Behind almost all of the disturbing issues raised by Mitt Romney's jaw-dropping tax returns stands one largely unchallenged conservative article of faith. Much lower tax rates for capital gains than income earned through labor, conservatives claim, spur investment, catalyze economic growth and fuel job creation. But if that Republican theology isn't true, then the United States has for decades done nothing more than deliver a massive windfall to the wealthiest Americans needing it least. Unfortunately, that's precisely what the data show. As it turns out, lower capital gains taxes increase income inequality - and not investment - in America.

As Paul Krugman recounted two weeks ago, the historically low capital gains rate enjoyed by Mitt Romney hasn't always been 15 percent. In the not-too-distant past, it reached 39.9 percent and with the Reagan tax reform of 1986 was briefly the same as the top tax rate on income. But successive presidents of both parties lowered the capital gains rate on investment income because they believed, the Washington Post explained, "it spurs more investment in the U.S. economy, benefiting all Americans."

But as Jared Bernstein demonstrated with the chart above, there's no evidence to support that claim. Bernstein found that the business cycle, not acts of Congress, drive investment in the U.S.

Hard to see anything in the picture supporting the view that either the level or changes in cap gains taxes play a determinant role in investment decisions.

Remember, the ostensible reason for the favoritism in tax treatment here is to incentivize more investment and faster productivity growth. But that's not in the data and the reason it's not in the data is because investors aren't nearly as elastic to cap gains rates as their lobbyists say they are (more precisely, they'll carefully time their realizations to maximize their gains around rate changes, but that's not real economic activity-that's tax planning).

Reviewing other analyses, Brad Plummer of the Washington Post concurred with that assessment that low capital gains taxes don't necessarily jump-start investment in the economy:

The top tax rate on investment income has bounced up and down over the past 80 years—from as high as 39.9 percent in 1977 to just 15 percent today—yet investment just appears to grow with the cycle, seemingly unaffected...

Meanwhile, Troy Kravitz and Len Burman of the Urban Institute have shown that, over the past 50 years, there's no correlation between the top capital gains tax rate and U.S. economic growth—even if you allow for a lag of up to five years.

Billionaire Warren Buffett, the inspiration for the "Buffett Rule" advocated by President Obama and his Democratic allies, couldn't agree more. As he told The New York Times last year:

"I have worked with investors for 60 years and I have yet to see anyone -- not even when capital gains rates were 39.9 percent in 1976-77—shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off."

But if lower capital gains tax rates have had little impact on investment, they have had an outsized impact on income inequality in the United States.

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The wingosphere is flipping out over an explosive Elliot Abrams piece in which he lambastes Newt Gingrich for his vituperative assaults on Ronald Reagan back in the '80s. Abrams writes that, while the Reagan administration was battling Congressional Democrats over foreign policy, "Gingrich chose to attack . . . Reagan."

The best examples come from a famous floor statement Gingrich made on March 21, 1986. This was right in the middle of the fight over funding for the Nicaraguan contras; the money had been cut off by Congress in 1985, though Reagan got $100 million for this cause in 1986. Here is Gingrich: “Measured against the scale and momentum of the Soviet empire’s challenge, the Reagan administration has failed, is failing, and without a dramatic change in strategy will continue to fail. . . . President Reagan is clearly failing.” Why? This was due partly to “his administration’s weak policies, which are inadequate and will ultimately fail”; partly to CIA, State, and Defense, which “have no strategies to defeat the empire.” But of course “the burden of this failure frankly must be placed first on President Reagan.” Our efforts against the Communists in the Third World were “pathetically incompetent,” so those anti-Communist members of Congress who questioned the $100 million Reagan sought for the Nicaraguan “contra” rebels “are fundamentally right.”

And the best part:

Such was Gingrich’s faith in President Reagan that in 1985, he called Reagan’s meeting with Soviet leader Mikhail Gorbachev “the most dangerous summit for the West since Adolf Hitler met with Neville Chamberlain in 1938 in Munich.”

Classic.

This is especially rich since Newt has been invoking St. Ronald of California more than any other GOP candidate.

Here's the thrice-divorced Newt, talking to the Christian Broadcasting Network on why he's become the fundie favorite.

GINGRICH: I think the two key appeals are passion -- I think they instinctively can tell that I care so deeply of this country and the future of their children and grandchildren -- and second, I think the sense that I understand that there's a war against religion, and that I'm prepared...to actually fight back for the first in their lifetime and take on the judiciary when it's overreaching and when it's trying to drive God out of life.

Let's be clear about something up front. When Newt talks about a "War Against Religion" he means "A War Against Conservative Christians." Because I'm quite sure he's not talking about Muslims or Wiccans or Unitarians or Reformed Jews -- or any other faith that the fundies hate.

Anyway, I know Evangelicals love to see themselves as some sort of oppressed minority, but Republicans -- who constantly beg for their votes -- have held the White House for 19 of the past 31 years. Just where are all these secular atheist Jesus-hating judges coming from?

Not to mention that the ultimate judiciary, the Supreme Court, is dominated by Republican-appointed Roman Catholics.

But what's this "for the first time in their lifetime" stuff? Did Ronald Reagan and the Bushes not "fight back" against all those secular atheist Jesus-hating judges that Jimmy Carter and Bill Clinton surely appointed?

Shorter Newt: I'm more Jesus-y than George W. Bush.

Guess JPod missed it when George W. Bush invited Julie Ainger-Clark to his 2007 SOTU. Who's that, you ask? She created the "Baby Einstein" series of DVDs, for which, after lawsuits, Disney was forced to offer refunds.

Just another example of Obama doing something completely innocuous and wingnuts -- like drooling, rabid Pavlovian dogs -- leaping to criticize him for it.

Bonus points here for working in a Reagan reference.

Three cheers for Ryan Lizza. On "Morning Joe" on Monday morning, he refuted the conventional Beltway wisdom that "both sides" are to blame for the political gridlock in Washington.

MEACHAM: What does the White House, I should say attribute the polarization to at this point and if the identified the problems can they do something to solve them?

LIZZA: I think two things that aren't that complicated, polarization, two parties moving to the left and right, but it’s not just polarization and I think where a lot of reporters have trouble describing this phenomenon accurately. Frankly, you have one party that has gone much farther to the extreme than the other. The Republican party has been pushed much farther to the right than the Democratic Party. So we don't have polarization, we have asymmetric polarization.

SCARBOROUGH: I just want to state for the record -- let the record reflect, I disagree. Go ahead. This is your time.

LIZZA: I think there’s some pretty, if you look closely at some of the political science behind that – I think you’d have a hard time making the case that the Democrats in Congress have gone as far to the left as the Republicans have gone to the right.

Scarborough lamely tried to refute Lizza’s point by suggesting that what unnamed Democrats said about George W. Bush was just as bad as what Glenn Beck is saying today about Obama. That’s nonsense, of course – there were no elected Democrats comparing George W. Bush to Hitler on the floor of the House or calling him a racist on national television.

But political rhetoric isn’t what Lizza was talking about.

As Nate Silver demonstrated with hard data, the Democratic Party is still a party primarily of moderates, and the GOP is totally dominated by conservatives. And even that doesn’t take into account how far right the scale has been titled over the past 30 years.

Back in the '50s, an era conservatives romanticize, Dwight Eisenhower presided over a 91% marginal rate on the wealthy and launched the biggest public works project in US history -- which was paid for by tax increases.

During the '80s, another favorite decade of the right-wing, Ronald Reagan raised taxes 12 times -- including one of the largest tax increases in U.S. history -- and signed a bill that provided a path to citizenship for immigrants. Both of which would be unthinkable in today’s GOP.

Today, we live in an era in which a 35% tax on the highest earners constitutes tyranny, a $787B emergency measure to stave off a second Great Depression – over a third of which was tax cuts – is characterized as a historically unprecedented spending binge -- and the GOP's answer to immigration is to forcibly deport 12M people. Not to mention the fact that Senate Republicans have used the filibuster more than any other minority in history -- and that now it's commonplace for Republican presidential candidates to argue that the most popular programs of the New Deal and the Great Society should be eliminated.

Lizza should be applauded for getting this right. This “both sides have become equally extreme” stuff is just lazy and uninformed -- and should be throughly refuted every time it comes up.

Today, we celebrate the life of a truly great man, who -- armed only with his bravery and powerful words -- brought Jim Crow to its knees. It's also important to remember that the political heirs of those who created and enforced Jim Crow for a century -- Southern conservatives -- are now running the Republican Party. And that's why it's easy to understand why the fiercest opposition to making MLK Day a national holiday was in the GOP.

The last Republican candidate for president opposed it.

"Mr. Conservative" (Barry Goldwater) voted against the holiday.

Ron Paul voted against the bill that created the holiday -- twice.

77 of the 90 nay votes in final bill in the House were cast by Republicans.

18 of the 22 nay votes in the final bill in the Senate were cast by Republicans.

And the Greatest American in the History of America, Ronald "States' Rights" Reagan, only reluctantly signed the bill into law because it arrived on his desk with veto-proof majorities. Before he signed it, he said,

Congress seemed bent on making it a national holiday.

What an inspiring endorsement.

American Conservatives: Wrong About Everything Since 1776.

(Sung to the tune of "The Twelve Days of Christmas")

On the first day of Christmas
Republicans told me
Obama's born in another country.

On the second day of Christmas
Republicans told me
Gay marriage is like box turtle love and
Obama's born in another country

On the third day of Christmas
Republicans told me
Thank the one percent
Gay marriage is like box turtle love and
Obama's born in another country

On the fourth day of Christmas
Republicans told me
We don't torture
Thank the one percent
Gay marriage is like box turtle love and
Obama's born in another country

On the fifth day of Christmas
Republicans told me
Tax cuts more revenues bring
We don't torture
Thank the one percent
Gay marriage is like box turtle love and
Obama's born in another country

On the sixth day of Christmas
Republicans told me
Half the people no taxes paying
Tax cuts more revenues bring
We don't torture
Thank the one percent
Gay marriage is like box turtle love and
Obama's born in another country

On the seventh day of Christmas
Republicans told me
Government Reagan was trimming
Half the people no taxes paying
Tax cuts more revenues bring
We don't torture
Thank the one percent
Gay marriage is like box turtle love and
Obama's born in another country

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What's the difference between Newt Gingrich and God? God doesn't think he's Newt Gingrich.

In a Republican presidential contest in which most of the major contenders, including Gingrich, claimed God "called" them to run, Newt alone worships at his own altar. Even after burning through three religions and three wives, Gingrich's self-proclaimed mission on earth remains to be "definer of civilization" and "leader of the civilizing forces."

Newt's belief in his destiny as a "world historical figure" dates well before he assumed the mantle of GOP frontrunner, became Speaker of the House or even led the 1994 Republican revolution. As he explained to the Washington Post in 1985:

"I have an enormous personal ambition. I want to shift the entire planet. And I'm doing it...Oh, this is just the beginning of a 20-or-30-year movement. I'll get credit for it."

As it turns out, the Newt the historian's grandiose self-vision was strongly influenced by science fiction. Gingrich's personal mission statement, uncovered in 1997 during the House investigation into his ethical woes, reads like the cover of Isaac Asimov's The Foundation about "a future century the Galactic Empire dies and one man creates a new force for civilized life":

"Gingrich--primary mission: advocate of civilization, definer of civilization, teacher of the rules of civilization, arouser of those who fan civilization, organizer of the pro-civilization activists, leader (possibly) of the civilizing forces."

And the Great Civilizer doesn't merely believe that "I am much like [Ronald] Reagan and Margaret Thatcher." As Gingrich explained in 1994, "People like me are what stand between us and Auschwitz."

As Gail Sheehy revealed in her jaw-dropping 1995 Vanity Fair profile of then-Speaker Gingrich, Newt's belief in his epic role has deep roots:

"I'm a mythical person," says Newt, no stranger to revolutions. "I had a period of thinking that I would have been called 'Newt the McPherson,' as in Robert the Bruce." He is referring to his childhood, when he strongly identified with his biological father, Newton McPherson.

"Robert the Bruce," Newt continues, "is the guy who would not, could not, avoid fighting...He carried the burden of being Scotland." Like the Bruce, Newt feels he must carry the burden of being his nation.

"What makes me unusually intense is that I personalize the pain of war, the pain of children being killed, the pain of a 16-year-old who has been permanently cheated by his school and cannot read."

If Gingrich's self-description as a fighter who personalizes the pain of war seems odd, it should. After all, Newt never served in the military, getting deferments while his first wife funded his education. "Without corrective lenses, he couldn't see across the room," Colonel Bob Gingrich sneered about his stepson Newt, "Flattest feet I've ever seen. He's physically incapable of doing military service."

Newt Gingrich may not actually be a fighter, but he apparently fancies himself a lover. As Sheehy made clear, Gingrich's endless appetite for women other than his wives goes back to his earlier runs for office:

Along with his amorphous political persona, Newt showed a propensity for the kind of behavior boys boast about in the locker room. Throughout his first campaign he was having an affair with a young volunteer. Dot Crews, who occasionally drove the candidate, says that almost everybody involved in the campaign knew. Kip Carter claims, "We'd have won in 1974 if we could have kept him out of the office, screwing her on the desk."

As Anne Manning, with whom Gingrich had a dalliance in the 1970's explained, Newt the "definer of civilization" put plausible deniability at the top of his civilizational values:

In the spring of 1977, she was in Washington to attend a census-bureaus workshop when Gingrich took her to dinner at a Vietnamese restaurant. He met her back at her modest hotel room. "We had oral sex," she says. "He prefers that modus operandi because then he can say, "I never slept with her." Indeed, before Gingrich left that evening, she says, he threatened her: "If you ever tell anybody about this, I'll say you're lying."

After dispensing with wife number one in 1980, Newt the world historical figure explained to wife number two why he had to leave her. As Marianne Gingrich (nee Ginther) told Esquire:

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When President Obama on Tuesday declared that decades of Republican trickle-down economics "never worked," conservatives were predictably apoplectic.

But for all of their protests of "class warfare", "socialism" and worse, Obama was being kind to the Republican ideologues. After all, as the historical record shows, from economic growth and job creation to stock market performance and just about every other indicator of the health of American capitalism, the modern U.S. economy has almost always done better under Democratic presidents. Despite GOP mythology to the contrary, America generally gained more jobs and grew faster when taxes were higher (even much higher) and income inequality lower. And while the U.S. recovery from the Bush recession remains painfully slow, most economists - including the nonpartisan CBO and some of John McCain's own 2008 advisers - believe President Obama saved it from the abyss.

(Click a link below for the details on each.)

• Job Creation and Economic Growth
• The Stock Market
• Income Inequality
• National Debt
• The Bush Recession and the Obama Recovery

Job Creation and Economic Growth

To be sure, George W. Bush provided the perfect bookend to era of modern Republican economic management ushered by Herbert Hoover. The verdict on President Bush's reign of ruin was pronounced even before Barack Obama took the oath of office. Just days after the Washington Post documented that George W. Bush presided over the worst eight-year economic performance in the modern American presidency, the New York Times on January 24, 2009 featured an analysis ("Economic Setbacks That Define the Bush Years") comparing presidential performance going back to Eisenhower. As the Times showed, George W. Bush, the first MBA president, was a historic failure when it came to expanding GDP, producing jobs and fueling stock market growth.

On January 9, 2009, the Republican-friendly Wall Street Journal summed it up with an article titled simply, "Bush on Jobs: the Worst Track Record on Record." (The Journal's interactive table quantifies his staggering failure relative to every post-World War II president.) The meager one million jobs created under President Bush didn't merely pale in comparison to the 23 million produced during Bill Clinton's tenure. In September 2009, the Congressional Joint Economic Committee charted Bush's job creation disaster, the worst since Hoover:

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I'll bet you're wondering how many lies Bill Bennett and Sean Hannity can shove into one minute and 41 seconds. I'm about to show you. This little clip is so priceless for so many reasons. Beyond Bill Bennett's reverent repetition of the usual lies and half-truths in the name of Saint Ronnie, it's just a shining example of why Fox News viewers are ignorant and biased. The conversation takes place with reverent clips flowing on the screen in homage to the Great Sainted Ronald Reagan, while Bennett's eyes get just a little misty as he stares past the camera in reverent reverie.

First, we have the tax lie.

HANNITY: You know what's interesting to me, though? Things are so -- I know things change, but they really remain the same. It's the battle between the state and their utopia, if you will. To quote my buddy Levin, statism versus liberty.

BENNETT: Yeah. Ronald Reagan, the way I tell it, and I served with him as you know. I was his Secretary of Education and I had another job too. He wanted to do two things. He wanted to restore America and destroy the Soviet Union. You know, he was just straightforward about it.

Here -- you talk about things being the same. Carter. You remember what the country was like under Jimmy Carter? That's kind of like where we are -- maybe worse. It may be worse. But the country was feeling bad, worried about the future. We know what the misery index was. Ronald Reagan came in, sunny, optimistic, and with a plan. He said we're going to restore America.

You know, a lot of people forget. We talk about lowering taxes. It was not part of Republican doctrine until Ronald Reagan and Jack Kemp, my former partner --

HANNITY: Kemp-Roth tax bill

BENNETT: -- made it part of Republican doctrine. And now it is.

Just for the record, Ronald Reagan raised taxes eleven times. That's an interesting way to create doctrine, don't you think? Insert some sort of doctrinal pledge never to raise taxes while raising them? But again, this is Saint Ronnie we're talking about and so he didn't raise taxes, even if he did. Eleven times.

Onward to the "lazy, angry, bitter, clinging to Gods and guns" meme:

BENNETT: And so he told America to get up, lift up, he didn't say we were lazy people --

HANNITY: He didn't say we're lazy or slothful?

BENNETT: No, he didn't...

HANNITY: Wait, he didn't say we were angry, bitter, clinging to guns and bibles and religion?

BENNETT: He actually didn't think we were the problem, you know, he actually thought the problem was elsewhere and then looking abroad, he always held up the banner of freedom, and always held up the banner of America, whether it was Nicaragua, whether it was China, whether it was the Soviet Union and boy was the Soviet Union...

How many stories are there from the Reagan era about how about Shiransky hearing the tap, you know Reagan is President, things are going to change, we knew change was going to come.

Wow.

Under Reagan, the U.S. waged a proxy war in Nicaragua against a lawfully elected President of that country -- Daniel Ortega -- with CIA resources. In fact, CIA director Stansfield Turner characterized our policy in Nicaragua as "state-sponsored terrorism". It isn't an especially proud moment in our history, and with the whole Iran-Contra scandal it's especially odious and ugly. But listen to the amazing rewrite Bill Bennett gives it. He makes it sound like every political prisoner everywhere perked right up when Reagan took office and knew -- KNEW -- that they would be released.

Really?

And of course, Hannity and Bennett have no problem repeating the lie that our current President thinks we're lazy, which is of course not at all what he said.

So how many lies is that? Well, it's as many as they could fit into a very short time, while waving the Saint Ronnie flag in its fully furled glory. And their audience probably wept at the memory of that sainted man who led our country into the financial ruin it is today.