Roundtable – Michael Flynn and Tax Reform

The Roundtable is Torchlight staff’s discussion of news and events. The text has been lightly edited for clarity, and some links were added after the fact. This conversation happened on December 2, 2017.

Tom Rich, Editor-in-Chief

Welcome to the Roundtable, Torchlight’s discussion of news and events. This was a big week for political news, with Senate Republicans passing a major tax bill and former National Security Adviser Michael Flynn pleading guilty to lying to the FBI, leading most observers to conclude that he’s offered the Mueller investigation information on wrongdoing by senior Trump administration officials. We’re starting with taxes today. The bill passed late on Friday, with some amendments and strike-outs hand-written onto the document and virtually nobody in the Senate having had time to read and review the document. Nevertheless, Senate Majority Leader Mitch McConnell declared that the bill had passed via regular order. First question for the panel: just how bad is this bill?

Christopher Dahlin, Politics Editor
So at 2 am Senate Republicans (minus Corker) passed a tax bill. It is most likely going to be disastrous, and increase taxes on the middle class to fund tax cuts for the rich. I say most likely, because we don’t quite know what was in the bill. There is handwriting, inscrutable notes, crossed out portions and so on. 479 pages of unsearchable PDF. Released hours before, given to lobbyists first. This is ludicrous.

Josh Kyu Saiewitz, Senior Managing Editor
Let’s keep in mind that the Senate bill is not yet law. Either the House has to pass it—and, while it is by all accounts a malevolent Christmas tree of poisonous amendments, it still might not be evil enough for the lunatics in the House Freedom Caucus—or the bill has to go to conference and return to both houses of Congress for a final vote. So the text of the bill, as inscrutable as it is now, may yet change.
That said, very fucking bad. We witnessed a great looting last night of the American people. They stole from everyone to give to the rich, at the probable expense of everyone from grad students and teachers to middle income homeowners to those in need of health insurance. Many bloody sacrifices to the false god of trickle down.

David Schmitz, Junior Managing Editor
So, it’s bad for all those reason yes, but something that always irks me and definitely this go around is the hypocrisy. For all the moaning from the right of the things like the ACA being “shoved down our throats”, the ACA had months of committee hearings to iron out the detail. This bill was literally a blank sheet of paper one moment and then suddenly a 500 page illegible piece of legislation being voted on before any debate, clarification, or time to even read. Regular order Mr. McCain, indeed.

Christo
I don’t think we should trust the House not to pass this. This is basically what Ryan has lived for his entire life.

Josh
David brings up a good point, which is that every one of the so-called “moderate” GOP Senators just participated in a mockery of democracy. Corker, who voted against the bill, could have stopped it in committee. Flake, who has spoken out against Trump, handed the President a legislative victory. McCain’s calls for regular order ring exceedingly hollow today. It’s unfortunate to say, but none of these people can be counted on to act in good conscience, even when they’re retiring and nothing should concern them but the welfare of their constituents and their legacies. Those legacies were secured last night, in my opinion, and they’ll go down in history as shameless collaborators in a terrible theft, men and women who saw evil happening, pretended to be better, and then did nothing. Damn them all. Vote them all out in 2018.

Christo
We must remember this betrayal.

Tom
It’s almost refreshing in its brazenness, I guess. Christo, you mentioned that this is basically Paul Ryan’s dream come true. I agree there, and I’ll be surprised if he doesn’t have musical accompaniment and backup dancers as he casts his vote for it. But my question is whether or not Ryan has sufficient control over his caucus to get it passed. Josh mentioned it might not be extreme enough for the Freedom Caucus, and there are deficit hawks in the House, too. Does it seem likely that Ryan, who is not the strongest Speaker of the House ever to raise a gavel, can corral his people into voting for it? Or will he not need to, because they’ll happily vote for it anyway?

Christo
All of them want this massive tax giveaway to the rich. The longer it is out there, the more time constituents have to scream at Collins. I don’t think they risk another Senate vote.

Josh
I’m less interested in whether it will pass than in the meaning of what has already happened. It’s refreshing, in a way, for having so brazenly exposed Republican lies. Democrats no longer have to worry about cries of shoving legislation down the body’s throat, as happened after Obamacare went through with 60 votes after a year long process during which they bothered to type out the entire bill first before voting on it not at 2 in the morning on a Saturday. Democrats don’t have to worry about being called out for passing legislation on party lines—not after this bill, which deliberately targets Democrats specifically by going after universities and students, by taking away state and local tax deductions which hits high tax blue states like CA and NY hardest. Democrats don’t have to worry about deficit hawks warning that something isn’t paid for—not after this bill, a package of lies that will inevitably raise the deficit by trillions before ten years is up.
Democrats should take this as a lesson that they should win back power and then wield it however they please for the good of the country. I only hope they and the media will take these lessons to heart. Both sides are not the same; vote Democrat.

David Spitzley, Contributing Writer
So, putting aside the theft, how bad is this as policy? And the mainstream economics answer is “pretty stupid.” Running up the deficit when the economy is running tolerably means the government is competing for investment dollars with private industry, which drives up interest rates, which undermines investment, a phenomenon known as “crowding out.”
On top of that, Krugman has been making the case that at least a third of the corporate tax cuts will accrue to foreign investors, and any increase in investment from outside the country due to the reduced rates will take years to materialize due to how the effect gets transmitted (through exchange rates). So, class warfare plus recessionary pressures. Thanks, GOP!

Tom
It should be noted, for new readers, that Dave Spitzley is our resident actual-factual economics PhD.

Christo
We should remember that not all deficit dollars are the same. Deficit spending for infrastructure or social programs actually help the economy. Going into debt to assist the rich in their dreams of becoming landed gentry, not so much.

David Spitzley
But doing it when you’re already at full employment raises the costs of both types of deficit spending.

Josh
Let’s not forget that the repeal of the individual mandate may crash the health insurance market.

Tom
Let’s take a pivot from taxes to scandals, as the other major news this week was Mike Flynn’s guilty plea. Many analysts and observers seem to think that Flynn pleading guilty suggests that he has information that the Mueller team thinks will lead to a big fish in the Trump Administration pond. To start us off, which admin member do you think Flynn has implicated, if any? Personally, I’m thinking it’s Don Junior. Just feels right.

Josh
They had Kushner in for an interview before Flynn was charged. That’s when a smart guy like Mueller has already learned what Flynn had to say and is getting Kushner on the record lying to the FBI. I’m betting it’s Jared.

Christo
The names we think we know are Kushner and KT Mcfarland. I wouldn’t be surprised, since the administration is compromised on Russia on many fronts, if there were multiple avenues of attack. Flynn is pretty clearly trying to protect his son, and what came out friday is just the tip of the iceberg. Amusingly, Trump and his legal team had no idea it was happening until it was on the news.

David Schmitz
Recall that Flynn has been asking for immunity to “tell his big story” ever since he was fired. I’m fairly convinced that Flynn did not lie to Pence, rather he was instructed from on high from either Pence (the transition leader and current Vice President) or Trump himself (possibly through Kushner) to do everything that he had been up to since joining the campaign. He came aboard with the connections and they were utilized to their fullest. Just like with Carter Page and George Papadopoulos.

Josh
Let’s all take a moment to marvel at Trump’s response to these charges:

In the opinion of the president of these united states, Flynn tragically lied for no reason about doing nothing. And then pled guilty, also for no reason.

David Schmitz
This is either a rather crude attempt at obfuscation or a heavy indication of misunderstanding how investigations and prosecutions work. It is clear that Flynn is cooperating with Mueller and for that cooperation which will include incrimination of individuals above Flynn on the food chain he receives leniency on all the possible charges that could be levied against him (and his son). He’s not being charged for all of the collusion adjacent things that Mueller more than likely has evidence of and that’s by design to protect the investigation going forward. Trump either doesn’t understand this, doesn’t want to believe it, or does and wants to erase it from his base’s minds as quickly and completely as possible.

Tom
It should be noted that much of what we’re saying here is speculation, since the Mueller team won’t return our calls. So it’s possible that Flynn is pleading guilty to the only charge levied against him. But given the striking charges Mueller levied against Manafort and Papadopoulos already, it would strain credulity to think that all Mueller was able to dig up on Flynn was lying to the FBI. And it would strain credulity that Flynn wouldn’t at least try to protect himself from that charge, if it was the only one.
We’re just about out of time for the Roundtable today. Final thoughts, on taxes or the Flynn plea?

Christo
This is probably going to be Trump’s only major legislative accomplishment for at least the next year. We need to remember that however horrific this is, we can do more. Vote people!

David Schmitz
My final thought is that there is nothing more important to our future than to stay engaged in the electoral process and fix this shit as soon as possible at the polls. Ten days out from the Alabama special election and we all need to focus on that because it appears winnable and even making it close will be a huge deal.

David Spitzley
The most amazing part of this whole situation, both on taxes and on Flynn, is how hard it is to predict the final outcome. Will McCain pass away before the final votes on taxes? Will another crisis come along and force it off the table? Will Trump go nuclear on Mueller? Hell, will he go nuclear on North Korea? It’s like the first season of Lost at this point.

Josh
Nothing happening right now is a coincidence. The GOP accepted Trump’s almost certain collusion with Russia so they could get the very tax cuts they jammed so undemocratically through the Senate last night. My chief hope is that deals with the devil rarely turn out well for those who take them. Even if Republicans manage to loot the country on their way out the door, the Russia investigation may end up toppling them from power before they’ve truly made their getaway. 2018, along with the Alabama special election, is more important now than ever to restore the rule of law for both those who consider themselves above it and those who pervert it to advance their plutocratic ends.

Tom
And we’ll have to leave both Flynn and taxes there. Thanks as always, everyone, for a lively conversation, and to our readers: make your opinion on these matters known. Democracy needs it.

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