CNN kept pushing for Republicans to abandon Grover Norquist and his anti-tax hike pledge on Monday evening. Piers Morgan belittled Norquist and ostracized him from the debate over tax hikes.
"Why are you so concerned about protecting the vast wealth of America's small percentage of increasingly rich people? Why do you care?" Morgan pressed Norquist, adding, "Everyone laughing at you from afar."
After quoting Warren Buffett's call for higher tax rates, Morgan openly agreed with Buffett. "I mean he's absolutely right, isn't he?" he told Norquist.
"But Grover, only you in America believes that there has to be this -- what I believe to be really farcical, now absolute pledge for life about these kind of things," he lectured Norquist, trying to isolate his guest in the tax debate.
"Everyone laughing at you from afar. The American public sick and tired of all the games going on. And there you, Grover Norquist, a very bright guy, still resolutely saying a pledge is a pledge is a pledge, it cannot be broken, when many of your own party now are saying, you know what, it doesn't make sense to just have this irresolute position anymore."
And Morgan scoffed at the Republican "intransigence" on not raising tax rates while increasing revenues. "I just don't get why they're so intransigent about this pledge on income tax in particular if they're prepared to go for all kinds of dodgy deductions and so on. It's all the same thing. It's all about raising revenue through taxing the wealthier Americans a little bit more, isn't it?" he asked liberal columnist Charles Blow.
A transcript of the segment, which aired on November 26 on Piers Morgan Tonight at 9:02 p.m. EST, is as follows:
PIERS MORGAN: So you're Captain Bligh, on the Bounty, the mutiny has begun. How are you going to avoid being chucked out on the boat?
MORGAN: Warren Buffett wrote this fascinating piece in the New York Times today. And I'll read you the bit, and I know you've been very familiar with today. "Suppose an investor you admire and trust comes to you with an investment idea. 'This is a good one,' he says enthusiastically. 'I'm in it, and I think you should be, too.' Would your reply possibly be this? 'Well, it all depends on what my tax rate will be on the gain you're saying we're going to make. If the taxes are too high, I'd rather leave the money in my savings account, earning a quarter of 1 percent.'" And Warren Buffett says, "Only in Grover Norquist's imagination does such a response exist." I mean he's absolutely right, isn't he? Why are you so concerned about protecting the vast wealth of America's small percentage of increasingly rich people? Why do you care?
MORGAN: But Grover, only you in America believes that there has to be this -- what I believe to be really farcical, now absolute pledge for life about these kind of things. Surely the nature of the modern world is very fast-moving, it's changing a lot. America clearly has huge economic problems, heading for another fiscal cliff.
Everyone laughing at you from afar. The American public sick and tired of all the games going on. And there you, Grover Norquist, a very bright guy, still resolutely saying a pledge is a pledge is a pledge, it cannot be broken, when many of your own party now are saying, you know what, it doesn't make sense to just have this irresolute position anymore.
MORGAN: Grover, here's my problem. Here's my problem. Going back to Warren Buffett's piece – and here you have the ridiculous position that the wealthiest guy in America and one of the greatest investors in history, if not the greatest, demanding to be taxable. But what he says is very interesting, I think. He says between 1951 and 1954 when capital gains was 25 percent and marginal rates from dividends reached 91 percent in extreme cases, "I sold securities and did pretty well. In the years from '56 to '69 the top marginal rate fell modestly but still a lofty 70 percent and tax on capital gains inched up at 27 and a half percent. I was managing funds for investors then. Never did anybody mention taxes as a reason to forego investment."
Now here's the crucial line. "Under those burdensome rates, moreover, both unemployment and the gross domestic product increased at a rapid clip. The middle class and the rich alike gained ground." So the point he's making is that over these extended periods of time in his lifetime when he's been a very successful investor, he saw no link between increasing capital gains tax or income taxes on unemployment or GDP or any of the triggers that you believe would be deflated by raising such taxes.
NORQUIST: Well, several things. He misses several points. His article – he needs a better ghostwriter. The suggestion that if the people have –
MORGAN: Actually I thought it was a rather good piece.
NORQUIST: Well, except it's factually incorrect. He talks about – he says we ought to get back to 18 and a half percent of GDP. Yes. That's where we were with Reagan tax rates, that's where we were with lower marginal tax rates and with – with reasonable economic growth we get revenues of 18 and a half percent of GDP. You don't get there by raising taxes, you get there through economic growth.
Again, growth is rather important and it's what we ought to do rather than raising taxes. If the economy grew at 4 percent a year instead of 2 percent a year for one decade, the federal government would net $5 trillion. That would pay down all of the debt that Obama's accumulated in the first four years. If we had grown at Reagan rates of growth instead of Obama rates of growth, 11 million Americans would be at work today who are out of work. That's the way you do it with less regulation, not more.
MORGAN: And what if we had carried along -- what if we had carried along the Bush rate of growth of the eight years before Obama?
NORQUIST: Well, there were three periods of growth, or low growth, during the Bush years. Just as there were two different periods during the Clinton years. The first two years –
MORGAN: Yeah, but hang on, he ended up, Grover -- as you well know he ended up, President Bush, handing President Obama the greatest financial hospital pass of most people's living memory. So the idea that somehow these Republican economic policies have been this wondrous success story going back the last three decades is poppycock.
NORQUIST: Taxes are not the only policy. When he cut marginal tax rates on capital gains and dividends from 2002, there was four years of strong economic growth from '03 to '07. What you had – you're right -- was Fannie Mae and Freddie Mac making loans they shouldn't have. The federal government mandating that loans be made that ought not to have been made. There was a financial collapse. It wasn't because tax rates were too low.
It was because financial institutions were making bad loans and selling to Fannie and Freddie and you had a collapse. Free market economists were warning about this for a decade, and it was Bush should have focused on that instead of being governor – Mayor of Baghdad for six years. It would have been more important to focus on Fannie and Freddie.
But that wasn't his tax policy. You can have financial problems from printing too much money, inflation under Carter, not just high tax rates but inflation. If Buffet would go back and look at how the Kennedy years did after the marginal tax rate cuts, the Reagan years, with marginal tax rate cuts, he'd understand that economic growth – you know, he says he made a lot of money selling bonds. The question is, how much money the people who invested in those bonds made.
We need economic growth, not higher taxes. And if the government takes a dollar away, that dollar is not available to be invested. The return on that dollar is zero. And for Buffet to not understand that if you take money out of the economy, it's gone, is a little bit odd.
MORGAN: Let me start with you, Alice Stewart. I've heard from Grover Norquist and from Rick Santorum tonight, two leading lights of the Republican Party. And they almost seem to be wrestling now with the possibility that this pledge that's really held them all to ransom for so long on income tax rises in particular, may just have to be altered in how they deal with that. Why doesn't the party just say, you know what, forget all the pledges before this election has just happened. We just got beaten again and beaten badly. It's time to rethink, regroup, and be open to new ideas.
MORGAN: Charles Blow, but this is the point I was trying to maintain, is that on both sides of the divide there has to be compromise. And the compromise the Republicans are going to have to make is surely on raising revenue through taxation. I just don't get why they're so intransigent about this pledge on income tax in particular if they're prepared to go for all kinds of dodgy deductions and so on. It's all the same thing. It's all about raising revenue through taxing the wealthier Americans a little bit more, isn't it?