The Hideous and Insidious – A Glimpse at the Sinuous 1% (Part One)


Over the weekend, Tom Kludt at TPM published a far too brief, but interesting Shutdown follow up.  His piece scratched the surface of the Koch Brothers Political War Machine by drawing attention to Matt Kibbe’s Tweet linking to Tyler Cowen’s post-shutdown analysis of the GOP: Freedom Works CEO: Shutdown, Debt Crisis Were ‘Brilliant Republican Strategy.’ For a brief reminder on Kibbe, this recent post includes a primer – Puppets and Puppeteers – Kibbe’s blurb is located in the “puppeteer” section.

What Kludt doesn’t do is plumb the depths of Kibbe’s tweet sufficiently to expose the Kochtapus tentacles and their attached pernicious suckers, and by so doing, identify the Propaganda Machine at play. Likely, the next bout of noxious, long term dissembling on the part of the Libertarian Aristocracy and their minions is staring Kludt right in the face, but he seems not to have seen it.  To his credit, Kludt rightly points to Tyler Cowen’s proposition at Marginal Revolution, by noting:

The article, published by the website Marginal Revolution, posits that “Republicans convinced some of their opponents that they are crazy and irresponsible, without actually being crazy (though they were irresponsible, but that is the whole point).”

“Look where we stand,” Tyler Cowen, the author of the piece, wrote. “In real terms government spending has been falling.  Sequestration appears to be permanent, or it will be negotiated away by Republicans in return for preferred changes in tax and spending policy.  Leading Democratic intellectuals are talking about future fiscal bargains with no new taxes.  The American public polls as increasingly conservative.”

An important admission regarding motive and unsurprising one to anyone who follows Labyrinthine Libertarian Propaganda Patterns. Cowen’s second fallacious assertion signals more desperate motive. The American public doesn’t poll increasingly conservative, as Cowen is aware, the trend is the opposite. From a May Gallup poll: Fewer Americans Identify as Economic Conservatives in 2013.

Talking Points Memo might have mentioned that what we see here is the Koch Propaganda Echo Chamber at play. Kludt might have mentioned that Tyler Cowen and Marginal Revolution are right hand appendages to none other than Charles Koch via the Mercatus Center, via George Mason University. Tyler Cowen is Chairman and General Director of the Mercatus Center also chief architect of its propaganda arm, Marginal Revolution.

A side note: As much as there is to loathe in Cowen’s Marginal Revolution for its subversive intent, one must acknowledge the sheer brilliance in its masquerade of respectable expertise that perpetuates more deeply embedded guise: the creation of faux populism by advocating public policy which actually favors the elitist interests of the wealthiest elite.

As interesting in Koch-Head Cowen’s “analysis” is this bit:

Imagine that you control only the House and can manage to convince your opponents that you are stronger and more dedicated to your cause than in fact you are.  Only the truly strong and dedicated can pull such a caper off!

Someday, if the Democrats wanted to raise the exemption level for the payroll tax, and pull in a lot of new revenue, what kind of opposition could they expect?  Probably they will shy away from that battle altogether, for fear of another Ted Cruz filibuster.

Yes, Virginia (literally), protecting the brand does sometimes mean going down with the ship.

In the longer run the Republicans will have changed the Doug Overton window on most of these issues.

Dog whistle and tacit admission of hardest-ball politicking aside, there are two take-aways here. The first is Koch-Man Cowen’s reference to the Overton Window. He reveals what (for whatever unfathomable reason) the media and the punditry hasn’t acknowledged when examining the dip in Republican poll numbers as a result of the Tea Party faction’s antics. And that is, what the puppets and their Koch-puppeteers are managing isn’t the rise in the un-favorability number. They’re negotiating the long term trend of the lower support figure. Call it the attrition-nudge that keeps Progressivism on the decline and the most radical end of Conservatism on the rise. The ambit-gambit we’ve just seen with the shut down we may very well see again during the Budget Conference “negotiations.” Because what happened with the Shutdown (what Cowen confirms) is the long game – the incessant Libertarian traction pulling electorate perception and predisposition to the far-right end of the political spectrum. That percentage dip in favorability merely signals the pivot point in agenda rhetoric for their recursive strategy – pivoting from Obamacare to debt, deficit, “entitlement” cuts and spending cuts.

The second take-away is the Mercatus-method, two-plus punch attack on Social Security, the first brass knuckle of that punch is the payroll tax holiday (the payroll tax cut), one route for Radical Conservatism to dismantle Social Security altogether via its favored method of destroying all Progressive legacies – starving the beast. Though “starving the beast” rhetoric may be out of favor. “Serve the check” might be the dissembling rhetoric that effects the same purpose in the upcoming Budget Conference negotiations. Like Obamacare and the Sequester, the payroll tax holiday in reality is the Libertarian Aristocracy’s pet policy which they seem to rally against.  The oblique punch here is assigning that policy to Democrats (or convincing the Left to adopt it) then feigning opposition to it. Perhaps the important factor to remember about the Koch echo-chamber is how it resonates. Its arms often embrace an ostensibly oppositional stance of subtle ambivalence. This is one way Charles Koch’s Mercatus Center functions. It is primarily a dissembling appendage rather than a bona fide think tank and candid policy advocate. It works kind of like this:


Take, for example, the combination of half-truths promulgated  in “Expert Commentary by Senior Research Fellows” Charles Blahous and Jason J. Fichtner at Mercatus summarized here.

Blahous “warns” that slowing the revenue stream to Social Security by introducing a payroll tax cut is potentially injurious to Social Security solvency which is true. Yet he and Fichtner follow that truth with mythologizing and obfuscation ultimately culminating in not preserving Social Security but gutting it:

 “If we conclude that economic stimulus is so important that it justifies cutting Social Security’s tax revenue stream, fine; but let’s not issue a second round of debt to paper over that choice, crediting the Trust Fund with phantom revenues.”

Similarly Flechtner in the paragraphs that follow:

… if a little payroll tax cut really is as good as a stimulus, then that would mean a whole lot more of it would be better. However, to actually make this work, the government would have to completely change how it finances Social Security.

“If the President is suggesting that a payroll tax cut stimulates the economy, then he should propose eliminating the payroll tax altogether,” said Fichtner. “We should acknowledge the Social Security trust funds are debt obligations on future taxpayers and put Social Security back ‘on budget’ to recognize the impact the program has on the unified budget deficit.”

Obviously one thing Fichtner is suggesting here is that Social Security is somehow related to the federal deficit. It isn’t. As the Social Security Administration observes, this variety of rhetoric is mythological double-talk, but really between the Blahous and Fichtner, it’s more like mythological triple-talk. SSA corrects the myth:

Myth 4: President Roosevelt promised that the money the participants paid would be put into the independent “Trust Fund,” rather than into the General operating fund, and therefore, would only be used to fund the Social Security Retirement program, and no other Government program

The idea here is basically correct. However, this statement is usually joined to a second statement to the effect that this principle was violated by subsequent Administrations. However, there has never been any change in the way the Social Security program is financed or the way that Social Security payroll taxes are used by the federal government.

The Social Security Trust Fund was created in 1939 as part of the Amendments enacted in that year. From its inception, the Trust Fund has always worked the same way. The Social Security Trust Fund has never been “put into the general fund of the government.”

Most likely this myth comes from a confusion between the financing of the Social Security program and the way the Social Security Trust Fund is treated in federal budget accounting. Starting in 1969 (due to action by the Johnson Administration in 1968) the transactions to the Trust Fund were included in what is known as the “unified budget.” This means that every function of the federal government is included in a single budget. This is sometimes described by saying that the Social Security Trust Funds are “on-budget.” This budget treatment of the Social Security Trust Fund continued until 1990 when the Trust Funds were again taken “off-budget.” This means only that they are shown as a separate account in the federal budget. But whether the Trust Funds are “on-budget” or “off-budget” is primarily a question of accounting practices–it has no affect on the actual operations of the Trust Fund itself.

And, of course, the suggestion or the implication made by Blahous and Fichtner is the real goal for the Senior Fellows at Charles Koch’s Mercatus Center. Like it is for Tyler Cowen, Chairman and Director of Charles Koch’s Mercatus Center . The long term end goal is to permanently enact the payroll tax holiday or a similar payroll tax provision which would drain the revenue stream altogether by fully or functionally eliminating the payroll tax and/or altering how Social Security is “financed.”

The question of reviving the One Percenter’s payroll tax holiday or some version of payroll tax “reform”  or payroll tax cut may resurface as a compromising tool in the upcoming Budget Conference. Fortunately, at least one of the conferees understands that succumbing to any of the nonsense perpetuated by the wealthiest elite is the death-knell for Social Security. A Sanders reminder from the last time such triple-talk made its way into budget negotiations:


Part Two of the Hideous and Insidious soon to come: a developmental view of faux-populism and its crusade against Social Security, “entitlements,” and Progressivism.


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2 thoughts on “The Hideous and Insidious – A Glimpse at the Sinuous 1% (Part One)

  1. Good post. I read elsewhere this morning that like vampires you just can’t kill, the billionaires have arisen post-shutdown to demand entitlement cuts. The President may agree to get his grand bargain, so it’s up to Senate Democrats to hold firm. We’ll see – money already buys these people fat subsidies, low tax rates and cheap money, now it may soon get them direct transfers from Grandma and Great Uncle Joe. Hey, what do they need heat or medication for anyway?

  2. Very good critique of the highly paid and very detailed Republican assault on Progressivism. Another consideration is the Sanders resistance which always comes and is expected to the extent that the public is buffered from its effects, while the Republican attack comes from many media and business sources like the Chinese death of a thousand cuts.

    Then if we are awake to the Republican willingness to spend the kind of money and expertise they do on these exercises, could we not be cautious about technical or economical sabotage like sitting on cash and picking vendors to further weaken the economy, putting green or progressive companies out of business; or even bribing technical support people and ISPs to foul up healthcare administrations and websites supporting Obamacare?

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