every Democrat’s explanation for why Obama’s Misery Index, over halfway through his presidency, is so much worse than Jimmy Carter’s, and why they think Carter’s was so bad in the first place. By all means, please do blame all of Obama’s problems on his predecessor. It will be so much easier to defeat an incumbent President who is described by his most fervent supporters as a helpless weakling.