Feet on the ground – head in the clouds.

Posts Tagged ‘Economics

Radical change we could agree on?

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Income Tax is the most ridiculously counter-productive tax we could possibly impose in terms of productivity. We want Americans to be productive. We want them to earn, to create things that others may buy, to create jobs. We do not want them to limit productivity in order to maintain a balance. Americans aren’t about wading in the middle, it’s our tax system that creates people like a friend of mine who always worked 36.5 hours, the minimum average to keep his full-time status, but where he figured that the rest of his check would all go to taxes. He was an accounting major, so I’m sure his math wouldn’t have been too far off, and he always seemed to have more take-home pay and get more back on his returns every year.

A consumption tax would serve the public good, be a better model for a more-free market, and most of all put the balance of incentives back in order. We want people to earn, to save and contribute to the circular flow of money within their communities. We don’t want anyone to shy away from work. If I work my ass off and save enough to buy a house with cash, that’s good for a lot of people. Sure, I may cut out some bank middle-mannery but who wants to argue they deserve to finance those who are inherently more responsible than their own management? If I’m keeping all of my money, I can afford to account for the taxes to buy a nice place in America, where many people enjoy resort-style amenities just for existing in a nice community. If I want to buy five platinum-plated Maseratis, I’ll be prepared to take the hit, but don’t punch me for punching in.

NI4D – The National Initiative for Democracy is the hidden-in-plain-view answer to many of our political woes. Last I checked, there are 11 states using some form of public initiative system. How else would things like medical marijuana get on a ballot? Or ever get a vote of any kind? Or gay marriage bans, for that matter? There are many things that make sense to the general public that are simply too dangerous for any politician to approach, let alone a majority of Congress. Throughout my college days I came across a lot of people who didn’t vote, but were somewhat informed and had an opinion. Even those who vote in Presidential elections rarely vote in off-year and local elections. Voter turnout does not really reflect a complete political apathy, more an apathy with the effectiveness of the current voting system.

Enter the national initiative. If the majority of Americans do not want a war, the majority should be heard. If a majority of residents of a state support a doctor’s right to prescribe medical marijuana, a conservative or pandering legislature should not block the will of the people on a state’s rights issue. If a majority of the public believe that a doctor may refuse to perform certain treatments based on their religious beliefs, I don’t believe any law could Constitutionally coerce them otherwise so long as this is made clear to the patient before their life is in the hands of the doctor. The Bill of Rights mentions the rights of the people in the 9th Amendment, and again as a part of state’s rights. This is better served in those 11 states with initiative systems, and referendum and recall can also be a better way to clear the haze of our current political system. All of the nonsense calls for resignation, all of the political posturing on issues the speaker doesn’t even believe will ever come to a vote and the back-and-forth nature of our failing two-party system would at least see some improvement and at most clear the way for real public discourse, real participatory democracy.

Concerning gay marriage: I say again, can the government simply refuse to define a marriage in any way? Let churches or individuals have the right to define their own “marriages”, and simply allow for all couples seeking to join their lives to be unified in the governments eyes. The slippery slope argument doesn’t fly here. The US has a long precedent of defining such unions as a union of only two, consenting adults. We have laws restricting the marriages of children which are legitimately in the public interest. Lately some ultra-conservative Congressmen have been comparing homosexuality to pedophilia. This is ludicrous and gets a gut reaction in many ways, but I’d offer one rational argument without gut involved. By definition, pedophilia violates legitimate laws in public interest. Sure, there could be homosexual predators out there, but as Chris Hansen proves there are predators of all stupid persuasions. But a union of consenting adults should not be the government’s business to deny one group if it is permitted for another.

If marriage is a religious practice, the sanctity of which should be defended, then it should remain out of the government. What the government should do is have a system for defining next of kin in a humane way, with the utmost priority on individual freedom to choose who is considered a spouse by a hospital.

I’m often accused of being an ultra-liberal or whatever you’d call it, but those tags really are just how others see you based on the conversations you’ve had. Sure, if you’re talking to me about health care, I sound a bit more on the liberal side. But if we’re talking about guns, I’m never really accused of being a conservative. That’s odd considering I don’t think any American should need to choose a “favorite Amendment” from the Bill of Rights. There was a specific reason our founders first defended speech, press and religion then our last line of defense second. This is not a “hunter’s” Amendment, although along with defense, we should be allowed to enjoy sport. It is the first line of the Constitution that says… and if you fail to obey the Kings of America as prescribed by the first three words of the Preamble… we’re not, ya know, gonna take it. The contentious issue here for many liberals is hinged on people like Glenn Beck, who think you start talking about getting guns ready. Paul Revere didn’t ride around practicing his speech. He wasn’t the lead character in ‘The Boy Who Cried Wolf’.

In all honesty, your guns will never be taken away. You’ll be able to feel more confident in that fact if we enact a national initiative system, but at the very least liberal politicians are not a monolith against guns. I was listening to J.Douche Hateworth on the radio the other day and he played a little “comedy” piece that described a terrorist with a knife coming at a family, he said if the father is a liberal he’d quake in his boots and think of pacifism. First of all, a terrorist with a knife? Second of all, his scenario says both fathers have a loaded weapon. You think liberals make bad fathers, Hayworth? Why don’t you come at me with a knife and see how liberal I am?

I’m no gun liberal in terms of ever wishing to take away the guns of any law-abiding citizen. I’m not sure that extreme restrictions on gun possession are the way to get the “more dangerous” criminals. If you look at the example of Al Capone, who was finally brought to justice on racketeering charges. The man ordered countless murders, but we get him for tax evasion? Don’t get me wrong, at the time it was a victory and having a definite criminal in prison is never a bad thing. But how many innocent people do go to jail? How many non-violent offenders serve time for marijuana possession? We can get the little fish, right or wrong, but we have trouble with the big fish? That’s essentially the same logic some liberals use that says driving through a school zone with a legally owned and registered weapon is automatically a crime. It’s pathetic when you consider that most legal gun-owners use their weapons for sport or self-defense. Sure, people stretch the definition of self-defense all the time, but that’s going to happen in society. The answer is more education. More organizations like the NRA who promote gun safety and tradition, and they need to be in the mainstream. The NRA shouldn’t automatically be considered one with the Republican party, although it’s most ardent supporters are often conservative. Gun ownership should be promoted among all law-abiding citizens, because at least one flying spaghetti monster knows that criminals will always have weapons.

“When guns are outlawed, only outlaws will have guns.” I can’t find the original source of that quote, although in looking I found a great quote from Charlton Heston speaking on Fox News back in 1997: “There’s no such thing as a good gun. There’s no such thing as a bad gun. A gun in the hands of a bad man is a very dangerous thing. A gun in the hands of a good person is no danger to anyone except the bad guys.” What we should do to curb gun violence is create more good guys, through lifelong education and a societal emphasis on family of some kind. I know adopted kids who are great successes and legacies who have fizzled out, and it all came down to involvement. If people are involved in the lives of children they will learn to act as responsible people do, if children are raised with every amenity money can buy with no relationship with parents or some caregiver they will look for a role model somewhere. Think of the ratio of crap-to-awesome at any given mall. I’d argue that you’re taking the same gamble by allowing your child to pick any role model from their lives in your absence. Sure, they could end up with an amazing role model somewhere but it’s a gamble parents don’t have to take. Well, they shouldn’t have to take.

This is where I can get more liberal on people, but I simply can’t believe you can support both family and bite-sized government. Health care is a part of this. Healthy parents can work without getting sick as often, imposing less of a burden on the family’s budget and productivity. Children’s health care helps give all Americans a chance to grow up and contribute to society rather than being punished by the circumstances of their birth. I do not advocate wreckless takeover of health care by the government, but a quick read of the Preamble would establish that the federal government has some responsibility to our health at least in terms of keeping us productive and safe from potential pandemic. The more free we are to be productive and contribute to society, the more we all benefit. We will all have different ideas about how to get us there, but I think we’d all agree on the benefits of a healthy society.

These are just some ramblings. I just wonder if we all agreed on the results we wanted, the discourse on the methods might be more civil.


The inherent injustice of trickle-down economics

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This point is simple. Trickle-down economics is the idea that lower taxes for the wealthy and for corporations will lead to jobs being created. So let me get this straight, we let the wealthy have more money in hopes that they’ll let the poor work for it? You mean to tell me the people who complain about “lazy welfare recipients” want us to give them money, so we can work for it? That’s ludicrous.

If everyone has purchasing power in this country, demand will dictate that jobs be created. If everyone were better off, the corporations would be better off in the sense that their customer bases would only continue to grow. When the economy tanks, even the corporations suffer, but they are some how immune to creative destruction (fossil fuels, bullet trains) or risk (banks, united airlines, chrysler). This nation is strong on the backs of the 300 million, not on the pocketbooks of the wealthy few.

Who should get tax cuts and why?

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I keep hearing bullet points from the campaign surrogates and media about what each of the candidates plans on doing with taxes.  In the last few days, I’ve actually gotten the 3rd grade synopsis — as opposed to the preschooler treatment — that Senator McCain is a “top down” guy, while Barack Obama prefers “bottom up” measures.  Although the media is beginning to realize adults watch their programs, the going is slow.  

First we bailed out Bear Stearns and JP Morgan-Chase, then Fannie Mae and Freddie Mac.  Next came the failure of Lehman Brothers and the emergency buyout of Merrill Lynch by Bank of America.  Then a government loan was needed to maintain AIG and at this point I stop worrying about the details.  It’s clear the government is in the bailout business, even with the holdout to Lehman Brothers.  It’s interesting to compare with how little was done for millions of American homeowners facing foreclosure.

This brings me back to the “top down” vs. “bottom up” argument.  Bailing out the banks is an example of the new “top down” philosophy.  If we stepped in to ensure that working families stay in their homes, that would be a good example of a “bottom up” philosophy.  But really, that simplification I’m seeing in the media misses the point completely.

Why would we cut taxes?  

If you think about the goal of tax cuts — besides the obvious point that officials who cut taxes end up being liked and returned to office 90% of the time — it is to stimulate the economy.  How exactly?  By people spending that money.  I know President Bush gets ridiculed for saying we needed to go out and buy things after 9/11, but he wasn’t all that far off.  He missed some key points that rendered his plan counterproductive, which is evidenced by what you see today.

Cutting taxes to stimulate the economy is based on the circular flow of money, or the paper flow if you’re in KC, Mo.  The idea relies on spending because if I spend my tax cut to buy a new MacBook, the demand for MacBooks goes up (not because of me, but because I’m not alone in a nation of 300 million) as does demand for work in Apple Stores and Best Buy.  This is the “creating jobs” part of tax cuts.  We also could assess that manufacturing jobs could be created, but that assumes we’re manufacturing the product in the United States.  We’re not an industrial economy anymore, we’re a service-based economy.  So we don’t get the full job-creating effect of tax cuts in most cases.  

Maybe it’s not a computer, but think about what you might buy with a $2000 tax cut. Is it manufactured here in the US?  Would you just pay down existing bills? That’s breaking even with the tax cut; few new jobs, sparse flow of money. The problem with President Bush telling us to go spend money, was that we weren’t really getting the bulk of the tax cuts and banks were so deregulated that credit was dispensed recklessly giving the illusion that we had money. Excessive debtors are as culpable, but the point of deregulation was to trap more people.  Loans handed out at 50% or greater is a crime against humanity and de facto slavery to many Americans. The Internets Celebrities have a great video on how slimy the financial industry acts in America’s poorest neighborhoods.

Continuing on with the flow of money, when we drive up business in places they open more jobs giving more people opportunities to work and make money — where they would become a part (or a bigger part) of the circular flow.  An industry that would really be nice for Americans to flock to after a tax cut would be the Green energy industry.  How about spreading some solar panels?  Free energy, and possibly an income source.  It would be like living in Alaska without having to rape the land!

Who should get the tax cuts?

The “top down” crowd (Bush, McCain) likes to say that tax cuts going to corporations and wealthy Americans will stimulate business through investment, creating jobs and opportunities.  This is what is known as the “trickle-down effect”.  I don’t know about you, but when I’m looking to open floodgates, I don’t aim for a trickle.  

People like Barack Obama propose to cut taxes for the middle class, not corporations or the ultra-wealthy. When you cut taxes on people who don’t have large excess, chances are they will spend/invest/save it. This may not have all of the effect immediately, but even if I decide to pay down my balances, I’m going to be more able in the future to make purchases. When tax cuts go to corporations, however, there is no guarantee they will do anything viable for average Americans with the money.  Take a look at Big Oil, for example.  Record profits, the rich get richer and the middle-class shrinks.  

By cutting taxes on the middle-class, they are more enabled consumers.  They can then make the decisions for themselves about how the economy is stimulated.  Kind of like a democracy for the economy.  If you cut taxes for corporations and the ultra-wealthy, that’s basically an aristocracy for our economy.  And really, an aristocracy for our country.  Think about it:  90% of the wealth lies in the hands of less than 10% of Americans.

This is why we must vote for the people, vote against the aristocracy and return to the glory years of the 90s, when taxes were just right to keep everyone moving up. The tide was rising, so everyone benefitted. Over the last 8 years we’ve seen the tide so low that many Americans are finding out just how small the middle class really is today. If you woke up one morning and found yourself evicted from the middle class, foreclosed upon, you can thank President Bush, Senator McCain, Phil Gramm and the theory to which they subscribe. Stop expecting trickle down, make them beg for you to beam it up.

The formerly respectable Becker-Posner Blog

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I’ve read the Becker-Posner Blog for a while now and often enjoyed the insight. These two economists have a deep understanding of some of the forces that affect our lives. They also, like many academics near the top of their profession, are complete idiots outside of their area of expertise. No post made that fact more evident than a recent focus on “Hollywood and Liberals“, which was rife with absurd assumptions and spurious links. The comments on these two posts were (mostly) far more intelligent than either of the author’s comments. For two well-respected, usually well-researched economists I’d expect a lot higher standards, even for such a pathetic topic.

I believe the single most important reason why so many of these Hollywood creative personnel are opposed to the Republican party, especially to the more conservative members of this party, is that the personal morals of many filmmakers deviate greatly from general norms of the American population.

General norms of the American population? Look around you, Dr. Becker. Where in this country can you find those norms being practiced? For someone who grew up in a religious, conservative town of 2,000 in the Midwest I would expect to have my own first-hand experience. Instead, I could create a laundry list of deviations from that “norm” among the residents of my hometown that would rival any sample of the same size in Hollywood. Sure, we hear about LiLo and Britney Gone Wild, but how many people from small town America have Access Hollywood tracking their divorce proceedings?

Anyone living in small town America should notice the doublespeak about how their traditional values are the backbone of this country while rumors fly around town about the latest affair involving a City Council member. It’s not that Hollywood is more liberal, it’s that Hollywood is admittedly more liberal. It is viewed as being more dysfunctional, but in reality it is a matter of exposure and a marginal increase in reckless behaviors. Any construction team in this country contains the same percentage of casual drug users (based upon my own substantial experiences, if you fund the research I will prove this empirically).

Creative contributors to films divorce in large numbers, often several times. Many have frequent affairs, often while married, they have children without marriage, they have significant numbers of abortions, have a higher than average presence of gays, especially in certain of the creative categories, who are open about their sexual preferences, they take cocaine and other drugs, and generally they lead a life style that differs greatly from what is more representative of the American public.

Again, Gary Becker assumes that what-you-see-is-what-you-get. In fact, he just seems a bit out of touch with reality (as he accuses Hollywood liberals of being) and more concerned with what our public record indicates (which has absolutely no balance of coverage between small town America and Hollywood). It’s true that some in Hollywood love their bananas and blow, but I’ve never seen more blow than I did while partying with the daughters of the “traditional values” crowd throughout my high school and college years.

Here I am making unsubstantiated claims as I am certainly accusing Gary Becker and Richard Posner of doing, with two major differences. One, I am not supposed to be a well-respected academic with standards to uphold and two, I am using my own experience as my guide. If anyone cares to argue that Becker and Posner have observed these behaviors in Hollywood firsthand, be my guest.

By contrast, an important base of the Republican Party is against out of wedlock births, strongly pro life and against abortions, against gays, especially those who adopt an publicly gay lifestyle, against affairs while married, and very much oppose the legalization of drugs like cocaine and even marijuana.

This is the gem of the entire post. I’d like to thank Gary Becker for making my argument for me. It’s true that “the Republican Party is against out of wedlock births…gays…affairs while married…and the legalization of drugs”. The inherent flaw in that statement is that it admits they are not always behaving as such. I can think of one impending prominent out-of-wedlock birth from among the ranks of the same party. I believe I remember hearing about the McCain campaign pandering to their (obviously) selfless but underground gay Republicans. If I’m not mistaken Senator McCain actually began seeing his current wife while still married to his newly disfigured first wife. Then there is the example of Senator David Vitter of Louisiana who admitted to frequenting an escort service. I could continue, but this hypocrisy has already been exposed to any rational person who bothers to pay attention.

When I read further and noticed that Becker would attempt to explain away the instances of hypocrisy among Republicans, I decided to remove the link from my blogroll. These authors may continue to have some great posts about economics, but their social commentary only proves that is their only area of expertise. Maybe their next post should be “why are economists always wrong?”

Written by unastronaut

September 7, 2008 at 2:11 pm

@Google talks, rock shows for nerds

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Tyler Cowen, Professor of Economics at George Mason University and co-author of Marginal Revolution.

I found this particularly interesting, and then I watched related videos for hours. Not exactly the most exciting weekend, but I didn’t want to do a thing and I’m succeeding.

Written by unastronaut

June 22, 2008 at 12:30 am

Jason Furman is a solid choice

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He actually understands our economy and Economics in general, unlike the cronies of the past 8 years. As a signal of executive ability, judgement and leadership I am glad Senator Obama made this move. Furman’s history gives a strong indication of Obama’s willingness (and ability) to work across the aisle. Fiscal conservatism needs a strong voice in a campaign that aspires to such great projects. The American people are not as weak-willed as the pundits who say these things are impossible, we just know if we elect another troupe of idiots we’ll never get the major problems of our day solved.

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Milton Friedman, former Reagan economist on the War on Drugs

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