Cycle of Deceit, Part 1—

Questioning Craig Huey’s

Made-Up Economic “Facts”

By Paul Rosenberg

On Monday morning, May 23, Random Lengths News contacted the Craig Huey’s 36th Congressonial District campaign, seeking a Wednesday interview. The initially promising response soon turned sour. The campaign deployed one excuse after another not to sit with the paper. “There were other interviews,” “there were campaign events,” and “there were fund raising calls.” Eventually, RLN was told the interview could not be done that week, which would make it impossible to run in this issue. One thing remained constant: The strong sense that there were questions we would ask, that Craig Huey did not want to answer — that he was afraid to face. We have posted the first half of those questions on our website, for readers to see and judge.

Because we were denied an interview, we turned instead to his readily available online record. His campaign website and other political websites he maintains are riddled with erroneous and misleading claims we would have asked about. This is a story in two parts, beginning with the economic side of things, because economic facts are ultimately number-based, and therefore much easier to indisputably nail down in black and white.

One telling example—big enough to really matter, but small enough to easily grasp—is the claim on his “Stop the Waste” webpage, that “The watchdog Government Accountability Office (GAO) has found that the federal government wastes $200 billion on overlapping and duplicative bureaucracy.” Unfortunately for Huey, that’s simply not true. On page 8, the report itself gives a much lower ballpark range.

“Collectively, these savings and revenues could result in tens of billions of dollars in annual savings, depending on the extent of actions taken.” That’s not chump change, but it’s only a small fraction of what Huey falsely claimed. The important point is not simply that Huey lied, but what consequences flow from his lie, and what this reveals about him more generally.

If Huey’s claim were true, then government discretionary spending (everything outside Medicare and Social Security) would include a staggering 16 percent of wasteful, duplicative spending that could simply be slashed at a single stroke. It would be evidence of tremendous inefficiency at best, criminal conspiracy at worst. But in reality, the figure for duplication is dramatically smaller — probably more like 3 or 4 percent. And even that isn’t necessarily waste.

“It wasn’t saying they were all waste, and all overlap. It was possibilities,” economist Dean Baker, co-director of the Center for Economic Policy Research, told Random Lengths. “If you’re managing a football team, and you have to cut your roster, you say, ‘Well, here’s maybe 20 guys that we could do without, in some way.’ It doesn’t mean you could do without all 20.”

This becomes crystal clear as Huey’s reckless misrepresentation continues in the very next line on his webpage, when it cites as an example, “47 job-training programs, 44 of which do the same thing,” meaning they overlap completely, and thus 43 programs could easily be eliminated. But the report actually says almost the exact opposite, that they overlap at least minimally (page 3).

“[W]e identified 44 federal employment and training programs that overlap with at least one other program in that they provide at least one similar service to a similar population.” And even that isn’t certain. The report continued: “[O]ur review of three of the largest programs showed that the extent to which individuals receive the same services from these programs is unknown due to program data limitations.”

This is the difference between meticulous investigation (in the GAO report) and wild-eyed hysteria as exhibited in Huey’s campaign literature. The more hysterical one becomes, the easier it is to make or believe exaggerated claims, which in turn fuels that person’s hysteria — a perfect vicious circle of deceit. This can be seen in Huey’s embrace of the Tea Party narrative, and his penchant for blaming Democrats, taxes and government spending for everything wrong with our economy, while letting Bush’s disastrous policies entirely off the hook. As we will see in part two, in the next issue, Huey embraces a similar circle of deceit with his religious right narrative, blaming liberals, Democrats and secular humanism for the rest of America’s problems. But for now, we stay focused on economics.

On Huey’s “Taxation Crisis” webpage, he says, “It’s outrageous. We need tax reduction and tax reform now — before it’s too late.” But federal tax receipts in 2009 and 2010 were just 14.9 percent of gross domestic product (GDP), the lowest levels since 1950. In contrast, the lowest level during Reagan’s presidency was 17.3 percent in 1984, 16 percent higher than last year. By Huey’s logic, the entire Reagan Administration was one long tax crisis that was far more dire than anything we’re experiencing today.

In an interview with the Mar Vista blog site on Patch.com, Huey said, “President Kennedy and President Reagan both proved that when you lower taxes, two things happen: economic growth and rising government revenue.” Not exactly, Baker explained. “Both of those are to a certain extent false, particularly the Reagan tax cuts. The revenue fell sharply off its [previous] growth path,” he said. “Put it this way: Any ten year old kid is going to be taller than when they were nine. If you gave the kid nothing but candy for a year, and you say, ‘Hey, he grew, that’s okay’, well maybe he only grew a tenth as much as he would otherwise.”

The Reagan tax cuts weren’t quite as bad as candy—revenues in the 1980s grew 78 percent as much as they did in the 1970s. But the difference was crucial: the debt-to-income ratio—which measures the debt in terms of our ability to pay—had been dropping ever since World War II, but started moving upwards again under Reagan, a path it’s been on ever since, except for the Clinton years, when it dropped again. This cumulative shortfall is the underlying reason why we have any debt problem at all.

“And just the opposite is true. The higher the taxes, the lower economic growth and less government revenue,” Huey continued in his interview.

Wrong again, said Baker. “Clinton had a big tax increase, at least people think so. And we got a lot of revenue and we had good growth. I wouldn’t say it was the cause of it, but they did go together.”

The issue of complex causality is crucial. As with Huey’s misrepresentation of the GAO report, the opposite of Huey’s simplistic economic narrative is not a simplistic negation or mirror image, but a much more nuanced picture in which many different factors interact — although sometimes he does just get things completely backwards, as he does with the Great Recession. On his “Historic Debt Crisis” webpage, Huey starts off, “A major cause of our economic crisis is the massive federal deficits run up by free spending politicians.” But as Baker has often noted, “It was the recession that caused deficits to explode.” The deficit was a relatively manageable $161 billion in fiscal year 2007 (starting October 2006), the last full year before the Great Recession, even though the housing sector had begun to shrink, the leading edge of the recession to come. The deficit grew to $459 billion in fiscal 2008, when the recession began, and skyrocketed to $1.4 trillion in fiscal 2009, Bush’s last budget year, when the financial meltdown kicked in. Looking at the debt picture from 2001 to 2019 (figure left), we can see that Bush’s wars and tax cuts account for almost half the debt in 2019, and that without other major spending that resulted from his disastrous economic policies, the debt would be significantly smaller in 2019 than it was in 2001, as a percent of GDP.

In short, Huey may want to blame “Washington” for all our country’s economic ills, and then equate “Washington” with Democrats like Janice Hahn; but the policies that have paved our road to ruin are those of Bush, his Republican majority, and a relative handful of Blue Dog Democrats who went along with him.

Next Issue: Huey’s “Satan letter” and voter guides that label Meg Whitman as “evil” reflect a similar circle of deceit in his moral argument. He presents distorted, even invented facts fueling hysteria, which in turn fuels even more belief in distorted or invented facts.