Did Bowles-Simpson really say we ought to lower rates?
I did not follow them closely enough but that sounds odd.
I can sympathize with him on some of these specific points, but this strikes me as Greg narrowly focusing on some favorite issues of his and confusing not doing what he'd like to do with not compromising. In a stand-off like this you have to always remember that both sides are going to be making initial offers that don't necessarily reflect where they want to be in the end. Modest dividend tax increases may be what Obama really wants - he may be demanding higher so that he can trade it for something else that the Republicans are being intransigent on. Because Greg, let's be honest - this is not a fight where you get a middle-of-the-road solution by laying all your cards out on the table on the first run.
Obama is a moderate Democrat. I think any partisanship is in large part a strategic reaction to Republican over-reaction to his administration. Given the environment of the Senate that Obama has been dealing with, the only way to not be a partisan Democrat is to be a partisan Republican and that's no solution. Partisan Republican bills have been the only thing with a chance of getting past the filibuster.
So Obama is betting that a negotiation between two partisan groups has a more likely chance of getting a moderate solution than offering a moderate solution and waiting for partisan Republican to accept it. He may or may not be right about that.
Whether Obama is right or not, I think Mankiw is being naive in his assessment here.
And, perhaps, a little bitter over the campaign and how people treated him during the campaign.
Magical Thinking on Tax Reform
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