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USC professors' book full of surprises for right-wing publisher

'The Fiscal Cliff' supports the view that tax revenues are too low and government can't be shrunk just like that.

August 05, 2012|Michael Hiltzik
  • Joe Ricketts is the founder and financial backer not only of Ending Spending but the Ending Spending Action Fund, a super PAC that supports conservative candidates.
Joe Ricketts is the founder and financial backer not only of Ending Spending… (Nati Harnick, Associated…)

Promoters of ideological campaigns just love college professors.

That may sound implausible, but it's not so hard to understand: Attaching a professor's name to your cause confers instant credibility and projects objectivity, there are lots of professors around, and their professional work may be so technical and abstruse that no one will know if they really do support your position. As a result, it's a rare campaign that won't at one point or another publish a list of faculty members, jangling with PhDs, backing it up.

One wonders if that explains the strange relationship between the right-wing multimillionaire Joe Ricketts and Selahattin and Ayse Imrohoroglu, a Turkish-born husband-and-wife team of economists at the University of Southern California.

Selahattin, 54, and Ayse, 53, are the authors of "The Fiscal Cliff," a book published by a Ricketts nonprofit called Ending Spending, which normally ranks Washington politicians by their support of a federal spending cap. The organization released the book last week with great fanfare, announcing that it was sending a copy to every congressional and Senate office in Washington, evidently to advance its position that government is too big and taxes are too high.

That's the point made in the book's introduction by Brian Baker, the president of Ending Spending.

As it happens, however, the Imrohoroglus' book doesn't quite say that. In some respects, their take may be just the opposite: Tax revenues are too low and government can't be shrunk just like that.

"We've got tax revenues at 15% of GDP," Selahattin Imrohoroglu says. "You've got to come back to the '80s and '90s." In those decades, tax revenues averaged 19.5% of gross domestic product; were that ratio in place today, it would mean additional revenue for the federal government of more than $700 billion a year, "and then all the gloom and doom projections go away."

The Imrohoroglus didn't even learn until their manuscript was finished that it would be published with Baker's introduction, or for that matter that the publisher would be Ending Spending. And it doesn't sound as if they were especially overjoyed at the news.

"I read the proposed introduction and said, 'This is some political statement that has nothing to do with the book,'" Selahattin says. He had to type "Ending Spending" into Google to figure out what it was.

But if the Imrohoroglus found their deal with Ricketts to be full of surprises, Ricketts may have discovered that the manuscript he got wasn't quite what he counted on either. "Their solution [to the deficit issue] is a little different from what I had expected," he states in his own introduction.

So are their perceptions of where the problems lie. Ricketts writes that "our country's debt-to-GDP ratio is a more important indicator of the condition of our overall economy than a price-to-earnings ratio is for a publicly traded company" (the public debt ratio is currently about 70%).

Selahattin Imrohoroglu thinks that may be an overstatement. "Some people think there's some magical ratio, and if you go above that, the world will end," he says. "I think the healthiest indicator is the long-run growth rate of the country."

Once past the introductions by Ricketts and Baker, the text of "The Fiscal Cliff"— with the exception of one very large and very curious error — turns out to be a nuanced, highly technical and not especially ideological analysis of fiscal policy. The text focuses on two key ideas: As Selahattin describes them, these are that the U.S. has to sharply increase its tax revenue (chiefly by eliminating the mortgage deduction and other tax breaks) and get healthcare costs under control.

Perhaps the most interesting question about the book is how Ricketts and the Imrohoroglus came together. Ricketts made his money as founder of what is now TD Ameritrade, the online brokerage. He and his family own the Chicago Cubs.

He's the founder and financial backer not only of Ending Spending but the Ending Spending Action Fund, a super PAC that supports conservative candidates. Baker says the two entities are "totally distinct," yet they're both funded by Ricketts and headed by Baker.

According to federal election reports collected by the Center for Responsive Politics, the PAC spent nearly $900,000 in 2010 trying to defeat Senate Majority Leader Harry Reid (D-Nev.) and contributed more than $150,000 this year to the successful Texas GOP primary campaign of tea party favorite Ted Cruz, who is seeking a Senate seat.

Ricketts also solicited a proposal for an ad campaign attacking President Obama. After it leaked into public view in May, Ricketts disavowed the project, which was built around references to Obama's relationship with the controversial pastor Jeremiah Wright, a cherished right-wing theme.

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