Archive for the 'Politics' Category

The Final Night

— Thank God for the hurricane; I don’t think I could have taken four nights of this.

— Off to a weak start tonight with Connie Mack mouthing platitudes and the Gingriches not adding much.

— Jeb Bush should have been the nominee. In fact, he should have been the nominee back in 2000. He was great tonight.

— It is heartening to see Bush, Condi Rice and others pushing education to the forefront. Rice called it the civil rights issue of our time. Me, I’d rank it second after immigration.

— Too damned many musical interludes.

— I feel like it’s my job to be cynical about the tearjerker stories, but I have to admit they were very effective.

Continue reading ‘The Final Night’

Share/Save

I Brag and Chant (and Complain a Bit) of Ryan, Ryan, Ryan, Ryan

Notes from the second night of the convention:

— What follows will be in more or less chronological order, except that I want to say upfront that Condi Rice gave one of the greatest political speeches in American history, and if you didn’t see it, you should scroll most of the way down this post and watch the video right now. (And no, that does not mean I agree with everything she said.)

— It took Cathy McMorris Rodgers less than 30 seconds to segue from “We will send every American to college” to “We will shrink the role of government”. This is the kind of thing that makes people hold Republicans in well-deserved contempt.

— Rand Paul lived up to my almost impossibly high expectations. He was superb:

— Rob Portman was good, on both substance and presentation. He did commit the sin of defending free trade as a boon to producers, as if consumers were nothing more than potted plants, but that’s only a sin of omission, and I don’t think it’s fair to expect too much depth in a ten minute convention speech. What he did say was spot on:

— There were far far too many musical interludes.

— Did I mention far too many musical interludes?

— Unlike Paul and Portman, Tim Pawlenty relies almost entirely on substance-free one-liners. He leaves me feeling dirty.

— Mike Huckabee, like Pawlenty, starts off largely substance-free and often negative, but pulls it off better because he’s more likable. Then he moves on to big themes, hits them well, and comes off lofty. He’s one of the best orators in American politics:

— I keep hearing, from speaker after speaker, that if you’ve been successful through study, hard work and risk-taking, then “you built it”, and therefore deserve your success. Okay. But it’s also true that if you’ve been successful through study, hard work and risk-taking, you probably had the good fortune of being born into a family that encouraged study, hard work and risk-taking. Not everyone has that good fortune, and it would be nice to hear that acknowledged.

Continue reading ‘I Brag and Chant (and Complain a Bit) of Ryan, Ryan, Ryan, Ryan’

Report Card

Here, for what it’s worth (and I’m sure it’s not worth much) are the grades I assigned to last night’s speakers. These are primarily for presentation, not content. They’re mostly quite high, which is unsurprising because of course these people were chosen largely for their skill as presenters. I’m sure that some of them would have gotten different grades if they’d spoken a half hour earlier or later, when I was worse or better fed. I am not prepared to defend these grades terribly vigorously, but maybe they’ll provoke some interesting discussion:

Continue reading ‘Report Card’

Conventional Wisdom

I became a lifelong political convention junkie in 1972, the year that George McGovern secured the nomination with a brilliantly executed ploy that nobody saw coming until it was over, and that even the sainted Walter Cronkite mistakenly reported as a disaster.

I was 18 years old. Most of the Democratic convention was held in the wee hours of the morning, and I went sleepless following the battle on black and white TV, jumping up every few minutes to twirl the dial to another network. All realtime analysis came from the anchormen, and at the crucial moment, the anchormen had no idea what was happening.

Continue reading ‘Conventional Wisdom’

In the Matter of Todd Akin

So there I was, putting together a long post on the fabric of the Universe, when Todd Akin came along and seemed to demand at least some brief commentary. A few remarks on that, and I’ll get back to the rest of the Universe in a day or two:

1) The exact quote, in response to a question about pregnancies resulting from rape, is: ““It seems to me, from what I understand from doctors, that’s really rare. If it’s a legitimate rape, the female body has ways to try to shut that whole thing down. But let’s assume that maybe that didn’t work or something: I think there should be some punishment, but the punishment ought to be of the rapist, and not attacking the child.”

2) It seems to me, from what I understand from news sources, that the female body does not in fact have ways of recognizing rape and preventing conception. I have absolutely no expertise in this matter; therefore my understanding might be wrong. Nevertheless, I’m happy to pass that understanding along.

3) It also seems to me that the phrase “from what I understand from doctors” says, in effect, “I am not an expert, so this might be wrong, but here’s what I’ve heard”. It is not unreasonable for people to make statements like this. In fact, I did it myself, just one paragraph back.

Continue reading ‘In the Matter of Todd Akin’

Charting the Tax Plans

Ezra Klein, quoted with approval by Paul Krugman, offers this chart of how the Obama and Romney tax proposals will change rates for taxpayers in various quintiles:

What we’re supposed to infer, according to Krugman, is that

we have an election in which one candidate is proposing a redistribution from the top … downward, mainly to lower-income workers, while the other is proposing a large redistribution from the poor and the middle class to the top.

But no such thing is remotely true. What we actually have is an election in which both candidates are proposing massive redistributions from the top downward, one slightly less so than the other. You’d never know this from looking at Klein’s chart because it illustrates changes in rates, whereas what actually matters is the rates themselves. It makes no sense to ask whether any particular group ought to be paying more or less without reference to how much they’re already paying.

Indeed, this is a classic example of what I once called the “Grandfather Fallacy” — by focusing on changes instead of absolutes, Klein’s chart conceals any existing inequities and hence treats them as “grandfathered in”.

Fortunately, Greg Mankiw has provided the numbers that allow us to make the requisite correction. Here, according to Mankiw, are the current tax burdens on various income groups (counting transfers as negative taxes, as of course one should):

Bottom quintile: -301 percent
Second quintile: -42 percent
Middle quintile: -5 percent
Fourth quintile: 10 percent
Highest quintile: 22 percent

Top one percent: 28 percent

That “-301 percent” means, for example, that a typical family in the bottom quintile receives $3.01 in net transfers for every $1 that it earns.

By adding these numbers to the numbers in Klein’s graph, we can construct a picture that actually depicts something interesting, namely the projected tax burdens for each group. It looks like this (the vertical axis represents percentage of income):

Note, for example, that, contrary to the impression you might have gotten from Klein’s and Krugman’s posts, both plans place the highest percentage burden on the top 1%, and both plans place a negative burden on the middle quintile — though Obama’s does both of these things to an ever-so-slightly greater extent than Romney’s does. There’s room for disagreement about which plan is fairer, but no room, I think, for disagreement about which chart is relevant.

Continue reading ‘Charting the Tax Plans’

In the News

As long as we have anything like traditional marriage, I believe that restricting it to heterosexual couples is an exceptionally bad and stupid policy, laced with unnecessary cruelty. It is not, however, an issue that is likely ever to affect my vote, because so much else dwarfs its importance. Legalizing gay marriage would make life substantially better for a few million people of the wealthiest people in the world (i.e. Americans) and is therefore a good thing, but if I’m going to pick my battles, I’ll cast my lot with, say, the tens or hundreds of millions of Third Worlders who are relegated to dire poverty by American trade and immigration restrictions. I’ll take the homophobic free trader over the protectionist crusader for sexual equality every single time.

Continue reading ‘In the News’

Frankly Speaking

Here’s something curious about this year’s political rhetoric: The Republican candidates claim that President Obama has made things worse, while he claims he’s made things better.

You might not think that’s a hard thing to explain. If so, I conclude that you are not Robert Frank, who keeps reminding us via his New York Times column (this one for example) that in many circumstances people care less about their absolute economic well-being than about their place in the pecking order. According to Frank, we buy big homes and fast cars not because we like big homes and fast cars, but because we like our homes and cars to be bigger and faster than our neighbors’. This in turn calls for a tax increase to tamp down that wasteful arms race.

But here’s the thing: Each of us has pretty good information on how we ourselves are doing. When politicians say the economy is doing poorly, they’re mostly informing us that other people are doing poorly. If Frank is right, we’ll consider that good news and (if we believe the news to be accurate) reward the incumbent who brought everyone else down. In other words, is Frank is right, then President Obama’s best strategy is to take credit for a disastrous economy, while his Republican opponents should argue that in fact we’re in the midst of a strong recovery.

Continue reading ‘Frankly Speaking’

Wisdom from the Ivy League

Greg Mankiw’s four principles of tax reform are extraordinarily wise, and I think it’s fair to say that almost everyone who has thought hard about these issues will agree with everything he says.

I have only one quibble, and that’s that Greg is very sure we should eliminate the mortgage interest deduction in accordance with his first principle: “Broaden the Base and Lower Rates”. I think we should maybe keep it in accordance with his second principle: “Tax Consumption Rather than Income”. (Though I certainly agree that after the second principle has been implemented, it will be time for the mortgage interest deduction to go.)

How sad that so much wisdom is sure to go unheeded.

Click here to comment or read others’ comments.

Ranking the Tax Plans

This post is a first attempt to rank the efficiency of the Republican candidates’ tax plans, concentrating on six dimensions:

1) The tax rate on wages and/or consumption. A wage tax and a consumption tax are pretty much interchangeable; you can tax the money as it comes in or you can tax it as it goes out. So I’m treating this as one category. The “right” level for this tax depends on your forecasts for future government spending.

2,3,4,5 and 6) The tax rates on dividends, interest, capital gains, corporate incomes and estates. I believe these tax rates should all be zero. That is not a statement about how progressive the tax system should be. A wage tax and/or a consumption tax can be as progressive (or regressive) as you like. It is instead a statement that while all taxes discourage both work and risk-taking, capital taxes have the added disadvantage that the discourage saving. This simple intuition is confirmed by much of the public finance literature of the past 25 years. (Here is a good example.)

My personal preference is for a system substantially less progressive than the one we’ve got, but for purposes of this exercise I won’t penalize candidates whose preferences differ from mine. For the record, Romney, Huntsman and Santorum are the three who (as far as I can tell) want to maintain substantial progressivity, with Romney, uniquely among the candidates, preferring even more progressivity than we currently have.

Here, then, is a chart, with candidates ranked roughly in order of their willingness to exempt capital income from taxation. I prepared this chart with a few quick Google searches (this is a blog post, not a journal article) and it probably contains errors. I’ll be glad for (documentable) corrections and will update the chart as they come in. Asterisks refer to further explanations, which you’ll find below the fold.

If we care about efficiency, we’re looking for zeroes in the last five columns. On the face of it, Johnson is the clear winner. But Cain’s 9/9/9 plan has two arguments in its favor that don’t appear on this chart. First of all, people are a lot less likely to bother evading one of three 9% taxes than a single 23% tax; therefore we’d have a lot fewer evasion problems under Cain than under Johnson. Second, it’s pretty easy to imagine Congress raising a 23% tax to 24% or 25% or 26%, but it’s a little harder to break the psychological barrier of single-digit tax rates, so Cain’s 9/9/9 might be more politically stable than Johnson’s 23. Therefore I’m calling this a tie between Johnson and Cain.

But the top six are all pretty good, except maybe for Paul, who hasn’t revealed his key number. Santorum is bad, Romney is atrocious, and Bachmann (who, as far as I can tell, has not bothered to release a tax plan) is an enigma.

Some explanations:

Continue reading ‘Ranking the Tax Plans’

Death And Taxes

Herewith my remarks about the estate tax (with particular reference to its effects on the very rich, and why we should care) to Congressional staffers, presented a couple of days ago under the auspices of the American Family Business Institute. Here is higher quality video. Here is the even higher quality YouTube version. Here is video of the entire event. I particularly recommend the first talk, by Stephen Entin.

Note that all of my remarks apply equally well to all forms of capital taxation. Entin did a better job of focusing on the particular shortcomings of the estate tax.

Get the Flash Player to see this content.

Click here to comment or read others’ comments.

Why Not Bob Dole?

So Mitt Romney wants to exempt capital gains from taxation — but only for taxpayers who earn less than $200,000 a year. In Tuesday night’s debate, Newt Gingrich asked him (I’m paraphrasing) “Why the cap?”. Romney’s answer — that he’s looking out for the middle class because “the rich can take care of themselves” — was as incoherent as anything I’ve heard this election year.

Here’s why:

I interpret Romney’s answer to mean that he wants to cut capital gains rates not on efficiency grounds, not on supply side grounds, and not on philosophical grounds, but on redistributionist grounds. Well, okay, I myself don’t think very much of redistribution as a primary driver of tax policy, but Romney and I can disagree on that one. But where the incoherence comes in is this: If your goal is to redistribute from the rich to the middle class, why on earth would you do it by cutting the capital gains tax, as opposed to lowering income tax rates in the middle and raising them at the top?

To put this another way: If you care about efficiency, you’ll want to cut the capital gains rate to zero for everyone. If you care about fairness, and if you believe fairness mitigates against double/triple/quadruple taxation, you’ll still want to cut the capital gains rate to zero for everyone. If you care about redistribution, you’ll want to juggle the tax brackets. But I can’t think of a single thing you could care about that would lead you to laser in on cutting capital gains rates for middle income taxpayers only.

Now it might be that somewhere in Romney’s 59 point economic plan there’s an answer to this. If so, Herman Cain was surely right when he intimated that Romney himself can’t be terribly familiar with the contents of that plan. Because, when asked a simple question about the justification, Romney wasn’t able to come anywhere close to making sense.

Continue reading ‘Why Not Bob Dole?’

Stopped Clocks

Incidentally, Paul Krugman made an incisive point last week when he wrote:

Here’s a question I haven’t seen asked: If fear of future regulations and taxes is holding business back, as everyone on the right asserts, why didn’t the Republican victory in the midterms set off a surge in employment?

After all, if you really believed that fears of Obamanite socialism were the key factor depressing employment, the GOP victory — with the clear possibility that the party will take the Senate and maybe the White House next year — should greatly reduce those fears. So, where’s the hiring surge?

I even set out to write a blogpost citing this argument with approval — but around the time I was composing it, Krugman followed up with this bit of idiocy, to which a response seemed more urgent.

Now that that’s out of the way, I can come back to the bit about the missing Boehner Boom. It’s a more-than-fair question. How would you respond to it?

Click here to comment or read others’ comments.

There He Goes Again

Paul Krugman’s latest venture into self-parody starts with a recent paper on the cost of air pollution, which finds that said costs are big and heavily concentrated in a few industries. Krugman then links to a New York Times article surveying Rick Perry’s past clashes with the EPA. With no further argument, he concludes that

Today’s American right doesn’t believe in externalities, or correcting market failures; it believes that there are no market failures, that capitalism unregulated is always right. Faced with evidence that market prices are in fact wrong, they simply attack the science.

Where to begin?

Continue reading ‘There He Goes Again’

Thursday Puzzle and More

Yesterday’s post on taxation generated a whole lot of comments that deserve responses; unfortunately I’m too swamped right now to respond. Worse yet, I’ll be out of town — and probably not blogging — for the next few days. Sometime next week, I’ll try to craft a new blogpost addressing much of what was said in those comments.

Meanwhile, here, courtesy of our frequent and invariably interesting commenter Mike H, is a puzzle to keep you busy while I’m gone:

Continue reading ‘Thursday Puzzle and More’

The Romney Plan

I have not read or even skimmed Mitt Romney’s 160-page economic plan; all I know is what I’ve seen in the headlines. So all of this is subject to revision. But:

Continue reading ‘The Romney Plan’

Krugman Followup

What I like about people in academics is that when we disagree, we actually care about figuring out who’s right — and therefore we have a tendency to reach consensus, though it can take a while.

Anybody who blogs often enough (very much not excluding yours truly) is occasionally going to post something that, at least as written if not as intended, is objectively plain flat out wrong. Paul Krugman did that a couple of days ago, I responded, he’s responded to my response, and at least 4/5 of our disagreement is now resolved. That’s exactly as it should be.

Continue reading ‘Krugman Followup’

Jesus Christ!


Kathleen Kennedy Townsend, writing in the Atlantic, has figured out that Jesus Christ wants you to be a Democrat. There are, you see, 2500 passages in the New Testament that call on us to care about other people. Rick Perry (and presumably others of his Republican ilk) ignores those passages, according to Ms. Townsend, when he voices “concerted opposition to government social programs”.

Now, of course Rick Perry is no more concertedly opposed to government social programs than is Kathleen Kennedy Townsend; instead, they disagree about how those programs should be structured and how extensive they should be. Not even Ms. Townsend (unless she is an even greater lunatic than she appears to be) believes that such programs should be unlimited, so her disagreement with Rick Perry is largely over where to draw the lines. Somewhere in those 2500 New Testament passages, she’s managed to discern an endorsement for her own preferred lines over Governor Perry’s. Quite a discerning reader she must be.

But it gets worse: According to Ms. Townsend’s reading of the Bible, we ought to “use all the tools we have at hand to help the poor, the sick and the hungry” — and I’m guessing that’s not someplace Kathleen Kennedy Townsend wants to go. That’s because using all the tools at hand to help the poor, the sick and the hungry means unleashing the power of capitalism. Regarding the poor and hungry, it means eliminating barriers to trade and immigration, reducing or eliminating capital taxation, and eliminating or drastically restructuring most federal regulations. Regarding the sick, it means curbing the power of the FDA, eliminating the tax deduction for employer-provided health insurance, and committing ourselves not to regulate the prices of prescription drugs. As a general rule, it means diminishing the power of the political class that Kathleen Kennedy Townsend has devoted her life to serving.

Continue reading ‘Jesus Christ!’

Last Night’s Debate

Putting aside all issues of who I did or did not agree with, and putting aside all issues of who I would or would not like to see in the White House, and ranking them solely on the criterion of “Demonstrated Ability to Think on Their Feet”, I score it this way:

1) Gingrich
2) Santorum
3) Bachmann
4) Cain
5) Paul
6) Romney
7) Pawlenty
8) Huntsman

You?

Click here to comment or read others’ comments.

Turn Off Their Lights

The EPA announced yesterday that new regulations mandating fuel efficiency standards for heavy trucks will cost vehicle buyers $8 billion, but that will be paid for in fuel savings over a year or two.

Oh. Sounds like the mandate is quite unnecessary then, no? With numbers like that, consumers will demand high efficiency vehicles with or without the EPA. Unless, of course, the EPA is, umm….lying.

Continue reading ‘Turn Off Their Lights’

Dakota Winds

thune ethanol

Here is Senator John Thune (R-SD), speaking on the floor of the United States Senate:

Ethanol producers have been ripping us off for a long time, and they’ve come to rely on that for a source of income. So it’s only fair to let them rip us off a little longer.

I’m quoting from memory, so I might have the wording slightly off, but that was the gist of it. Oh, wait, here’s the exact quote:

We have a lot of folks who made investments, you have people across the country whose livelihoods depend upon this. I think it makes sense, when we put policy in place and we say it is going to be in place for a certain period of time, that it be honored.

As you can see, my parapharase was accurate.

Senator Thune speaks in the great tradition of his institution. Back in 1848, senators by the score made exactly the same argument for preserving slavery. A lot of folks had invested in slaves, you know. And their livelihoods depended on it.

Continue reading ‘Dakota Winds’

Make Them Gamble

A Guest Post

by

Jamie Whyte

Last week, Britain had a referendum to decide whether or not to replace its current “first past the post” electoral system with the alternative vote system (AV). During the campaign, the No to AV campaign claimed that changing to AV could cost £250 million, in part because voting machines would be introduced with it. Yes campaigner and member of parliament, Simon Hughes claimed that this was false and that the No campaigners knew it was. He asked the electoral commission to stop the No campaigners from lying.

Similar appeals are often made by other frustrated political disputants. But the idea that electioneering politicians should be allowed to say, and voters to hear, only what the electoral commission deems to be true and honestly believed is outrageous. It would make election outcomes depend on the judgement, not of the voters, but of the electoral commissioners.

The proposal is also unnecessary. As anyone who has argued with blowhards will know, there is an easy way of showing that someone does not really believe what he says. Challenge him to a wager. Demand that he put his money where his mouth is.

If the No campaigners really believe that changing to AV would cost £250 million, they will be willing to bet on it. By offering the wager, and having it declined, Mr Hughes would expose their insincerity. Equally, Mr Hughes’ failure to suggest the wager may tell us something about his own alleged certainty on the matter.

Politicians should generally be obliged to bet on the outcomes their various claims. This would discourage their lying which, incredible as it may sound, is even more widespread than people working with the standard definition of lying realise.

Continue reading ‘Make Them Gamble’

The President’s Taxes

obamaJust a couple of days ago, President Obama excoriated the Republican Congress for wanting to keep tax rates low for “people like me” — that is, people who, like the President, have very high incomes.

Now we learn that on an income of $1.7 million, the Obamas paid $450,773 in taxes, taking full advantage of the Bush tax cuts. I think it is fair to ask: If the President believes that people like him ought to be paying more, then why didn’t he pay more? There is absolutely no rule against sending in more money than you owe.

Now you might say that the Obamas believe it’s important to raise many billions more in taxes, and that sending in an extra hundred thousand or so would make essentially no progress toward that goal. But I don’t think you’d continue to say that if you thought about it. If the Obamas are one of, say, a million families in their financial position, and if the Obamas, and only the Obamas, send in some extra money, that’s only (by Mr Obama’s reckoning) one one-millionth as good as repealing the Bush tax cuts — but at the same time it’s costly to only one one-millionth as many taxpayers. Surely these things should scale.

Continue reading ‘The President’s Taxes’

Subtraction Distraction

Paul Krugman, getting less serious by the minute, on the budget deal:

It’s worth noting that this follows just a few months after another big concession, in which [Obama] gave in to Republican demands for tax cuts. The net effect of these two sets of concessions is, of course, a substantial increase in the deficit.

Well, no, actually. The net effect of these concessions is a (small but not insignificant) cut in spending coupled with a (somewhat larger) set of tax cuts.

To sum that up by saying that the “net effect” is an increase in the deficit is like saying that if a woman gives birth to twins and then murders her husband, the “net effect” is to increase the population. We’re entitled to care about more than just the bottom line.

Continue reading ‘Subtraction Distraction’

Senator B.S.

faceofevilA lot of people think of janitors as a group that’s not particularly well paid. Those people might be surprised to learn that in the last five years alone, American janitors earned over $250 billion! That’s billion! With a B!

Despite that enormous income, janitors pay no taxes whatsoever — or at least no taxes whatsoever over and above the taxes that are paid by you, me and other ordinary Americans. And shockingly, it appears that the U.S. Congress would rather cut spending than institute a new tax on janitorial income.

If the above strikes you as insane, congratulations. You are smarter than the intended audience of Senator Bernie Sanders, who observes in his new book “The Speech” that General Electric’s shareholders collectively earned a staggering $26 billion over the past five years, and paid absolutely no tax on that amount.

Of course $26 billion is only a tenth of what janitors earned over the same time period, but I guess it does look mighty big if you don’t bother dividing by the number of shareholders. Without having all the numbers in front of me, my best guess is that we’re talking maybe a few hundred bucks per shareholder, though of course (as with janitors) some earn more and others earn less.

And as for the shareholders paying absolutely no tax, perhaps they didn’t, as long as you don’t count taxes on dividends, capital gains and wages. To wit:

Continue reading ‘Senator B.S.’

Warring Camps

Scott Sumner argues that when it comes to policy, the key division is often not left-versus-right or Democrat-versus-Republican, but idealistic intellectuals versus corrupt politicians. He lists six great public policy failures, where idealistic intellectuals, regardless of ideology, largely agree that reform is urgent, while practicing politicians, regardless of ideology, largely defend the status quo:

  1. The huge rise in occupational licensing.
  2. The huge rise in people incarcerated in the war on drugs, and also the scandalous reluctance of doctors to prescribe adequate pain medication (also due to the war on drugs.)
  3. The need for more legal immigration.
  4. The need to replace taxes on capital with progressive consumption taxes.
  5. Local zoning rules that prevent dense development.
  6. Tax exemptions for mortgage interest and health insurance.

Continue reading ‘Warring Camps’

Hypocrisy Lessons

I swear to God I am not making this up. The New York Times ran an editorial yesterday arguing that the EPA’s proposals to regulate carbon dioxide emissions cannot reasonably be characterized as the borderline-illegal efforts of a rogue agency, because those proposals originated during the Bush administration.

Or something like that. At least they’re saying that House Republicans cannot without hypocrisy so criticize the EPA, presumably because all Republicans are required by the Times hypocrisy police to endorse all policies of all past Republican administrations. I wonder if the Times plans to level the same charges against the 26 House Republicans who voted last week against the extension of the Patriot Act.

Oh. Guess not.

Click here to comment or read others’ comments.

Judicial Overreach

Along with Mike Rizzo at the Unbroken Window, I am ambivalent about the Florida district court ruling thats strikes down Obamacare (by first striking down the mandate for individuals to be insured). Yes, Obamacare is bad policy; yes, it’s arguably unconstitutional. But as bad and unconstitutional policies go, it’s relatively benign. I (like Rizzo) am uncomfortable with a judiciary that can reject Obamacare while accepting agricultural subsidies, affirmative action, the Americans with Disabilities Act, and laws that dictate the size of your showerhead.

In fact, unlike, say, agricultural subsidies, the mandate for individuals to buy health insurance is at least a defensible response to a genuine problem — in fact, it’s a defensible response to two genuine problems.

First, as long as people are uninsured, they are going to show up at emergency rooms demanding care, and they are going to get it. Arguably, the best policy is to turn those people away unless they’re able and willing to cover the costs of their own care, but we all know that’s never going to happen. Given that we’re going to make medical care available to everyone, there’s at least an argument for making everyone pay for it.

Second, there really are good arguments for insuring people regardless of (at least some) pre-existing conditions; most of us would have insured against those conditions before we were born if we’d had the opportunity, and the inability of pre-born souls to sign insurance contracts can be seen as a form of market failure that bears correcting. But if you don’t allow discrimination on the basis of pre-existing conditions, then you’ve pretty much got to have an individual mandate; otherwise everyone waits till they get sick to buy insurance and the whole system breaks down.

Now the Obamacare system is very far from my preferred approach to these problems, but at least it’s a plausible response to a real set of problems, and hence arguably amounts to a system of taxes designed to provide for the general welfare of the United States, as allowed under Article I, Section 8 of the Constitution. That’s a lot more than you can say about, say, mandatory wheelchair ramps, the cost of which often far exceeds what you’d have to pay the wheelchair-bound to compensate for their absence. It’s a lot more than you can say about the Post Office, or the Commerce Department, or the Occupational Safety and Health Administration.

Continue reading ‘Judicial Overreach’

Freedom, Prosperity, and the Future of Egypt

With regime change perhaps imminent in Egypt and elsewhere in the Middle East, and amid all the calls for democracy and political freedom, it’s a good time to remind ourselves that desirable as political freedom may be, it’s no guarantee of prosperity. For that you need capitalism.

My colleague Alan Stockman and I looked into this question about 10 years ago; I have not updated the data since then but I expect it would still tell pretty much the same story. First, the following graph plots political rights (as defined and measured by Freedom House) against GDP per capita. Low scores indicate more political freedom (defined by criteria that include the existence of free and fair elections, the right to organize, the existence of opposition parties, the absence of domination by the military, religious heirarchies and economic oligarchies, open and transparent government operations, and full political rights for ethnic, religious and cultural minorities, ). There is a small postive relationship between political freedom and prosperity, but many of the freest countries are still poor. And there is very little difference in GDP per person between countries ranked between 2 and 7 on the political freedom scale.

Continue reading ‘Freedom, Prosperity, and the Future of Egypt’

Foreign Policy

xenoThe LA Times reports that Republican lawmakers have called on the Obama administration to return to the Bush-era practice of sending jackbooted thugs into private workplaces to arrest illegal aliens — revealing (as if we didn’t already know) that virulent xenophobia is alive and well in the Republican party. (Note well the hypocrisy of complaining that foreigners sneak into our country to take advantage of the welfare system, and then addressing the problem by focusing your deportation efforts on foreigners who have obviously come here to work).

The same Times article observes that even without the workplace raids, deportations have reached new heights for two years running at the direction of President Barack Obama — revealing (as if we didn’t already know) that virulent xenophobia is alive and well in the Democratic party too. This is, after all, the same Barack Obama who said in his acceptance speech at the 2008 convention that nobody benefits when an employer undercuts American wages by hiring illegal workers. Well, sure. Nobody, that is, except the employer, his customers, and the illegal workers who, in Barack Obama’s universe, count as “nobody”.

This raises the idle question: Which political party harbors more xenophobia? I have no careful documentation of this, but my impression in the 2008 election was that the Democrat John Edwards was the most despicable of the candidates in this dimension, with the Republican Mitt Romney running a somewhat distant but still unchallenged second. Going back to 2004, it was the Democrat John Kerry who called for federal contracts, whenever possible, to be performed by American workers, demanded tax incentives for firms that hired Americans instead of foreigners, and endorsed legislation encouraging consumers to “buy American”. (If that doesn’t strike you as virulent, ask yourself how you’d feel about a candidate who called for federal contracts, whenever possible, to be performed by white workers, demanded tax incentives for firms that hired whites instead of blacks, and endorsed legislation encouraging consumers to “buy White”.) But it was the Republican victor, George Bush, who followed in his Republican father’s footsteps by dispatching those jackbooted thugs who evoke such nostalgia in Republican leaders of today.

Continue reading ‘Foreign Policy’