Thursday, June 15, 2017

on tax cuts: JFK and Reagan vs. Bush II and Kansas (and Obama) OR do you know what "supply-side" is?

Schlesinger is confused on at least two things here. (This Slate piece looks similar.) One can be a K on spending *and* a SS'er on tax cuts; it's not necessarily either/or. I haven't studied JFK's record on spending and his thoughts on that. (His spending approach is not particularly novel.) But when you cut marginal tax rates (MTR's), you're *automatically* (by definition) a SS'er.

So, let's cover some "principles of macro" here. The "SS" nickname is a reflection of the impact of MTR cuts on investment *supply* in general and labor *supply* in particular. To note: When the govt takes 91% or 70% or 28% of the last $1,000 you make, it changes the incentives to work harder. (In class, I use an example where my MTR went from 15% to 60%+ for playing string quartets, when I moved to IUS from grad school.)

(As an aside, this also changes the incentives to use tax avoidance [through accts and lawyers] and tax evasion. Note also that the JFK and Reagan MTR cuts are dramatic [and much-more-likely-to-be-positive] departures, compared to the Bush II and Kansas MTR cuts {which were smaller and much nearer the peak of the "Laffer Curve"-- the broad and *necessary* relationship between tax rates and tax revenues.)

A SS tax cut has demand-side (D) implications as well-- by putting more money in people's pockets. But a K tax cut *only* sends money back to people, without reducing MTR"s and impacting the "supply side". You get an impact on D, as people have more money in their pockets, but you haven't changed the incentive to be more productive-- e.g., to *supply* more labor.

Obama did K cuts; Bush II did a good bit of it too. (For 40 years, the profession has understood that K tax cuts can only succeed-- if at all-- by moving prosperity from the future to the present.) Bush II is particularly instructive here: he cut MTR's slightly *and* sent people checks-- a dog's breakfast of tax policies that reflects his nasty dog's breakfast approach to fiscal policy. (His massive increases in spending were at least implicitly K.)

Any questions?

Thursday, June 8, 2017

political parties vs. religion (and political ideology vs. religious beliefs)

WHAT DO POLITICAL PARTIES (PP's) AND RELIGIONS HAVE IN COMMON? (To clarify: Political parties would be related to [but distinguished from] political ideology-- as religions : religious beliefs.)

-PP's are a bigger dog's breakfast of beliefs, given the need to reduce, mostly, to two camps. Religion allows people to self-select into smaller, purer groups. (So, are we talking about "denominations" [where people almost-casually move around and leave the tribe] or religions [where people leave less often-- but still more often than within politics]?)
-Political parties are looking to use the force of govt on others (or avoid its use on them). With the winner/loser outcomes, you get much more of a "sports team" comparison. Religion starts with self; its direct impact on others is usually modest; its indirect impact is larger. Unless combined with govt and politics, it's much more about persuasion than compulsion and coercion.

-Is there generally more fervor within politics? Seems so today, but I'm not sure about generally. Probably not-- only if there's enough at stake and "the game" is close. Both rely on mostly-voluntary donations to overcome the "free rider problem" (although this characteristic goes far beyond politics and religion). I don't know the numbers, but I'd guess religions are far more "successful" by this metric. Both have emotive rallies and revered forefathers and /founders.

-There's probably more self-righteousness among the avid in politics, probably because there is no (religious) check on pride or self-r, no clear connection to love and morals, etc.

-There's more ignorance (although rationally so) in politics. In politics, the connection of ideology to your personal life and your beliefs to changing the system/outcomes are minimal, so people (rationally) don't invest as much thought there. 

-Interestingly, given the reputation of religion: the levels of faith might be the same-- or ironically, faith within politics could be higher. On the one hand, religions are interested in things that are less concrete, more subjective, more super-natural-- things that, at least initially, may require more faith. But in politics, people invest far less time in politics AND public policy. So, they end up relying on faith to draw their inferences (or something akin to faith, for those who are allergic to the term).

-Likewise...In politics: unless one has big resources, one can't do much to influence the process. In religion: because it's personal, it can deliver a lot, assuming modest investments. 

-If there's more knowledge and effort to think within religion, we probably find more people who purposefully pick-and-choose within their knowledge-- "cafeteria believers". If there's less knowledge in politics, partisan hackery should be more prevalent.

-More generational continuity through families in politics. Because religion generally promotes more thought (given what's at stake for the individual), people walk away from their parents' religion more often that their parents' politics.

-Religion has a greater cultural element, so you end up with more culturally-religious (than culturally-political) types.

-In American Christianity right now, we're seeing a decline in "broad" numbers, but arguably, no change or an increase in avid participation. Over time, after a 20 year decrease, participation (proxied by voting) has returned to earlier levels. At least in this election, we saw, I think, a drop in avid supporters (partisans), given the lousy candidates who were nominated. But I don't know what this means for the near-term future of American politics. 

Wednesday, June 7, 2017

addressing GW in a nutshell

1.) Is there "global warming"? Likely.
2.) If so, is a good chunk of it anthropogenic? Probably.
3.) Is it a problem-- as in net costs/benefits? Not at all sure.
4.) If net cost, will it be addressed *ably* with policy. Doubt it.

There you go: that's my position in a nutshell. If you're not willing to address all four questions, then you don't yet have a useful position on the topic. The options: Get with it, hold your tongue, or flaunt your ignorance.

Here's the tough thing: many of the people on whom we depend for help in drawing informed inferences in this arena...they purposefully (or out of ignorance!) only tell us about half of the coin. On top of this, they condone and placate their false prophets. And they use rhetoric, comparing those who question (or even disagree) to Holocaust deniers. The problem: if you compare me to Nazis, then you've lost the debate.

As an economist, I'm trained to look at the whole coin. And when I find persistent (and often passionate) half-coiners, the confident inference is to dismiss them cynically.

Is there any debate on *this*? Where is the call for science and logic-- in demanding full analysis rather than half measures? Apparently, it won't be the "scientists", the "elites", and the politicians leading this charge, so I guess it falls on the economists.

Friday, June 2, 2017

on Bevin's (excellent) call to prayer walks and federalism

Here's some cynical coverage, but the C-J's coverage of this was refreshingly respectful (check out the article and video). Bevin calls people to prayer (walks) and more-- in particular, "involvement". (It's also interesting and cool that he provides guidance on how to do this well!) There are clearly public policy issues at hand too. But Bevin's call is unlikely to hurt, quite likely to help, and arguably, the best approach to the problems that plague Louisville's West End. 

Paraphrasing something I like from C.S. Lewis on prayer-- whatever prayer does in the divine economy, it changes our hearts. As any other discipline, the practice works to change mind, body, and soul in positive ways.

That's one reason why Christians are commanded to pray for their leaders in I Timothy 2:1-2. (Of course, Jesus tells us to pray for our "enemies"-- and sometimes those are the same folks!). In fact, if I don't pray for my leaders, I can't criticize them. This prevents me from wanting to throttle Bush II, Obama, Clinton, Trump, McConnell, Pelosi, Reid, Birthers, today's Hysterics, and the other partisan enablers who make all of this lovely garbage possible.

In this context, prayer would be expected to "get people (more) involved". (I know some [mostly secular] fundamentalists are fond of a narrow interpretation of the passage where Jesus critiques some public expressions of prayer. But in this context, prayer walks are a likely improvement over mere prayer.) Meeting people, building relationships, enhancing empathy, actually doing work (!) in distressed communities. Why isn't this something to be applauded? More broadly, what if even a modest proportion of professing Christians and self-styled liberals got involved in the West End?

And then there are the policy angles. Some have critiqued Bevin for a lack of policy. But these problems are largely local (see: WalMart and JCPS) and federal (see: welfare policy and War on Drugs). And our best, politically-viable solutions are largely local. As for state efforts, what would those look like? (Well, other than redistributing money from poor people in the state to Louisville's city government...and who can be a big fan of that?) And when the state govt has proposed useful reforms-- e.g., charters and vouchers for substantive K-12 ed reform-- the same folks have been critical of that too. So, for critics, one suspects this is merely an exercise in blame-evasion, partisan striving for political power, and grabbing resources.

current politics and contempt vs. anger

If your response is "contempt"-- whether to Obama, Clinton, or Trump-- then you're definitely "part of the problem". Ironically, your sins in this realm clearly exceed those of OCT supporters and at least rival those of OCT.

If your response is "anger", you may be part of the problem. There is a place for anger, but "in your anger, do not sin" (Eph 4:26). As Garret Keizer once quipped, "I cannot commit to a Savior who doesn't overturn some tables." But think about the tables He overturned: those inside the Temple. Most people spend their time attacking the tables of "their enemies" rather than doing the difficult and courageous work of dealing with the sins in-house and in-heart. If you're a partisan of a major political party, how about you spend more time cleaning house than chucking rocks?

on the temptation to keep campaigning

I agree with Michael Barone's title and thesis in this article. But...

-Trump's predecessor campaigned more than governed for eight years, so an unfortunate pattern has been established.

-When you've just lost a contentious election-- and you're powerful (e.g., media, academics, and other upper-class elites)-- then a likely move is to start the campaign again ASAP. (The last admin's "Birthers" weren't powerful enough to campaign-- only complain.)

-When you have few policy ideas-- and the few you have are woefully incomplete (e.g., Dems on "climate change" and GOP'ers on health care)-- then all you have is campaigning, in your grasping for power.

-Trump's weaknesses and annoying qualities make it far too tempting to continue all of the above.

Thursday, June 1, 2017

denier demagoguery and faux science

If you're going to call those who ask good questions "deniers" (as in "Holocaust deniers"), then you're a demagogue who makes Trump look good by comparison.

If you're not going to make the case for 1.) significant GW; 2.) significant AGW; 3.) the costs of AGW being greater than the *acknowledged* benefits; and 4.) the benefits of your policy proposals being greater than the *acknowledged* costs-- then you're more interested in ideology and demagoguery than truth, science, and the social good. Without all four of those, you have NADA. Please be quiet; you're making life worse...oddly, you're engaging in pollution. 

Or put it this way: all that's needed to take action on climate change is:
1.) significant GW
2.) a significant proportion of GW is anthropogenic
3.) GW has more costs than benefits
4.) we have a public policy that will create more benefits than costs

Unfortunately, if we accept 1 and 2, we still need 3 and 4 to take action-- well, at least, if we're trying to make things better, rather than pretend/pose, assuage some sort of guilt, use this as a tool to grasp for power, etc. But on the rare occasions that 3 and 4 are addressed, it's almost always the costs of GW and the benefits of policy, rather than a thorough look at costs and benefits. When people tell you half of the story-- and the half that leans their direction-- they're morons or demagogues. I don't have time for either, especially when they're self-righteous (and hypocritical).

This author compares the complaints to Groundhog Day-- but people don't pay much attention and have short memories, so this strategic (or reflexive?) approach can still be effective.

Even though Trump is obviously a mess, many of his critics are no (clear) improvement-- and they hurt their credibility in this arena by...

1.) opposing everything with an hysteria akin to the last admin's Birtherism
2.) failing to call out the false prophets in their camp
3.) their penchant for nasty name-calling ("deniers"? really?!)
4.) failing to make the necessary case for effective climate change legislation, if such a thing exists (from their approach, one *must* suspect that it doesn't-- and that they're just trying to play a demagogic game with us)