Lies, damn lies and the four whoppers of 2011

By Jonathan Alter, Bloomberg View
Posted Dec. 23, 2011, at 6:05 p.m.

“Have It Your Way,” the Burger King slogan goes. And most politicians do, twisting words to fit their interests. But sometimes they go beyond french-frying facts to serving whoppers.

Two reputable nonpartisan organizations, FactCheck.org and PolitiFact, have helped to keep everyone honest in the holiday season by pointing out “death panels” (Sarah Palin) and Obamacare as a “government takeover” (Frank Luntz) as the top lies of recent years.

In 2011, Mitt Romney claimed that President Barack Obama “went around the world and apologized for America,” Obama claimed that his administration’s review of obsolete regulations was “unprecedented,” and Michele Bachmann claimed that the vaccine to prevent human papillomavirus can “cause mental retardation.”

These and other contenders for this year’s Lie of the Year title are worth cataloging, but let’s remember that not all big fat ones inflict equal damage on our politics. I’m more concerned with what bloggers call “memes,” which are ideas — or in this case, lies — that may not be attributable to an individual, but penetrate our consciousness through repetition and are soon assumed to b e true. My Four Fat Ones are:

No. 1. “The financial crisis was caused not by Wall Street but by the federal government, namely Fannie Mae and Freddie Mac.”

This is a convenient argument made by conservatives trying to gut regulation of Wall Street (or attack Freddie “consultant” Newt Gingrich), one that draws its force from Fannie and Freddie’s role as a piggy bank for ex-officials from both parties over the last 20 years. The two institutions performed abominably and attempted to conceal their mistakes and thwart regulators; so far, six of their former executives have been sued by the Securities and Exchange Commission.

But the abuses of Fannie and Freddie did not cause our woes. David Min of the Center for American Progress makes mincemeat of Peter Wallison, a lonely dissenter on the Financial Crisis Inquiry Commission who has loudly and fallaciously insisted that the government’s affordable housing policies lie at the root of the entire financial crisis. Min points out that bubbles in commercial real estate and consumer credit developed independent of housing, and that the crisis extended around the globe to regions and institutions with no U.S. residential housing exposure. Besides, mortgages from private lenders defaulted at higher rates than those from Fannie and Freddie, which got into the securitization racket much later and at lower levels than Wall Street, the true source of the mess. This week’s $335 million settlement in the Countrywide case, where private lenders preyed on blacks and Hispanics, is a reminder that Fannie and Freddie were hardly the only miscreants and sho uldn’t be immortalized as the direct cause of the crisis.

No. 2. “Republicans voted to end Medicare.”

That line from the Democratic Congressional Campaign Committee recently won top honors as PolitiFact’s 2011 “Lie of the Year,” with good reason. Almost all Republicans in Congress voted this year in favor of a plan introduced by Rep. Paul Ryan that privatizes Medicare for those younger than 55. Their support has many Democrats licking their chops for 2012 and twisting “privatize” into “end,” even though seniors’ health care would still be subsidized by Washington, which is the essence of Medicare.

I didn’t favor Ryan’s original privatization plan, but the whopper told about it looks even worse now that Ryan has joined with Democratic Sen. Ron Wyden on an intriguing compromise that would allow seniors to shop for insurance on exchanges or stay in traditional Medicare if they wish. The idea is essentially to extend Obama’s Affordable Care Act to older Americans, which would help shift the system away from the fee-for-service model that drives its unsustainable costs. Already, Ryan-Wyden has the support of many of the same Republicans who despise “Obamacare” for everyone younger. Go figure. Democrats, meanwhile, crassly reject it because they don’t want to lose an election-year issue.

No. 3. “Democrats’ tax increases on millionaires are a ‘job-killer’ for small business.”

Republicans this year have argued that Obama’s proposal for a surtax on millionaires would hurt as many as half of all small-business owners. It’s the only reason they have (other than paying off wealthy campaign contributors) for placing the protection of the rich at the very top of their agenda.

But the Treasury Department’s Office of Tax Analysis (made up of career, not political, staff) recently issued a technical report that details who among the 392,000 Americans reporting more than $1 million in annual income could reasonably be called “small-business owners.” The answer was about 51,000, or 13 percent — a long way from half of all small-business owners.

Moreover, there’s no evidence to suggest that even those 51,000 job creators would dismiss workers if they paid taxes at Clinton-era levels. In fact, at higher levels of taxation during the 1990s, these and other employers were creating a record 22 million new jobs. In the last decade, when they were paying lower taxes, job creation was little changed.

Another big GOP talking point is that expiration of the Bush tax cuts would mean that half of all small-business income would be taxed at higher rates. According to the Treasury study, this is also false. The number applies only if all American businesses — big and small — are included. In truth, according to the nonpartisan Joint Committee on Taxation, the end of those cuts for the wealthy will affect only 3 percent of all taxpayers with net positive business income.

No. 4. “We’re inches away from no longer having a free economy.”

This line from Mitt Romney, now close to gospel in Republican circles, is untrue even by the standards of a conservative think tank. The U.S. ranks ninth out of 179 countries in the Heritage Foundation’s Economic Freedom Index of 2011. Of major economies, only Canada ranked above the U.S. (Hong Kong and Singapore were No. 1 and 2.)

You wouldn’t know it from the GOP campaign rhetoric, but the total local, state and federal tax burden is lower than it was when Obama took office, according to the Tax Foundation. It’s now among the five lowest in the industrialized world. And government spending as a percentage of gross domestic product was stable in recent decades before rising 5 or 6 points to a hardly unprecedented 37 percent after the economic crisis hit. If the history of American wars and recessions is any guide, this increase will be temporary.

The holidays are a time not just for gift-giving but also for throwing out the trash that has become part of the national conversation. Let’s make sure there’s only one Fat One at Christmas — the guy coming down the chimney.

Jonathan Alter is a Bloomberg View columnist.

http://bangordailynews.com/2011/12/23/opinion/contributors/lies-damn-lies-and-the-four-whoppers-of-2011/ printed on July 14, 2014