Saturday, June 15, 2002
WHY IT IS IMPORTANT
Since the Blogosphere (from here on out, the term is capitalized on my blog) has piled on the Guardian letter, it is important to address why it is important that pundits take on the ramblings of leftists so obviously out of touch with mainstream America. It is because, if left unopposed, they might eventually strike a chord with a significant portion of America.
The best blog I’ve recently found on this matter (sorry, I can’t remember who provided the link) is at a site called The Razor’s Edge. The host of the site, Mike Hanson, gives a great explanation on why it is important to address loony-left arguments:
You know, I speak with many people about current events and politics and they always notice one thing, my anti-leftist rants. Some of them ask, and rightfully so, "Mike, don't you think you are being a little paranoid ... considering what happened on 9/11, there is no way that the left could twist this nation like they did in the 60's".
What they do not understand about the Noam Chomskys, Mike Malloys, and Jello Biafras of the world is their favorite MO is to take the moral high ground, and it always falls on sympathetic ears. No matter what the issue, they can always use populist rhetoric, class warfare and misrepresentations to draw people away from the truth.
One thing we cannot allow is for the hard core left to take over this debate and frame it in their terms. Words like 'racism', 'imperialism', 'pacifism', and, my favorite, 'social justice' can be very powerful motivators and are very seductive.
We cannot allow them to take the moral high ground.
Well put, Mike.
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THE SELF-IMPORTANT, POMPOUS, NOSTALIGIST MANIFESTO
I’m coming a little late to this—late by blogosphere standards, anyway. Just in case you haven’t heard, the usual suspects of the hard left have dumped their collective flatulence on the pages of the London Guardian. The ramblings of these oh so brave souls have been dissected with great skill by numerous bloggers. (Thanks to Croooow Blog for many of these links.) Of note is Steven Den Beste’s outstanding essay. Also take a look at Brian O’Connell’s point by point refutation of the screed. Damian Penny tries to remind them what the war is all about. And there is these funny bits over at Amygdala and Bucket o’ Rants. (I’ve noticed that some of these sites are not among my links. That will be rectified shortly.)
Okay, my comments on the letter. First, look at this bit of sophistry:
In our name the government has created two classes of people within the US: those to whom the basic rights of the US legal system are at least promised, and those who now seem to have no rights at all.
Note the "at least promised" part of that sentence. The implication is our rights are just a flimsy house of cards ready to come crashing down with the slightest government push.
If rights in American are really so tenuous, then I’d like to know something from the likes of Noam Chomsky and Edward Said. Did the jack-booted thugs storm your ivory towers and haul you away in shackles after the appearance of the letter in the Guardian? No? Then your rights are more than just "promised"; they are respected and protected.
Next, compare these two passages:
Thus we call on all Americans to resist the war and repression that has been loosed on the world by the Bush administration. It is unjust, immoral and illegitimate. We choose to make common cause with the people of the world.
President Bush has declared: "You're either with us or against us." Here is our answer: We refuse to allow you to speak for all the American people.
Note that in the latter passage they are upset at President Bush, a democratically elected leader whose handling of the war continues to receive the approval of over 70% of Americans, because he presumes to speak for all of America. But in the first passage they presume to speak not just for America, but for the entire world. And what is their basis for this authority? Next to nothing; they are self-appointed spokesmen for the masses.
In his 1985 book Turning the Tide, Noam Chomsky wrote " Reagan loves to prate about the Bible….Perhaps he might begin his reading of the Scriptures with the definition of ‘hypocrite’ in the Gospel according to St. Matthew, 7.5." At present, Chomsky would do well to take his own advice.
Finally, the last two paragraphs in the letter reveal what is really bothering these folks:
We who sign this statement call on all Americans to join together to rise to this challenge. We applaud and support the questioning and protest now going on, even as we recognise the need for much, much more to actually stop this juggernaut. We draw inspiration from the Israeli reservists who, at great personal risk, declare "there is a limit" and refuse to serve in the occupation of the West Bank and Gaza.
We draw on the many examples of resistance and conscience from the past of the US: from those who fought slavery with rebellions and the underground railroad, to those who defied the Vietnam war by refusing orders, resisting the draft, and standing in solidarity with resisters. Let us not allow the watching world to despair of our silence and our failure to act. Instead, let the world hear our pledge: we will resist the machinery of war and repression and rally others to do everything possible to stop it.
These paragraphs wax nostalgic for a time over thirty years in the past: Oh when will the halcyon days of rage return? Won’t you please come out and protest with us? Unlike the 1960s, the people are not taking to the streets to protest the "unjust war." If anything, they take to the streets on occasion to support it. That fact alone says mountains about the justice of this war. But that never occurs to people like the letter signers. Rather, they hope for the return of a long-gone era, when they could self-righteously rant in front of throngs of young people eager to listen.
I’ve described these clowns as arrogant and nostalgic. Let me finish by adding one more adjective: pathetic.
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Friday, June 14, 2002
DEBATING THE ESTATE TAX
Via zonitics, I found that Gail Davis took issue with some of my points on the estate tax. This is what she wrote:
FROM DAVID HOGBERG: ONE SIDE SAYS - Repeal of the Estate Tax Will Cost the Government Huge Amounts of Revenue. THE OTHER SIDE SAYS - ...the estate tax does harm investment and job creation. That means that the government is not collecting the taxes associated with such economic activity, like income taxes and payroll taxes.
I'll assume that both "sides" are playing with their numbers and that neither side tells the complete story. One concern of mine in this war of numbers is that Republicans have already cut taxes for the most wealthy in this country and are prepared to go further along this line. Another concern is what “job creation” are we talking about? More MacDonalds jobs? We now have some of our high paid technical job leaving the country. Pretty soon we are only going to have lawyers, CEO's and their ilk, those elected to congress and those with inherited wealth. Everyone else will be "outsourced." Tell me how eliminating the estate tax will help this.
First, we need a supply-side primer here. It is important to cut taxes for the wealthy, because the wealthy are also “wealth producers.” When they receive a tax cut, they don’t stick that money in a mattress. Many of them invest it, often in new businesses and technology. Those are the sorts of investments that result in job creation. Cutting taxes also provides them with more incentive to invest, because they get to keep more of their money if and when their investment pays off.
Second, I’m talking about creation of all kinds of jobs, including high-skilled, high-paying ones. Despite what people like Michael Moore, Ralph Nader, and others think, we are not becoming a nation of hamburger flippers. Let me refer you to a recent article in BusinessWeek about income and jobs in the 1990s. Of particular note are these passages:
Why did workers fare so well in the 1990s? The education level of many Americans made an impressive leap in the '90s, putting them in a better position to qualify for the sorts of jobs that the New Economy created. Low unemployment rates drove up wages. And a torrent of foreign money coming into the U.S. created new jobs and financed productivity-enhancing equipment investment….
A key reason many Americans could take advantage of the New Economy is that they absorbed the big lesson of the 1980s: Education pays, especially in an information-based economy. The latest numbers show that 51% of the adult population now has at least some college education, up sharply from 40% in 1991 and 33% in 1982. Among the critical 25- to 34-year-old age group, the percentage with some college education has risen from 45% in 1991 to 58% in 2000….
But there are plenty of nonroutine tasks that cannot be easily replaced by technology—and those were the ones that boomed in the 1990s. They span a wide range of skill and education levels and include such jobs as sales, truck driving, and network installation….
The U.S. economy continues to produce more high-skilled jobs than low-skilled ones. This had been the trend since the 1980s. It will be the trend in this decade. Repeal of the estate tax would reinforce it.
. . .
SOMETIMES YOU FEEL LIKE A NUT
Croooow Blog has a link (which he received from Amygdala) to a story by David Corn about a bag-of-gummy-worms named Michael Ruppert. Ruppert is an ex-cop peddling a wacko conspiracy theory that Bush knew 9/11 was going to happen. What I found most interesting about the article was this line: “Ruppert maintains that 20 members of Congress subscribe to his newsletter.” I’ll bet one of them is you-know-who.
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MS. CRUNCHY-GRANOLA PANTS ALERT
Ms. Crunchy-Granola Pants, aka Jane Yoder-Short, has another attempt at sounding intelligent in the Iowa City Press-Citizen today.
The title of her column is “Fight Terrorism With Creativity.” Among her suggestions is “Go shopping when you need new underwear.”
Then there is this gem:
We are blessed with an abundance of flies. They convene immense parties on the driveway. The neighbor's mighty tractor periodically attacks the middle of the driveway. His massive tires never seem to smash any flies. He has squashed a few caterpillars and even a misguided toad, but not flies.
Bringing in a tractor to destroy flies on the driveway is the wrong approach. OK, you know I'm going to say bringing in the bombers is not the way to get terrorists.
I can’t make this stuff up.
On a more serious note, Ms. Yoder-Short contends:
An NPR news commentator wisely pointed out how Israel has tried to deal violently with terrorists for years. Their bringing in the tanks has not reduced the number of suicide bombers.
If anything, military maneuvers increase the desperateness and numbers of willing bombers.
Actually, that’s not correct. Recent Israeli military maneuvers have reduced the amount of suicide bombers. See Charles Krauthammer’s latest.
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FLEXIBILITY IN TEACER HIRING MAY BE COMING TO IOWA
This editorial in the Burlington Hawkeye reports that “a panel of Iowa lawmakers this week approved an alternative teacher plan” that might “entice non–teachers into classrooms.” It appears that Governor Vilsack will sign it. Guess who wrote in support of this idea back in February?
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YOU’RE NOT FROM A SMALL TOWN, NYAHH, NYAHH!!
The Cedar Rapids Gazette has a good editorial on the Doug Gross-Tom Vilsack p**sing contest over who is really from a small town. It contains this very good paragraph:
Together, these candidates are examples of this state's fluid population: Iowa has people who have moved to small towns from bigger places, as has Vilsack, as well as those who have moved from small towns to large, as has Gross. And then, so what? Voters need to hear about where Iowa should be moving.
Nicely put.
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IF YOU NEED ANOTHER REASON TO BE AGAINST CLONING….
….read this column. Ben Godar shows typical left-wing contempt for the American public, this time because it is against cloning:
It's a bit curious that the public is so adamant about staving off the possibility of murderous clone armies marching on the world, but less concerned about the effect their Land Rover has on global warming.
With lines like that, here’s hoping Mr. Godar’s cells do not show up in petri dish anytime soon.
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TOO MANY RIGHTS
Dean Krenz in the Sioux City Journal thinks that we think we have more rights than we really do have. He has an excellent list of such “non-rights.”
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SEPARATION OF CHURCH AND STATE? HELL, LET’S BAN RELGION FROM SCHOOLS ALTOGETHER
Anyone who still thinks that the left’s problem with religion in the schools is motivated by a concern for separation of church and state, and not by an actual hostility toward religion, needs to see this opinion piece by Andie Dominick in the Des Moines Register today. Ms. Dominick’s antipathy toward religion drips from the page. Lets’ begin with this passage:
I've already found fliers for church-sponsored activities in my son's backpack. Then Heartland Club, an evangelical church group that runs an after-school program for elementary kids, set up shop in my son's school. Roughly 40 kids chanted about Jesus in the room next to the in-school day care.
Distribution policies in the Des Moines school district have been modified to ensure parents know who is sponsoring after-school programs.
And eventually, I came to terms with the presence of the evangelical group. I had to. The Supreme Court and the school district left me no choice.
Ah yes, the Supreme Court standing up for freedom of religion and association during non-school hours. That First Amendment is a pain in the butt, isn’t it Ms. Dominick?
Then comes this eye-opening snippet:
Prayer in school. A moment of silence. Prayer at graduation. Singing a prayer at graduation. Those teachers—few in number—who inappropriately use their classrooms to further a religious agenda. Attempts by religious groups to ban comprehensive sex education. Individuals who fight to require that creationism be taught.
If you're sensitive to it, Christianity starts to feel insidious.
Prayer in School! Creationism! Can snake handling be far behind?!
Ms. Dominick seems to be motivated by fear of religious groups. She is "sensitive" about it. She "feels" bad about it. That her concerns are based on emotion, and not thought, is evident in the remainder of her argument:
Christianity is pervasive and ingrained in contemporary society.
But that doesn't mean it has a place in the public schools.
As a second-grader, my child should not be a pawn in a politically charged debate about whether God is welcomed into the classroom. Kids shouldn't even have to contemplate the decision of whether or not to bow their heads or accept literature from a peer.
In school, children should be free from feeling pressure to attend after-school church groups because "all their friends are doing it."
What they learn about sexuality shouldn't be dictated by religious groups with an agenda.
Ms. Dominick doesn’t think religion should be in public schools, but if that last sentence is any indication, she has no problem with sex-education programs. She feels that kids shouldn’t have to deal with difficult decisions about religion. But weighty questions of sexual behavior, apparently, are fair game for the little skulls-full-of-mush.
As for feeling pressure because "all their friends are doing it," well, sorry, but peer pressure is part of growing up. Kids have to deal with peer pressure on a host of matters, many of them, like drugs, harmful. Why should religion—which teaches about morality—be singled out by Ms. Dominick?
Because she doesn’t want religious people dictating sex-education policy. Which begs the question of who she does want determining such policy—the folks who gave us "Heather Has Two Mommies"? Indeed, in the last fifteen years or so it has been religious groups that have drawn attention to the excesses of sex education, and tempered it with such policies as abstinence promotion. To Ms. Dominick, however, such influence is baleful.
In fact, she doesn’t want religion influencing any education policies:
Yes, religion is everywhere. And that's exactly why children should be free from its influences for the few hours each day when they're attending school.
What kind of retarded argument is that? American values like liberty and the pursuit of happiness are everywhere too. Should they also be off limits at school?
No, it isn’t the prevalence of religion that bothers Ms. Dominick. It’s that religion promotes values that are at odds with the liberal social agenda of sexual liberation, unwed motherhood, homosexuality, and abortion. Indeed, many religious groups promote a conservative agenda. That is the real reason liberals like Dominick want religion banned from school grounds.
. . .
TITLE IX NEEDS FIXING
A good editorial today in the Quad City Times decrying the effect that Title IX has had on men’s college athletic programs. It also zings a proposal by Representative Jim Leach to increase Federal spending to fix it. Well worth reading.
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IT’S NOT THE ECONOMY, STUPID
Will some please forward a copy of my welfare policy study to Bob Kuttner?
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Thursday, June 13, 2002
SHAKY ASSUMPTIONS SUPPORT THE ESTATE TAX
Yesterday, I posted a blog taking William Gates, Sr. and Chuck Collins to task for their defense of the estate tax in the American Prospect. That blog examined their arguments about the economic effects of the estate tax. This one takes a look at the assumptions in their column.
1. A Tax Cut is a ‘Cost’ to the Government
-If, however, the Senate bows to this lobby's pressures by permanently repealing the estate tax, the country stands to lose $800 billion between 2011 and 2021.
-If the direct costs weren't high enough….
Referring to tax cuts as a “cost” to government is one of the biggest liberal rhetorical triumphs of our time. This is especially so when one considers that it bears no resemblance to reality. A cost is the amount of the resources—usually money—that rightfully belong to you that you give to another entity. Paying taxes, for instance, is a cost. You are giving up some of your resources, in the form of income, to the government. To understand why a tax cut is not a cost to government, it is important to understand what a cost is not. It is not returning resources that you took by force. For example, if a thief steals your wallet, and later the police capture him and your wallet is returned, the return of your wallet is not a “cost” to the thief. Similarly, government gets its tax revenue by taking income from citizens. Thus, when it gives some it back in the form of a tax cut, it is not a “cost.”
2. The Great Man Theory of Wealth Creation is Largely a Myth.
-Like the “great man” theory of history, our dominant “great man” theory of wealth creation borders on mythology.
-There is no question that some people accumulate great wealth through hard work, intelligence, creativity, and sacrifice. Individuals do make a difference, and it is important to recognize individual achievement. Yet it is equally important to acknowledge the influence of other factors, such as luck, privilege, other people's efforts, and society's investment in the creation of individual wealth.
Consider the many components of the social framework that enable great wealth to be built in the United States. Among them are a patent system, enforceable contracts, open courts, property ownership records, protection against crime and external threats, and public education.
Note the rhetorical sleight of hand: “some people accumulate great wealth through hard work, intelligence, creativity, and sacrifice.” Some? Actually, most people who accumulate great wealth do so through those means. Misters Gates and Collins need to pick up a copy Thomas Stanley and William Danko’s The Millionaire Next Door. Their extensive study of wealth in America found that factors like luck and privilege had very little effect on wealth accumulation.
Also consider the things that they claim comprise the social framework that enable wealth creation, like a patent system, public education, open courts, etc. While it is true that those things are necessary for wealth creation, doesn’t most everyone in America have access to said things? And if so, why do some people become wealthy, while others, including yours truly, do not? The difference is largely attributable to individual initiative. This suggests that the great man theory of wealth creation is more fact than myth.
On a different but related point, a serious argument can be made that that the great men and women who create wealth also contribute more to the “social framework” than does the average Joe.
3. Multi-Gazillionaires Who Want Are in Favor of the Estate Tax Have Special Authority on This Issue
Okay, that was a bit of cheap shot. But only a bit. In fact, such sentiment seems to ooze from these two paragraphs:
Some potential beneficiaries of estate tax repeal are well aware of the dynamic relationship between individual wealth and the society in which it's produced. Last year, Responsible Wealth (an organization co-founded by co-author Chuck Collins) circulated a petition in support of reforming, but not eliminating, the tax. More than 1,100 business leaders and investors who will pay estate taxes in the future signed it, including George Soros, Ted Turner, and David Rockefeller Jr., as well as hundreds of small-business owners and "millionaires next door" whose wealth totals between $1 million and $10 million.
Bootstrap sagas and "great man" theories reflect deep strains of American self-perception, but a countervailing view of wealth also claims roots in this country's history. In response to the dramatically unequal distribution of wealth in the first Gilded Age, Andrew Carnegie wrote The Gospel of Wealth, which proposed to address these disparities through steep inheritance taxes and aggressive charitable giving.
The underlying premise seems to be that since people like William Gates, Sr., George Soros, and Ted Turner are willing to give up their wealth to the government upon the relinquishing of their mortal coil, then the estate tax must be a good idea. I’ll just finish by saying that if they want to leave a ton of their own money to the government, that’s fine. Just don’t force others to do the same.
. . .
IMMUTABLE LAWS OF DOWD
The OxBlogger has a good post on Maureen Dowd’s recent column. In it, he provides a link to his “Immutable Laws of Dowd.” I’d seen this phrase floating around the blogosphere, but had yet to actually see the “Laws.” Now you can see them too.
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YOU ARE LATE TO THE PARTY. VERY, VERY, VERY, VERY, VERY LATE!
The Daily Nonpareil has an editorial today about Michael Skakel with the following headline: Is honeymoon over for Kennedys?
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TAKE THE TICKET AND STICK IT
Eric Olsen at Tres Producers has this great blog on fighting speeding and parking tickets. Seems he is a regular warrior in this skirmish. Eric, you are my hero!
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WELCOME BACK DAILY PUNDIT
Bill Quick is back, and one of his first posts made my day. Oh yeah, Jihad Cindy is going down!
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MAYOR TEDESCO DEFENDS COUCH POTATOES
The Mayor of Ames, Ted Tedesco, has struck a blow for liberty by vetoing the ordinance that banned couches being left out overnight on porches or in yards of rental properties (i.e., the homes of college students.) Nice going Mr. Mayor.
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A LITTLE MORE ON POLITICAL CORRECTNESS AT ISU
This isn’t much, really. I merely found an editorial at the Iowa State Daily on the Professor Tracey Owens Patton – Jay Gardner dispute at Iowa State University. Note that the editorial can’t figure out who is lying—Professor Patton or Chief of Campus Police Gene Deisinger—about Patton’s claim that the Campus Police warned her of a white supremacist group on campus. Here’s a hint to the Daily: the Ames Police Chief, Loras Jaeger, also said he was unaware of any such groups in the city.
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ZONITICS ON THE ESTATE TAX
Ed Boyd has a good blog in response to Gail Davis on the estate tax. He does an excellent job of explaining how the wealthy avoid paying the tax, and the consequences that has. I particularly like this passage:
In 1998 - over 50 years after Joe set up that trust to hold the Merchandise Mart, the Kennedy family trust finally sold the asset for $625 million.
Now think about that for a minute. If Joe had just left the money outright to Teddy and his other sons, is there any doubt that Ted would have pissed away his share long ago on bourbon and hookers alone. Instead, his father's tax avoidance scheme serves to protect Ted from his vices and keep the money locked up for generations.
No, Ed, there is no doubt whatsoever.
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CROOOW BLOG ON FIRE!
It is days like today that you would swear Crooow Blog has his fingers permanently affixed to the keyboard. He has links on nearly everything. Of note: A good review by Gene Healy of Chomksy’s recent book; this stupid post by Atrios; and a NewsMax story about a DNC employee with a big mouth—oh wait, they all have big mouths; hers is just exceedingly large.
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MARSHALL ON THE LEVY CASE
One of my favorite lefties, Joshua Micah Marshall, has another outstanding piece on the Chandra Levy investigation today. He reports on his recent visit to the site where Levy’s body was found. As in most of his analyses on this matter, he manages to combine solid insight with a humor that is never morbid. Check it out. You might also want to check out some of his previous posts, here and here.
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THE NY TIMES SHOULD LOOK IN THE MIRROR
If you want to understand why the blogosphere is exploding as an alternative media source, go read the New York Times editorial today on the estate tax. Pay particular attention to the second paragraph.
The Times claims:
The movement to repeal the estate tax has been a cynical and fraudulent exercise.
Really? Consider this sentence in the same paragraph:
Only 2 percent of all inheritances are subject to the tax.
Are the Times’ editorial writers really so stupid that they think the effects of a tax are limited only to those who actually pay the tax? (For more on the effects of the estate tax, see my previous blog). I’ll bet they know better, but simply prefer to repeat a DNC talking point.
The Times also doesn’t seem to understand why Congress didn’t make the estate tax repeal, and the rest of the tax cut, permanent last May:
Last year, in an effort that was equally irresponsible and illogical, Congress enacted a phased-in repeal over 10 years, and then in the 11th year reinstated the tax.
Illogical? Congress did this because numerous liberal critics howled themselves hoarse over the supposed “cost” of the tax cut over the next decade. They screamed that it would cost the government over $4 trillion between 2011-2020. Never mind the deceitful rhetoric that a tax cut is a “cost” to the government. Never mind that such an argument completely overlooks the economic effects of a tax cut. No, tax-cut opponents like the Times saw that $4 trillion figure and worked themselves into a tizzy.
How do I know that the Times’ editorial writers are worried about the so-called “cost”? Because they say so in the very next sentence:
The lawmakers were trying to disguise the fact that in the second decade of the repeal, the [estate] tax reduction would drain $750 billion from the Treasury that the nation could not afford to lose.
There are only two explanations for this. One is that the editorial writers can’t see the political cause and effect that are in two sentences right next to each other. That’s pretty blockheaded, even for the Times.
The other explanation is that the Times wants us to believe that the carping from the political left had nothing to do with the Congressional decision to not make the tax cut permanent.
And the Times accuses proponents of repealing the estate tax of cynicism? Those who live in glass houses….
. . .
THOSE MEAN, INCOSIDERATE BANKS
Whenever I read an editorial bemoaning the rising cost of something, I know that the editorial writer doesn’t understand basic economics. That’s the case with the Quad City Times this morning. The editorial complains about rising ATM fees:
Automated Teller Machines, or ATMs, are widely used by many Americans because they’re accessible any time of the day. However, the cost of that convenience began increasingly sharply in 1996 after banks were allowed to charge noncustomers for making withdrawals from their ATMs.
The exception has been Iowa, where state banking rules prohibited such a surcharge. Bucking the national trend kept ATM fees down in Iowa for several years, but the holdout recently was defeated. In March, a federal judge overturned the state regulation that banned the surcharge….
The ATM surcharge is part of a troubling trend of steadily rising bank fees. Ironically, the ATM originally was touted as a cost-saving convenience from new technology
An ATM fee might be better understood as the "price" of using an ATM. Prices are not just arbitrary numbers put on products by greedy companies. They are signals that tell companies how much of their resources to devote to a particular product or service. If more and more people are using ATMs, then charging a fee makes economic sense: If people are willing to pay that fee, it tells banks to devote more resources to the maintenance of ATMs.
The editorial writer also displays his or her economic ignorance in these passages:
This forced change seems wrong. It’s not customer friendly, and it likely will reduce competition and choice, as it has across the nation….
Because no one likes to be hit with an extra fee just to access their own money, this court-ordered change may well convince customers of smaller banks with fewer ATM locations to switch to large banks with more ATMs to help avoid the surcharge. Competition would be reduced.
That’s what has happened in most other states, where two or three large banks own most of the ATMs. In California, for example, Bank of America and Wells Fargo own nearly two-thirds of the ATMs.
Reduced competition may be the result of market forces. But a much likelier explanation is that some government regulation makes it more difficult for smaller bank to own and maintain ATM machines. Yet a lazy and liberal editorial writer finds it much easier to blame it on the free market, of course.
Finally, the editorial encourages readers to "Contact your congressman or senator about legislation to change federal banking regulations regarding ATM fees."
Yeah, that’s the ticket! If those mean, greedy banks won’t provide ATMs for free, we’ll use the government to make them do it. This is just further economic ignorance, specifically ignorance of one of the most basic economic principles: There is no such thing as a "free lunch."
. . .
BLAST!
Well, the Senate fell short of the 60 votes necessary for repeal of the estate tax. There was enough votes, 54, to actually repeal the estate tax, but not enough to end debate, which requires 60 votes. Guess my blog yesterday came a little late.
There is both good news and bad news on this. The bad news, obviously, is that we still have this stupid tax. The good news is that the Democrats have handed the Republicans another issue for the Fall. Speaking of which, Senator Harkin voted against repeal of the estate tax. Can you envision the campaign commercials, Representative Ganske? I know I can.
Well, not just the Democrats. As Ed Boyd at zonitics notes, Senator John McCain voted against ending debate. Boyd pleads "Can no one rid me of this man?" Sorry, Ed, but I fear you’re stuck with the pompous fool for as long as he wants to stay in the Senate.
Last word: Some of the blame has to be put on President Bush, who did not spend enough time pressuring the Senate to repeal the estate tax. Last year he toured the country promoting his tax cut, encouraging the public to contact their Senators to express support for tax reform. This year, in the weeks preceding the estate tax repeal, Bush did little more than mention it in a few speeches. Senators respond to public pressure, especially in an election year. Pity that Bush didn’t apply any.
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Wednesday, June 12, 2002
THE SENATE SHOULD IGNORE BILLIONAIRES AND KILL THE DEATH TAX
This is the first of a two-parter examining William H. Gates Sr. and Chuck Collins’ recent defense of the estate tax in the American Prospect. This one disputes the economic claims the authors make about the estate tax.
My primary source for this column is a policy study released in July 2000 by the Public Interest Institute (which I work for) titled “A Declaration of Independence from Death Taxation: A Bipartisan Appeal.” Of particular interest is the authors: Dr. Richard Wagner is a political conservative; Professor Edward McCaffery is a liberal. Wagner attacks the liberal assumptions underlying the estate tax. McCaffrey questions it as a means for achieving various liberal goals. It is a fascinating study and well worth the read if you have the time.
Anyway, on to Gates and Collins’ claims about the economic effects of the estate tax.
1. The Estate Tax Falls on the Wealthiest 2 Percent of the Population.
-For more than a decade, a powerful group of special-interest organizations has waged a multimillion-dollar campaign to turn public opinion against a tax that falls on the wealthiest 2 percent of the population.
-Ultimately, the question is this: How high a price is America willing to pay in order to give a handful of millionaires and billionaires a tax break?
No, the question is much broader than that. Only two percent pay the tax, but many more are affected by it. Americans spend a good deal or resources each year on estate planners and tax attorneys to avoid paying the tax. The study argues that the death tax encourages the very wealthy to slow down their work and savings, and increase their consumption to avoid paying the estate tax. That translates into less investment and capital formation. And that has economic consequences that reach much, much further than the “wealthiest 2 percent.”
2. Repeal of the Estate Tax Will Cost the Government Huge Amounts of Revenue.
-If, however, the Senate bows to this lobby's pressures by permanently repealing the estate tax, the country stands to lose $800 billion between 2011 and 2021.
This assumes that the estate tax has no effect on economic activity that yields other types of taxes. But, as noted above, the estate tax does harm investment and job creation. That means that the government is not collecting the taxes associated with such economic activity, like income taxes and payroll taxes.
The study examines some research (pages 8-11) that found that if the estate tax had been repealed in 1999, the resulting economic activity would yield $117 billion in extra GDP by 2008. Also by 2008, the federal government would have been taking in slightly more tax revenue from the increase in economic activity than it would be losing from a repeal of the estate tax.
3. The Estate Tax is Necessary to Limit the Hereditary Build Up of Wealth.
-No doubt [Teddy] Roosevelt would consider the great income and wealth inequalities of our second Gilded Age reason to increase rather than to eliminate the one tax we have that limits the buildup of hereditary concentrations of wealth.
-Between now and 2052, the intergenerational transfer of wealth is projected to reach between $41 trillion and $136 trillion. An estimated one-third to one-half of this wealth will be transferred by estates worth more than $5 million. The estate tax, should it remain in place, will therefore be an increasingly significant progressive source of revenue in the coming decades.
Then Teddy Roosevelt would have been wrong. It is not at all clear that the estate tax is responsible for the break up of vast sums of wealth. Evidence suggests that the free market does a pretty good job of this without help from the government. Most children of wealthy parents tend to fare slightly less well than their parents, on average. This indicates that while one generation may be good at accumulating wealth, the next generation is not necessarily good at hanging on to it. Furthermore, research by Lawrence Lindsay found “that less than half of the top one percent of American wealth holders received any inheritance at all, and in the aggregate for those people inheritances were less than ten percent of their reported wealth.” In sum, those who are bequeathed wealth are not too good at maintaining it, while those who accumulate wealth do so by means—hard work, prudent investing, etc.—other than inheritance.
4. Repeal of the Estate Tax Will Harm Philanthropic Giving.
-Philanthropy is not solely inspired by the tax code, but the estate tax unquestionably provides a powerful incentive for charitably oriented people to stretch their giving. Estate tax repeal will most likely reduce charitable giving and bequests, particularly from estates in excess of $20 million, by an estimated $5 billion to $6 billion a year.
Actually not repealing the estate tax may harm it more. Here’s the key passage in the policy study:
….philanthropy is surely harmed by death taxation. That harm emerges out of the negative impact of death taxation upon wealth creation. There is both reason and evidence to support the claim that charitable bequests have relatively high wealth elasticity. This means that a ten percent rise in wealth will typically be accompanied by an even larger increase in charitable bequests. The decrease in wealth that is induced by the death tax will thus bring about a disproportionately larger decrease on charitable bequests.
To sum up, the estate tax, like all taxes, has effects far beyond the object from which it intended to extract revenue. And like high income and capital gains taxes, it has more negative effects than positive ones. There is no better reason to repeal it.
Tomorrow: the assumptions underlying Gates and Collins’ analysis.
. . .
COMING UP
The first part on the estate tax will be up no later than 7pm Central Time.
. . .
EGO BOOSTING TIME
Well, the hits have exploded this week. I guess my Mom has been logging onto more computers than Paul Krugman has ways to diss the Bush Administration. I don’t know how you do it Mom. But thanks! Love ya’!
Seriously, the hits are the result of an Instalance, courtesy of Glenn Reynolds. The links are here and here. Can I thank him enough? Probably not. But I’ll try: Thank you to a factor of 1,000.
Thanks also to zonitics, who gave me nice write-ups on both the welfare study and the ISU incident. I particularly liked this line:
The Cornfield Commentator is making a serious play to dethrone the Mickster [for the uninitiated, that’s Mickey Kaus] on the frontlines of the welfare reform debate.
Thanks for the compliment, Ed. But I have about as much chance of dethroning the Mickster as the D.C. Police do of solving Chandra Levy’s murder. (Sorry, but somebody had to say it. Or maybe Josh Marshall already did? I’ll have to check on that.)
Other very nice compliments on the welfare study came from Eric Olsen of Tres Producers. Thank you Eric.
By the way, Eric is a bit unhappy that he is leading the Grumpiest Blogger Poll over at Dawn Olsen’s website. Eric, here is how you solve the problem. Contact Dawn and insist she read my website, after which she will no doubt put my name on her poll. Once I’m on there, everyone else will be lucky to get above 5%.
Finally, let me thank new blogger Indepundit who also linked the ISU incident. He ended his post:
Well put, David. But you don't have to be a conservative to believe that the right to free speech is important. You just have to be an American.
Very true. Very, very true.
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SOME COMMENTS ON WELFARE REFORM
Yesterday I received an email from Nicholas Stix about my blog on my welfare study. Mr. Stix made some excellent points that more than merit a response. So here is the email, in parts, with my comments after each part:
Congratulations on your new welfare study.
Thank you.
While I am happy to hear that Iowa “welfare leavers” on average were able to live above the poverty line, I think that saddling welfare reform with the expectation that welfare leavers will manage to lift themselves out of poverty, is as unrealistic as the belief that poverty will ever be wiped out.
First, if you are saying that is unrealistic to expect that all welfare leavers will lift themselves out of poverty, then I agree with you. Some of them will remain in poverty. (This, of course, begs the question of what really constitutes poverty? But for the purpose of this blog, I’m staying away from that debate.) However, if you are saying that it is unrealistic to expect that some or even many leavers can lift themselves out of poverty, then I disagree. First, many studies show that millions of leavers have already lifted themselves out of poverty, and we are only six year into welfare reform—about a decade if you count the early efforts by state governments. At present, I don’t see any reason why that trend won’t continue. Do you?
Next, I refer you to the classic work on welfare policy, Charles Murray’s Losing Ground. Specifically, you should turn to page 65 and examine the trends presented in Figure 4.5. Murray notes that the rate of poverty dropped precipitously from 1950 until about the mid-1960s. Then it began to level off, eventually trending slightly upward. He attributed the arrest to the changes in welfare policy under the “Great Society.” My point here is that before the disastrous welfare policies of the 1960s, poverty was declining. Now that welfare has been reformed, it is conceivable that such a trend will resume.
The poor will always be with us; however there is a world of difference, morally, between a society in which the poor are predominantly working-poor, as opposed to people who refuse to work.
No argument from me here.
Politically, such an expectation saddles every welfare reform program with the same assumption of welfare programs, an assumption that will render reform impotent: That it is government’s job to lift people out of poverty.
I don’t think that welfare reform can be saddled with such an assumption, because the success of welfare reform undermines it. Welfare reform represented a philosophical shift in welfare policy away from subsidy and entitlement to self-sufficiency. In other words, the premise of reform is that the government will provide some help, but the ultimate burden lies with the individual—it is the individual who bears responsibility for lifting him or herself out of poverty. The success of welfare reform provides very strong evidence that the assumption of personal responsibility is correct, and the assumption government responsibility is not.
If you have more thoughts on this Nick, or anyone else for that matter, please post a comment or email me.
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TERRORISTS HAVE RIGHTS TOO
Following up yesterday’s paean to liberal hand-wringing over the War on Terrorism, the Des Moines Register today has two angst-ridden editorials about the rights of criminals. One thing you can say with certainty about the Register editorial page: a trend-setter it is not.
The first bemoans a recent Supreme Court decision that upheld the denial of privileges to a Kansas inmate who refused to participate in a sex-offender rehabilitation program that included use of a lie detector. Just in case the Register hasn’t noticed, convicted felons don’t have the exact same rights as law-abiding citizens. That’s why they are in prison.
The second one deplores the treatment of captured terrorist Jose Padilla, or Abdullah Al Muhajir, or whomever he thinks he is. Of particular note are the last two paragraphs:
Harold Hongju Koh, a law professor at Yale, said, "If calling people enemy combatants is another way of holding American citizens indefinitely, it's extremely troubling. If they can charge him with a crime, they should try him."
That makes sense. Granted, this war on terrorism is a different kind of war, one that requires a difficult balance of protecting the public while preserving personal freedoms and rights to due process. However, Padilla is an American citizen. He has not yet been charged with a crime, let alone convicted of anything. Yet he's being held indefinitely by the U.S. government—a government that seems to be operating under the presumption of guilt rather than innocence.
Yes, Padilla is an American citizen. He is an American citizen who has trained and collaborated with al Qaeda, a terrorist group with whom we are presently at war. He was involved in a plot to kill other American citizens. And he may have information that could help prevent terrorists from killing more Americans. Those distinctions would seem sufficient to treat him the same as a combatant captured on the front lines of a conventional war.
But that seems to elude the wise men and women at the Register. To them, Padilla should be treated the same as your average Joe walking down a Des Moines sidewalk.
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ON THE OTHER SIDE OF THE BORDER
The Quad City Times reports that the Illinois Legislature has voted to uphold nearly 90% of Governor Ryan’s $500 million in budget cuts. In a way, the timing of state budget crises couldn’t be better. By occurring during an election year, massive tax increases are avoided.
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SMALL START THIS MORNING
-This one in the Quad City Times: Ms. Callaway, I feel your pain.
-Finally, an Iowa City Press-Citizen editorial that I agree with!
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Tuesday, June 11, 2002
LAST POST FOR THE EVENING
Well, thanks to Glenn Reynolds, aka InstaPundit, it looks like I'm experiencing another Instalanche. Boy these are fun!
Anyway, I'm beat and going home. Tomorrow I'll have my first piece on the estate tax, plus I'll address some points made in an email from Nicholas Stix about my welfare policy study. One last thing: To all of you who have visited my site, know that I am immensely appreciative. Thank you so much!
. . .
MORE ON POLITICAL CORRECTNESS RUN AMOK AT ISU
With the aid of someone I can’t mention at this point, I have discovered three more articles on the recent incident involving a Journalism Professor and a graduate student at Iowa State University. Two appeared in the Des Moines Register, the other in the Ames Tribune. They are linked below.
I have blogged on this previously. Here is the synopsis again: Journalism Professor Tracey Owens Patton expelled a graduate student, Jay Gardner, from her class, “Ethnicity, Gender, and the Media.” She claims that he was being disruptive. He claims that she suppressed his free speech and unfairly removed him from the classroom.
The three recently discovered newspaper articles provide more detail to this incident. They also provide more insight into Professor Patton. It isn’t flattering.
One of the articles in the Register summarizes a letter Professor Patton sent to ISU official regarding Gardner:
In a letter to ISU officials, Owens-Patton said Gardner criticized a holiday honoring the Rev. Martin Luther King Jr., among other complaints. She said Gardner defended racial profiling because “minorities do commit more crimes than whites.”
First of all, Gardner claims that these accusations are either lies or distortions. But even if they are true, so what? Why are such matters out of bounds for classroom discussion? Certainly someone can debate the merits of the Martin Luther King Jr. holiday. One might argue against it on the basis of King’s sexual dalliances. I doubt that I would be persuaded by such an argument, but it is not a thoroughly unreasonable one, and one that would certainly be fair game for debate in a college class.
As for the second one, that seems even more appropriate to discuss in a college course. The debate over racial profiling was very heated before the election of 2000. It has raged since September 11, especially in discussions of airport security. It seems that any responsible professor would want to address such an issue in class, given the chance. Also, what Gardner allegedly said is factually accurate and would be an important part of a classroom discussion of racial profiling. But it appears that instead of seeing it as a legitimate point, Professor Patton saw it as proof that the Klan had entered her classroom.
The article in the Tribune provides further insight into Professor Patton’s mentality:
Patton quotes Gardner in her complaint as saying he has a biased perspective, that minority perspectives are flawed and that Martin Luther King day is terrible.
Consider the first part, that of Gardner’s “biased perspective.” Doesn’t that seem to belie a good deal of arrogance on Patton’s part? Is she really so assured of herself that she thinks that her view is absolute, objective truth, while anyone who disagrees with it is “biased”? If she is, she almost certainly does not react well when someone actually does disagree with her.
Perhaps the most damning information about Patton appears in the Register article that tries to ascertain the truth of Patton’s contention that “campus police warned her about a white-supremacist group targeting minority women.”
In her complaint, Owens-Patton said [Campus Police Captain] Deisinger warned her “to be aware of your personal safety. There are two students who have begun to organize a white-supremacist movement on campus. These two other students are targeting ethnic minority female-run classrooms. Jay Gardner could be a third person in this movement.”
But,
“There are no police reports that I know of, nor any groups that have identified themselves as white supremacists at Iowa State,” Capt. Gene Deisinger, the campus police official quoted in Owens-Patton's complaint, said.
And,
Loras Jaeger, the Ames [where ISU is located] police chief, said he knew of no white-supremacist groups in the city.
It appears that the Register caught Professor Patton in a lie, a lie used to justify her actions toward Gardner. And if she has to lie, then her actions can’t be all that justifiable.
It is likely that Professor Patton is the type of ideologue masquerading as a scholar that is so prevalent in minorities’ and women’s studies programs at many college campuses. She sees everyone to the right of Jesse Jackson as an extremist nut who has a white hood hidden away in his closet. Thus, she was unable to tolerate a student like Gardner and resorted to trumping up bogus charges to justify booting him from her class. Perhaps she should attach to her course descriptions the same warning that appeared in one for a course at Berkeley on Palestinian poetry: Conservatives are encouraged to seek other sections.
I’ll try to end this otherwise sullen blog on a humorous note with what I found to be the biggest laugh in the three articles:
ISU leaders have tried to lure and keep minorities since the state Board of Regents pressed for increased campus diversity more than 10 years ago. That doesn't mean minorities automatically win disputes, said Howard Shapiro, a vice provost.
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OTHER BITS OF IOWA
-License Plate in Ames: ALLAH-1
-The Cedar Rapids Gazette has a good editorial on global warming today. In particular, it faults Bush for not using the recent EPA report to start a better debate over climate change.
-I read this one by Rachel Farber in the Iowa State Daily with some interest. At first she upped my level of hope for the next generation of college students:
…. customer service is the cornerstone of a successful business. Civil servants are the antithesis of customer service. When no competition exists, the customer is never right. Can you imagine sitting down at a Deparment of Transportation office and being offered a discount on your next order of vanity plates if you have to wait too long for a license renewal? Dissatisfied with your taxes? Get online and find a competitor that will offer lower rates.
But, alas, she brought it back down again:
Despite promises to run government like a business, Iowa voters are assured that their taxes will not go up. At minimum, this indicates that the business our candidates wish to run is not profit-minded. At most, failing to raise taxes at a time when the state is woefully short of money and to continue providing services at previous levels means that the name of the business our state will become ends in a dotcom.
If students like Farber would learn to follow the ideas in the first paragraph, and reject the ones in the second….well, just think about it.
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WHAT IS MUDSLINGING?
The Quad City Times has an editorial calling on the candidates in both the Iowa and Illinois gubernatorial races to cease and desist with the slinging of the hog slop. And in the Iowa race, I think the editorial has a point. But this is its take on the Illinois race:
In Illinois, Republican Jim Ryan and Democrat Rod Blagojevich are slugging it out using TV ads to question each other’s credibility. Ryan, the attorney general, has portrayed Blagojevich as too liberal on social issues, while Blagojevich is attempting to link Ryan with the current governor, whose administration has become scandal-ridden.
We suspect the verbal wars will continue, but what would surprise us and voters is a departure from mudslinging and the introduction of some substantial ideas.
One my pet peeves is that the term “mudslinging” gets thrown around carelessly. That seems to be the case here. Why is attacking Blagojevich’s position on social issues mudslinging and not a debate on the issues? Or why should Jim Ryan’s conduct as Illinois Attorney General, especially in regard to the scandal-ridden Administration of Governor George Ryan, be a matter for tabloid headlines rather than a matter for public debate? It seems to me that those are both legitimate political questions that Illinois voters should know about before they choose their next governor.
The Times is concerned, and perhaps rightly so, that the candidates in Illinois are failing to address the state’s fiscal crisis. In other words, they are not spending enough time on issues that more important. Now that is a solid complaint. The Times should instead say that the candidates are spending too much time on issues that are less important, not that they are slinging mud.
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GOOD READING ON THE WEB
Have you visited the New York Post opinion page today? No? There is a number of very good columns on the War on Terrorism. Don’t miss out.
Also, Nicholas Stix has a very funny, yet disturbing, piece at Too Good Reports about Barbara Hatch Rosenberg, the microbiology professor who is spinning conspiracy theories about the anthrax mailings. Turns out, though, her conspiracy theory isn’t all that original.
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KUTTNER LOVES THE CARROT
Most effective public policies employ some form of the “carrot and stick” approach: Provide benefits, but impose sanctions if the beneficiaries do not follow certain rules. Unfortunately, from the 1960s until the 1990s, state and federal welfare policies were all about carrots. Recipients received cash benefits, but little was expected of them in return.
In the 1990s, that all changed. Numerous state governments, and ultimately the federal government, reformed their welfare laws to include sanctions for recipients who did not take steps toward self-sufficiency. Here in Iowa, the government enacted a new welfare policy that required recipients to sign a plan to achieve self-sufficiency, and penalized them with a reduction in, and possible denial of, welfare benefits if they did not. At the federal level, the welfare reform act passed in 1996 imposed time limits, most notably a five-year lifetime limit, on benefits.
In both cases, the message to welfare recipients was clear. You must become self-sufficient or you will ultimately lose your benefits. The results of this policy shift have been nothing short of astounding: Since the enactment of welfare reform, caseloads are down by over 50%, and those leaving welfare are well on their way to moving out of poverty. Clearly, sanctions have worked.
However, some continue to neglect the stick side of the equation. In a recent article in the American Prospect, Robert Kuttner, criticized the new Bush Administration welfare proposal because it “imposes new costs, it provides no new money.” He praises state welfare reform programs that “help poor women get many kinds of training,” and have “invested in ‘career-ladder’ programs.” These are likely worthwhile programs. But would these programs have succeeded without the threat of a cessation of benefits? In other words, would recipients have participated in such programs if not faced with the prospect of eventually losing their welfare checks? Kuttner is so focused on the carrot (training programs), he doesn’t entertain the possibility that those programs might not have worked without the stick (sanctions.)
This leads him to dismiss the Bush Plan to raise the work requirement to 40 hours per week as motivated by “ideology—a desire to be tough on welfare.” It may also be motivated by the desire to enact good welfare policy. If the sanctions instituted under the first wave of welfare reform played a large roll in moving people from the rolls into jobs, then any sensible update of reform should continue moving in that direction. The last few years of welfare reform success suggest that a more stringent work requirement of 40 hours per week would yield even greater success.
(Sidenote: I’m not sure that Kuttner is correct that the Bush Administration wants to “rigidify the rules.” It seems that the version that is before the Senate does give states flexibility in interpreting what constitutes 40 hours. I’ve copied the definitions and posted them here. If I’m looking at the wrong version of the Senate bill, I’d appreciate knowing about it from someone reading this.)
But Kuttner simply tries to marginalize anyone who would make an argument in favor of tougher sanctions: “It's hard to find many Americans, outside of a small clique of ideologues, who think the 1996 program wasn't tough enough.” This is the first time I can remember being part of an elite group!
It seems that what really bothers Kuttner and others like him is they just can’t stand the fact that welfare was improved in our society without a massive new government undertaking. Back in 1996, welfare reform critics claimed that reforming welfare would require a lot of new government programs and spending. Rather, it was achieved with a few common sense changes, like imposing sanctions and giving states more flexibility. Critics like Kuttner have been proven wrong, and it must be very threatening to their worldview of more government as the solution to society’s problems.
This can be seen in Kuttner’s second-to-last sentence: “All this was real progress, though the toughest cases with the most severe family problems were left behind.” This is increasingly the liberal mantra on welfare reform: “Okay, we’ve gotten the easy cases of the welfare rolls. Now the hard-core cases remain.” Kuttner and others like him seem to hope that the “hard-core cases” will require the massive government undertaking that they wanted back in 1996. Indeed, the hard-core cases might need more government attention. On the other hand, they might just need a bigger stick.
. . .
ESTATE TAX TEASER
I’m going to post a two-parter on the estate tax beginning tomorrow. So I’ll refrain from doing an extended analysis of the Des Moines Register editorial that opposes repeal of the tax. A brief comment will suffice for now.
Based on a study by Citizens for Tax Justice, the editorial states that "Only the wealthiest 1.4 percent of Americans leave estates large enough to be taxed."
This reflects the Register’s typical cluelessness when it comes to the subject of taxes. Yes, only a tiny percentage actually pay the estate tax; but a much larger percentage are affected by it. Each year, many people waste lots of resources on estate planners and tax attorneys in order to avoid paying the estate tax. Furthermore, the tax encourages less productive economic behavior, like spending large sums of money, and discourages more productive behavior, like saving and investing. In other words, the estate tax has an adverse effect on the entire economy, not just those folks who are wealthy enough to pay the tax. Typical of the Register editorial writers, they completely overlook that.
. . .
SADDAM WHO?
Well, it was only a matter of time. The Des Moines Register editorial board has now given us its official liberal hand-wringing about the War on Terrorism. Among the things that are making the editorial board anxious:
Now the Bush administration is proposing a policy that supports pre-emptive attacks against terrorists and countries with weapons of mass destruction. This part of the president's "national security strategy" will add the options of "pre-emption" and "defensive intervention." In other words, bomb them before they bomb us.
The Register fails to explain why, exactly, Bush’s new policy of "pre-emption" is undesirable. Perhaps it is just too hard to come up with a good argument as to why we shouldn’t intervene against rogue states before they send terrorists over to knock down more of our buildings.
Granted, Americans were warned the war on terrorism would be long. The focus, however, should be more clear. The bombing of Afghanistan was months ago. Since then, public attention has been occupied by everything from domestic attacks and the loss of civil liberties to communication breakdowns between government agencies. American troops are scattered around the world, and the president is now poised to draw first blood in any nation that even looks like a threat.
Ah yes, typical liberal fare. All that was missing from that paragraph was the standard pejorative against John Ashcroft.
The editorial concludes with this sentence:
One can't help but wonder where all this is headed.
Have the Register editorial writers been living in a cave in Afghanistan these last six months? (Okay, that was a cheap shot.) But seriously, after reading that sentence you’d swear that they have yet to hear the words "Iraq" and "invasion" mentioned in the same sentence.
. . .
HOW TO DISRUPT A MARRIAGE: THE INS
This column by Rekha Basu in the Des Moines Register examines how the Immigration and Naturalization Service is making life very difficult for a young married couple in Iowa. It gives a personal touch to what many people already know: the INS is one the most screwed up bureaucracies in the nation.
CENSUS INFORMATION ABOUT IOWA
If you are interested in Census Bureau data on income in Iowa, then these are the places to visit. The first is at the Des Moines Register; the second is at the Cedar Rapids Gazette. Both have a lot of good information.
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Monday, June 10, 2002
FARM BILL AND HARKIN
There are two good op-ed pieces on the farm bill today. The first is in the Omaha World Herald. It praises a number of Senators, including Nebraska’s Chuck Hegel and Iowa’s Chuck Grassley, for trying to impose some reasonable payment caps on farm subsidies.
The second is by Dennis Clayson in the Waterloo-Cedar Falls Courier. This one not only points out the flaws in the farm bill, but takes Senator Tom Harkin to task for it. I’m always a sucker for that.
. . .
REGISTER USES FLAWED STUDY
Last week I criticized a Des Moines Register editorial for claiming that pharmaceutical companies charge too much for prescription drugs. Now it turns out that the study the Register relied on has some serious flaws. To read more, see this article by Robert Goldberg in National Review Online.
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THE ‘I’ IN IOWA MEANS ‘INTERESTING’
Two good articles on Iowa politics. The first is by Kate Thompson in the Sioux City Journal. She explores some of the “what-ifs” of the upcoming convention to determine the Republican nominee for the 5th District.
The second is by Kathie Obradovich in the Mason City Globe-Gazette. She takes a look at the upcoming Governor’s race; it isn’t pretty.
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DROP IN WELFARE CASELOADS DUE TO REFORM, NOT THE ECONOMY
A recent debate over welfare reform focuses on whether the decline in welfare caseloads in the 1990s was due to reform or the booming economy. For example, in March of this year the Des Moines Register editorial page argued that it was largely due to the economy. According to this argument, the economic boom of the 1990s created jobs at a record pace, providing employment for welfare recipients who otherwise would have been unable to find jobs. It was largely coincidence that welfare reform occurred during this period.
A study that I authored and released today by the Public Interest Institute, examines the reform vs. economy question. Titled “The Decline in Welfare Caseloads in the United States and Iowa: Reform or the Economy?,” it looks at month-to-month and quarter-to-quarter changes in welfare caseloads in both the U.S. and the state of Iowa from 1977 to 2001. Using a statistical procedure called “Time Series Regression,” it gauges the effect that welfare reform in the 1990s had on caseloads. At the same time, it controls for numerous economic factors, including the unemployment rate, gross domestic product, industrial production, and personal income. The key findings are on page 6-9.
What I found was remarkable. None of the economic variables had a significant impact on welfare caseloads. This means that it was not the booming economy of the 1990s that resulted in the decline in welfare caseloads.
Indeed, my results show that it was largely the result of changes in welfare policy. All of the variables that controlled for changes in welfare policy had a significant impact on welfare caseloads. Specifically, in the U.S., the welfare reform adopted by Congress in 1996 has resulted, on average, in a 1.26% decline in caseloads per month. In Iowa, it has resulted, on average, in a .35% decline in caseloads per month.
There are two main conclusions to draw from this. First, the claim by critics of welfare reform that “welfare recipients want to work but there are not enough jobs” is bogus. There are usually plenty of jobs; welfare recipient simply need the more initiative to find them. Welfare reform has given them such initiative.
The second conclusion, as I argue in the report, is that incentives matter. When welfare changed from an entitlement to a program to achieve self-sufficiency, the behavior of welfare recipients also changed. As recipients realized the benefits would be temporary, they took steps toward finding employment. In this light, the Bush proposal currently before Congress moves in the right direction. It increases incentives—most notably the requirement that recipients engage in 40 hours per week of work activity—for recipients to become self-sufficient.
Welfare reform is one of biggest public policy successes of the last two decades. In less than a decade it has achieved what the previous welfare system could not do in the previous thirty: decrease dependency among the poor.
. . .
STAY TUNED
Coming up sometime between 10 and 10:30am. You’ll like it, I promise.
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ARE THEY JOKING?
The Burlington Hawkeye thinks that Snake Alley belongs on the Iowa state quarter. Is this June 10 or April 1?
. . .
BUSH IS PETTY?
In today’s Des Moines Register, Rob Borsellino has this snippet in his column:
The president was in town Friday, and the White House's decision to exclude Tom Harkin from the entourage was the height of pettiness. Particularly when George W. Bush was up on stage with Greg Ganske. Then, speaking about what a great job he's doing as president, Bush said: "I'm doing everything I can to put the interests of the American people ahead of politics." And he said it with a straight face.
Mr. Borsellino, if you want to understand who was really trying to play politics, click here. Or, click here.
. . .
NUSSLE IN TROUBLE?
Jim Nussle’s opponent, Bettendorf Mayor Ann Hutchinson, claims to have a poll showing that Nussle only leads her 43-38. If so, that is trouble, since Nussle is the incumbent. Undecided voters generally break 2 to 1 in favor of the challenger. Nussle's campaign dismisses this news, saying it has polls showing Nussle with a twenty-point lead. I hope that isn’t over-confidence.
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