Let’s play hardball

Alex Castellanos Co-founder, Purple Strategies
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Chris Matthews is not an economist, though he has overcome that constraint and fearlessly plays one on television. Recently, on his program “Hardball,” where for the sake of efficiency, he both asks and answers all the questions, he took on what he termed the Republican Party’s “religious argument” that there is a relationship “between taxes and jobs.”

Matthews illustrated the GOP’s case with a clip of Speaker John Boehner. “The American people understand that tax hikes destroy jobs. The last thing that we should be doing right now at a time of 9.2% unemployment is enacting more government policies that will destroy jobs,” Boehner said.

The irrationality of Boehner’s argument offended Matthews, as he continued to interview himself:

When I learn I have got to pay more taxes out of my income — and I’m not complaining much, because I’ve lived with it all my life,” alleged Matthews, “I say I have got to work harder. The Republicans claim that you work less hard when your taxes go up because you’re making less money. I would argue common sense says the less real money you’re taking home, the harder you will work. But tell me where this comes from, this argument they keep selling us. If my taxes go from 39.6 down at the top down to 35, I’m not going to work less, I don’t know who is. Why do they [Republicans] keep saying that?”

In an uncharacteristic departure from Matthews’s usual format, after he declared Americans would work more to earn less, a guest was permitted a brief utterance. Former Clinton Labor Secretary Robert Reich was allowed to assent that, “There’s almost no empirical basis for the claim that raising taxes will reduce economic growth.” Game, set and match to Matthews, who not only insightfully agreed with himself but also found his rubber stamp in sync.

What “empirical basis” could there be for the claim that “raising taxes will reduce growth”? A few bits of empirical experience and observation come to mind, among them the existence of money, Chris Matthews’s desire for a paycheck and the American economy’s success.

Matthews surely is familiar with the first of these, money. It transmits economic value. Taxes, he might recall, are paid with it. Raising taxes, in short, is equivalent to paying people less for their work.

As Adam Smith noted, “The real price of every thing, what every thing really costs to the man who wants to acquire it, is the toil and trouble of acquiring it.” Perhaps that is why Americans who train longer, work harder and endure more risk than others routinely expect to be rewarded with more, not less, money. Among these, we might expect, is Chris Matthews. It is doubtful he entered his last contract negotiation with MSNBC offering to work more while asking for a tinier edition of his paycheck. His network must be happy to hear he has altered his views. How much less should they now pay him to inspire greater diligence? I hope MSNBC is willing to renegotiate his contract.

The success of America’s economy and the failure of Cuba’s, more than 50 glorious years after the revolution, may also provide empirical evidence that earning more money is a stronger incentive for prosperous production than being paid less. Inconveniently for Matthews, his conviction that people will work harder and create more economic growth for less money is confounded by capitalism, which has led the 5% of the world’s people who are in his country to produce 25% of the world’s wealth and prosperity. It is the Cuban system, in which everyone is “taxed,” in effect, so they have the same paycheck, where progress and prosperity remain beyond reach.

Why are Republicans intransigently opposed to President Obama’s deficit-reduction tax increase? Because it would gouge a $1 trillion dollar hole in the private sector, reduce growth and produce less revenue. It’s an anti-stimulus that would shrink the economy.

Empiricism requires testing and proof rather than a reliance on a priori reasoning or irrational “religious” devotion to capitalism. So let’s conduct an experiment: Any journalist who asks for evidence that “raising taxes will reduce growth” immediately gets a bite out of his paycheck, substantial enough to make them feel they are contributing to deficit reduction.

Let’s play hardball. We know where to begin.

Alex Castellanos is a Republican media consultant and co-founder of Purple Strategies.