While it would be a mistake to take the President's political rhetoric more seriously than it ought be, two observations from his address last night.
The President appears fond of his professor moments. He likes saying things like "I won’t bore you with the details of every plan or proposal, but basically, the debate has centered around..." and "something known as the debt ceiling -- a term that most people outside of Washington have probably never heard of before." He even felt the need to explain that should we default, "we would not have enough money to pay all of our bills" One imagines that liberals find such rhetoric smugly self-affirming whereas conservatives bristle.
He also repeated his now oft-used line about asking "hedge fund managers to stop paying taxes at a lower rate than their secretaries." This argument is somewhat ambiguous.
The term "Hedge Fund Managers" can refer to the companies that manage hedge funds. A big portion of their revenue is proportional to the returns they generate and allowed to be taxed as capital gains (~15%), rather than ordinary income (~35%). While there are good arguments for taxing this revenue at the higher rate, doing so will certainly reduce employee compensation, including for secretaries. In other words, raising taxes on fund management firms will indirectly, but surely, raise taxes on those firm's secretaries.
"Hedge Fund Manager" may also refer to the fund's principles, many of whom earn staggering figures by investing their own money. This return is absolutely investment income and taxed appropriately. An attempt to better discriminate, to have different classes of investors pay wildly divergent tax rates would very much appear confiscatory.
Monday, July 25, 2011
Debt Politics
The President, in his speech tonight, reached out to the sort of independent who likes "balance" and "compromise". In his, Boehner spoke to the sort of independents who, back in the day, supported Perot. In that the latter are more likely voters, Boehner played the stronger card.
The founding fathers dealt Boehner perhaps the strongest card in preventing the Senate from initiating a revenue bill (i.e.: A bill the Republican house would not support). The proposed Senate bill very much works to the G.O.P.'s political favor. Accepting it, in the last minute will take some air out of the claim they are un-compromising extremists, they will honestly take home to their base the best deal they could get, and it will put real teeth into the 2012 election.
Boehner's proposed two-step process is likely less politically advantageous. It will give the Democrats, before the election, another opportunity to frame Republicans as stooges of the very-wealthy and, most dangerously, it will give the President another chance to finally appear a strong and effective leader.
The founding fathers dealt Boehner perhaps the strongest card in preventing the Senate from initiating a revenue bill (i.e.: A bill the Republican house would not support). The proposed Senate bill very much works to the G.O.P.'s political favor. Accepting it, in the last minute will take some air out of the claim they are un-compromising extremists, they will honestly take home to their base the best deal they could get, and it will put real teeth into the 2012 election.
Boehner's proposed two-step process is likely less politically advantageous. It will give the Democrats, before the election, another opportunity to frame Republicans as stooges of the very-wealthy and, most dangerously, it will give the President another chance to finally appear a strong and effective leader.
NFL Settlement
From: ... To: Sent: Monday, July 25, 2011 12:04 PM Subject: Have No Fear.... Degenerate Football Fans- The league, the NFLPA and myself have reached a settlement, and there will be the Confidence/Rank Em pool for the 2011/2012 season. A more detailed email will be forthcoming, but it will be comparable in format to past years (weekly winners, cumulative winners, etc.) As spots often go quickly, please let me know if you are interested. Also, if you know others that may be interested, please let me know. Thanks, and I hope you are all enjoying your summer. ________________________________________ From: [ME] Sent: Monday, July 25, 2011 12:43 PM To: ... Subject: Re: Have No Fear.... I'm interested. But I believe we should cap the potential winnings of new entrants for the first five years they are in the pool at 30% of the stated prizes, and divide any excess amongst those of us who have been in the pool the longest (and thus have contributed the most to the pool pots over the years). Just to be fair. And we should set some of that money taken from the new entrants aside for people who used to be, but are no longer, in the pool. To compensate them for their sacrifices and contributions to the success of the pool.
Wednesday, July 13, 2011
The Debt Limit
A WSJ op-ed argues that "The tea party/talk-radio expectations for what Republicans can accomplish over the debt-limit showdown have always been unrealistic... Republicans might have played this game better, but the truth is that Mr. Obama has more cards to play." According to the op-ed:
In a separate column, Rove argues that the Government has sufficient revenue for debt payments, Social Security benefits, Medicaid and Medicare, active duty military pay, Department of Defense vendors and IRS refunds. In other words, that the political consequences of not raising the limit are bearable. As not raising the debt limit will set a hard cap on Federal spending and give the President, in effect, a line item veto to enforce, why would fiscal conservatives support raising it? The President will be politically constrained in his spending choices -- imagine the blow-back if he continued to pay six figure salaries to political appointees while cutting social security.
While Republicans have no political -- or principled -- interest in a debt limit deal, they would be wise to offer proposals that framed "Spending as a percent of GDP" as the issue. Failing that, they may have difficulty countering the President's intended claim that he "offered" the largest deficit cuts.
The polls that now find that voters oppose a debt-limit increase will turn on a dime when Americans start learning that they won't get Social Security checks. Republicans will then run like they're fleeing the Pamplona bulls, and chaotic retreats are the ugliest kind. By then they might end up having to vote for a debt-limit increase and a tax increase.
In a separate column, Rove argues that the Government has sufficient revenue for debt payments, Social Security benefits, Medicaid and Medicare, active duty military pay, Department of Defense vendors and IRS refunds. In other words, that the political consequences of not raising the limit are bearable. As not raising the debt limit will set a hard cap on Federal spending and give the President, in effect, a line item veto to enforce, why would fiscal conservatives support raising it? The President will be politically constrained in his spending choices -- imagine the blow-back if he continued to pay six figure salaries to political appointees while cutting social security.
While Republicans have no political -- or principled -- interest in a debt limit deal, they would be wise to offer proposals that framed "Spending as a percent of GDP" as the issue. Failing that, they may have difficulty countering the President's intended claim that he "offered" the largest deficit cuts.
Monday, July 11, 2011
Social Science Bubbles
In his latest column, David Brooks acknowledges that 50 years worth of gigantic policies driven by flawed social science has produced disappointing results. He is, however -- like those perpetually convinced that the latest financial bubble is not a bubble at all -- absolutely convinced that the latest social science, this time, can produce effective policies.
At the center of his argument is research by Eldar Shafir of Princeton and Sendhil Mullainathan of Harvard that finds "scarcity produces its own cognitive traits." For example, if you are poor, you are more likely to know the starting taxi fare or make complicated trade-offs involving milk and orange juice. This imposes enormous cognitive demands, crowding out other cognitive function. He doesn't explain what policies follow from this insight, but the most obvious would be those freeing poor people from these difficult choices. He does re-iterate his belief that "we need to design policies around" the knowledge that "we each have multiple selves" that "emerge or don’t emerge" in specific contexts.
It is worth noting that generations of folk lore would contradict any policy conclusions of scarcity research: Those we celebrate as having lifted themselves from poverty, do so, largely, because, not in spite, of their acute -- even obsessive -- attention to the kind of questions Brooks is convinced are obstacles.
Above all, as previously argued, pre-scientific teachers well understood our complex and divided natures. For that reason, they encouraged beliefs -- in particular: virtue and personal responsibility -- that supported our better angels. There is no evidence that social "science" ever has, or will, improve on what it displaced.
At the center of his argument is research by Eldar Shafir of Princeton and Sendhil Mullainathan of Harvard that finds "scarcity produces its own cognitive traits." For example, if you are poor, you are more likely to know the starting taxi fare or make complicated trade-offs involving milk and orange juice. This imposes enormous cognitive demands, crowding out other cognitive function. He doesn't explain what policies follow from this insight, but the most obvious would be those freeing poor people from these difficult choices. He does re-iterate his belief that "we need to design policies around" the knowledge that "we each have multiple selves" that "emerge or don’t emerge" in specific contexts.
It is worth noting that generations of folk lore would contradict any policy conclusions of scarcity research: Those we celebrate as having lifted themselves from poverty, do so, largely, because, not in spite, of their acute -- even obsessive -- attention to the kind of questions Brooks is convinced are obstacles.
Above all, as previously argued, pre-scientific teachers well understood our complex and divided natures. For that reason, they encouraged beliefs -- in particular: virtue and personal responsibility -- that supported our better angels. There is no evidence that social "science" ever has, or will, improve on what it displaced.
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