News n Notes from the Web

Captives of the Supply Side
By Jonathan Chait, OpEd Contributor - New York Times - 9Oct2007

Washington: REMEMBER the Republican presidential debate a few months ago, when three candidates raised their hands to indicate they didn’t believe in evolution? Something just as laughable is likely to happen today, at the first Republican debate on the economy. Every candidate will probably embrace the myth that cutting taxes increases government revenues. At the very least, no one will denounce it as a falsehood.

It’s been said for years that the Republican nominating process is controlled by social conservatives, and that any aspiring nominee must kowtow to their demands. But this year’s Republican primary is making it increasingly clear that a different tiny minority — the economic far right — truly calls the shots. Last year, Senator John McCain earned widespread ridicule for publicly embracing Jerry Falwell, whom he had once described as “evil.” But an equally breathtaking turnabout occurred earlier in the year, when Mr. McCain embraced the Bush tax cuts he had once denounced as an unaffordable giveaway to the rich. In an interview with National Review, Mr. McCain justified his reversal by saying, “Tax cuts, starting with Kennedy, as we all know, increase revenues.” It was the political equivalent of Galileo conceding that the Sun does indeed revolve around the Earth. Mr. McCain is not alone. Every major Republican contender — Rudy Giuliani, Fred Thompson, Mitt Romney — has said that the Bush tax cuts have caused government revenues to rise. No prominent Republican office-seeker dare challenge this dogma for fear of offending the economic far right.

Yet there is no more debate about this question among economists than there is debate about the existence of evolution among biologists. Most economists believe that it is theoretically possible for tax rates to be high enough that a reduction in rates could actually produce more revenues. But I do not know of any tenured economist in the United States who believes this is true of the Bush tax cuts. Granted, economic growth sometimes causes revenues to rise faster than expected after a tax cut, as has happened since the 2003 tax cut. But sometimes revenues fall faster than expected after a tax cut, as they did after the 2001 tax cut. And sometimes revenues rise faster than expected after a tax increase, as they did after the 1993 Clinton tax increase.

Even very conservative economists who have worked for the Bush administration — including Greg Mankiw, a former chairman of the Council of Economic Advisers under President Bush who is now an adviser to Mr. Romney — have publicly stated that today’s tax revenues would be even higher were it not for the Bush tax cuts. No Republican candidate can risk committing heresy by acknowledging this bipartisan consensus among economists. On social issues, however, Republicans actually tolerate diversity of thought. For example, Mr. McCain, Mr. Giuliani and Mr. Thompson all oppose, on federalist grounds, a constitutional amendment to ban gay marriage.

The Republican Party is organized around a strategy of building political capital on social issues while spending political capital on economic issues. Republicans will advance the social conservative agenda, but they will rarely risk their popularity to do so. As Trent Lott, the former Senate majority leader, recently observed: “Republicans tend to squabble, but when it’s fiscal issues, when it’s economic issues, we tend to come together. That’s what makes us Republicans.” Mr. Lott is right if he’s referring to the members of the Washington establishment who run the Republican Party. But when it comes to the party’s rank-and-file members, he has it exactly backward. Grassroots Republicans agree on social issues but disagree on economics.

The most recent Pew survey of the electorate, which came out two years ago, revealed that Republicans find common ground on social issues like discouraging homosexuality and teaching creationism alongside evolution in the public schools. They disagree on economic policy. In the survey, most members of the Republican coalition preferred deficit reduction to tax cuts. Ardent anti-tax conservatives represent a clear minority among Republican voters. And yet the most extreme and counterfactual subgroup among them — supply-siders — remain firmly in control of the party.

The party’s economic priorities are reinforced at Grover Norquist’s weekly “Wednesday Group” meetings, where conservative activists, politicians, business lobbyists and pundits meet to hash out a common agenda. Mr. Norquist is known to cut off any mention of issues like abortion or homosexuality with a curt “No sex talk, please.” A handful of fanatical ideologues, along with a somewhat larger number of money men who stand to gain a fortune from supply-side policies, relentlessly enforce the faith. They do so with far more success than the religious right, and they receive far less mockery for their efforts. Just last month President Bush insisted, yet again, that “supply-side economics yields additional tax revenues.” Hardly an eyebrow was raised.

Jonathan Chait, a senior editor at The New Republic, is the author of “The Big Con: The True Story of How Washington Got Hoodwinked and Hijacked by Crackpot Economics.”
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Supreme Court Won’t Hear Torture Appeal
By David Stout - New York Times - 9 Oct 2007

WASHINGTON, Oct. 9 — A German citizen who said he was kidnapped by the Central Intelligence Agency and tortured in a prison in Afghanistan lost his last chance to seek redress in court today when the Supreme Court declined to consider his case.
The justices’ refusal to take the case of Khaled el-Masri let stand a March 2 ruling by the United States Court of Appeals for the Fourth Circuit, in Richmond, Va. That court upheld a 2006 decision by a federal district judge, who dismissed Mr. Masri’s lawsuit on the grounds that trying the case could expose state secrets.

The Supreme Court’s refusal, without comment, to take the case was not surprising, given that a three-judge panel for the Fourth Circuit was unanimous. Nevertheless, today’s announcement prompted immediate expressions of dismay, and it could exacerbate tensions between the United States and Germany. The Fourth Circuit acknowledged the seriousness of the issues when it dismissed Mr. Masri’s suit. “We recognize the gravity of our conclusions that el-Masri must be denied a judicial forum for his complaint,” Judge Robert B. King wrote in March. “The inquiry is a difficult one, for it pits the judiciary’s search for truth against the executive’s duty to maintain the nation’s security.”

The ordeal of Mr. Masri, who is of Lebanese descent and was apparently the victim of mistaken identity, was the most extensively documented case of the C.I.A.’s controversial practice of “extraordinary rendition,” in which terrorism suspects are abducted and sent for interrogation to other countries, including some in which torture is practiced. The episode has already caused hard feelings between the United States and Germany, whose diplomatic ties were already frayed because of differences over the war in Iraq. Mr. Masri’s lawyer in Germany, Manfred Gnjidic, said the high court’s refusal to consider the case sends a message that the United States expects other nations to act responsibly but refuses to take responsibility for its own actions.

“We are very disappointed,” Mr. Gnjidic said in an interview today with The Associated Press. “It will shatter all trust in the American justice system.” Mr. Masri contended in his suit that he was seized by local law enforcement officials while vacationing in Macedonia on New Year’s Eve 2003. At the time, he was 41 years old and an unemployed car salesman. “They asked a lot of questions — if I have relations with Al Qaeda, Al Haramain, the Islamic Brotherhood,” Mr. Masri said in a 2005 interview with The New York Times. “I kept saying no, but they did not believe me.” After 23 days, he said, he was turned over to C.I.A. operatives, who flew him to a secret C.I.A. prison in Kabul. There, Mr. Masri said, he was kept in a small, filthy cell and was shackled, drugged and beaten while being interrogated about his supposed ties to terrorist organizations. At the end of May 2004, Mr. Masri said, he was released in a remote part of Albania without ever having been charged with a crime.

The C.I.A. has never acknowledged any role in Mr. Masri’s detention. But investigations in Europe, as well as news reports in the United States, have bolstered his version of events. German prosecutors issued arrest warrants in January for 13 suspected C.I.A. agents believed to have taken part in the operation that swept up Mr. Masri. As a practical matter, it is extremely unlikely that President Bush would ever agree to turn the 13 agents over to German authorities. But the warrants against them could hinder their ability to travel in Europe.

When the Fourth Circuit dismissed Mr. Masri’s suit, Anthony D. Romero, executive director of the American Civil Liberties Union, called the action “truly unbelievable” and “reminiscent of third-world countries.” The Constitution Project, a nonpartisan organization that seeks to focus attention on constitutional issues, called the Supreme Court’s refusal to take up the case “profoundly disappointing.” “The government’s treatment of Mr. El-Masri has been appalling, and the executive branch should not be permitted to hide its mistakes behind the so-called state secrets privilege,” said the organization’s senior counsel, Sharon Bradford Franklin. “Now that the court has declined to consider this issue, Congress should immediately take up legislation to reform the state secrets privilege and clarify that it does not authorize unchecked power to disregard individual rights.” Representative Edward J. Markey, Democrat of Massachusetts, who has introduced legislation to ban extraordinary rendition, said today that “the Bush administration reflexively responds with the ‘state secrets’ defense whenever it is caught bending or simply ignoring the law.” The chief White House spokeswoman, Dana Perino, said later that, on the contrary, the administration is “judicious” in citing state secrets to avoid lawsuits. “And the fact that the Supreme Court agreed with us is, in our opinion, a good thing,” Ms. Perino said. For his part, Mr. Masri was arrested by the German police in May on suspicion of setting a fire that caused $675,000 in damage to a market in a Bavarian town. His lawyer said Mr. Masri had had a dispute with the store, and that his action was the result of not receiving psychological counseling that he had sought. A German judge ordered him held in a psychiatric ward.
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