"The hoary fool, who many days
Has struggled with continued sorrow,
Renews his hope, and blindly lays
The desp'rate bet upon tomorrow."
-- Matthew Prior
Wednesday, August 22, 2012
Ann Coulter Champions Exception For Abortion In Cases Of Rape On Hannity
Why is it we hear the loudest shrieks for mortal sin from the mouths of Republican Roman Catholics?
The Voting-Third-Party Line of the Day from Forbes.com
-- John Quincy Adams
The Growth In Income Inequality Wasn't A Bug, It Was A Feature Invented By Liberalism
If you generally tax some income at one rate and other income at a lower one, what do you think would happen over a long period of time?
Obviously you would see income shift to the category taxed at the lower rate, to the extent that this is possible for those earning it.
This is what has happened with income from capital gains, the tax rate on which has been much lower by law than the tax rates paid on ordinary income.
That's the long-term lesson from the data, the salience of which seems to elude Bruce Bartlett writing for The New York Times:
For most people, income is simple: it means wages or perhaps a pension or Social Security benefits. Income from capital – dividends, interest, rent and capital gains – seldom enters into the calculation. The vast bulk of such income is earned by the ultrawealthy, like Mr. Romney.
According to the Tax Policy Center, in 2011 those in the middle of income distribution got about 70 percent of their income from labor and only about 3 percent from capital. By contrast, those in the top 1 percent of income distribution got 30 percent of their income from labor and 35 percent from capital.
The disparity is even more pronounced when one looks at the distribution of aggregate capital income. The total came to $1.1 trillion last year. Of this, 86 percent was earned by those in the top 20 percent of households, ranked by income. But this figure is misleading, because within the top quintile, the vast bulk of capital income went only to those at the very top. ...
[T]he tax code makes a sharp distinction between income from labor and income from capital. Wages are fully taxed at rates as high as 35 percent by the income tax, plus taxes for Social Security and Medicare. In contrast, realized capital gains and dividends on corporate stock are taxed at a maximum rate of 15 percent and do not bear any taxes for Social Security or Medicare.
Income inequality in America has grown precisely for this reason, and it is an artifact of progressivism, and of liberalism generally.
The contemporary distinction between capital gains and ordinary gains got much of its impetus under FDR, when the modern tax code differentiated for the first time between capital gains held for 1, 2, 5 and 10 years, exempting from taxation 20 percent of gains, 40 percent, 60 percent and 70 percent, for the respective holding periods. Considering how steep and confiscatory marginal tax rates became after 1916, the provisions under FDR look like a bone thrown to the rich. What these reforms did, however, was cement the trend toward tax avoidance for the rich which had been introduced earlier.
Originally capital gains had been taxed as ordinary income up to a rate of 7 percent, which was the top marginal income tax rate for the first three years of the modern income tax. But as marginal tax rates on ordinary income skyrocketed after 1916, the low 7 percent capital gains rate continued to apply until 1921, after which the rate was 12.5 percent, regardless of holding period and despite the fact that marginal income tax rates soared to 63 percent and higher as the years marched on.
So from the very beginning the rich were given their privileges in tax avoidance by making distinctions between income while the broad mass of the people got soaked with income taxes on their ordinary income. The steeply progressive rates made it appear that the rich were paying their fair share when in effect they had recourse to a back door to ameliorate their condition through the capital gains code provisions. Liberalism was nothing if not hypocritical.
If our tax policy goal today is to reduce income inequality, as seems to be the prevailing notion among liberal and liberal-leaning commentators, we ought to reconsider that history and appreciate better how tax policy is often just pushing on a string. To a conservative what leaps to mind is making taxes on ordinary income look more like taxes on capital gains income by flattening rates, not the other way around, raising capital gains rates to look more like progressive income tax rates, and broadening the base up the scale by capturing all income of all kinds for Social Security and Medicare before considering broadening the base down the scale by abolishing tax loss expenditures like the mortgage interest deduction.
Income inequality begins with treating some forms of income differently than others for tax purposes. There may be important social and economic reasons for doing so, such as promoting family formation or capital investment, but it should never be forgotten that you will immediately be introducing inequality into the equation when you do. How you compensate for that is what matters in approximating a just society.
Paladins of Economics Eschew the Mob and Excuse the Fed
So says Brian Domitrovic for Forbes, who thinks the Fed's bad habits are congenital.
Domitrovic calls attention to the glaring omission of monetary reform in Mitt Romney's economic proposals, about which his hundreds of recent endorsers from the economics profession have likewise said not a word:
This is a worrisome tendency in economics, on two counts. The first is that the vox populi is probably onto something. Why should the profession risk being wrong on such an important issue?
There is perhaps no institution in our government that has been so cornered by economists as the Fed. The Fed is the place most dominated by the credentialed Ph.D.’s of the profession. It would rankle economists to concede that despite this capture of the Fed by their ranks, the Fed was at fault for causing the worst economic crisis in eons. It would implicate the profession in the whole mess.
Gee, just maybe it's because the capture has gone precisely in the other direction: economics professionals profit from the status quo which puts them in the center of the system which puts them and their friends first in line for the funny money. Why do you think people so desperately worship the presidency in this society, and so desperately want to possess it?
Read the whole thing here.
Tuesday, August 21, 2012
Byron York Doesn't Get It: EVERY Toss Up State Matters If Romney Loses Florida
Mitt Romney can take a loss in a New Hampshire or an Iowa, give or take, but if he loses in Florida he cannot. Romney absolutely must win in every single other toss up state if he loses Florida, from Iowa to New Hampshire to Nevada to Ohio to Wisconsin to Virginia to Colorado to North Carolina, in order to win.
Iowa doesn't have a special meaning, especially now if it's really true that Michigan moves into the toss-up column as Real Clear Politics says today. Rick Santorum did especially well here in Michigan with pro-life Democrats, who also helped pick Todd Akin in Missouri, and Romney's throat cut to Todd Akin today isn't going to play well with Santorum's supporters, an incident which post-dates the poll taking Michigan out of the leaning-Obama category. The broader point is that 56 percent of Republican primary voters in Michigan picked someone other than Romney: either Santorum, Gingrich or Ron Paul. Romney might have capitalized on the new poll had he not flubbed on Todd Akin. It just shows Romney is still not a skilled politician.
Mitt Romney has emphasized protecting Medicare in Florida as a matter of first importance because he knows Florida is the key to his victory in November. If he can convince seniors there, he can convince them anywhere. Florida makes it easier to win in this bad environment, but without it, it's going to be very much more difficult.
Mitt Romney has emphasized protecting Medicare in Florida as a matter of first importance because he knows Florida is the key to his victory in November. If he can convince seniors there, he can convince them anywhere. Florida makes it easier to win in this bad environment, but without it, it's going to be very much more difficult.
Misguided story here.
Mitt Romney Just Lost My Vote
Romney should quit not just for the good of the Republican Party, but for the good of the nation. Surely the Republican convention can come up with someone better than this man Romney, whose political convictions are as uncertain as Barack Obama's biography.
Otherwise Romney is certainly going to lead the Republican Party to defeat in November, just like John McCain did in 2008, and a bunch of us who haven't gone broke already will promptly do so while the likes of David Frum tell us it's no debacle. Only in the Republican Party can conservatism be transformed from opposition to the welfare state in 1965 into support for Medicare as a matter of principle in 2012. And you feared Barack Obama would transform America.
The only thing Romney is proving in the case of Rep. Akin is that Republicans once again don't know how to fight, and don't understand how politics works.
Winning parties like the Democrat Party rally around their own when they are in trouble, and at the minimum do not make things worse for themselves by joining in on the criticism of individuals who make mistakes. A good recent example is Rep. Charlie Rangel who has been censured by the US House but is still standing, and quite happily so. Republicans, by contrast, have a habit of rushing at the first sign of trouble to distance themselves from members who come under fire, and end up isolated and alone, resorting to their own devices to survive.
No one but a fool wants such for friends. The voters can smell that smell for what it is: lack of self-confidence. And then they vote accordingly.
My hunch is Missouri will have a new senator named Todd Akin come November, and America will have another four years of Barack Obama.
We deserve it.
Not Only Is Rep. Paul Ryan A Hypocritical Catholic, So Is Radio Talker Sean Hannity
Just now he said he's fairly libertarian on the issue of contraceptives and doesn't object to their use by Americans.
That's not the position of the Roman Catholic Church, to which he belongs and readily and publicly subscribes.
What we're witnessing in America isn't just the shallowness of the beliefs of rank and file Catholics, but also of their most public representatives.
Obama must be thrilled.
Water Is Nineteen Times Rarer Than Gold
"Bodies are much more rare and porous than is commonly believed: water is nineteen times lighter, and by consequence nineteen times rarer than gold . . .."
-- Sir Isaac Newton
Even On The Most Generous Interpretation Of The Data, Rep. Akin Of Missouri Is Right
The wildest estimates of pregnancy resulting from rape range from as few as 200 to as many as 83,000, the latter representing many self-reported cases.
As a percentage of all pregnancies, 83,000 pregnancies represents almost 1.4 percent of the total.
Calling that rare evidently is impermissible among liberals, and frightened conservatives like Rush Limbaugh. But if 1.4 percent isn't rare, I don't know what is.
The sorriest spectacle today is how conservative talk radio is throwing Todd Akin under the bus.
Romney/Ryan Response To Akin On Abortion Contradicts Roman Catholic Teaching
Will Rep. Paul Ryan, a Roman Catholic, get a pass from the Roman Catholic Church for opposing its teaching on abortion?
In response to the inelegant remarks of Republican Senate hopeful Rep. Todd Akin from Missouri, the Romney/Ryan campaign says it does not oppose abortion in the case of rape, which is not the position of the Roman Catholic Church.
The New York Times reports, here:
The Republican presidential ticket of Mitt Romney and Paul Ryan was quick to distance itself from Mr. Akin’s remarks.
“Governor Romney and Congressman Ryan disagree with Mr. Akin’s statement,” the campaign said. “A Romney-Ryan administration would not oppose abortion in instances of rape.”
Rep. Ryan's position permitting abortion in instances of rape constitutes formal cooperation in a crime and self-excommunication according to the Roman Catholic catechism, here:
Formal cooperation in an abortion constitutes a grave offense. The Church attaches the canonical penalty of excommunication to this crime against human life. "A person who procures a completed abortion incurs excommunication latae sententiae,"77 "by the very commission of the offense,"78 and subject to the conditions provided by Canon Law.79 The Church does not thereby intend to restrict the scope of mercy. Rather, she makes clear the gravity of the crime committed, the irreparable harm done to the innocent who is put to death, as well as to the parents and the whole of society.
Rep. Akin's position against abortion in all circumstances is identical to Catholicism's whereas Rep. Ryan's position explicitly contradicts his own religion.
That's the Republican Party: where conservatives like Rep. Akin are not welcome, but open hypocrites, and fudgepackers from the Log Cabin crowd, most certainly are.
"Valuations Remain Unusually Rich"
So says John Hussman, here:
Valuations remain unusually rich on our measures . . . it should be of some concern (though it is clearly not) that the price/revenue multiple of the S&P 500 is now above any level seen prior to the late-1990’s market bubble. Prior to that time, the highest post-war peaks were in 1965 (which was not followed by a deep or immediate decline, but marked the onset of what would ultimately become a 17-year secular bear market), and 1972, just before the S&P 500 lost nearly half of its value.
The Shiller p/e bears him out (esp. the post-war peak on January 1, 1966 at 24.06 vs. nearly 23 today, and the post-war nadir of 6.64 in July/August 1982, a 72 percent decline in valuation over the course of the secular bear and the mother of all buying opportunities since the war):
The price for performance remains steep.
Monday, August 20, 2012
With "You Didn't Build That" Obama Revealed We're No Free Market Economy
 |
| Barack The Builder-Thief |
"What we have—and have had for a long time—is corporatism, an interventionist system shot through with government-granted privileges mostly for the well-connected–who tend to be rich businesspeople. This system is maintained in a variety of ways: through taxes, subsidies, cartelizing regulations, intellectual “property” protections, trade restrictions, government-bank collusion, the military-industrial complex, land close-offs, zoning, building codes, restrictions on workers, and more. As a result, people can get rich at the expense of the government’s victims. Even some who have prospered apparently by market means have actually done so through government intervention, such as transportation subsidies and eminent domain. Wealth can be transferred in many ways besides welfare and Medicaid, some of them quite subtle. Most transfers are upward."
Obama's flub in "you didn't build that" wasn't some supposed expression of disdain for free-market capitalism, but rather a too-open affirmation of the collusion which exists in America between government and business, a collusion redolent of the fascism of an earlier era.
The line was supposed to be, before it blew up in his face, a gentle reminder to his peeps that they owe their continued success to his stewardship of this system of corporatist largesse.
In stating the obvious Obama has let the cat out of the bag and proven himself an unreliable leader for the game of charades we call the free market economy. He let his guard down and opened a window on this uncomfortable truth about America, that in economics we consider our advocates of free market capitalism analogous to the preachers of fundamentalist Christianity. It's a free country and that's all well and good, as long as you're not really serious.
Sunday, August 19, 2012
Government Payments Like Social Security/Medicare Consume 89 Percent Of Tax Revenues
The government collects only $2.66 trillion in taxes but spends $2.36 trillion just on Social Security, Medicare, Medicaid, food stamps and the like, summed up as Personal Current Transfer Payments.
If we ran a balanced budget, that would leave just $300 billion for everything else, such as defending the country from our enemies, for which we actually spend about $700 billion currently.
Total current expenditures are running at $3.8 trillion, nearly 41 percent more than we presently take in.
On 1/1/2011 Social Security/Medicare Payments Exceeded Revenues By $329 Billion
Social insurance revenues were $906 billion on 1/1/11, but outlays for Social Security were $703 billion and for Medicare $532 billion on that date, meaning the programs were not self-sustaining, running a deficit of $329 billion.
Romney Has Ryan Reassuring On Medicare Because He Really Needs Florida To Win
The projection (here) back in the second week of April was that 124 electoral college votes were up for grabs in 9 states, with Obama at 233 and the Republicans at 181, who needed at the time 70 percent of the remaining electoral college votes to win.
Today the picture (here) shows the toss-ups reduced to 110 (still in 9 states, though a different mix), Obama up slightly to 237, and Romney up from 181 to 191, who now needs to win almost 72 percent of the remaining toss-up electoral college votes to win, according to the analysis.
In 2008 John McCain lost to Barack Obama because McCain lost in George Bush's red states of Colorado, Florida, Indiana, Iowa, Nevada, New Mexico, North Carolina, Ohio and Virginia (112 electoral college votes) by 1.4 million votes.
A Southern/Western strategy concentrating on Florida, North Carolina, Virginia, Colorado and Nevada would still leave Romney 7 electoral college votes short of 270 if he wins the currently projected 191 in addition.
Romney losing Florida would necessitate winning the 191 plus every one of the states in the toss-up category today, including New Hampshire, hence the recent Medicare emphasis in Florida where many seniors live.
An Eastern Time Zone strategy winning Florida, North Carolina, Virginia, New Hampshire and Ohio in addition to the 191 would give Romney exactly 270.
Rep. Paul Ryan Rejects Conservatism For The Government Dependency Culture
Quoted here:
"When I think of Medicare, it's not just a program, it's not just a bunch of numbers, it's what my mom relies on, it's what my grandma had."
"Medicare was there for our family, for my grandma when we needed it then. And Medicare is there for my mom, when she needs it now. And we have to keep that guarantee."
"But in order to make sure that we can guarantee that promise for my mom's generation, for those baby boomers who are retiring every day, we must reform it for my generation."
Saturday, August 18, 2012
Rep. Paul Ryan And His Mother: This Is Not Conservatism
This is Republicanism defending the welfare state. This is not conservatism.
Peter Schiff Warns About Rising Interest Rates But Avoids The Sorry Truth
Peter Schiff, here:
The current national debt is about $16 trillion (this is just the funded portion...the unfunded liabilities of the Treasury are much, much larger). The only reason the United States is able to service this staggering level of debt is that the currently low interest rate on government debt (now below 2 per cent) keeps debt service payments to a relatively manageable $300 billion per year.
First of all, interest payments on the debt haven't been close to $300 billion a year since 1994. They've been above that level ever since 1994, and frequently way above that level.
In fact, interest payments on the debt have been above $400 billion each year from 2006 inclusive, except for 2009. This is important in the context of a Republican House which congratulates itself endlessly for a one-time spending cut of $38 billion.
Secondly, if we were really paying an effective 2 percent interest rate to service the debt, say in 2011, our interest payment that year would have been closer to $296 billion.
But the total US public debt at the end of the 2011 fiscal year reached almost $14.8 trillion, and interest payments on that debt were actually $454 billion, implying an interest rate in excess of 3 percent, half again as high.
That's the real lesson of rising interest rates. A 50 percent rise in interest rates from 2 percent to 3 on a pile of debt that size means an increased interest expense of $158 billion. People who think rates can't rise that much very quickly haven't been paying attention to the recent experiences of Greece, Spain and Italy. For example in Spain interest rates paid on 10yr paper lept 50 percent in six months' time this year.
In Italy they lept over 35 percent in five months' time.
Third, while Peter Schiff is surely right when he warns that rising interest rates threaten to consume government revenues, leaving nothing for essential services, the sorry truth is that our interest payments on the public debt are really more like the interest-only payments on loans people took out during the housing bubble. Those loans were DESIGNED never to require principal payments, and so the buyers of those homes never built any real equity and never were on a path to retiring those debts. That's our federal government. We NEVER make principal payments on the money we borrow, and we effectively borrow the money we need to make the interest payments, and then some.
Instead of paying $454 billion a year in interest-only payments on the national debt, we should be on a path to retiring that debt. At 3.5 percent interest for 30 years, that would mean interest AND principal payments together totaling $864 billion a year, not $454 billion. And it would also mean: NO MORE BORROWING.
Can you imagine such an America? Of $2.8 trillion in current revenues, that would leave just $1.9 trillion for the feds to spend, 50 percent less than the $3.8 trillion and climbing which they spend now.
If there were any real conservatives in America, let alone in the Republican Party, that's what they'd be telling the American people. Anyone who tells you otherwise is just a pretender.
Subscribe to:
Posts (Atom)