More on Glenn Hubbard’s Attempt to Split Hairs Incredibly Finely on Simpson and Bowles

• Tim Geithner says that Glenn Hubbard said in 2012: “Well of course we [i.e., America] have to raise taxes, we [i.e., Mitt Romney and his campaign apparatus] just can’t say that now…”

• Glenn Hubbard says: “Geithner is making it up. It’s pretty simple. It’s not true…”

• Jenni LeCompte (who does not appear to have been there) says: “Mr Geithner’s memory on this exchange is crystal clear…”

• Matthew Yglesias says: “The entire dispute is taking place as if fuzzy recollections of years-old private conversations are the only way to gain insight into this matter, when in reality Hubbard’s views on this question are a clear matter of public record — Hubbard favors low taxes, but thinks conservatives should be willing to embrace tax hikes as part of an overall budget compromise…”

But making it about years-ago conversations is Hubbard’s entire strategy

There are three “wes” floating around in Geithner’s report of what Hubbard says. The first “we” is “America”: Hubbard believes that America needs to raise taxes a la Alan Simpson and Erskine Bowles’s recommendations (not The Simpson-Bowles Commission, which made no recommendations). The second “we” is Glenn Hubbard himself. The third “we” is the Mitt Romney campaign in 2012.

Hubbard’s position, as near as I can understand it, is that America needs to raise taxes, and he is happy to say that America needs to raise taxes, and that he certainly believes that America needs to raise taxes, but that he did not tell Tim Geithner in 2012 that Mitt Romney and his campaign apparatus believed that America needs to raise taxes.

It is unclear whether Hubbard’s claim is:

• In 2012, Mitt Romney and his campaign believed that good economic policy should and could be made without raising taxes.
• In 2012, Mitt Romney and his campaign believed that good economic policy should be made without raising taxes, but that it could not be and that some compromise with Democrats and some increasing in taxes would be necessary.
• In 2012, Mitt Romney and his campaign believed that good economic policy necessarily required raising taxes, but that he, Glenn Hubbard, did not tell Tim Geithner so.

Matthew Yglesias: The Geithner-Hubbard spat shows how conservative wonks try to have it both ways on taxes: “The entire dispute is taking place as if fuzzy recollections of years-old private conversations…

…are the only way to gain insight into this matter, when in reality Hubbard’s views on this question are a clear matter of public record — Hubbard favors low taxes, but thinks conservatives should be willing to embrace tax hikes as part of an overall budget compromise….

It is, instead, necessary to recall just two things. One is that the Simpson-Bowles plan contained tax increases. The other is that Hubbard wrote an entire op-ed column — in the New York Times no less — about the Simpson-Bowles plan and why he likes it. Here’s the relevant part:

What of the critics on the left and right? I understand the complaints of liberals. The proposal essentially claims that maintaining a broad welfare state is inconsistent with planning for a long-run fiscal trajectory that includes economic growth and social insurance. This idea is anathema to Democratic Congressional leaders. The proposal also lays bare the fallacy on the left that any lowering of marginal tax rates is necessarily “tax cuts for the rich.” The plan’s limits on tax deductions and cutbacks in the generosity of entitlement benefits for upper-income households render the plan a progressive reform.

The right’s criticisms are more puzzling. Groups like Americans for Tax Reform insist that any member of Congress who supported the proposal would be voting for a tax increase. It is hard to share the view that no tax increase of any sort can figure in a fiscal solution. The proposal calls for taxes and spending to be capped at 21 percent of gross domestic product, which, while higher than I might design, is a serious suggestion worthy of debate.

So there is Hubbard, in public, saying that it is wrong of conservatives to say that tax hikes should be entirely off the table in terms of a fiscal solution. Hubbard does not endorse a 21 percent of GDP revenue target, but like any sensible person he is willing to swallow some things he does not favor as part of an overall package that contains other ideas that he likes.

The bottom line

There is no way of knowing whether Geithner’s recollection of the private conversation with Hubbard is accurate, but the entire controversy here underscores the points he was making…. Conservative economic policy elites like Hubbard… try… to have it both ways… criticizing the White House for not immediately endorsing [Simpson-Bowles]… while also adhering to a rigid “no tax hikes” line that makes discussing Simpson-Bowles pointless…. Hubbard’s angry insistence that he never deviated from the party line on taxes — even though he did, very publicly, in the country’s most famous newspaper–is emblematic…