Monday, December 21, 2015

AEI Values

My attention has just been brought to this paper by two "resident scholars" and a "research fellow" at the AEI propaganda mill, in which they argue against the proposed top marginal tax rates proposed by Diamond and Saez.

Hers's the meat of their argument:

"Imagine a high school student who graduates in a world where the top marginal income tax rate is more than 70 percent. He may decide not to pursue his dream of becoming a college-educated engineer because the government will take a large share of the returns to his college investment — that is, much of the extra money he will earn because he is a college-educated engineer will be seized by the government, so he may conclude that going to college isn’t worth it. He is worse off because of the high top income tax rate. And so is society, because we now have one less engineer. Or imagine a medical school student. She may decide to become a pediatrician instead of a heart surgeon because a large share of the extra money she would earn being a surgeon would be taken by the government. There is nothing wrong with pediatricians, but the problem is that the government is distorting this medical student’s decision — that is, she isn’t making the choice based on her preferences and market prices alone. If enough people made that choice, there wouldn’t be enough surgeons (an economist would say there is an inefficient allocation of human resources). Or imagine a small business owner. His business is growing and he has the opportunity to expand it over the next decade. But because expanding it will require a lot of work — not to mention that the payoff is risky — he chooses not to. He decides that it’s just not worth it given that the potential rewards from his hard work will largely go to the government."

Let's take a realistic look at their argument here.
" (A high school student) may decide not to pursue his dream of becoming a college-educated engineer because the government will take a large share ....of the extra money he will earn because he is a college-educated engineer.."
What would be his income tax rate as a high school graduate?  The NCES data show high school graduates earning a median annual income of $30,000, and if the tax rates I proposed in my post of February 22, 2013 were in place, his income tax (single person) would be $3,875, leaving an after tax income of $26,125
If he were to be an engineer, he could expect to be making $62.950 a year (taking the average of median entry level incomes for different engineering fields). My proposed tax rates (single person) would mean an annual income tax bill of $11,273, leaving an after tax income of $51,677 (i.e. more than the pretax income of a high school only graduate).
The difference in income after taxes: $25,552.
This difference in income would pay off a college debt of $100,000 in four years, leaving the engineer in a far better financial position than the high school graduate for the rest of their careers.
Similar calculations could be made for the other examples suggested by the AEI, but consider: these are financial calculations only.  They do not take into account the benefits of the realizations of dreams and continuing job satisfaction, which I suggest would outweigh the mundane financial considerations that the AEI "scholars" seem to think are so important.

Monday, December 14, 2015

TIME Goofed

TIME should have named President Obama its Person of the Year, in recognition of his leadership in bringing about the Paris climate accord. As Jonathan Chait so sagely points out, the Paris agreement is an historical accomplishment, and it far outweighs Angela Merkel's contributions to Europe's passing economic woes.

And oh yes, a second Nobel Peace Prize would be appropriate also.

Monday, September 28, 2015

A Counterfactual

In 2000, the "Butterfly" ballot is not printed, but a more clear standard form is used.

Al Gore becomes president.

When warnings of an Al Qaida attack surface, the Gore White House goes on alert, asking for any scrap of intelligence, and reminding all agencies to be on full alert, just as the Clinton White House did in 1999 when the millennium threats arose.

The Al Qaida plot is nipped in the bud.

Gore calls a press conference to announce the thwarting of a plot to hijack four airline planes and crash them into the twin towers, the Pentagon, and the Capitol.

The reaction from the press:
"There goes Gore, exaggerating again."

Wednesday, September 23, 2015

Another Press Fail

At Donald Trump's town hall meeting, one person  stood up to say:
"We have a problem in this country. It's called Muslims. We know our current president is one. He's not even an American."

"We have training camps growing where they want to kill us. That's my question. When can we get rid of them?"
What he had to say was clearly absurd, but the press reports of what he said are almost as absurd. The questioner is clearly asking when can we get rid of the (in reality non-existent) "training camps".  (It may not be as clear in the transcript, but is certainly clear from intonation and emphasis in the person's speech.) Yet he is reported to have asked when can we get rid of Muslims, which he clearly did not.  (Though he probably would like to get rid of Muslims, given the tenor of his statements.)

Wednesday, September 9, 2015

Another Missed Opportunity

On Stephen Colbert's first Late Show, Jeb Bush said this of the Iran deal:
"I think President Obama's being naive to trust the Ayatollahs."
To which a follow up question could have been:
"But this isn't just an agreement between the United States and Iran. It's an agreement between Iran and the United States, the UK, France, Germany, Russia, and China. Are you calling the Prime Minister of Britain, the Presidents of France, Germany, Russia and China, are you calling all of these people naive?"
Would Jeb! really want to go on the record as calling them all naive?  But if not, how was he going to justify singling out Obama as naive?   He would clearly be exposed as the hack that he is.

Darn it, Stephen, you missed a great opportunity there!  (I realize you were following a script, but you could have veered from it for a moment to ask this question.)

You may think a member of the main stream press could pick up on Jeb!'s foolish statement and ask the question I'm suggesting?  Hah!  I'm not holding my breath.

Tuesday, August 11, 2015

Scuttling the Iran Deal - No Big Deal?

So the Republicans and those Democrats who owe more fealty to Israel then to their own country want to scuttle the agreement reached between the major powers and Iran to limit Iran's progress towards obtaining a nuclear weapon.

The rhetoric I hear from the right is all about "Obama's deal with Iran", with the suggestion that it will fall apart if is not approved by Congress, or is reneged on by a future president.

I'm puzzled by this assurance on the part of the right.  The US is just one of the countries that has been imposing sanctions on Iran, and the agreement between Iran and the US, China, Russia, France, Britain, and Germany means that sanctions will be lifted, and trade will resume. So what if the US reneges? The other five major countries will be ending the sanctions as long as Iran keeps to its end of the bargain, allowing continuing inspections of its nuclear sites by the IAEA.  So businesses in those countries can expect to profit from the renewed trade, but US businesses  won't if the US alone insists on keeping up the sanctions.

And once the other countries have resumed normal relations with Iran, leaving the US isolated, what do the renegers propose?  The two options I hear are "Go back for a better deal" (as though the deal was solely a US deal, and was not hammered out through years of negotiations with all parties as the best deal that could be made), or military action.  Can anyone seriously propose unilateral military action once the rest of the international community has accepted the Iran deal?  Well - I suppose the crackpots of the right might continue their warmongering rhetoric, but to put it into practice against the wishes of every other major power?  Could they really be that crazy?

Update 8/14/2015  Fareed Zakariah takes Senator Schumer to task for opposing the deal:
Rejecting this deal would produce an Iran that ramps up its nuclear program, without inspections or constraints, with sanctions unraveling and a United States that is humiliated and isolated in the world.

Monday, August 3, 2015

Posing the Question

I do wish reporters were able to find the right words for questions to politicians.

For instance, asking "Do you believe in evolution?" carries with it the suggestion that evolution is a subject that can reasonably be doubted.  A more appropriate phrasing would be: "Do you accept the scientific reality of evolution?"

Sunday, August 2, 2015

Winner or Loser

At the the Senate Armed Services Committee hearings on the Iran nuclear deal, Senator Graham had this exchange with Defense Secretary Ashton Carter:
Graham: Could we win a war with Iran? Who wins the war between us and Iran? Who wins? Do you have any doubt who wins?
Carter: No. The United States.
Graham: We. Win.
If Carter had had his wits about him, he could have replied something like this:
 "If you are talking of a strict military to military confrontation, the United States wins. If you are talking about the state of the world after such a conflict,  the United States loses."

Monday, July 27, 2015

Huckster Huckabee

So President Obama has responded to Mr. Huckabee's outrageous comment:
This president’s foreign policy is the most feckless in American history. It is so naive that he would trust the Iranians. By doing so, he will take the Israelis and march them to the door of the oven.
But Mr. Obama's response is, I'm afraid, too tepid:
The particular comments of Mr. Huckabee are, I think, part of just a general pattern that we’ve seen would be considered ridiculous if it weren’t so sad.
What I would have liked to have heard is something like:
I would remind Governor Huckabee (assuming he was ever aware of the fact) that this is not just an agreement between the United States and Iran, but an deal agreed to by all six nations that have imposed sanctions on Iran.  And one of those six nations is Germany. For Governor Huckabee to suggest that Germany is returning to its Nazi past is simply outrageous.

Tuesday, June 30, 2015

Republicans Lie

A bold statement, perhaps, but I'm quoting a friend who worked for years in broadcast journalism, and had the opportunity to see many politicians up close and personal.  His sad conclusion, he told me, was that Republicans lie.

The most recent confirmation comes from Tom Moran of the NJ Star-Ledger Editorial Board on Chris Christie's record of non-veracity.  Politifact's "Truth-o-meter" tells us that 68% of Ted Cruz's statements are false.  And let's not forget Mitt Romney's serial dishonesty during his 2012 election campaign, which justified a weekly update of untruths from Steve Benen with the appropriate title of Mitt's Mendacity.

Now stand by for a wave of untruth as the 2016 campaigns come closer.  I suspect the zombie lies we have already been hearing from Republicans will seem mild by comparison.

Update 7/6/2015  And it continues....

Update 8/13/2015  And continues....

Update 9/1/2015  False and misleading...   (Aka par for the course)

Update 11/30/2015  Catherine Rampell points out how the news media aids and abets the untruth tellers.
While Brian Beutler adds to the catalog.

Monday, June 29, 2015

Why the Right Opposes Gay Marriage

I think Amanda Marcotte is on to something in her explanation for the right wing's fierce opposition to gay marriage and their frantic call to maintain "traditional marriage". 
She writes:
The tradition that is disappearing is the belief that marriage is a duty, especially for women  ........  Marriage is, bit by bit, becoming more about a partnership between equals who choose each other for the purpose of love and happiness. Which means it’s becoming less about giving men control over women’s lives. 
To accept same-sex marriage is to accept this modern idea that marriage is about love and partnership, instead of about dutiful procreation and female submission. Traditional gender roles where husbands rule over wives are disintegrating and that process is definitely helped along by these new laws allowing that marriage doesn’t have to be a gendered institution at all. 
"Giving men control over women's lives"  ...  we see that in the right wing efforts to deny contraception and abortion as well. It's all of a piece.

Another Press Fail

Ted Cruz appeared on The Today Show, interviewed by Savannah Guthrie.
"If a state clerk refused to issue a marriage license to an interracial couple, would you agree with that too?" she asked Cruz on Monday morning, noting that people who once objected to interracial marriage used religion to support their beliefs.
"There’s no religious backing for that," Cruz responded.
The natural follow up would be something like, "But in the 1940s and 50s, people were claiming religious backing for their opposition to interracial marriage, just as you are doing today in opposing gay marriage.  Today, we look back and say that those people were using religion as a cover for their bigotry.  Aren't you concerned that fifty years from now, people are similarly going to be saying that you're using religion as a cover for bigotry?"

And if Cruz pointed out that the Bible condemns homosexuality, a further follow up might be, "Yes, but as well as homosexuality, the Bible also condemns eating shrimp, eating raw meat, eating rabbit, wearing linen and wool at the same time.  Does your religion mean you condemn people who do any of those things?  Do you never do any of those things because your religion forbids them?"

But network interviewers are too namby pamby to press politicians like that.

Sunday, June 28, 2015

Undermining the First Amendment

From the NY Times:
 This month, in anticipation of the marriage ruling, Senator Mike Lee, Republican of Utah, and Representative Raul Labrador, Republican of Idaho, introduced the First Amendment Defense Act, which would push federal law far beyond the existing religious protections. Sure to be strongly opposed by civil rights groups and most Democrats, the bill would prohibit federal officials from penalizing individuals, businesses, charities or schools for actions based on a conviction that marriage is between a man and a woman.
The title of the proposed law is ironic, as it does exactly what the first amendment prohibits:  it establishes a religious belief as trumping the law of the land.

No Respect for Precedent

In his dissent in Lawrence v Texas, Justice Scalia observed:
"If moral disapprobation of homosexual conduct is 'no legitimate state interest' for purposes of proscribing that conduct ... what justification could there possibly be for denying the benefits of marriage to homosexual couples exercising '[t]he liberty protected by the Constitution?' "
i.e. the logic of the majority opinion in Lawrence led ineluctably to the conclusion that gay marriage should be legal. And as the majority opinion in Lawrence became a legal precedent set by the highest court in the land, so a  lawyerly respect for precedent would have required Scalia and the other Republicans on the Supreme Court to uphold the right of gay people to marry when the issue came before them, no matter their personal views.

Their failure to do so exposed them as ideologues first, lawyers second.

Wednesday, June 24, 2015

Campaign Promise Already Kept

When Donald Trump announced his entry into the presidential race, he informed us that
"I will be the greatest jobs president that God ever created I tell you that,”
Well, if reports like this are true, he is the first candidate to keep a campaign promise as part of his entry announcement: he gave jobs to a bunch of actors to come and applaud his announcement.

Tuesday, June 23, 2015


From cdub24 at Daily Kos:

Bernie is the Obama we all wanted to elect in 2008.

Sunday, June 14, 2015

Lottery Winnings

Yes, the state run numbers game, aka the lottery, is with us for good or bad, but I do question the way prizes are distributed.

From time to time I see posted in store windows the top prize that will be awarded to a winning ticket; this sum sometimes exceeds $200 million.  Now consider who are the purchasers of lottery tickets: the poor, the indebted, the desperate.  How much would it take for them to get their lives back on track?  I would suggest a lot less than $200 million, and I also ask myself: just what is the average lottery ticket purchaser going to do with that much money?

It would make more sense to split the large prizes into a number of smaller amounts that would be enough to turn people's lives around (pay off debts, buy a house, get some job training, put kids through college), but not so huge a sum as to be overwhelming.  Say twenty $10 million prizes instead of one large prize.  So instead of the size of the prize going up week by week as there are no winning tickets, the number of prizes would go up.  Having a larger number of prizes increases the chance of picking a winning number combination, so we could have more winners, and so more people whose lives could be improved.

Update 1/10/2016  And now the top prize on the Powerball  has reached 1.3 billion dollars.  That could be split to make 130 ten million dollar winners.

Rodney King Redux

This video has much in common with the Rodney King recording.

The Salinas police chief explains:

As he says:
"This is where people need to understand that making a judgment based on a grainy video is not necessarily the best thing to do until you really understand exactly what you're looking for and understand what happened in the run up to it."
His statement could just as well be applied to the Rodney King video recording, but our lazy press continues to refer to the Rodney King forcible arrest as "the Rodney King beating".

Thursday, June 11, 2015

Saturday, June 6, 2015

Summing It Up

Commenter BoiseBoy on this post has a masterful summary:
Honest Question. What exactly does the Republican Party do for our country other than screw it up? They cut taxes for billionaires, run up the debt like drunken frat boys, start wars, limit freedom (marriage equality, reproductive choice, harsh prohibitions, mass incarceration, etc.), eliminate corporate regulation (which in turn causes situations like banks operating like casinos and causing the housing crash / Great Depression), make delusional Supreme Court decisions (like Citizen's United), obstruct and block anything that would actually help citizens, fight with one another to see who can be more reactionary, repress the ability for people to vote, deprive the poor of any semblance of dignity or sustainability, trash teachers and the higher education system, give credence to lunatics like Glenn Beck, Sarah Palin, Rush Limbaugh, and Ted Nugent, the list just goes on.

Tuesday, June 2, 2015

Jon Stewart Has a Theory

From his Daily Show interview with Stanley McChrystal:
The Iran-Iraq war of the eighties, right - Saddam and Iran are having this war.  We're funding Saddam; we're giving him arms.  Now, the general people who learned their lessons of war with Saddam are leading this ISIS - apparently there's a lot of command and control from Saddam's generals.  We are now in many ways on the side of Iran fighting these guys - and it looks like we've just shifted the Iran-Iraq war fifty miles north-east and switched sides.
As McChrystal observed, that might be overly simplistic - for one thing, Saddam's regime was a secular one - but there's some truth to Stewart's humorous observation. 

Right On Rick!

So Rick Santorum thinks "we’re probably better off leaving science to the scientists" on the question of global warming.

I completely agree.  Now if only he and the rest of the GOP would follow that advice....

Right On Rand!

It's not often that I agree with Rand Paul, but he's right to point out that there cannot be a "right" to health care.
“With regard to the idea whether or not you have a right to health care you have to realize what that implies. I am a physician. You have a right to come to my house and conscript me. It means you believe in slavery. You are going to enslave not only me but the janitor at my hospital, the person who cleans my office, the assistants, the nurses. … You are basically saying you believe in slavery,”
A right implies a corresponding duty.  We can talk of rights of free speech (a corresponding duty not to suppress it), against unreasonable search and seizure (a corresponding duty not to force one's way into your home), against arbitrary imprisonment,  and so on.  What we properly call "rights" have a corresponding duty not to do something harmful to you.

But when some people loosely talk of rights to health care, to housing, to food, and to education, then that implies someone has to provide you the medical attention, build you the house, grow you the food, and teach you whether you compensate them or not, and whether they want to or not.  In other words - involuntary servitude. 

It's more realistic to talk about ensuring our citizens have adequate health care, housing, food, and education as a matter of good public policy, not as a matter of rights.

Monday, June 1, 2015

Words of Wisdom

from Teddy Roosevelt:
"No man should receive a dollar unless that dollar has been fairly earned. Every dollar received should represent a dollar’s worth of service rendered — not gambling in stocks, but service rendered. The really big fortune, the swollen fortune, by the mere fact of its size acquires qualities which differentiate it in kind as well as in degree from what is possessed by men of relatively small means. Therefore, I believe in a graduated income tax on big fortunes, and in another tax which is far more easily collected and far more effective — a graduated inheritance tax on big fortunes, properly safeguarded against evasion, and increasing rapidly in amount with the size of the estate."
(Update 6/5/2015)  Robert Reich agrees:
 At a time of historic economic inequality, it should be a no-brainer to raise a tax on inherited wealth for the very rich.
The richest 1 percent of Americans now have 42 percent of the nation’s entire wealth, while the bottom 90 percent has just 23 percent.
That’s the greatest concentration of wealth at the top than at any time since the Gilded Age of the 1890s.
Instead of eliminating the tax on inherited wealth, we should increase it – back to the level it was in the late 1990s. The economy did wonderfully well in the late 1990s, by the way.
Adjusted for inflation, the estate tax restored to its level in 1998 would begin to touch estates valued at $1,748,000 per couple.
That would yield approximately $448 billion over the next ten years – way more than enough to finance ten years of universal preschool and two free years of community college for all eligible students.


Maybe some things shouldn't be revealed, lest they encourage would-be airplane hijackers.
 An internal investigation of the Transportation Security Administration revealed security failures at dozens of the nation’s busiest airports, where undercover investigators were able to smuggle mock explosives or banned weapons through checkpoints in 95 percent of trials, 
I'm a believer in transparency in government, but also in using discretion.

Hooray for the 'N' word!

And hooray to Bernie Sanders to bringing it into our political discourse.

I'm referring of course to the word "ninety" - as in ninety percent top marginal tax rate - the approximate rate we had in the Eisenhower years, when we were able to balance our federal budget, and raise the revenue to build the interstate highway system.

While 90% may not be the optimal top marginal tax rate for raising adequate revenue without doing economic damage (Diamond and Saez put the rate somewhere between 50% and 70%), Sanders is doing us a favor by putting the higher figure out for discussion - so that settling on a lower but still effective rate could seem reasonable.

(My own suggestions for marginal rates included in this post)

Sunday, May 31, 2015

Republican Obama, ctd.

 As I've noted before, President Obama is essentially an Eisenhower Republican.

As further support for this observation, I've pulled a few excerpts from the 1956 Republican Party platform.
(Emphasis added)

While jealously guarding the free institutions and preserving the principles upon which our Republic was founded and has flourished, the purpose of the Republican Party is to establish and maintain a peaceful world and build at home a dynamic prosperity in which every citizen fairly shares.

We are proud of and shall continue our far-reaching and sound advances in matters of basic human needs—expansion of social security—broadened coverage in unemployment insurance —improved housing—and better health protection for all our people. We are determined that our government remain warmly responsive to the urgent social and economic problems of our people.


The protection of the right of workers to organize into unions and to bargain collectively is the firm and permanent policy of the Eisenhower Administration.
'Nuf said.

Update 6/14/2015   Yet more support for the view that the moderate Republicans of the past are the Democrats of today:

Update 2/14/2016:  And David Cay Johnson agrees that "back in the day, (Obama) would have been called a liberal Republican",

Wednesday, April 15, 2015


As I've long said, we don't need more redistribution, we just need better distribution in the first place.
$70,000 per year minimum wage
The idea began percolating, said Dan Price, the founder of Gravity Payments, after he read an article on happiness. It showed that, for people who earn less than about $70,000, extra money makes a big difference in their lives.
His idea bubbled into reality on Monday afternoon, when Mr. Price surprised his 120-person staff by announcing that he planned over the next three years to raise the salary of even the lowest-paid clerk, customer service representative and salesman to a minimum of $70,000.
Price clearly has a business model others would do well to emulate.

Update 6/172015:  More on predistribution here.


I'm perversely looking forward to how the right will use this against Hillary Clinton.

Because you know they'll find a way, don't you?

Bumbling Bravado

This tweet has just the right expression for GOP posturing:

What began, & nom-hopefuls are finishing… bumbling bravado on the world stage.

Tuesday, April 14, 2015

Minimum wage

I hear opponents of raising the minimum wage to a liveable level say things like: "If businesses have to pay their workers more, they won't be able to stay in business."

To which the obvious response is: if a business model requires underpaying/exploiting employees, then perhaps it's time to re-examine that business model.

Saturday, April 11, 2015

The Democrats' rhetorical Deficiency, ctd

Republicans are pushing through new "right to work" legislation in their ongoing effort to destroy the last vestiges of union (i.e. working people) power.

And who could be against the right to work?  Another example of the Republicans' ability to frame an issue, and the Democrats' rhetorical failure to respond.  It would not take that much to respond effectively in a way that makes the issue clear. For instance, when the expression "right to work" is used, it could jeeringly be referred to as the "right to be exploited".

Think back to George Bush's use of the term "death tax" to describe the estate tax (aka inheritance tax).  Who could be for a "death tax"? Again, a jeering reframing could make clear what the GOP is up to by referring to legislation to reduce/eliminate the estate tax as the "making rich kids richer bill".

It's really not that hard!

The Laugher Curve

Krgthulu makes it clear why the "Laffer curve" deserves its homophone.

Tuesday, February 24, 2015


Ezra Klein looks at Obama Derangement Syndrome:
It isn't so much paranoia about President Obama's policies as it is paranoia about the man himself — that he is, in some fundamental way, different, foreign, untrustworthy, even traitorous. What's odd is that it is attached to a president whose presidency has been, in almost every respect, conventionally liberal.
Obama's presidency is in many ways ordinary, but the feelings it evokes are not. There is something about seeing Obama in the White House that deeply unsettles his critics. Obama Derangement Syndrome rationalizes those feelings.
If it's really true that Obama doesn't love this country, if it's really true that his birth was a conspiracy and his ideology is baroque, foreign, and hateful, then the discomfort some Americans feel when they look at Obama is justified — it's a kind of patriotic spidey-sense. The alternative explanation — the one that looks at why Obama makes some Americans so much more uncomfortable than, say, Joe Biden — requires a much harder conversation.
And commenter Claudius on Brad DeLong's site makes the obvious comparison between criticisms of GW and criticisms of Obama, and why the latter have to be invented:

I think that in a way, this President is unusually scandal free. He really is a rather remarkable individual and politician, and going from Columbia and leaving behind a more traditional role in business and consulting, became an organizer in poor, rough neighborhoods of Chicago, then the Chicago school of law and a civil rights firm. And what he did growing up, he fully confessed in his first book.
For someone coming out of Chicago politics, they have nothing to hang on him.
I don't think the Clintons were guilty of any of the petty scandals created on the right, but there was more fertile ground to till; there actually were associates who went to jail, and an early cabinet member that committed suicide. They still made things up about the Clintons, but didn't have to stretch as far. For Obama, because he is either clean or already confessed his sins, and has such an idyllic family life, they have to make up so much ridiculousness.
I didn't like W, but it was because he wasn't paying attention before 9-11, allowed torture, blundered the US into war in Iraq and then mismanaged the occupation, and otherwise neglected America in service of the rich and corporate interests. He didn't need any strange background - it was enough that he was a poor leader, poorly advised, making poor decisions, and intellectually incurious. I was perfectly comfortable judging him on what he did as president, and without hyperbole. Obama's critics have no such easy ammunition.

Pushing Ahead

Our pretty good president is doing more to help ordinary people.
This of course raises the question of what it is that brokers who serve the middle class — people at mass market brokerages who pick up the phone when you dial the number on your company's 401(k) site — are doing to make money. The answer is that they are earning a living marketing financial products that are profitable to their employer and disguising the marketing as advice.
Obama is proposing to force people who purport to be advising on investment strategy to actually give good advice and reveal conflicts of interest. That the bank lobby claims this will put their advisors out of business is a damning indictment of the way they've been running their industry. More formal studies show the same thing, that investment advisors reenforce their clients' worst instincts, "encourage returns-chasing behavior, and push for actively managed funds that have higher fees, even if the client starts with a well-diversified, low-fee portfolio."
Details of proposed rules here. 

Update:  Ben Walsh weighs in.

Tuesday, February 3, 2015

More Press Failure

So the Republicans think that vaccinating children should be an option, not a requirement for living in a modern society.

For example, here's Wisconsin state representative Sean Duffy:
"...I do think we want to make sure we continue to let parents make these decisions for their kids. I think it's a slippery slope when we let the state get so involved with our children."
So presumably he's also against mandatory child seats and seat belts for kids in cars, not to mention mandatory bicycle helmets for young children while bicycling, and mandatory life jackets for young children out on the water in boats?

Needless to say, the feckless interviewer didn't follow up with these obvious examples of the state ensuring protections for children, asking for Mr. Duffy's opinion of those requirements. 

Toilet Training

So Senator Tillis believes that it is government overreach to require that restaurant workers wash their hands after using the toilet.
‘I don’t have any problem with Starbucks if they choose to opt out of this policy as long as they post a sign that says “We don’t require our employees to wash their hands after leaving the restroom,” Tillis said.
" long as they post a sign..."  Hmmm.  Would that be a legal requirement?  And if so, wouldn't that be another of those pesky regulations?  And supposing Starbucks wanted to opt out of that rule....

Friday, January 30, 2015

10% or 1%

Gernot Wagner's book Climate Shock is due out this spring.
His argument:
If you had a 10 percent chance of having a fatal car accident, you’d take necessary precautions. If your finances had a 10 percent chance of suffering a severe loss, you’d reevaluate your assets. So if we know the world is warming and there’s a 10 percent chance this might eventually lead to a catastrophe beyond anything we could imagine, why aren’t we doing more about climate change right now? We insure our lives against an uncertain future—why not our planet?
 Well, yes.  Or we could apply Dick Cheney's 1% rule.


A Pew Research Center study on the differences in views of science between the general public and sciences includes this chart:

Opinion Differences Between Public and Scientists
It shows how poorly informed the US public is on scientific matters, as we might expect, but my question is:

Who are the 2% of scientists who do not believe in human evolution?

Monday, January 26, 2015

Teleprompter Dependence

Here is part of Sarah Palin'e incoherent ramble (I can't describe it as "her speech") at the January Iowa "Freedom Summit":
"Things must change for our government. Look at it. It isn’t too big to fail. It’s too big to succeed! It's too big to succeed, so we can afford no retreads or nothing will change with the same people and same policies that got us into the status quo. Another Latin word, status quo, and it stands for, ‘Man, the middle-class everyday Americans are really gettin’ taken for a ride.’ That's status quo, and GOP leaders, by the way, y'know the man can only ride ya when your back is bent. So strengthen it. Then the man can't ride ya, America won't be taken for a ride, because so much is at stake and we can't afford politicians playing games like nothing more is at stake than, oh, maybe just the next standing of theirs in the next election."
Her explanation for this incoherence:  her Teleprompter broke down, so she had to improvise.

And these are the people who claim that the eloquent President Obama is totally dependent on his Teleprompter!

Wednesday, January 21, 2015

The Reagan/Bush Deficits Continue

The Reaganistas still believe (or pretend to believe) that cutting taxes will spur so much economic growth that tax revenues will actually increase.

You'd think that the "tax cuts bring in more revenue" myth would have been exploded by the experience of Gov. Brownback of Kansas.  He followed the Reagan playbook, and cut taxes while assuring the cuts would result in an economic boom.  We have seen what happened

Here's how Kansas Republican legislator Don Hineman describes the state's budget problem:
"But think about this: the entire budgets for public safety and general government could be eliminated and we still would not have eliminated the $648.3 million budget deficit for fiscal year 2016.  The budgets for all elected statewide offices and cabinet-level departments could be eliminated, all legislative functions be defunded, highway patrol and KBI abolished, and all state prisoners let out on the streets, and we still would not have totally eliminated the hole in the budget."

Tax cuts increase revenue? Hahahaha!.

But - but - but Reagan, reply the ideologues.

Yes, revenue increased under Reagan, but the increase came despite the cuts, not because of them. (Post hoc ergo propter hoc is a common logical fallacy.)

The revenue increased for two reasons.

Firstly, Reagan came into office when the economy was depressed as Volcker was squeezing the economy to reduce inflation.  So once Volcker removed the screws, the economy took off from its depressed 1980 baseline - a growth that was going to happen anyway without the Reagan tax cuts.  So yes - the increased economic activity brought in a certain amount of tax revenue, even when the rates had been cut.

But a more significant source of increased revenue came from the increase in government spending - largely spending on unproductive military toys. This increased spending (mostly borrowed) translated into people's incomes, a proportion of which came back as taxes.  So a big part of the much-touted Reagan revenue increase came from borrowed money.

This may be hard to follow in the abstract, so let's make it concrete.  If the government spends $1 million that's unfunded, that $1 million becomes income for corporations and individuals out there in the workplace.  They will pay taxes on that new income - let's say 25%, so $250,000 comes back to the government, and voila! - an increase in revenue of $250,000.  Except that the government is out $750,000 to get that $250,000 back.

That's the story of the 1980s revenue increase - a lot of it was essentially borrowed money as Reagan and HGW tripled our national debt with irresponsibly low tax rates. If taxes had not been cut so much under Reagan, the economy would still have boomed when the Fed relaxed interest rates, but not at the expense of such heavy borrowing.

These low rates (only slightly ameliorated by Clinton) have persisted, meaning that we've had constant borrowing since the 1980s. (There were a couple of Clinton surpluses, but they arrived only as a result of the tech bubble - the underlying underfunding continued.)  Then GW made things worse by more irresponsible tax cuts, whose full disastrous effects were masked by the housing bubble.  Once the housing bubble collapsed, and the economy went into freefall, we started seeing the full effects of the Reagan/Bush tax cuts.

Which is why blaming the resultant deficits on Obama is disingenuous and intellectually dishonest. They are still the Reagan/Bush deficits.

Wednesday, January 14, 2015

"....people as demented as I was are running the show."

Frank Schaeffer, son of Christian evangelist Francis Schaeffer, regrets his past  in helping the Republican Party win over the evangelicals by promising to make abortion illegal again.
We were leaders participating in various meetings with Congressman Jack Kemp, Presidents Ford, Reagan and Bush, Sr., when the unholy marriage between the Republican Party and the Evangelical Reconstructionist-infected “pro-life” community was gradually consummated. Dad and I — as did many other evangelical leaders like Jerry Falwell — met one on one or in groups with key members of the Republican leadership quite regularly to develop a “pro-life strategy” for rolling back Roe v. Wade. (Senator Jesse Helms named Dad as his favorite author when asked by the American Spectator magazine to name his favorite books.)
And that strategy was simple: Republican leaders would affirm their anti-abortion commitment to evangelicals, and in turn we’d vote for them — by the tens of millions. Once Republicans controlled both houses of Congress and the presidency, “we” would reverse Roe, through a constitutional amendment and/or through the appointment of anti-abortion judges to the Supreme Court or, if need be, through civil disobedience and even violence, though this was only hinted at at first. In 2016, the dream we had will become a reality unless America wakes up. The Republicans are poised to destroy women’s rights.
Schaeffer has come to see how misguided he had been.  Unfortunately, similar realization has not been widespread in Republican circles.  Schaeffer laments:
As I said, in the 1970s we were outsiders asking for change. The change came and now people as demented as I was are running the show.
Yes, the demented have both houses of Congress now.....