Friday, April 25, 2003
WHAT DO YOU KNOW THAT PAUL KRUGMAN DOES NOT?
Today, Paul Krugman asks the following question:
Congressman Richard Gephardt's new proposal — to scrap the 2001 tax cut and use the reclaimed revenue to provide health benefits to the uninsured — has been widely dismissed as unrealistic. And in political terms that's probably true. After all, these days it's considered "moderate" to support an irresponsible tax cut that is merely large, as opposed to gigantic.
But today I'd like to take a holiday from political realism, and ask a naïve question: Why shouldn't the American people favor a proposal like Mr. Gephardt's? Never mind the details; why shouldn't the typical citizen, faced with a choice between Bush-style tax cuts and a plan to provide health insurance to most of the uninsured, choose the latter?
Matthew Hoy has a good answer to it here (also see Don Luskin.)
Actually, I think it’s a pretty good question, one worthy of debate, and kudos to Krugman for asking it. But then he has to screw it up with this bit of condescension:
If American families knew what was good for them, then most of them — all but a small, affluent minority — would cheerfully give up their tax cuts in return for a guarantee that health care would be there when needed. And even the affluent might prefer to live in a society where no sick child was left behind.
This reminds me of William F. Buckley’s remark (I’m paraphrasing here) that he’d rather be governed by the first twenty people in the Brooklyn phonebook than by the faculty of Harvard. Or perhaps Princeton. Sorry, I couldn’t resist.
Anyway, I suspect that many Americans have—and Krugman does not—a healthy distrust of government. They don’t believe that government can effectively administer a health-care system. They likely believe the current system leaves enough room for improvement to fly a 747 through, but also believe that a government-run system would be worse. This would seem to be confirmed by Oregon voters’ overwhelming rejection (by a near 3-to-1 margin) of a proposed state-government health-care system last November. And Oregon is not exactly a hotbed of conservatism.
I further suspect that most Americans fear Gephardt’s health-care plan will, in the long run, cost more than the Bush tax cut they would be foregoing. Their fear is well founded. The problem with a government run system is that the government becomes a third-party payer, much like the private insurance companies in America today. Under such a system, consumers never directly pay the cost of their medical needs. Since they don’t pay the cost, they have no incentive to economize. This results in exploding costs, which, in turn, results in (1) higher taxes to pay for the system, and (2) rationing by the government to hold down costs. Perhaps most Americans are not as enlightened as Krugman, but they probably have a lot more common sense.
Krugman also makes this sweeping claim:
So why should tax cuts take priority over health care? I know the party line: tax cuts for high earners are the key to economic growth, and a rising tide lifts all boats. But there's not a shred of evidence supporting that claim. More than two decades after the supply-siders launched their tax-cut crusade, ordinary workers have yet to see a rising tide. The median real wage is only 7 percent higher now than it was in 1979, with all of that increase achieved after Bill Clinton raised taxes for the top bracket.
“Not a shred of evidence”? How about Richard B. McKenzie’s book What Went Right In The 1980s, specifically chapter 4? McKenzie notes that a lot of wage data is misleading because it doesn’t account for the rise in employer “fringe benefits” such as contributions to health and life insurance, contributions to retirement funds, increased vacation days, etc. As McKenzie puts it:
Nonwage compensation as a percentage of wages and salaries rose dramatically in the 1960s and 1970s, from just under 9 percent in 1960 to nearly 21 percent in 1990. The fact of the matter is that workers were gradually taking a larger share of their earnings in nonmoney forms, understandably so. Fringe benefits are often nontaxable forms of income.
As a result, inflation-adjusted total compensation per hour rose from $15.53 in 1978 to $16.25 in 1990. Even that may not tell the whole story, according to McKenzie:
The rise in the labor force participation of women and minorities and the growing use of part-time workers during the 1970s and 1980s pulled the average wage down, despite the fact that greater employment of women and minorities meant income gains for many families. Women, minorities, and part-time workers tend to earn less than average wages, so their increased participation lowers the overall average hourly wage rate.
Not only is there a shred, there’s a whole heapin’ plateful of evidence that ordinary workers have seen a rising tide. Either Krugman is unaware of this, in which case he’s ignorant, or he is aware of it, in which case he’s lying. Take your pick.
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YOU’LL PAY YOUR TAXES AND YOU’LL LIKE IT!
My new column at the American Prowler.
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LOVEABLE UNCLE FIDEL
Matthew Hoy has done us all a favor by listing the Cuban democracy advocates that Fidel Castro recently imprisoned.
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HALLELUJAH!!!!!!!!!!!!!!!
It appears that the $800 million economic development boondoggle is swirling the bowl. Governor Vilsack’s unwillingness to compromise on tax and regulatory reform has soured the Republicans in the State Senate on the economic development fund. For someone who is supposedly so smart, Vilsack sure doesn’t have very good legislative skills.
David Yepsen does a fine job explaining why the economic development fund is falling apart. However, he makes this uncharacteristically dunderheaded remark:
borrowing money for one-time expenses is sound policy and interest rates are low.
When has government spending ever been a “one-time” expense? Once such a fund is depleted, the various interest groups that benefit will line up for more. The political allies in the Statehouse will expound on the virtues and necessity of the fund. And, thus, the trough will fill up so they can all get their snouts in it again.
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KIM JONG IL AND ELEPHANT SKIM MILK?
Piddling around the Extreme Tracker, here is a search term that yielded CC as the first link:
“fidel castro and water buffalo yogurt”
Here’s the search, if you don’t believe me.
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Thursday, April 24, 2003
POLITICIZING THE WSOP
For you poker illiterates, WSOP stands for World Series of Poker, which is played each year at Binion’s Horseshoe Casino in Las Vegas. It’s comprised of many different poker tournaments, not just the major $10,000 No-Limit Hold’em event you may have seen on the Discovery Channel (or ESPN if you’re home in the daytime.)
Anyway, in this year’s Pot-Limit Hold’em event, winner Prahlad Friedman decided to make a political statement following his victory. Fortunately, writer Max Shapiro saw fit to call a spade and spade (pun intended):
Friedman is a 24-year-old ethnic studies student at UC Berkeley who plays side games in the northern California area at limits up to $400-$800. Last year he chopped a $3,000 no-limit tournament at the Bellagio, taking home 150k. A social activist who's considering law school to practice civil rights or environmental law, he took advantage of his moment in the spotlight following his victory to take the microphone and make a brief anti-war statement and plea for peace ala Michael Moore at this year's Academy Awards.
I wonder what Dale Petrosky was so worried about. Can’t imagine.
P.S. Shapiro’s article is not online yet. I will provide a link once it is.
UPDATE: Here is the article.
UPDATE II: Eric Olsen adds some more.
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AND NOW FOR SOMETHING COMPLETELY DIFFERENT
I have adopted a useless blob. Here it is:
Kind of spooky, huh?
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WHY ISN’T IT A CRIME….
….to torture logic? Well, probably because the entire editorial staff of the Des Moines Register would be serving long sentences. Yesterday the anti-syllogism gang took on a business deregulation bill in the Iowa Legislature that:
* Requires a one-week waiting period before unemployment benefits could start.
* Eliminates the automatic 13 additional weeks of unemployment benefits for workers at plants that close.
* Makes employer-favored changes in workers' compensation for injuries suffered on the job.
* Provides employers conducting their own safety audits immunity from civil or administrative penalties if they voluntarily and quickly disclose occupational safety and health violations.
* Lets businesses escape state regulations of indoor sources of air pollution that are stricter than federal regulations.
* Limits non-economic damage awards to plaintiffs in personal-injury actions.
* Limits corporate liability so it would be harder to win a lawsuit over unsafe products.
* Reduces the protections for endangered species in the construction of state highway projects if federal money is involved.
According to the Einsteins at the Register this
is an anti-growth bill.
Here's why: Leaders of Iowa's major industries have studied the state's dismal demographics. They will tell you one of the biggest obstacles to their growth is a looming shortage of workers. The state scarcely has enough young people in the pipeline to fill even the existing jobs as older workers retire - let alone fill any new jobs.
Iowa industries simply cannot expand unless they succeed in attracting thousands more workers to the state. Against that background, it is counterproductive to pass legislation that would make Iowa a less desirable place for workers.
Gee, I didn’t realize that when workers considered taking a job they were primarily concerned about their ability to sue, get workers compensation, or apply for unemployment benefits. I always thought it had more to do with salary and benefits. What do I know?
Furthermore, the problem isn’t that Iowa can’t attract good workers. It’s that we can’t attract the type of businesses that pay the salaries that attract good workers. Reducing business regulations gives a state a more business-friendly climate. The Register editorialists seem to think that businesses follow the workers. Nothing like putting the cart before the horse when you have all sorts of government regulations to defend.
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LEFTY HUMOR
Over at WhiteHouse.org. (Thanks to Doug Dever.)
Guess they were too classy to include fried chicken and watermelon in the poster.
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Wednesday, April 23, 2003
LITE BLOGGING TODAY
Sorry folks, but I need a battery recharge. Will return tomorrow.
For compensation, go to Impromptus by Jay Nordlinger over at NRO. Great stuff over there, including this bit about Susan Sarandon and Tim Robbins: "They think that the Constitution gives them the right to be universally approved and adored."
For further compensation here is another cute-baby picture. For an explanation, go here.
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Tuesday, April 22, 2003
THE NEW RULES
Generally speaking, if you are charged with accomplishing a certain task, you are to blame if the task is not completed. But apparently that rule doesn’t apply to the education establishment, according to the Des Moines Register editorialists. They urge us:
Stop blaming schools.
So who is to blame? Glad you asked!
But, truth be told, most lack of achievement stems not from the failure of schools but from outside factors that schools cannot control.
And what are these “outside factors”? Well, there’s the parents:
* Blame too few job-training opportunities. Many parents are hard-pressed to break the cycle of poverty and find the income and time to adequately care for school-age children.
* Blame households where Dad beats Mom. Or where TV is the baby sitter and no one checks to see if homework is done. Or where drug and alcohol abuse create constant chaos.
* Blame the attitude that education is the schools' job alone. Some parents think that they don't need to help their children learn.
I wonder, does this describe the vast majority of parents with kids in failing schools? Or does it describe the parents of the kids who disrupt class so regularly that none of the other kids can learn? But let’s not bother asking such questions, because that could put the education establishment back on the hook. And not when there’s so many other factors left to blame:
* Blame those who become parents too early in life. They are unprepared to give their children the help they need. And blame a society that doesn't help those unprepared parents do better.
It’s society’s fault! We need to do more to help those people who are dumb enough to get knocked up at 16.
We’re not done yet. Oh no, far from it:
* Blame a shortage of adult literacy programs. Parents new to this country want to learn to speak English, so they can read to their children and help them with schoolwork.
* Blame a bias that certain children can't, or shouldn't, excel academically. Some people hold this dead-wrong assumption about poor and minority children.
* Blame the lack of universal preschool. The public has been unwilling to support giving all children a solid start before they reach kindergarten, no matter their economic background.
* Blame state government for underfunding education. This forces school districts to reduce teaching positions and programs.
* Blame state government, too, for shortchanging the Human Services Department. Youngsters with serious problems don't always get the help they need, and then bring those problems into the classroom.
* Blame the federal government. It is not paying its fair share of its mandates, such as special education.
In other words, the taxpayer isn’t shelling out enough bucks to properly fund little Johnny’s after-school program. Do you get the sense that you’re not reading a Register editorial but a talking points memo from the National Education Association?
Look at any of the things in the above litany that “need” more funding. Name one that hasn’t received more money in the last thirty years. Fact is, per-pupil funding is up over 80% when controlling for inflation over the last three decades. Yet test scores remain stagnant. Funny, but when you spend more money and continue to get dismal results, one might logically conclude that spending more money isn’t the answer.
And, of course, here is what’s driving this screed:
Still the federal government has chosen to blame the schools. It has imposed the costly, unrealistic, punitive No Child Left Behind Act. Washington insists that every child must be proficient in reading and math in a decade, with penalties for schools that don't measure up, as if the schools alone are responsible for the troubling gap.
In other words, the No Child Left Behind Act holds schools accountable for failure. And generally speaking, when an entity fails, it must face consequences. But apparently that rule doesn’t apply to education establishment either.
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POT CALLS THE KETTLE….
I had to laugh upon reading the introduction of Rekha Basu’s most recent column:
Much of what passes for discourse on talk radio isn't worth dignifying with a response. Wild assertions are offered without supporting facts. Trivial things are generalized and distorted out of all proportion to score political points. Bluster and ridicule are turned on efforts for justice and equality, and scapegoats are made of easy targets.
There's a simplistic if paranoid formulation behind these rants: Government and taxes are bad. America needs to be rescued from the clutches of the politically correct. The country lacks morals and discipline. The world is going to hell in a hand basket.
Wild assertions?! Paranoid?! This from a woman who compares the U.S. war in Iraq to child abuse, suggested that the U.S. was slipping into tyranny, that Bush was possibly an illegitimate president who wanted to start the Iraq war to plunder America’s resources, suggested that weapons of mass destruction was a made-up justification for war because no WMDs had been found during the first week of the war, and questioned whether a U.S. occupation of Iraq was any better than Saddam’s rule. And this in just one column!
Methinks someone needs to look in the mirror.
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Monday, April 21, 2003
ONE BAD IDEA DESERVES ANOTHER
There is actually one thing I agree with in this pro-economic development spending editorial in the Des Moines Register:
Iowans typically don't pay taxes on Internet sales now. (So this plan would raise taxes, no matter what anyone says otherwise.)
Yes, that’s right. Please send a note to your buddy, Governor Vilsack.
Now, on to the usual nonsense:
Increasing the cigarette tax is a better bet.
To come up with $1 billion through bonding for the economic development fund, Iowa would need to raise at least $75 million a year for 20 years. Today's cigarette tax of 36 cents a pack generates $88 million a year. A $1 per-pack tax increase would bring in more than $183 million in new revenue the first year, estimates Iowa's Health Initiative coalition, which wants the hike mostly for health reasons.
That may be optimistic, but raising the cigarette tax is certain to bring in more than $100 million a year.
Well, that depends on the effect a dollar per-pack increase has on behavior. You see, increasing taxes does affect behavior, something that the Des Moines Register will probably never understand. If higher cigarette taxes Iowa encourage some people to quit or cut back, others to order over the Internet or from Indian reservations, or, for those who live near the Iowa border, to purchase in other states, then tax collections will be smaller than projected.
And then the Register gives us another reason to oppose a cigarette tax increase:
Then, Iowa could use Internet sales-tax collections as part of its strategy to build a healthier state budget. It would not be depending on them, however, to replace essential revenue.
Oh joy! A boondoggle called the “Iowa Values Fund” and more money for the state government to spend! This could be a real disaster in the making.
But….
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I’M NOT TOO WORRIED….
….because it looks like the economic development scheme has hit an impasse. If this article in the Register is any indication, the legislative session may end with nothing much getting done other than passing a budget:
The bold changes that Gov. Tom Vilsack and legislative leaders promised Iowans in January to spark a sluggish state economy could fizzle as lawmakers near the end of the 2003 session in two weeks.
Vilsack's top priority, a massive new economic development fund intended to fuel growth, hangs in the balance. So do legislative leaders' plans to make historic changes in two of the state's biggest and most confusing taxes: income and property taxes.
Iowans could learn this week whether a deal can be reached on those and other blockbuster issues. Senate Majority Leader Stewart Iverson, a Dows Republican, has threatened to adjourn, leaving Vilsack empty-handed if there's no comprehensive agreement soon.
"He's the leader of the state," Iverson said. "If we can't work something out, we'll be finishing the budget and going home."
If you scroll down just a bit, you’ll see I suggested that, based on the tone of a recent Register editorial, the economic development boondoggle was probably in trouble. Don’t doubt the prognosticating power of the Hogberg, boys and girls!
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