Can Ryan’s Radicalism Shift the Focus off the Hunt for Romney’s Tax Returns?

Posted: August 11, 2012 | Author: | Filed under: 2012 presidential campaign, Psychopaths in charge, religious extremists, Republican Tax Fetishists, Tea Party activists, The Bonus Class, VAGINA MItt Romney, We are so F'd | Tags: , , , | 38 Comments

So,what better way to take the focus off your own short comings and the way you hide your viewpoints and taxes than to appoint a VP candidate that is sure to be a touch stone with the political press? That’s how I see the Ryan appointment. Romney’s positions are all over the place. Ryan’s are very much on record. Romney’s specific agendas and plans have been as translucent as his tenure at Bain and his tax returns. Ryan’s agenda is very much known. Ryan holds extreme views on abortion and all social issues as well as having introduced two extremely controversial and unpopular budget plans. What a way to change the conversation. Here’s a reminder of the extremist positions of Paul Ryan who still manages to be a media darling. This is from The Daily Beast today and was written by Michelle Goldman.

By now, you surely know, if you didn’t already, that Paul Ryan, Mitt Romney’s vice presidential pick, wants to privatize social security and turn Medicare into a voucher system. You might have read that, according to the Center on Budget and Policy Priorities, his economic plan “calls for radical policy changes that would result in a massive transfer of resources from the broad majority of Americans to the nation’s wealthiest individuals.”

Less attention has been paid, though, to Ryan’s hard-right positions on social issues. Indeed, on abortion and women’s health care, there isn’t much daylight between Ryan and, say, Michele Bachmann. Any Republican vice presidential candidate is going to be broadly anti-abortion, but Ryan goes much further. He believes ending a pregnancy should be illegal even when it results from rape or incest, or endangers a woman’s health. He was a cosponsor of the Sanctity of Human Life Act, a federal bill defining fertilized eggs as human beings, which, if passed, would criminalize some forms of birth control and in vitro fertilization. The National Right to Life Committee has scored his voting record 100 percent every year since he entered the House in 1999. “I’m as pro-life as a person gets,” he told the Weekly Standard’s John McCormack in 2010. “You’re not going to have a truce.”

Indeed, Ryan exemplifies a strange sort of ideological hybrid that now dominates the GOP. On economic issues, he’s a hardcore libertarian who once said, “[T]he reason I got involved in public service, by and large, if I had to credit one thinker…it would be Ayn Rand. And the fight we are in here, make no mistake about it, is a fight of individualism versus collectivism.” Yet when it comes to women’s control of their bodies, he quickly turns into a statist. “In the state of nature—the ‘law of the jungle’—the determination of who ‘qualifies’ as a human being is left to private individuals or chosen groups,” he wrote in a 2010 essay titled “The Cause of Life Can’t be Severed from the Cause of Freedom.” “In a justly organized community, however, government exists to secure the right to life and the other human rights that follow from that primary right.”

For anyone who wants to know how Ryan thinks, that essay is worth reading. It’s about 1,500 words long, but the word “woman” doesn’t appear in it once. Nor does the word “mother.” To him, a woman’s claim to bodily autonomy or self-determination doesn’t merit even cursory consideration. Here’s his analogy: “The car which I exercised my freedom of choice to purchase…does not ‘qualify’ for protection of human rights. I can drive it, lend it, kick it, sell it, or junk it, at will. On the other hand, the widow who lives next door does ‘qualify’ as a person, and the government must secure her human rights, which cannot be abandoned to anyone’s arbitrary will.”

Here’s the same source but an article written by Paul Begala who focuses on Ryan’s plutocratic upbringing. Today, it’s all about Ryan’s very public radicalism and his hypocrisy.

In selecting Paul Ryan, Mitt Romney has doubled-down on the one thing he has never flip-flopped on: economic elitism. Romney, born to wealth, has selected Wisconsin Congressman Paul Ryan, who was also born to wealth. As the former University of Oklahoma football coach, Barry Switzer, once said of someone else: both these guys were born on third and thought they hit a triple.

There’s nothing wrong with inherited wealth. Lord knows great presidents from FDR to JFK came into their fortunes through the luck of birth. But there is something wrong with winners of the lineage lottery who want to hammer those who did not have the foresight to select wealthy sperm and egg.

Finally, we have peered into Mitt Romney’s core. It is neither pro-choice nor pro-life; neither pro-NRA nor pro-gun control; neither pro-equality nor antigay. But it is pro-wealth and very anti–middle class. Mitt Romney has decided to go nuclear in the class war.

Paul Ryan, the darling of the New York–Washington media elite, is almost certainly not the most qualified person Romney could have picked. Unlike governors like Chris Christie or Tim Pawlenty, or a former high-ranking White House official like Rob Portman, Ryan has never run anything larger than his congressional office or the Oscar Meyer Weinermobile. The elite love Ryan because he speaks for more cowardly members of their class; his stridently anti–middle class policies are music to their ears.

You will often hear people who ought to know better dress up Ryan’s savage economic priorities with euphemisms. Ryan wants to “fix” Medicare. No, he doesn’t. He wants to kill it. Saying Paul Ryan wants to “fix” Medicare is like saying the vet wanted to “fix” my dog Major; that which used to work very well no longer works at all—and Major is none too happy with the procedure.

Ryan’s budget is the fiscal embodiment of the deeply evil, wholeheartedly selfish so-called philosophy of Ayn Rand. In fact, Ryan has described Rand as “the reason I got involved in public service,” and reportedly makes staffers read her works.

Think about that. As my buddy James Carville has said, what would all the Best People say if Nancy Pelosi made her staffers read, say, Margaret Sanger? Or if Barack Obama made interns study Das Kapital? Sure, a few months ago, facing Catholic protestors at Georgetown University, Ryan said he renounced Rand. But as the national Catholic weekly, America, wrote, he did not change the substance of a single policy. Some renunciation. It seems to me Ryan has renounced Rand’s politically incorrect atheism, not her morally bankrupt philosophy of Screw Thy Neighbor.

So, how long will the focus be on Major’s neutering rather than poor Shamus who was strapped to the top of a car for 12 hours?

How long will the focus be on Paul Ryan whose life is an open book compared to the secretive and snaky Willard?

Was this part of the strategy of picking Paul Ryan. Was this an attempt to get the focus off of the car elevators, the dancing horses who get bigger tax deductions than most people’s children, the you don’t get to see my taxes stand, the insults to Japan and Britain and the highly botched tour abroad? Is this all about appeasing the base and getting the punditry to chase a less important bone?

Is This the Conversation We’ve Been Waiting For . . . Or Not?

Posted: January 14, 2012 | Author: | Filed under: #Occupy and We are the 99 percent!, 2012 primaries, Banksters, Congress, Corporate Crime, corporate money, Economy, income inequality, Regulation, Republican Tax Fetishists | Tags: , , , , | 22 Comments

The recent brouhaha over Newt Gingrich and Mitt Romney locking horns over Romney’s involvement [I created 100,000 jobs] at Bain Capital has raised speculation that a conversation about capitalism, the way it’s been practiced these last 30-40 years, is about to commence, a conversation that is way overdue.

The irony is that the issue has been brought to the fore by Republican candidates, none of whom questioned the blowback of leveraged buyouts [LBO] and private equity firms in the past or even whispered the traitorous phrases–crony capitalism, vulture capitalism–in public.  In fact, the centerpiece of GOP economic theory is free market fundamentalism—set the market free, unfetter business from governmental regulation and Heaven’s Gate will open.

Not quite.

There’s the 2008 meltdown to contend with, the abuses of Wall Street and a clear example that Greenspan’s ‘self-regulating’ market theory was a cruel and greedy joke.  Following the meltdown, Greenspan himself glumly admitted his worldview was incorrect.

In addition, we have plenty of evidence that the so-called Trickle-Down philosophy has not ‘raised all ships’ as heralded by the true believers but rather led to huge income disparities, flat wages and the death-rattle of the middle-class.

Yes, there is the question of globalization.  Like it or not, we have grown interconnected.  But when decisions are made purely on profit, the quicker the better, then transferring manufacturing abroad, exploiting cheap foreign labor, taking advantage of lax worker safety rules and nonexistent environmental regulations begins to make a twisted sort of sense.  So, too with trade agreements made deliberately lopsided and unfair because these ‘deals’ have no national loyalty.  Profit is king; all else is subservient.

The long-term damage is massive.  We don’t have to speculate about this.  The evidence is everywhere in our unemployment numbers [which are far worse than reported] and the slide into poverty for alarming numbers of Americans.  Add in the housing crisis, still escalating health care costs, the Gulf oil spill, endless wars, the battles over extracting oil, coal and natural gas while refusing to work on rational and workable alternative energy policies,  and .  .  .

Well, it’s enough to make your head explode.

But suddenly, the door has flown open for a conversation on what it means to be a shareholder capitalist.  The unquestioned virtue of profit over all else has begun to raise its ugly head.

For instance, what value [if any] is created for a society when money is valued above all else, valued over the welfare of fellow citizens–the sick, the disabled, even our children.  What value is maintained when corners are cut, laws rewritten, ridiculous tax policies hyped as necessary for growth and future job creation?  But the mythical jobs, positions offering a living wage, never come. What does it mean when massive profits stream only to the top tier of the population, the so-called job creators, while everyone and everything else is left to flounder?

I call it a no-value deal–a lie, a theft–the magnitude of which hollows out a society, sucks it dry.

For too long Newt Gingrich [for all his caterwauling now] and his like-minded buddies have called it the free enterprise system.  Free for whom?  Certainly not for the families who have lost their homes, seen their jobs exported and have no reasonable expectation that their own children will ever see better times.  Not with the continuation of what Dylan Ratigan has termed Extractionism, a system that takes money from others without offering anything of value, anything that actually promotes growth or improves society.  This is a system that merely fills the coffers of the Extractionists, while they play a heady game of King of the Mountain and continue to spread the folklore that this is what freedom and liberty look like.

But let’s be fair.  Mitt Romney is not the devil incarnate, nor is Bain Capital the worst of the worst.  Much of what Newt Gingrich’s SuperPac is selling to the electorate conveniently let’s Wall Street and multinational corporations off the hook.  The ads fail to mention the cushy collusion of legislators who push laws and tax breaks to keep the circle spinning.  And Washington Democrats who may be dancing the happy dance now are just as guilty of supporting the status quo, going along to get along, eagerly taking campaign donations from their own smiling Extractionists.

Is this the conversation Republicans are offering?

Sorry, no.

Rush Limbaugh has been apoplectic on the issue.  According to Limbaugh, Gingrich has ‘Gone Perot.’

So you might say that Newt now has adopted the Perot stance, because he just said it: ‘I’m gonna make sure that Romney doesn’t come out of New Hampshire with any momentum whatsoever.’ And he’s using language that the left uses, and he’s attempting to make hay with this. You know, he’s trying to dredge up and have long-lasting negatives attach to Romney [this is what’s so unsettling about this] in the same way the left would say it. You could, after all these bites, say, “I’m Barack Obama, and I approve this message.

Rudy Giuliani also weighed in.

What the hell are you doing, Newt?” Giuliani said this morning on “Fox and Friends.” “The stuff you’re saying is one of the reasons we’re in this trouble now.

This whole ignorant populist view of the economy that was proven to be incorrect with the Soviet Union with Chinese communism.

Oh yes, the ‘ignorant populist’ view that has beamed a light on business as usual.  Which btw, is not working, except for a tiny fraction of the American public.  If anything, Uncle Newt has pulled back the curtain and revealed an unsettling truth.

This might not be the full-throated conversation Americans need to engage in.  Still it’s a beginning from a most unexpected quarter, whose raison d’etre is as caught up in short-term results as are its economic principles.  Almost Occupy Wall St. in nature, the conversation is now in the open.  This is a conversation that defies Mitt Romney’s suggestion that sensitive subjects are better left to the privacy of ‘quiet rooms.’

This is the conversation of the moment.  The first word, the opening sentence.  It has just begun.

Tuesday Reads

Posted: December 6, 2011 | Author: | Filed under: morning reads, Republican politics, Republican presidential politics, Republican Tax Fetishists, Team Obama, U.S. Economy, U.S. Politics | Tags: | 27 Comments

Good Morning!!

Lets begin with some really big news. NASA announced yesterday that it has found an “Earth-like” planet, IOW, it could be habitable by Earth-like creatures. Perhaps some of our species can escape to it after the U.S.–or Iran or Israel or India, or Pakistan or China blows this one up. From Scientific American:

NASA’s orbiting Kepler telescope has discovered its first planet in the habitable zone of another star. By “habitable,” astronomers mean that a planet could harbor temperatures conducive to liquid water—and maybe life.

The new planet, Kepler 22b, orbits somewhat closer to its host star than Earth does to the sun. “The star is some 600 light years away.” NASA’s Bill Borucki, who leads the Kepler mission, in a December 5th teleconference.

That star is a bit cooler than the sun. So if the greenhouse warming were similar on this planet, and it had a surface, its surface temperature would be something like 72 Fahrenheit—a very pleasant temperature here on Earth.

Kepler 22b is more than twice as large as Earth. One big caveat is that it may not be rocky, like Earth is. It could instead be a gas planet like Neptune. If that were the case, prospects for life there would be rather dim.

Pretty cool, huh? From Cnet:

Along with the confirmed extra-solar planet, one of 28 discovered so far by Kepler, researchers today also announced the discovery of 1,094 new exoplanet candidates, pushing the spacecraft’s total so far to 2,326, including 10 candidate Earth-size worlds orbiting in the habitable zones of their parent stars.

Additional observations are required to tell if a candidate is, in fact, an actual world. But astronomers say a planet known as Kepler-22b, orbiting a star some 600 light years from Earth, is the real thing.

Artist's rendering of newly discovered planet

According to the BBC:

Kepler 22-b was one of 54 candidates reported by the Kepler team in February, and is just the first to be formally confirmed using other telescopes.

More of these “Earth 2.0” candidates are likely to be confirmed in the near future, though a redefinition of the habitable zone’s boundaries has brought that number down to 48.

Via The Guardian: About a month ago, graphic artist and screenwriter Frank Miller posted an attack on OWS on his blog. Miller is the author of Sin City. Here’s an excerpt:

The “Occupy” movement, whether displaying itself on Wall Street or in the streets of Oakland (which has, with unspeakable cowardice, embraced it) is anything but an exercise of our blessed First Amendment. “Occupy” is nothing but a pack of louts, thieves, and rapists, an unruly mob, fed by Woodstock-era nostalgia and putrid false righteousness. These clowns can do nothing but harm America.

“Occupy” is nothing short of a clumsy, poorly-expressed attempt at anarchy, to the extent that the “movement” – HAH! Some “movement”, except if the word “bowel” is attached – is anything more than an ugly fashion statement by a bunch of iPhone, iPad wielding spoiled brats who should stop getting in the way of working people and find jobs for themselves.

This is no popular uprising. This is garbage. And goodness knows they’re spewing their garbage – both politically and physically – every which way they can find.

Wake up, pond scum. America is at war against a ruthless enemy.

Maybe, between bouts of self-pity and all the other tasty tidbits of narcissism you’ve been served up in your sheltered, comfy little worlds, you’ve heard terms like al-Qaeda and Islamicism.

I know nothing about Frank Miller or his cartoon creations, but reading between the lines, I’m getting the feeling there’s a whole lot of projection going on in that rant. As you can well imagine Miller’s fans weren’t all that pleased by it either.

Now a much more famous and beloved graphic novelist, Alan Moore, has responded to Miller’s ugly tirade.

Well, Frank Miller is someone whose work I’ve barely looked at for the past twenty years. I thought the Sin City stuff was unreconstructed misogyny, 300 appeared to be wildly ahistoric, homophobic and just completely misguided. I think that there has probably been a rather unpleasant sensibility apparent in Frank Miller’s work for quite a long time. Since I don’t have anything to do with the comics industry, I don’t have anything to do with the people in it. I heard about the latest outpourings regarding the Occupy movement. It’s about what I’d expect from him. It’s always seemed to me that the majority of the comics field, if you had to place them politically, you’d have to say centre-right. That would be as far towards the liberal end of the spectrum as they would go. I’ve never been in any way, I don’t even know if I’m centre-left. I’ve been outspoken about that since the beginning of my career. So yes I think it would be fair to say that me and Frank Miller have diametrically opposing views upon all sorts of things, but certainly upon the Occupy movement.

As far as I can see, the Occupy movement is just ordinary people reclaiming rights which should always have been theirs. I can’t think of any reason why as a population we should be expected to stand by and see a gross reduction in the living standards of ourselves and our kids, possibly for generations, when the people who have got us into this have been rewarded for it; they’ve certainly not been punished in any way because they’re too big to fail. I think that the Occupy movement is, in one sense, the public saying that they should be the ones to decide who’s too big to fail. It’s a completely justified howl of moral outrage and it seems to be handled in a very intelligent, non-violent way, which is probably another reason why Frank Miller would be less than pleased with it. I’m sure if it had been a bunch of young, sociopathic vigilantes with Batman make-up on their faces, he’d be more in favour of it. We would definitely have to agree to differ on that one.

Alrighty-then. You can read the whole interview with Moore at the link.

The head of the FAA, Jerome “Randy” Babbitt has been placed “on leave” after being arrested and charged for driving drunk. How unseemly.

The Transportation Department, which oversees the FAA, said it didn’t learn about the incident until Monday, two days later. Deputy Administrator Miguel Huerta will serve as acting administrator while officials consider Babbitt’s “employment status,” the Transportation Department said.

More from HuffPo:

Babbitt, 65, was charged with driving while intoxicated after a patrol officer spotted him driving on the wrong side of the street and pulled him over about 10:30 p.m. EST Saturday in Fairfax City, Va., police in the Washington, D.C., suburb said.

Babbitt, who lives in nearby Reston, Va., was the only occupant in the vehicle, the statement said. Police said he cooperated and was released on his own recognizance.

Babbitt apparently delayed telling administration officials about the arrest. White House spokesman Jay Carney said President Barack Obama and Transportation Department officials learned of the arrest Monday afternoon, about an hour before a 1:30 p.m. EST statement was released saying Babbitt had been placed on leave at his request.

Separately, Fairfax City police issued a statement on the arrest to the media at about noon Monday. They refused to disclose the results of Babbitt’s blood alcohol test. The legal limit is .08.

At least he wasn’t piloting an airplane…

I really kind of hope that the Republicans nominate Newt Gingrich. He’ll be the gift that keeps on giving for bloggers like me–and for comedians too. In the New York Times, Trip Gabriel discusses Gingrich’s “big thoughts.”

Ideas erupt from the mind of Newt Gingrich — bold, unconventional and sometimes troubling and distracting.

On Monday, Mr. Gingrich sought to do damage control on the latest of his Big Thoughts to land him in hot water — helping children bootstrap their way out of poverty by paying them to mop and clean their schools, and rolling back child labor laws that he has called “truly stupid.”

Mr. Gingrich defended the idea, which critics have labeled Dickensian, as a way to introduce children in housing projects with few examples of working adults to the idea of earning a paycheck.

“This is how people rise in America — they learn to work,” he said at a news conference in Manhattan.

Mr. Gingrich’s tendency to speak bluntly, provocatively and sometime impulsively may be part of his emerging appeal at a time when conservatives seem intent on sending a no-business-as-usual message to Washington. It helps with his attempts to foster an image as a candidate eager to bring about change. But the fallout from his statements often traps him in lengthy digressions from his main messages, and it highlights one of the central questions about him as a candidate and potential president: is he sufficiently disciplined?

The funniest example in the article is Gingrich implying that Donald Trump grew grew up poor and had to work hard as a child. On the contrary, Trump inherited big bucks from his father, “a wealthy landlord.”

“New York’s finest” AKA the NYPD has a Facebook page, and in September they used it to display crude and disgusting comments about participants in New York’s West Indian America Day Parade, referring to them as “animals” and “savages” and suggesting, “Drop a bomb on them and wipe them all out.”

The subject was officers’ loathing of being assigned to the West Indian American Day Parade in Brooklyn, an annual multiday event that unfolds over the Labor Day weekend and has been marred by episodes of violence, including deaths of paradegoers. Those who posted comments appeared to follow Facebook’s policy requiring the use of real names, and some identified themselves as officers.

On Monday, Paul J. Browne, the Police Department’s deputy commissioner for public information, said he learned of the Facebook group from a reporter’s call and would refer the issue to the department’s Internal Affairs Bureau. The comments, in the online group that grew over a few days to some 1,200 members, were at times so offensive in referring to West Indian and African-American neighborhoods that some participants warned others to beware how their words might be taken in a public setting open to Internal Affairs “rats.”

But some of the people who posted comments seemed emboldened by Facebook’s freewheeling atmosphere. “Let them kill each other,” wrote one of the Facebook members who posted comments under a name that matched that of a police officer.

“Filth,” wrote a commenter who identified himself as Nick Virgilio, another participant whose name matched that of a police officer. “It’s not racist if it’s true,” yet another wrote.

Lovely. The NYPD is one of the nation’s most corrupt, violent, and out-of-control police organizations. And judging by this story and their behavior toward OWS, they don’t mind being up front about it.

Awhile back I wrote about Mitt Romney destroying all of his and his staff’s e-mails from his four years as governor of Massachusetts. In addition, Romney and his aides purchased and took with them the hard drives from their state computers. Apparently there was something they desperately wanted to hide. Now Reuters has learned that the cover-up cost the state almost $100,000.

Mitt Romney spent nearly $100,000 in state funds to replace computers in his office at the end of his term as governor of Massachusetts in 2007 as part of an unprecedented effort to keep his records secret, Reuters has learned.

The move during the final weeks of Romney’s administration was legal but unusual for a departing governor, Massachusetts officials say.

The effort to purge the records was made a few months before Romney launched an unsuccessful campaign for the Republican presidential nomination in 2008. He is again competing for the party’s nomination, this time to challenge Barack Obama for the presidency in 2012….

When Romney left the governorship of Massachusetts, 11 of his aides bought the hard drives of their state-issued computers to keep for themselves. Also before he left office, the governor’s staff had emails and other electronic communications by Romney’s administration wiped from state servers, state officials say.

Those actions erased much of the internal documentation of Romney’s four-year tenure as governor, which ended in January 2007. Precisely what information was erased is unclear.

Republican and Democratic opponents of Romney say the scrubbing of emails – and a claim by Romney that paper records of his governorship are not subject to public disclosure – hinder efforts to assess his performance as a politician and elected official.

I’m not sure where Reuters got the idea this was “legal.” Massachusetts has a law that public officials must save all public records and turn them over to the state.

The Democrats have been talking about caving compromising with Republicans on the extension of the payroll tax holiday. Naturally, GOP congresspeople smelled blood and immediately went in for the kill. Arizona Senator John Kyl announced that there will be no extension of this middle-class tax cut unless the Bush tax cuts for the rich are made permanent.

The top Republican vote counter in the Senate says extending the expiring payroll tax holiday is a terrible idea and he’ll only do it if Democrats agree to major concessions — in particular, simultaneously extending all the Bush tax cuts, which are scheduled to expire just over a year from now.

On the Senate floor Monday, Sen. Jon Kyl argued that reducing the payroll tax doesn’t stimulate the economy — a claim most economists disagree with — and criticized the Democrats’ plan to offset the cost of the tax holiday with a small surtax on millionaires.

“We should therefore only do it under circumstances that in effect override these objections, one of which would be to extend all of the taxes that expire at the end of next year — at the end of 2012,” Kyl said. “That would be a good idea.”

In November 2009, Kyl felt differently. On CNBC he argued, “What you’re suggesting here is that you can do some things to stimulate job creation and certainly doing something like reducing the payroll tax, which has been written about recently, would accomplish that.”

That’s probably because he senses that President Obama is just about to surrender and give the Republicans everything they want, as usual.

Sigh… That’s all I have for today. What are you reading and blogging about?

More Empirical Research on Tax Policies tanks Right Wing Memes

Posted: November 22, 2011 | Author: | Filed under: Republican Tax Fetishists | Tags: , , | 18 Comments

I’m now trying to dig up my fall copy of the Journal of Economic Perspectives.  This link will take you to a pdf file of a new research article published there called ‘The Case for a Progressive Tax: From Basic Research to Policy Recommendations’. The authors are MIT professor Peter Diamond–who should be on the FED Board of Governors now– and Emmanuel Saez. Emmanuel Saez is a UC Berkley economics professor and director of the Center for Equitable Growth. Diamond won the Nobel Prize in 2010.   Paul Krugman has some early analysis up on his blog today having found the paper via Mark Thoma’s website.  This one ought to send the Republican party into propaganda overdrive.  I’m still reading it but I thought I’d share some of it with you.

The interesting thing is this comes as I was reading this study from Wider Opportunities for Women that shows that just under half the population–approximately 45% of US citizens–are living hand to mouth.

As 25 million Americans and their families continue to struggle to find jobs or full-time work and many newly created jobs are in low-wage industries, a new report on family economic security shows that 45 percent of Americans are unable to cover their basic expenses. Based on a comprehensive analysis of economic and demographic data by Wider Opportunities for Women (WOW), the new report finds many families are living without economic security even when household breadwinners are working. The findings suggest that federal budget cuts to programs like job training, career and technical education, unemployment insurance, and child care programs could compound the crisis facing American families.

I also was reading the newly revised GDP growth numbers which have lowered to 2% which is definitely not enough to send unemployment figures in the right direction.   Some of the inventory numbers look bad too.  We could potentially get more mass layoffs from companies since we still appear to have way more capacity than customers in the country.

Anyway, back to the academic study that shows that the top bracket on top income earners should “optimally” be set at about 70%.  So, much for the “taxing the job creators” is horrible meme once again.    This study is the latest in a long line of them that shows that highly progressive tax systems are beneficial.  Rich people even do better under them.  The 70 percent solution is considered the optimal rate given the goal of these types of models which is basically as follows.  (Hang on, this is from the paper and it’s in economist speak, so bear with me.  If you’re not used to thinking in terms of calculus based maximization models given specific definitions of things so you can do the math, it can read like stereo instructions.) This is the basic explanation in the introduction of the goal of this line of research.

Models in optimal tax theory typically posit that the tax system should maximize a  social welfare function subject to a government budget constraint, taking into account that individuals respond to taxes and transfers. Social welfare is larger when resources are more equally distributed, but redistributive taxes and transfers can negatively affect incentives to work, save, and earn income in the first place. This creates the classical trade-off between equity and efficiency which is at the core of the optimal income tax problem. In general, optimal tax analyses maximize social welfare as a function of individual utilities—the sum of utilities in the utilitarian case. The marginal weight for a given person in the social welfare function measures the value of an additional dollar of consumption expressed in terms of public funds. Such welfare weights depend on the level of redistribution and are decreasing with income whenever society values more equality of income. Therefore, optimal income tax theory is first a normative theory that shows how a social welfare objective combines with constraints arising from limits on resources and behavioral responses to taxation in order to derive specific tax policy recommendations. In addition, optimal income tax theory can be used to evaluate current policies and suggest avenues for reform. Understanding what would be good policy, if implemented, is a key step in making policy recommendations.

What this basically is looking for is a level of tax that will not cause disincentives to work, factor in the federal budget requirements, and consider what the society needs to achieve its overall goals of having good infrastructure, providing jobs, educating people. etc.  It also mentions that you have to consider this analysis subjectively because it is based on achieving society’s group vales and goals as expressed through the political process. In our case, our values and goals are express through democracy.   This is important because their study shows that you can actually tax rich people a lot without creating disincentives for them.  That’s exactly the opposite of what Republicans usually bleat and it really kicks that dead horse of a Laffer curve one more time.

Here’s Krugman’s thoughts on what will probably come out of the right wing meme manufacturers.

In the first part of the paper, D&S analyze the optimal tax rate on top earners. And they argue that this should be the rate that maximizes the revenue collected from these top earners — full stop. Why? Because if you’re trying to maximize any sort of aggregate welfare measure, it’s clear that a marginal dollar of income makes very little difference to the welfare of the wealthy, as compared with the difference it makes to the welfare of the poor and middle class. So to a first approximation policy should soak the rich for the maximum amount — not out of envy or a desire to punish, but simply to raise as much money as possible for other purposes.

Now, this doesn’t imply a 100% tax rate, because there are going to be behavioral responses – high earners will generate at least somewhat less taxable income in the face of a high tax rate, either by actually working less or by pushing their earnings underground. Using parameters based on the literature, D&S suggest that the optimal tax rate on the highest earners is in the vicinity of 70%.

OK, I hear loud screams from the right side of the room. Parsing those screams, I hear the following arguments:

1. Theft! Tyranny! OK, I hear you. This can’t be argued on rational grounds; I think there are a lot more important moral issues in the world than defending the right of the rich to keep their money, but whatever.

2. They’ll go Galt! This amounts to saying that D&S’s estimate of the “behavioral elasticity” is too low. Maybe, but they’re pretty careful about that, and your gut isn’t better than their econometrics.

3. You’ll kill job creation! This is where it gets interesting.

Right now the official rhetoric of the right, and a fair number of people who consider themselves centrist, is that high-income individuals are “job creators” who must be cherished for the good they do.

Yet textbook economics says that in a competitive economy, the contribution any individual (or for that matter any factor of production) makes to the economy at the margin is what that individual earns — period. What a worker contributes to GDP with an additional hour of work is that worker’s hourly wage, whether that hourly wage is $6 or $60,000 an hour. This in turn means that the effect on everyone else’s income if a worker chooses to work one hour less is precisely zero. If a hedge fund manager gets $60,000 an hour, and he works one hour less, he reduces GDP by $60,000 — but he also reduces his pay by $60,000, so the net effect on other peoples’ incomes is zip.

Of course, he doesn’t actually lose all of that $60,000, since he ends up paying less in taxes. So there is a loss of revenue from that withdrawal of effort. But that’s precisely what the Diamond-Saez calculation takes into account, and the reason the optimal top tax rate isn’t 100%.

This sort’ve follows what Warren Buffet is saying when he says sure, raise my taxes.  When you’re talking incomes as high as his, the benefit of having a little bit more just isn’t that great compared to the benefit of having a lit bit more when you are you or me.   Our little bit more goes to basic bills for at least 45% of us. They really don’t miss anything they don’t already have.  This probably could apply to corporate taxation too.  At some level of project income, effective taxes paid is usually not the major expense of any project, so when you do the present/future value analysis, taxes really don’t cut into the future cash flows.  There are many more expenses that are much more significant.   In the case of the uppermost income earners, they don’t really feel it until around 70 percent.  Remember, this is US data and not from places like Sweden or Norway where people are demonstrably happier about pitching in to build a better country and society and don’t have an entire political party plus a portion of the opposition party working to bring the rest of the country and the economy to its knees.

There’s also a good argument presented against zero taxation of capital gains which is another right wing sacred cow.  There’s an entire section on if it makes sense to tax income from labor differently than income from capital.  In a review of literature, the authors show how favoring capital over labor tends to shift money from labor to capital.   This is because the tax system does not distinguish between capital gains from entrepreneurial activities like actually setting up a business, producing something, and hiring yourself and others and speculating in dicey derivatives.   Hopefully, you can skim over the literature review, the rationale behind the model, and the discussion of results and find some of the interesting things.   The analysis uses pareto coefficients and elasticities which are have intuitive explanations but are normally not the things people remember from their microeconomics classes.  In this case, the elasticity is how sensitive various income earners are to changes in tax rates.  The Pareto coefficients are a measure that show optimal marginal tax rates that maximize revenue collection and individual and social “welfare”.   Welfare economics studies how a society is efficient and welfare maximizing in that it produces the maximum amount of  stuff and the resulting benefit from using the stuff to the society.  It should do so at the lowest costs also which implies that all resources in the society are used the best way possible.

I’m continually amazed by the number of studies that have been done that basically contradict the political narrative of many politicians and true believers in a system they don’t frankly understand.  I’m also amazed at the number of people that really don’t know what constitutes a functional and efficient market.  They also don’t understand what capitalism is any more than they understand what socialism is.  On the way back from Denver, some extremely wealthy real estate investor who had just gotten back from a customized jaunt to Bhutan was telling me that he loved capitalism because it was all about being allowed to take on risk.  He really was describing entrepreneurship which can flourish under a lot of different economic systems including mercantilism which is the economic system on which this country was founded.  I actually think sometimes that Republicans really don’t want capitalism, they want a return to mercantilism with its limitations on wages, focus on exploiting resources, hoarding of gold and silver, use of colonies, and jingoistic approach to foreign countries.   Risk taking isn’t inherent to the definition of capitalism.  But then, maybe all this confusion is  because of this:  “Fox News viewers less informed about current events than those who don’t watch news at all, study finds”.   The propaganda machinery in this country is highly efficient.

Anyway, I hope this study finds its way to some states–at the very least–and does some good.  It’s not really a good idea to base your economic policy on wishful thinking and fairy tales.

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