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Special Report

Teachable Moment From the Dismal Science

The emerging compromise to avert an imminent and massive tax increase illustrates perfectly the depth of the political divide in America.

The president's willingness to extend Bush-era tax rates for everyone, including the rich, has inflamed his base on the left. Moveon.org has a video out with people demanding to know what happened to the committed liberal they thought they elected. A leftist commentator in Sunday's Washington Post spoke of Obama's -- quote -- "spinelessness" on this and other issues. To them, higher taxes on the rich are a foundation of the just society they seek. To conservatives, the issue is a no-brainer: You don't raise taxes on anyone, least of all the rich, in a fragile economy. They ask a simple question: When's the last time a poor person offered you a job?

But the right may now have to agree to further extension of unemployment compensation and here, the differences are just as deep. The president and his party think paying people not to work actually creates jobs, because the unemployed spend the money and that stimulates the economy. Conservatives think paying people not to work may be compassionate, there's no way it creates jobs. Instead, they think, it makes it easier for people not to take whatever jobs are available, thereby prolonging unemployment.

Do not look to the field of economics to settle these disputes anytime soon. Nothing ever seems settled in economics. Maybe that's why they call it the dismal science.