Posted: March 15, 2025 | Author: bostonboomer | Filed under: just because | Tags: Alan Simpson, Columbia University, Donald Trump, government shutdown, House continuing resolution 2025, immigration, Justice Department, Kevin Drum, Ma Yang, Mahmoud Khalil, Rasha Alawieh, travel ban |
By Brian Laing
Good Morning!!
After Daknikat’s comprehensive post yesterday, it’s hard to imagine there could be any more news to report on today, but I’ve found a few things.
There were two notable deaths yesterday, pioneering blogger Kevin Drum and former Senator Alan Simpson, half of Simpson-Bowles, who created what came to be known as the “Cat Food Commission.”
The New York Times: Kevin Drum, Influential Early Political Blogger, Dies at 66.
Kevin Drum, who gave up his day job in software marketing to write online about politics, policy and his cats, quickly becoming a key figure in the vanguard of center-left bloggers during the genre’s heyday in the early 2000s, died on March 7. He was 66.
His wife, Marian Drum, announced the death on his website but did not say where he died or cite a cause.
Mr. Drum, who lived in Irvine, Calif., had been diagnosed with multiple myeloma in 2014 and had recently developed pneumonia. He blogged about those personal challenges openly and with the same insight that he brought to issues like health care policy and urban planning.
He spent most of his life in Orange County, Calif., which distinguished him from the majority of early big-name bloggers, many of whom hailed from the Washington-Boston corridor or from academic enclaves.
Mr. Drum began blogging in 2002 and quickly developed a large nationwide following. He helped shape what became known as the liberal blogosphere, populated by a broad amalgam of left-of-center thinkers who emphasized policy debates over political horse races.
His curiosity was broad, and he wrote on a variety of subjects from a variety of perspectives — sometimes casually observational, sometimes rigorously analytical — in a way that set him apart from the assorted camps that defined the blogosphere, including academics, politicos and ideologues.
Four years after that, Mr. Drum moved to Mother Jones, where he wrote not just blog posts but also extensive reported pieces for the magazine.
Most notable was a deep dive in 2013 into the theory that the crime wave of the late 20th century was driven in large part by childhood exposure to lead in gasoline and paint, a key factor in the development of behavioral problems and, in turn, delinquency. As lead was phased out, health outcomes improved and crime rates dropped.
“He was just able to unpack very complicated — particularly economically complicated — stories in an immensely readable way,” said Clara Jeffery, the editor in chief of Mother Jones.
The New York Times: Alan K. Simpson, a Folksy Republican Force in the Senate, Dies at 93.
Alan K. Simpson, a plain-spoken former Republican senator from Wyoming who championed immigration reforms and conservative candidates for the Supreme Court while fighting running battles with women’s groups, environmentalists and the press, died on Friday in hospice in Cody, Wyo. He was 93.
He had been struggling to recover from a broken hip that he sustained in December, according to a statement from his family and the Buffalo Bill Center of the West, a group of museums of which he was a board member for 56 years. The statement said his recovery had been hindered by complications of a case of frostbite to his left foot that he endured about five years ago and that required the amputation of his left leg below the knee.
By Matt Cauley
Folksy, irreverent and sometimes cantankerous, a gaunt, 6-foot-7 beanpole with a ranch hand’s soft drawl, Mr. Simpson was a three-term senator, from 1979 to 1997, whom school children and tourists in the gallery sometimes took for a Mr. Smith-goes-to-Washington oddball, especially during his occasional rants against “bug-eyed zealots” and “super-greenies,” as he liked to call environmental lobbyists.
The son of a former Wyoming governor and United States senator, Mr. Simpson had been a hell-raiser as a teenager. He and some friends shot up mailboxes, killed a cow with rifles and set fire to an abandoned federal property. He punched a police officer who arrested him. While no one had been seriously hurt, he faced prison. But he was put on probation for two years and paid restitution….
Mr. Simpson had love-hate relationships with the press. Many journalists liked his earthy humor and easy accessibility. But his language could be coarse and his tone contemptuous when he attacked the news media, sometimes singling out reporters by name. He crossed a line when he accused Peter Arnett of CNN of being an enemy “sympathizer” for his reporting from Iraq during the Persian Gulf war, and wrongly accused him of bias in the Vietnam War because he had married a Vietnamese woman.
His political positions sometimes seemed contradictory, or perhaps personal. He supported abortion rights and right-wing nominees to the United States Supreme Court who might overturn Roe v. Wade. And partly out of a friendship forged when he was a 12-year-old Boy Scout, he called on the nation to apologize to Japanese Americans who were interned as potential security risks during World War II.
Read more at the NYT if you’re interested. Frankly, I thought he was a horrible person, but what do I know?
Daknikat covered the Republicans’ horrific continuing resolution yesterday. Of course it pass with Democratic help.
HuffPost: Here Are The Democrats Who Advanced A GOP Bill To Avoid A Government Shutdown.
In the end, nine senators who caucus with Democrats joined with Senate Minority Leader Chuck Schumer (N.Y.) in voting to advance legislation to avoid a government shutdown, essentially giving up Democratic leverage over President Donald Trump for the foreseeable future.
Their support meant the bill was able to break the 60-vote threshold to avoid a filibuster, 62-38….
“The off-ramp is in the hands of Donald Trump and Elon Musk and DOGE. We could be in a shutdown for six months or nine months,” Schumer told The New York Times earlier on Friday, arguing a shutdown would be far too unpredictable.
Internal party critics have said Schumer gave up a rare moment of leverage far too easily, misplaying his hand after an often-fractious House Republican Caucus passed a party-line spending bill with Trump’s blessing.
Schumer suggested he was willing to face withering criticism from moderate House members to angry progressive activists: “I’ll take some of the bullets.”
These nine senators are likely to share in Schumer’s political suffering, though none of them are an obvious target for an immediate primary challenge.
- Sen. John Fetterman (D-Pa.): The party’s leading contrarian at the moment, Fetterman has repeatedly said he will never vote for a government shutdown under any circumstances. He’s not up for reelection until 2028.
- Sen. Catherine Cortez Masto (D-Nev.): Cortez Masto said her vote was not an “easy decision,” but she was refusing to “hand [Trump and Musk] a shutdown where they would have free reign to cause more chaos and harm.” She’s not up for reelection until 2028.
- Sen. Dick Durbin (D-Ill.): Durbin, the No. 2 Democrat in the party’s Senate leadership, is up for reelection in 2026 but is widely expected to retire.
- Sen. Angus King (I-Maine): King’s state is heavily reliant on government funds, and he said in a statement posted to his Facebook page giving Musk and Trump power would be a “significantly greater danger to the country than the continuing resolution with all of its faults.” King is not up for reelection until 2030.
- Sen. Brian Schatz (D-Hawaii): Schatz is known to have leadership ambitions, and taking this vote may show he’s willing to take a political hit for the rest of the caucus. Hawaii is also heavily reliant on federal employees. “Given the number of federal workers in Hawai‘i, mass furloughs would be deeply painful for people across the state,” he said in a statement. Schatz is up for reelection in 2028.
- Sens. Maggie Hassan and Jeanne Shaheen (D-N.H.): The Granite State duo are both moderates, and Shaheen is set to retire rather than run for reelection in 2026. Hassan is up for reelection in 2028. “Allowing the federal government to shut down with this President in charge is too dangerous to risk,” Hassan said in a statement.
- Sen. Gary Peters (D-Mich.): Peters has already announced his plan to retire in 2026. He said a shutdown under Trump would be “catastrophic”
- Sen. Kirsten Gillibrand (D-N.Y.): A close ally of her fellow New Yorker, Gillibrand is also the chair of the Democratic Senatorial Campaign Committee this cycle. She’s not up for reelection until 2030.
I thought Schumer had some good arguments; but when we are facing a takeover by a dictator, it seems to me the Democrats should fight tooth and nail.
The Daily Beast: Dem Civil War Erupts With ‘Screaming’ and Primary Threats Behind Closed Doors.
Schumer’s politically dicey decision—ahead of a midnight Friday shutdown deadline—has infuriated Democrats to the point some are suggesting he step aside as leader. He explained on the Senate floor late Friday afternoon that his decision was “a Hobson’s choice,” conjuring images of a chainsaw-wielding Elon Musk.
”I believe that allowing Donald Trump to take even more power via a government shutdown is a far worse option,” he said. “The shutdown would allow DOGE to shift into overdrive. It would give Donald Trump and DOGE the keys to the city, the state and the country. And that is a far worse alternative.”
Vintage Lady with White Cat, by Sharyn Bursic
“Next question,” House Democratic leader Hakeem Jeffries answered Friday afternoon when a reporter asked if it was time for new leadership in the Senate. Jeffries said House Democrats are “strongly opposed to the partisan funding bill” that Schumer says he now supports.
Former Speaker Nancy Pelosi repudiated Schumer’s choice earlier in the day, saying, “I salute Leader Hakeem Jeffries for his courageous rejection of this false choice, and I am proud of my colleagues in the House Democratic Caucus for their overwhelming vote against this bill.”
Rep. Alexandria Ocasio-Cortez said Schumer’s “unthinkable” acquiesce was a “betrayal,” adding she was “texting, calling, sending carrier pigeons” to Senate Democrats to beg them to not follow suit.
Democratic lawmakers are so “infuriated” with Schumer that some have spoken to Ocasio-Cortez, a New York progressive, about running against him in a Senate primary race, according to CNN, which noted even “centrists” are “so mad” at Schumer they are “ready to write checks for AOC for Senate” come 2028 when he is up for re-election.
Daknikat wrote quite a bit about the Democrats’ anger yesterday. They were even angrier, if possible, after the bill passed. Schumer should retire anyway. We have to get rid of these old fossils.
Remember the days when the Bush administration was disappearing people they decided were terrorists? It looks like Trump is going to follow a similar playbook. I just hope it doesn’t involve torture. The Trump gang are coming down hard on Columbia and other elite universities about protests against the Israel war on Gaza. As you know, they have basically disappeared former Columbia student and protest leader Mahmood Kahlil.
ABC News: White House allegedly asked for updates on arrest of activist Mahmoud Khalil, his attorney says.
Mahmoud Khalil — the pro-Palestinian activist and green card holder detained by Immigration and Customs Enforcement this week — said he overheard federal agents say that the White House was asking for an update on his detention, his attorneys said.
“He was surrounded by many DHS agents, or people he believed to be DHS agents, and he believes that he saw or heard, during a call, one of them say that the White House wants an update on what’s going on,” Samah Sisay, a staff attorney at the Center for Constitutional Rights who is representing Khalil, said at a press conference Friday.
“We have every reason to believe, as we allege in the petition, that many people within the executive branch of the government were involved, including the White House,” Sisay said.
Khalil took part in student protests at Columbia University calling for the institution to divest and cut ties with Israel, and he participated in negotiations with university administration.
“His one and only goal was to get Columbia University to divest from its complicity with Israeli government crimes in Gaza and the West Bank,” said Ramzi Kassem, the director of CLEAR, a group representing Khalil….
The Trump administration has claimed that Khalil distributed “pro-Hamas propaganda fliers with the logo of Hamas,” without providing evidence.
The First Amendment is dead, apparently.
AP: The Justice Department is investigating whether Columbia University hid students sought by the US.
The U.S. Justice Department is investigating whether Columbia University concealed “illegal aliens” on its campus, one of its top officials said Friday, as the Trump administration intensified its campaign to deport foreigners who participated in pro-Palestinian demonstrations at the school last year.
Agents with the Department of Homeland Security searched two university residences with a warrant Thursday evening. No one was arrested and it was unclear whom the authorities were searching for, but by Friday afternoon U.S. officials had announced developments related to two people they had pursued in connection with the demonstrations.
A Columbia doctoral student from India whose visa was revoked by the Trump administration fled the U.S. on an airliner. And a Palestinian woman who had been arrested during the protests at the university last April was arrested by federal immigration authorities in Newark, New Jersey, on charges that she overstayed an expired visa.
Deputy Attorney General Todd Blanche, speaking at the Justice Department, said it was all part of the president’s “mission to end antisemitism in this country.”
What a bunch of bullshit.
“Just last night, we worked with the Department of Homeland Security to execute search warrants from an investigation into Columbia University for harboring and concealing illegal aliens on its campus,” Blanche said. “That investigation is ongoing, and we are also looking at whether Columbia’s handling of earlier incidents violated civil rights laws and included terrorism crimes.”
Blanche didn’t say what evidence agents had of wrongdoing by the university. It was unclear whether he was accusing the school itself of “terrorism crimes” or saying that people involved in the protests had committed such crimes.
Girl with a Cat, by Zakir Ahmedov
The Boston Globe has a scary immigration story today: R.I. doctor prevented from returning to US after visiting her parents in Lebanon.
A Rhode Island doctor who had traveled to Lebanon to see her parents was prevented from re-entering the United States at Boston’s Logan International Airport on Thursday evening, her lawyer and a colleague said.
Dr. Rasha Alawieh, 34, who lives in Providence, has been working at Brown Medicine’s Division of Kidney Disease & Hypertension since last July, and she been part of the transplant service at Rhode Island Hospital, according to Dr. George Bayliss, the organ transplant division’s medical director. She has been studying and working in the United States for about six years, he said Friday.
The US consulate in Lebanon had issued her an H-1B visa, which is given to people in specialty occupations requiring expertise. The visa was valid through mid-2027, said Thomas S. Brown, an attorney representing her and Brown Medicine.
Alawieh was detained when she returned to Logan airport, and family members are afraid that she is about to be deported to Lebanon, he said.
“We are at a loss as to why this happened,” Brown said. “I don’t know if it’s a byproduct of the Trump crackdown on immigration. I don’t know if it’s a travel ban or some other issue.”
He said her phone has been seized and he has not been able to contact Alawieh.
Bayliss said a lawyer filed a petition with the US District Court in Massachusetts, and Judge Leo T. Sorokin issued an order saying Alawieh should not be moved outside of Massachusetts without 48 hours notice. But he said that message apparently did not reach immigration officials in time, and a plane carrying Alawieh left for Paris.
“This is outrageous,” Bayliss said in an interview. “This is a person who is legally entitled to be in the U.S., who is stopped from re-entering the country for reasons no one knows. It’s depriving her patients of a good physician.”
This is a creepy story from The Guardian: Pro-Israel group says it has ‘deportation list’ and has sent ‘thousands’ of names to Trump officials.
A far-right group that claimed credit for the arrest of a Palestinian activist and permanent US resident who the Trump administration is seeking to deport claims it has submitted “thousands of names” for similar treatment.
Betar US is one of a number of rightwing, pro-Israel groups that are supporting the administration’s efforts to deport international students involved in university pro-Palestinian protests, an effort that escalated this week with the arrest of Mahmoud Khalil, an activist who recently completed his graduate studies at Columbia University.
This week, Donald Trump said Khalil’s arrest was just “the first of many to come”. Betar US quickly claimed credit on social media for providing Khalil’s name to the government.
Betar, which has been labelled an extremist group by the Anti-Defamation League (ADL), a Jewish advocacy group, said on Monday that it had “been working on deportations and will continue to do so”, and warned that the effort would extend beyond immigrants. “Expect naturalized citizens to start being picked up within the month,” the group’s post on X read. (It is very difficult to revoke US citizenship, though Trump has indicated an intention to try.)
The group has compiled a so-called “deportation list” naming individuals it believes are in the US on visas and have participated in pro-Palestinian protests, claiming these individuals “terrorize America”.
A Betar spokesperson, Daniel Levy, said in a statement to the Guardian that Betar submitted “thousands of names” of students and faculty they believe to be on visas from institutions like Columbia, the University of Pennsylvania, UCLA, Syracuse University and others to representatives of the Trump administration.
By Martin Pierce
Here’s another immigration horror story from The Milwaukee Journal Sentinel: Milwaukee-area woman deported to Laos though she’s never been there, doesn’t speak the language.
A Hmong American woman who has lived in the Milwaukee area since she was 8 months old was deported last week to Laos, a country she has never visited, and says she is stranded in a rooming house surrounded by military guards.
Ma Yang, 37, a mother of five, said she does not speak the Lao language, has no family or friends in the country and that the military is holding all her documents. She was born in Thailand, the daughter of Hmong refugees after the Vietnam War, and she was a legal permanent U.S. resident until she pleaded guilty to taking part in a marijuana trafficking operation.
“The United States sent me back to die,” she said. “I don’t even know where to go. I don’t even know what to do.”
As President Donald Trump pushes the mass deportation of immigrants, Yang believes she is one of the first Hmong Americans to be deported to Laos in recent years. As of November, the U.S. considered Laos an “uncooperative” country that accepted few, if any, deportees. Zero people were deported to Laos in the last fiscal year, according to federal data.
Once she arrived in the Laotian capital of Vientiane on March 6, she said she was questioned by military authorities then sent to a rooming house, where guards did not allow her to leave or contact anyone for five days. She paced in circles around the compound and ate food the guards gave her.
A few days ago, she was taken to buy a cellphone and withdraw cash. She could finally reach out to her partner of 16 years, Michael Bub of South Milwaukee, a U.S. citizen. The military official in charge of her situation — she does not know his rank or title — then said she could leave if she wanted. But she is scared to venture out.
Trump is apparently planning a new travel ban. The New York Times: Draft List for New Travel Ban Proposes Trump Target 43 Countries.
The Trump administration is considering targeting the citizens of as many as 43 countries as part of a new ban on travel to the United States that would be broader than the restrictions imposed during President Trump’s first term, according to officials familiar with the matter.
A draft list of recommendations developed by diplomatic and security officials suggests a “red” list of 11 countries whose citizens would be flatly barred from entering the United States. They are Afghanistan, Bhutan, Cuba, Iran, Libya, North Korea, Somalia, Sudan, Syria, Venezuela and Yemen, the officials said….
The officials, who spoke on the condition of anonymity to discuss the sensitive internal deliberations, cautioned that the list had been developed by the State Department several weeks ago, and that changes were likely by the time it reached the White House.
Citizens on that list would also be subjected to mandatory in-person interviews in order to receive a visa. It included Belarus, Eritrea, Haiti, Laos, Myanmar, Pakistan, Russia, Sierra Leone, South Sudan and Turkmenistan.
See the full draft list of countries at the link. I can’t reproduce it here.
This is getting too long, but I need to touch on Trump’s speech at the “justice department” yesterday. The speech was supposed to be about fentanyl.
Mary Sauer, Figure with Black Cat
Hugo Lowell at The Guardian: Trump vents fury about his criminal cases in extraordinary speech at DoJ.
Taking over the justice department headquarters for what amounted to a political event, Donald Trump railed against the criminal cases he defeated by virtue of returning to the presidency in an extraordinary victory lap the department has perhaps never before seen.
The event was billed as a policy address for the administration to tout its focus on combating illegal immigration and drug trafficking, but the majority of the president’s freewheeling remarks focused instead on his personal grievances with the department.
Trump spoke from a specially constructed stage in the great hall of the main justice building, backed with blue velvet curtains that underscored the theatrics and symbolism of Trump cementing his control over the justice department, which had tried and failed to hold him to account.
The choice of venue carried additional resonance about how Trump has fully implemented his agenda at the justice department, doing away with the longstanding tradition of independence from partisan politics and instead turning it into an extension of the White House.
The great hall has historically been used for major law enforcement announcements by the justice department and its senior leaders, and when presidents have delivered speeches at the building, the remarks have been of a national security or non-political stripe.
In Trump’s hourlong speech, he repeatedly strayed from his prepared remarks to assail the criminal cases against him, various lawyers and former prosecutors by name and accused the Biden administration of trying to destroy him, declaring Joe Biden the head of a crime family.
“The case against me was bullshit,” Trump said with fury, in the building where the charges were approved.
But he heaped praise on his defense lawyers Todd Blanche and Emil Bove, whom he elevated to in effect run the justice department as the deputy attorney general and the principal associate deputy attorney general respectively, as well as the department’s chief of staff, Chad Mizelle….
Trump offered notable praise for the US district judge Aileen Cannon, who dismissed his criminal case on charges of mishandling classified documents, over decades of legal precedent. Trump claimed criticism of her made her angry, although he also said he had never spoken to her.
“She was brilliant,” Trump said of Cannon, “the absolute model of what a judge should be.”
Liam Reilly at CNN: Trump baselessly accuses news media of ‘illegal’ behavior and corruption in DOJ speech.
President Donald Trump launched some of his harshest attacks yet on the media on Friday, using a speech at the Department of Justice to baselessly accuse outlets including CNN of illegal and corrupt behavior.
In his Friday speech, Trump praised Florida district court Judge Aileen Cannon, whom he appointed in 2020 and who sided with him in January, blocking the DOJ from sharing a report on Trump’s alleged mishandling of classified documents with members of Congress.
But Trump claimed news publishers had gone after Cannon because of the January ruling, alleging “they do it all the time with judges” and that they “will write whatever these people say,” without offering proof.
“The Washington Post, The Wall Street Journal and MSDNC, and the fake news, CNN and ABC, CBS and NBC, they’ll write whatever they say,” Trump said. “And what do you do to get rid of it? You convict Trump.”
“It’s totally illegal what they do,” Trump continued, addressing DOJ employees. “I just hope you can all watch for it, but it’s totally illegal.”
While Trump did not immediately clarify who “they” are, he later claimed that CNN and MSNBC are “political arms of the Democrat Party.”
“In my opinion, they’re really corrupt,” Trump said.
He’s doing everything in the dictator’s playbook, folks.
That’s it for me. What’s on your mind today?
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Posted: May 24, 2014 | Author: bostonboomer | Filed under: Gun Control, income inequality, morning reads, racism, The Bonus Class, U.S. Economy, U.S. Politics | Tags: Chris Giles, Donald Sterling, economic theory, Financial Times., guns, inequality, Kevin Drum, LA Clippers, mass murder, mass shootings, NBA, offshore tax havens, open carry laws, Paul Krugman, Reinhart and Rogoff, Shelly Sterling, Ta-Nehisi Coates, The Case for Reparations, The Economist, Thomas Picketty, wealth distribution, wealth vs. income |
Thomas Picketty
Have a Stupendous Saturday!
It’s too bad Dakinikat is so busy today, because there’s an economics food fight brewing. Perhaps she’ll still find time to comment on the controversy later the evening after she returns home with her newly adopted canine family member, Temple. Meanwhile, I’ll do my best to describe the dispute over Thomas Picketty’s conclusions about wealth inequality, published in his book Capital in the Twenty-first Century.
The Accusations:
At the Financial Times, Economics Editor Chris Giles has claims to have found problems with Picketty’s work: Piketty findings undercut by errors.
Thomas Piketty’s book, ‘Capital in the Twenty-First Century’, has been the publishing sensation of the year. Its thesis of rising inequality tapped into the zeitgeist and electrified the post-financial crisis public policy debate.
But, according to a Financial Times investigation, the rock-star French economist appears to have got his sums wrong.
The data underpinning Professor Piketty’s 577-page tome, which has dominated best-seller lists in recent weeks, contain a series of errors that skew his findings. The FT found mistakes and unexplained entries in his spreadsheets, similar to those which last year undermined the work on public debt and growth of Carmen Reinhart and Kenneth Rogoff.
The central theme of Prof Piketty’s work is that wealth inequalities are heading back up to levels last seen before the first world war. The investigation undercuts this claim, indicating there is little evidence in Prof Piketty’s original sources to bear out the thesis that an increasing share of total wealth is held by the richest few.
Prof Piketty, 43, provides detailed sourcing for his estimates of wealth inequality in Europe and the US over the past 200 years. In his spreadsheets, however, there are transcription errors from the original sources and incorrect formulas. It also appears that some of the data are cherry-picked or constructed without an original source.
John Maynard Keynes
In one specific example, Giles says the corrected data do not show significant growth in Europe since 1970. In a second article, Giles goes into more detail. In addition, he argues that the U.S. data doesn’t support the conclusion that a greater proportion of the wealth is controlled by top 1% than in recent decades. He does admit to the top 10% controlling a greater share of wealth than previously.
An investigation by the Financial Times, however, has revealed many unexplained data entries and errors in the figures underlying some of the book’s key charts.
These are sufficiently serious to undermine Prof Piketty’s claim that the share of wealth owned by the richest in society has been rising and “the reason why wealth today is not as unequally distributed as in the past is simply that not enough time has passed since 1945”.
After referring back to the original data sources, the investigation found numerous mistakes in Prof Piketty’s work: simple fat-finger errors of transcription; suboptimal averaging techniques; multiple unexplained adjustments to the numbers; data entries with no sourcing, unexplained use of different time periods and inconsistent uses of source data….
A second class of problems relates to unexplained alterations of the original source data. Prof Piketty adjusts his own French data on wealth inequality at death to obtain inequality among the living. However, he used a larger adjustment scale for 1910 than for all the other years, without explaining why.
In the UK data, instead of using his source for the wealth of the top 10 per cent population during the 19th century, Prof Piketty inexplicably adds 26 percentage points to the wealth share of the top 1 per cent for 1870 and 28 percentage points for 1810.
A third problem is that when averaging different countries to estimate wealth in Europe, Prof Piketty gives the same weight to Sweden as to France and the UK – even though it only has one-seventh of the population.
Get even more detail and charts here: Data problems with Capital in the 21st Century.
Karl Marx
The Pushback So Far:
Paul Krugman: Is Piketty All Wrong?
Great buzz in the blogosphere over Chris Giles’s attack on Thomas Piketty’s Capital in the 21st Century. Giles finds a few clear errors, although they don’t seem to matter much; more important, he questions some of the assumptions and imputations Piketty uses to deal with gaps in the data and the way he switches sources. Neil Irwin and Justin Wolfers have good discussions of the complaints; Piketty will have to answer these questions in detail, and we’ll see how well he does it.
Krugman suggests that Giles may be doing something wrong.
I don’t know the European evidence too well, but the notion of stable wealth concentration in the United States is at odds with many sources of evidence. Take, for example, the landmark CBO study on the distribution of income; it shows the distribution of income by type, and capital income has become much more concentrated over time:
It’s just not plausible that this increase in the concentration of income from capital doesn’t reflect a more or less comparable increase in the concentration of capital itself….
And there’s also the economic story. In the United States, income inequality has soared since 1980 by any measure you use. Unless the affluent starting saving less than the working class, this rise in income disparity must have led to a rise in wealth disparity over time.
At Mother Jones, Kevin Drum notes that
Giles’ objections are mostly to the data regarding increases in wealth inequality over the past few decades, and the funny thing is that even Piketty never claims that this has changed dramatically. The end result of Giles’ re-analysis of Piketty’s data is [below] with Piketty in blue and Giles in red. As you can see, Piketty estimates a very small increase since 1970.
R.A. at The Economist: A Piketty problem?
Milton Friedman
Mr Giles’s analysis is impressive, and one certainly hopes that further work by Mr Giles, Mr Piketty or others will clarify whether mistakes have been made, how they came to be introduced and what their effects are. Based on the information Mr Giles has provided so far, however, the analysis does not seem to support many of the allegations made by the FT, or the conclusion that the book’s argument is wrong.
There are four important questions raised by the FT‘s work. First, which data are wrong? Second, how did errors in the work, if they are errors, come to be introduced? Third, how do the errors affect the specific points made in the relevant chapters? And fourth, how do the errors affect the fundamental conclusions of the book?
Mr Giles focuses on wealth inequality, to which Mr Piketty turns in Chapter 10 of his book. Mr Piketty has not published nearly as much research on the question of wealth inequality, and it seems that much of the analysis in Chapter 10 was done specifically for the book, based on others’ research. Mr Piketty’s wealth-inequality analysis certainly matters as a component of the book’s argument, but it is not accurate to say, as Mr Giles does, that the results in Chapter 10 constitute the “central theme” of the book.
Are the data wrong? Mr Giles identifies discrepancies between source material cited by Mr Piketty and the figures that appear in the book. He identifies cases in which Mr Piketty appears to have chosen to use data from one source when another would have made more sense. Further, the calculations in Mr Piketty’s spreadsheets (which have been available online since the book’s publication) seem to include adjustments in the data that are not adequately explained, and some figures for which Mr Giles cannot find a documented source. Finally, Mr Piketty has made choices concerning weighting of data used in averages, and assigning of data from one year (1935, for example) to another (1930) when such assignments seem unnecessary or inadvisable.
Alan Greenspan
The author concludes that, unfortunately, ideology will determine how many people respond to the Giles critique. Much more extensive analysis at the link.
Here is Picketty’s–presumably preliminary–response to Giles in a letter to the Financial Times:
Let me also say that I certainly agree that available data sources on wealth are much less systematic than for income. In fact, one of the main reasons why I am in favor of wealth taxation and automatic exchange of bank information is that this would be a way to develop more financial transparency and more reliable sources of information on wealth dynamics (even if the tax was charged at very low rates, which you might agree with).
For the time being, we have to do with what we have, that is, a very diverse and heterogeneous set of data sources on wealth: historical inheritance declarations and estate tax statistics, scarce property and wealth tax data, and household surveys with self-reported data on wealth (with typically a lot of under-reporting at the top). As I make clear in the book, in the on-line appendix, and in the many technical papers I have published on this topic, one needs to make a number of adjustments to the raw data sources so as to make them more homogenous over time and across countries. I have tried in the context of this book to make the most justified choices and arbitrages about data sources and adjustments. I have no doubt that my historical data series can be improved and will be improved in the future (this is why I put everything on line). In fact, the “World Top Incomes Database” (WTID) is set to become a “World Wealth and Income Database” in the coming years, and we will put on-line updated estimates covering more countries. But I would be very surprised if any of the substantive conclusion about the long run evolution of wealth distributions was much affected by these improvements.
I thought this was important:
…my estimates on wealth concentration do not fully take into account offshore wealth, and are likely to err on the low side. I am certainly not trying to make the picture look darker than it it. As I make clear in chapter 12 of my book (see in particular table 12.1-12.2), top wealth holders have apparently been rising a lot faster average wealth in recent decades, at least according to the wealth rankings published in magazines such as Forbes. This is true not only in the US, but also in Britain and at the global level (see attached table). This is not well taken into account by wealth surveys and official statistics, including the recent statistics that were published for Britain. Of course, as I make clear in my book, wealth rankings published by magazines are far from being a perfectly reliable data source. But for the time being, this is what we have, and what we have suggests that the concentration of wealth at the top is rising pretty much everywhere.
In Other News:
There has been a mass shooting in Southern California–this time perpetrated from behind the wheel of a car. From the LA Times, 7 dead in drive-by shooting near UC Santa Barbara.
The shootings began about 9:30 p.m., a sheriff’s spokeswoman told KEYT-TV. It wasn’t clear what the attacker’s motivation might have been.
An 18-year-old Newport Beach man who was visiting Santa Barbara described a confusing scene as the shots rang out.
Nikolaus Becker was eating outside The Habit, 888 Embarcadero Del Norte, near the scene when the first set of shots was fired about 9:30 p.m. At first he thought it was firecrackers. A group of three to five police officers who were nearby started to casually walk toward the sounds, said Becker, but ran when a second round of shots broke out.
“That’s when they yelled at us to get inside and take cover,” Becker said.
The BMW took a sharp turn in front of The Habit, Becker said, and moments later a third round of shots was heard. Becker and his friends moved toward the restaurant’s kitchen but were told to wait in the seating area by employees.
He estimates there were at least 13 to 15 shots total at three locations. The locations were about 100 yards from one another.
The shooter, whose motivation is unknown, was found dead in his BMW. It’s not yet clear if he shot himself or was killed by sheriff’s deputies.
In another gun-related story, TPM reports that some gun nuts are reconsidering their campaign of carrying long guns into public places: Scaring The Crap Out of People Oddly Not Winning Fans.
Earlier this week we reported how Chipotle felt obliged to ask its customers not to bring guns to chipotle restaurants. Seems like a reasonably enough request to most of us. And it’s been preceded by similar requests by various other chains like Starbucks and others.
Now the top pro-gun group in Texas pushing the demand for “open carry” firearm rights and trying to get people to show up at various restaurant chains with long guns is deciding it may not be such a hot idea after all.
Open Carry Texas and a group of other aggressive gun rights groups have issued a joint statement telling their members, Dudes, let’s stop taking our guns to restaurants. It’s freaking people out and making them hate us.
Read the full statement at TPM.
Soon-to-be former LA Clippers owner Donald Sterling has signed over the team to his wife and wants her to negotiate the sale.
Shelly Sterling, who previously shared ownership of the beleaguered NBA franchise with her estranged husband, is now in talks with the NBA over selling the team, the source said.
The NBA banned Donald Sterling for life from all league events after an audio tape became public that caught him on tape uttering racist comments to his assistant V. Stiviano. He told her not to post photos of herself with black people on Instagram — such as Magic Johnson — or bring them to his basketball games.
But the NBA isn’t buying it. From ESPN: Why the NBA won’t allow Shelly Sterling to control the Clippers.
At first glance, Donald Sterling’s gesture may seem like serendipitous news for the NBA. Taking him at his word, Donald Sterling has agreed to leave the league without a fight and has signed off on the sale of his team. Digging deeper, however, reveals possible ulterior motives on Sterling’s part to delay and potentially block the sale of the team. Do not forget a crucial point: capital gain taxes. As first reported by SI.com, the Sterlings have significant incentives under capital gain tax law to avoid the sale of the team and keep it in the Sterling family. Doing so, would save them hundreds of millions of dollars. Also, contrary to some reports, the Sterlings are unlikely to benefit from the “involuntary conversion” tax avoidance provision of the Internal Revenue Code. The bottom line is if the Sterlings have to sell the Clippers, they will probably pay hundreds of millions in state and federal taxes.
Along those lines, Donald Sterling’s proposed maneuver does not accomplish the NBA’s goal of ousting the entire Sterling family on June 3. As explained in a previous SI.com article, the NBA interprets its constitution to mean that ousting Donald Sterling on June 3 would also automatically oust Shelly Sterling as co-owner, with the Clippers then falling under the control of commissioner Adam Silver. Donald Sterling’s proposed maneuver risks the prospect of Shelly Sterling undertaking a slow-moving effort to sell the team. A sale process that takes months or years would clearly aggravate the NBA, which wants to erase the Sterling family name from the league as quickly as possible. A protracted sale of the Clippers by Shelly Sterling might also constitute a potential rationale for players to boycott NBA games.
Even of greater risk to the NBA, what is to stop Shelly Sterling from deciding to keep the Clippers? She could plausibly reason, on various grounds, that now is not the right time to sell the team. Also, her instruction from her husband to sell the team would not be legally binding; it would be a mere suggestion the moment she takes over the team.
Read much more at the link.
Ta-Nehisi Coates
I’ll end with a long article that I haven’t gotten to yet, but I’m hearing it’s a must read: The Case for Reparations, by Ta-Nehisi Coates at The Atlantic. Here’s the tagline:
“Two hundred fifty years of slavery. Ninety years of Jim Crow. Sixty years of separate but equal. Thirty-five years of racist housing policy. Until we reckon with our compounding moral debts, America will never be whole.”
Some reactions:
The Guardian: The ‘Case for Reparations’ is solid, and it’s long past time to make them.
Slate: An Ingenious and Powerful Case for Reparations.
The Wire: You Should Read “The Case for Reparations.”
NPR: How To Tell Who Hasn’t Read The New ‘Atlantic’ Cover Story.
WaPo: Culture change and Ta-Nehisi Coates’s ‘The Case For Reparations’.
What else is happening? As always, please post your links in the comment thread.
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Posted: November 21, 2012 | Author: bostonboomer | Filed under: U.S. Politics | Tags: Dave Wiegel, federal income taxes, Jennifer Rubin, Kevin Drum, marginal tax rates, media hacks, Megan McArdle, stupid rick people, whiny rich people |
Washington Post hack blogger Jennifer Rubin
It all started on November 18, when The New York Times published an article by Nathaniel Popper and Nelson D. Schwarz headlined, Investors Rush to Beat Threat of Higher Taxes. Much of the discussion was about tax increases that would take place in 2013 if the fiscal cliff curb is not averted, but the article quoted a woman in McLean, VA who is deeply concerned about what will become of her business if President Obama’s tax proposal is enacted.
Kristina Collins, a chiropractor in McLean, Va., said she and her husband planned to closely monitor the business income from their joint practice to avoid crossing the income threshold for higher taxes outlined by President Obama on earnings above $200,000 for individuals and $250,000 for couples.
Ms. Collins said she felt torn by being near the cutoff line and disappointed that federal tax policy was providing a disincentive to keep expanding a business she founded in 1998.
“If we’re really close and it’s near the end-year, maybe we’ll just close down for a while and go on vacation,” she said.
Either Popper and Schwartz do not understand Obama’s proposal or they simply chose not to call Ms. Collins’ attention to her error–or perhaps they’re just media hacks. A number of bloggers responded with derision. Here’s Dave Wiegel:
How do you get to be as rich as the people in this New York Times story without ever figuring out how taxes work? [….]
You see these idiots every time a tax hike becomes possible again. They have no apparent idea how marginal rates work. Right now, if her and her husband make $250,000, they pay at most a 33% tax on some of that income. If they made $251,000, they would have to pay the same rates for everything except that last $1000 — that, they’d be taxed at 35%. If the rates increase across the board that top rate becomes 39.6%.
Derek Thompson argues that the NYT journalists should have at least gently explained to Collins that she was confused about the way tax rates work.
Kevin Drum provided a handy dandy tax table to help the “innumerate rich people” who are confused about marginal rates.
Megan McArdle, Newsweek hack
Yesterday, conservative media hack Megan McArdle complained that Wiegel and Drum were only talking about ordinary income.
Their analysis is basically sound, except for the fact that it is not quite true. They have forgotten to look at deduction phaseouts, surtaxes, and the AMT, which are not taxes on marginal income.*
No matter what you have heard on the SEO expert, there are in fact a lot of sizeable marginal inflection points for high earners. There are the Pease deduction phaseouts, temporarily abated by the Bush tax cuts but scheduled to go back into effect in 2013, which can eliminate up to 80% of deductions for couples who make more than about $175,000 (the number is indexed for inflation, so it changes every year): your deductions are reduced by 3% of the amount by which your income exceeds the threshhold. The student loan interest deduction phases out at $150,000 ($75,000 for singles). And a lot of tax-free savings opportunities disappear: educational savings accounts and IRAs have income limits, so your ability to use them starts phasing out in the low-six-figure income range. So do various educational and child tax credits. These things obviously aren’t a huge deal for people who make $1,000,000 a year but they can be a huge tax hit for couples in the $150,000 to $300,000 range. Come 2013, they will be an even bigger hit.
And we haven’t even discussed the AMT, which virtually eliminates deductions for couples who make the mistake of doing things like buying a house, having children, or living in a high tax state.
McArdle provided this chart:
I have to be honest, I’m not going to spend a lot of time worrying about people as wealthy as the ones McArdle is freaked out about. But in any case, Kevin Drum took note of the issue McArdle raised in a follow-up to his earlier post. He agreed that there are complex issues for people in the upper income brackets.
None of this really affects our discussion of people with incomes over $250,000, but it does illustrate the fact that moving across a phaseout line can sometimes have a significant effect on your taxes:
For example, a married couple filing jointly in 2013 with two kids at home and one in college who go from making $100,000 to $125,000 loses a $2,000 child tax credit and $1800 worth of HOPE credit, an increase of almost 4% in their effective—not marginal—tax rate. The marginal tax rate on their extra earnings is 15.2% just from deduction losses; that comes on top of the 28% they’ll be paying the federal government in income taxes, and whatever state income tax they owe.
I don’t have any real point to make here. I just wanted to acknowledge that my income tax chart only showed one piece of the picture. It’s the most important piece for most people who earn under $1 million (above that, investment taxes tend to become more important), but there are still plenty of little gotchas in the tax code that can have funny effects as they phase in and out.
Finally today, the media hack of all media hacks Jennifer Rubin weighed with this: Obama’s class war against his supporters.
Democrat and former Michael Dukakis campaign manager Susan Estrich is very upset that the presidential candidate whom she supported actually is intent on raising taxes on the rich — which, lo and behold, includes her. She complains: “I did not vote for Obama because I think I am paying too little in taxes. Like many people I know, I am ‘rich’ by Obama’s standards. I pay more taxes, percentage wise, than Mitt Romney and Warren Buffett, because I earn virtually every penny of my income. I work. And yes, all those deductions that allow the truly rich to not work, or at least to not work all the jobs I do, make me angry.”
She means she earns mostly ordinary income as opposed to capital gains, but you see her point — who the heck is Obama to tell a hardworking upper-middle class gal she’s not paying enough in taxes?!
I have no idea how much Susan Estrich earns, but if it’s all ordinary income, then she’d pay the same amount as before on the first $250,000, right? And she’d pay a few percentage points more on anything she earns over that amount. Big f&cking deal!
More from Rubin:
If you live in New York or Los Angeles and have an income of $250,000, two kids and a house in a nice but not ostentatious neighborhood, you are not living a lavish lifestyle and you already pay gobs and gobs in taxes. You didn’t inherit wealth and you worked hard in college and in your profession, only to find yourself living paycheck to paycheck. And now, you’re going to get socked with a tax hike.
Not if it’s all ordinary income (i.e., “paycheck to paycheck.”) And if a family with an income of $250,000 is living “paycheck to paycheck,” they need to work on a budget. I didn’t inherit wealth and I worked my ass off in college too. So did millions of other Americans. Big f&cking deal! If you need more, get a second job.
Even more:
For years Republicans have been warning that the Obama-size of government will require much more than taxing the “rich.” That means not only the $250,000 earners (say, a white-collar professional with a mortgage, college tuition bills and a mother in long-term care) but the $80,000 earners (say a teacher in Massachusetts with a cramped condo, an old car and kids) also are going to be told they have to pay even more of their income to the federal government.
Newsflash for Rubin–you can do better than a cramped condo on $80,000 in Massachusetts–and that would be on the high end for a public school teacher. But Obama’s plan wouldn’t increase taxes on someone making $80,000 as salary income anyway.
To these whiny rich people and concern troll media hacks, I say tough shit! The average income in this country is a little over $50,000. Plenty of those people have parents in long term care–or are caring for them at home. And plenty of poor people have the same problems.
Obviously the White House needs to get busy educating the public as well as the lazy corporate media about how the tax system works and exactly what Obama’s tax proposals are. And hacks like Jennifer Rubin especially should be fired. As long as the Washington Post keeps this hack among hacks on staff, it cannot be considered a serious newspaper.
Feel free to use this as an open thread. I know most people are gearing up for Thanksgiving. I’m another one of those people who don’t really like the holidays.
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Posted: July 3, 2011 | Author: dakinikat | Filed under: The Media SUCKS, We are so F'd | Tags: crony capitalism, crony journalism, Kevin Drum, plutocracy |
Occasionally one of the villagers gets it right (h/t to Digby). Today’s Awake Villager Award goes to Kevin Drum of MoJo who expresses 
utter contempt for the current Republican strategy of destroying the country at any cost to take down a Democratic President while mentioning that said Democratic President and his crony congress cadre have basically given said right wingers absolutely everything they’ve wanted for over a decade without a fight. I bestow this prize because the piece also recognizes the complicity of “journalists” in this charade.
People who are making policies and people giving air time to policy makers these days exist in a state of complicity in lies. The continuation of more and more of the same damned policies are basically getting the same damned result yet real analysis of the results and the connection to the policy never occurs in the public forum. The polices of the last 12 years induced a financial crisis and are inducing another one. They created high unemployment and falling wages and they continue to perpetuate joblessness and income inequality. No one holds the policy makers or the narrators of the results accountable to hard, cold reality. How is it that this game continues to grow exponentially without riots in the streets by the 99% of the country that’s been hurt and continues to be hurt by this insanity? Are we so doped up with sports and “reality” shows that we don’t have time to take stock of what these people are doing to us?
But then, for about the thousandth time, my mind wanders over the past ten years. Republicans got the tax cuts they wanted. They got the financial deregulation they wanted. They got the wars they wanted. They got the unfunded spending increases they wanted. And the results were completely, unrelentingly disastrous. A decade of sluggish growth and near-zero wage increases. A massive housing bubble. Trillions of dollars in war spending and thousands of American lives lost. A financial collapse. A soaring long-term deficit. Sky-high unemployment. All on their watch and all due to policies they eagerly supported. And worse: ever since the predictable results of their recklessness came crashing down, they’ve rabidly and nearly unanimously opposed every single attempt to dig ourselves out of the hole they created for us.
But despite the fact that this is all recent history, it’s treated like some kind of dreamscape. No one talks about it. Republicans pretend it never happened. Fox News insists that what we need is an even bigger dose of the medicine we got in the aughts, and this is, inexplicably, treated seriously by the rest of the press corps instead of being laughed at. As a result, guys like Marco Rubio have a free hand to insist that Obama — Obama! The guy who rescued the banking system, bailed out GM, and whose worst crime against the rich is a desire to increase their income tax rate 4.6 percentage points! — is a “left-wing strong man” engaged in brutal class warfare against the wealthy. And Rubio does it without blinking. Hell, he probably even believes it.
We are well and truly down the rabbit hole. The party of class warfare for the past 30 years is fighting a war against an empty field and the result has been a rout. I wonder what would happen if the rest of us ever actually started fighting back?
There are so many little gems in this assessment it’s hard to point to them all. The Republican denial of how their policies have and continue to trash the nation’s economy is the obvious one. The next is the obvious enabling by the press that exists in some strange struggle to seem fair or be some Orwellian version of “fair and balanced” that ignores facts and data and experts in fields. The press puts party operatives and politicians on TV to lie their frigging hearts out without fact checking their statements. Some how, fair and balanced means repeatedly letting people put out “opinions” like the sky is green and dirt is blue. An opinion isn’t misstating facts last time I checked my notes on the scientific method and the rules of public debate.
This is what drives me craziest. The press treats “seriously” people that get on TV to present alternate reality under the guise of looking at all sides. Misstatement of facts are not opinions. They are damned lies.
Most journalists these days peddle in access to lies and not much more. There is lots and lots of irrefutable, scientific evidence on evolution, climate change, and the results of “voodoo” economic policy. One does not get an “opinion” on appendicitis except on TV news shows. In life, a certified and trained doctor diagnoses the condition. Fair and balanced reporting should not mean getting a panel of grade school educated yokels on TV who insist that people can’t get appendicitis because the appendix doesn’t exist. It also doesn’t mean that some congressman that sits on a committee looking at health issues should be freed of the burden of proving his point that the appendix doesn’t exist because god and Ayn Rand wrote it down somewhere. There are tons of freaks these days that are funded by rich idiots–many that own said corporate media outlets–that set up “think tanks” to put out false research that basically states that the sky is green. These freaks show up on TV news constantly. Study after study shows that people that view Fox news–as an example–don’t just hold opinions. They hold completely false information. This is a huge problem because an effective democracy relies on an informed electorate. We are getting systematically fed falsehoods that are killing our country and our livelihoods. This particulary bothers me because as an economics and finance professor, I have to confront the economic and finance fairy tales daily. I hear the economic version of “the appendix doesn’t exist” from people who think they are just expressing an opinion instead of repeating a complete falsehood.
I guess what really struck me the most about Drum’s rant was that same sense of frustration and near-depression throughout that basically haunts me too. I have absolutely no idea how to stop what he’s described. What brought about the huge changes during the Great Depression was the vision of a leader and the people who surrounded him and the fear of the elite that US citizens might actually take to the streets. They feared it was the New Deal or a Communist-style revolution in which they would lose everything. The political and economically powerful no longer fear us and we no longer have leaders with vision beyond their own re-elections. Something is going to give eventually and I’m just hoping its not the 200+ year experience that’s called the United States of America. Over the last thirty years, all three branches of government and the press have been successfully infiltrated to represent only the most rich and powerful. What are we going to do about it?
Oh. The answer to the question at the top is that every one hears the Rubio Down the Rabbit Hole. That’s because we’re not only victims of crony capitalism, we’re victims of crony journalism.
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Posted: January 23, 2011 | Author: dakinikat | Filed under: just because, Populism, right wing hate grouups, Second Amendment, Social Security, SOTU, The Bonus Class, the villagers, U.S. Economy, U.S. Military, U.S. Politics, Voter Ignorance, We are so F'd | Tags: Kevin Drum, leftwing, liberals, libertarians, political ideology, Right Wing |
You know me and my wonky graphs. You also know I blog a lot about rising income inequality and that I think it’s a huge problem. So, this MOJO Power graph and the article it came with piqued my curiosity. It’s from an article by Kevin Drum writing on a Timothy B Lee blogpost on the preemption of ‘genuine left wing voices’ by libertarians. I’m not sure how libertarians could be confused for moderates, liberals or lefties but given that establishment conservatives have an orthodoxy so tight that few fit, I suppose everything else gets to wear the liberal label. But, maybe there’s more to it than that.
We talked about this a little on a thread yesterday. Both Ariana Huffington and Kos used to be Republicans. They left the party when the religious right took over and because, frankly, I don’t think they like the fact that so many blue collar Reagan Democrats had just up and joined their old country club. There’s also the odd phenomenon of tea party populists that don’t seem to know where they are or where they belong either. We’ve seen how a lot of these folks have made their way into policy circles through their support or their horror of the current administration so I think it’s worth viewing three blog writers on that topic. Why are so many people confused about their political identity any more?
Libertarian ‘insight’ used to the butt of jokes at academic cocktail parties where you discussed Utopian moonbattery and even worse fiction. Now there seems to be an industry around producing what they call journals, institutions, and philosophy that is some how running loose in mainstream conversations demanding to be taken seriously. It’s hard to do that because they don’t associate with data and they seem to thrive on passing memes that have no basis in reality. (The ones on the FED just kill me.) They’re in the tea party, they’re all for Rand and Ron Paul, and yet, some of them have made their way to the liberal blogosphere. What’s going on? Plus, what’s the deal with all these solid working class–in some cases UNION folks–heading to tea party rallies? Haven’t they ever heard of Dick Armey?
Drum shows how the worst of the libertarian assumptions they hold up as facts just don’t hold up to the light of day. He starts with a shared assumption from the right wing and libertarians as described by Will Wilkinson. This meme is the mild form libertarianism from the Hayek-Friedman sect.
It’s best to just maximize growth rates, pre-tax distribution be damned, and then fund wicked-good social insurance with huge revenues from an optimal tax scheme.
We’ve got scads of data that show this meme to be a completely false assumption. We’d have a better economy right now if that were true. In fact, the only time we had a decent economy in recent history was when that particular assumption was rolled back during the Clinton years. But, don’t take it from me, read what Kevin Drum has to say. Those assumptions are very wrong.
First, it contains an implicit conviction that libertarian notions of tax and regulatory structures will maximize growth rates. This is practically an article of faith on the right, but there’s virtually no empirical evidence to support it. As it happens, I’d argue that my preferred brand of the modern mixed economy is, on the whole, probably more efficient than a stripped down libertarian state, even one that includes lots of centrally-directed income redistribution. But not by much. Personally, I’d be pretty happy if both sides accepted the notion that within a fairly wide range of modern capitalist systems — from Sweden to the U.S., say — overall growth rates change very little. For the most part, we’re really arguing about other things.
Second, I suspect there’s no feasible path to Will’s state of the world. The problem is that a system that generates enormous income inequality also generates enormous power inequality — and if corporations and the rich are allowed to amass huge amounts of economic power, they’ll always use that power to keep their own tax rates low. It’s nearly impossible to create a high-tax/high-service state if your starting point is a near oligarchy where the rich control the levers of political power.
Third, look at the graph. We’ve had this trickle up to the one percent form of economic nonsense since the Reagan years and all it’s done is made things radically worse. It’s led to this situation where the supply side of the curve completely craps all over the demand side of the curve in product markets. The outright hostility to unions and the abuse and disempowerment of human beings–not human “capital”–have completely shifted income levels and underlying market power to some place where you truly think you’d see some kind of general revolt, strike, or overthrow.
It should be patently obvious now that Wall Street has recovered, bonuses have recovered, and corporate profits have recovered while any one not up at the top of that racket can hardly survive these days. The unemployment rate, the numbers of foreclosures, and the numbers of bankruptcies are tips of the icebergs. We’re not going to see growth rates of GDP that will clear that up too. More frightening is that the powers that be don’t seem to even fake caring.
When you point all these things out to libertarians, they’ll shift the ground on you and say point me where it says in the constitution and mutter something about Wilson and the imperial presidency. This is the place where they firmly intersect the right wing. Look, Wilson is dead. The Bush legacy lives and the Obama legacy is still being written. Still, some of them have crept over and become neoliberals and identified with the left. Why?
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