The Obama administration got good news and bad news on the economy Thursday.

The bad news: The Commerce Department revised the economic growth rate downward, to just 1.3 percent in the second quarter of 2012, down from an earlier estimate of 1.7 percent. That’s close to stall speed, not nearly enough to generate enough jobs or income growth. To add to the administration’s bad day, durable-goods orders dropped 13.2 percent in August.

The College Board released its data on 2012 SAT scores on Monday, and beneath the headlines (which tallied how much SAT scores have slipped as more and more students take the test) was a revealing picture of the influence of students’ household income on their performance.

The influence couldn’t be more decisive. The board measured household income in increments of $20,000 – starting with students from households making $0 to $20,000 annually, then $20,000 to $40,000, all the way up to $160,000 – then an increment of $40,000 ($160,000 to $200,000) and then a final category of more than $200,000. And SAT scores rose considerably at every step in the income scale. The poorest students, from households making less than $20,000 had a mean combined score of 1322 out of 2400; the next highest, 1397; then 1458, then 1497 – all the way to a score of 1722 for students from households making more than $200,000. That’s a 400-point difference between our richest and poorest students.

Until not long ago, there was a widespread assumption that the economy could well be Barack Obama's undoing. After all, no president since Franklin Roosevelt had been re-elected with unemployment as high as it is now, so if Obama were to prevail, it would take an unusual combination of factors that usually matter only on the margins—the skills of the respective candidates, a foreign crisis or two—to allow him to win.

Lots of Republican conservatives, Paul Ryan and Bill O’Reilly among them, have taken the position that even if Mitt Romney’s rhetoric was clumsy, his point was basically right. Some Americans pay taxes; others collect benefits.

But his basic claim was total baloney. When you count income taxes, payroll taxes, excise taxes, and highly regressive state and local taxes, the typical lower income working American pays about one-fifth of his or her income in taxes—more than Mitt Romney!

According to a study by Citizens for Tax Justice, the bottom fifth of the income distribution paid 17.4 percent of their income in state and local taxes. The second-poorest fifth paid 21.2 percent.

A lot of the debate we have in America about economics (like many issues) ends up being statements of principle masquerading as analysis of empirical reality. And maybe this is my bias talking, but it seems like most of this comes from the conservative side. For example, it's now become disturbingly common to hear conservatives say that when you cut taxes, total tax revenues actually go up, since the tax cutting creates an explosion of economic growth that brings in lots of new revenue. This idea has zero empirical support. It isn't that cutting taxes can't increase growth somewhat, it's just that it doesn't increase it enough to make up for the lost revenue. Yet no matter how many times economists demonstrate that cutting taxes doesn't actually increase revenue, Republican politicians continue to claim that it does. This is widely known as the "Tax Fairy," since believing in it makes about as much sense as believing in the Tooth Fairy. But conservatives would certainly like it to be true. Their belief in low taxes, particularly for the wealthy, is really a moral position more than anything else. And if cutting taxes actually increased revenue and enabled us to cut the deficit, then that would be great too. But their moral belief is where things originate, and why empirical evidence that their preferred policy produces problems doesn't make them change their position.

I thought about this when I read this article in yesterday's New York Times by David Leonhardt, in which he relates a conversation he had with Paul Ryan about taxes. He gave Ryan a chart showing economic growth over the last few decades, to initiate a discussion about the efficacy of tax cuts. As you might remember, Bill Clinton raised taxes in 1993, and what ensued was a period of spectacular economic growth, with 23 million jobs created overall during Clinton's two terms. Then George W. Bush came in and cut taxes repeatedly, and what ensued was a decade of economic stagnation. How does Ryan explain the fact that in the real world, things worked out exactly the opposite of what conservative dogma predicts? His answer reveals the core contradiction at the heart of Republican beliefs about taxes:

As Chicago teachers union officials and Mayor Rahm Emanuel’s office were assuring Chicagoans that they had reached an agreement Friday afternoon on their contractual dispute, a judge a hundred miles north in Madison, WIsconsin struck down as unconstitutional that state’s hugely controversial law banning collective-bargaining rights for public employees. As I write, the text of the judge’s decision is not yet available, but since a ban on public-employee collective bargaining exists in many states, either the judge found new grounds to declare the law unconstitutional, or he declared it so for reasons not related to the constitutionality of such prohibitions.

One morning earlier this year, in the borderland town of Brawley, California, 75-year-old Ignacio Villalobos perched on a chair in his trailer, removed a plastic bag from the well of a rubber boot, and finished dressing for work. Dawn was still an hour away, and in the wan light of the kitchen, Villalobos took off his house sandals and pulled the bag over his right foot. He bunched it at the ankle, then slipped his foot into his boot.

“These shoes aren’t made for water,” he said, adding that morning dew and irrigation keep farm fields damp—even in the desert of the Imperial Valley where he was working. Villalobos estimated that a pair of decent used boots would run him $30, almost half a day’s wages; the bags were free.