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Where have you gone, Joe DiMaggio?

Posted by Eliot Weinstein on November 8, 2016

My favorite verse from “Mrs. Robinson” (1968), featured in the hit Mike Nichols movie The Graduate (1967), arrives near the end:

Sitting on a sofa on a Sunday afternoon
Going to the candidates’ debate
Laugh about it, shout about it
When you’ve got to choose
Every way you look at it you lose.

The song continues, quite memorably, with the mention of a famous baseball star:

Where have you gone, Joe DiMaggio?
A nation turns its lonely eyes to you
What’s that you say, Mrs. Robinson?
Joltin’ Joe has left and gone away

Joe DiMaggio was reportedly somewhat confused when he heard the song, as he was 16 years past his retirement from Major League Baseball but was still well-known for the records he set (including his still-unbroken record of a 56-game hitting streak) and because he had been the second husband of the late Marilyn Monroe. Friends told DiMaggio that the song didn’t seem to be intended as a criticism of him, and an eventual meeting with songwriter Paul Simon allowed Simon to explain that the lines were not meant literally. Rather, that part of the song relates to (among other reasonable interpretations) a metaphorical absence of heroes and role-models in 1967-1968 and to the disillusionment of younger Americans with the ideals and virtues of the older generation that worked, fought, and started their families in the immediate World-War-II-era.

After the death of Joe DiMaggio in 1999, Paul Simon explained his respect for DiMaggio and the purpose of his reference to Joltin’ Joe in the song (especially considering Simon had previously admitted that his first choice for a baseball player to mention in “Mrs. Robinson” was Mickey Mantle, but that name didn’t have the right number of syllables). Simon wrote in the New York Times:

In the 50’s and 60’s, it was fashionable to refer to baseball as a metaphor for America, and DiMaggio represented the values of that America: excellence and fulfillment of duty (he often played in pain), combined with a grace that implied a purity of spirit, an off-the-field dignity and a jealously guarded private life. It was said that he still grieved for his former wife, Marilyn Monroe, and sent fresh flowers to her grave every week. Yet as a man who married one of America’s most famous and famously neurotic women, he never spoke of her in public or in print. He understood the power of silence.
In these days of Presidential transgressions and apologies and prime-time interviews about private sexual matters, we grieve for Joe DiMaggio and mourn the loss of his grace and dignity, his fierce sense of privacy, his fidelity to the memory of his wife and the power of his silence.

For all that has lamentably not been improved about our politics and our national discourse since Simon wrote those words about “Presidential transgressions and apologies and prime-time interviews about private sexual matters” in 1999, we should at least consider ourselves fortunate that we GET to choose, however poor quality the options.

And although we might be dissatisfied, and perhaps with good reason, we should not be so eager to declare our contempt for what is best about our nation. In the face of adequate warnings and the lessons of history, doing so would take us down a dark and dangerous path. The United States would re-create the experience of mid-20th Century Argentina, complete with open, organized violence between political left and political right and the nearly unprecedented self-inflicted destruction of substantial economic prosperity (Argentina was in the top 10 world economies by GDP per capita before the First World War, but lost this status and has experienced nearly a century of minimal net economic growth amid continuing post-dictatorship political turmoil and institutional decay).

Our nation, though flawed like all human endeavors, is already great. Angry extremists of the far-left and (particularly this year) the far-right show they either don’t understand, or actually disagree with, the sources and the nature of that greatness. There will always be those who profit from scaremongering and scapegoating, those who benefit from the creation of dysfunction and disorder, and those who just like to watch things burn. An especially pernicious form of this behavior consists of telling those who are hurting something like, we’ll solve your problems, it’s simple: we can tear everything down, and then everything will be rebuilt, but in the process we can make sure to exclude certain groups of evildoers living among us whose perfidy just so happens to be the cause of your social and economic pain. (Well, what do you know folks, that solution is terrific! It’s great, so simple that our previous leaders, whatever their party or ideology, must have been stupid or crooked for not figuring it out…)

To those who have been ignored and feel betrayed by the status-quo, this siren song can sound so persuasive that the would-be destroyers don’t even need to be subtle, proclaiming they really do want to “burn it all down”. The proposed remedies of the destructive charlatans are to our body politic, at best, alchemy–of the turn lead-into-gold variety–and at worst, medieval bloodletting. Such “cures” are far worse than the vastly exaggerated disease, and the process of enacting them would cause us to lose something essential and valuable about being the United States of America. For those who don’t like what we are, who promise to lead us back to a greatness they say we lost an undetermined number of decades ago, who relish the chaotic retribution they will get to unleash upon disfavored groups in order to supposedly bring us there, that’s probably the point. We must reject their narcissistic carnival of institutional pyromania, and mock the pretension that they speak for some greater good as boastful foolishness, because that’s what it is.

As Benjamin Franklin was said to have warned, the nation that declared its independence in 1776 and that created its Constitution in 1787 will be, “A Republic, If You Can Keep It”.

Let’s keep it, and work on ways to make it better.

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Protected: Donald vs Hillary, Now What? Part 2

Posted by Eliot Weinstein on July 14, 2016

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Protected: Donald vs Hillary, Now What? Part 1

Posted by Eliot Weinstein on July 14, 2016

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The 2012 Illinois GOP Primary

Posted by Eliot Weinstein on March 20, 2012

Voting is currently underway here in Illinois for primary election day 2012. While Democrats are voting to select candidates for various local and state offices, national attention is focusing on the Republican voters who are having their say in the tightly-contested race to select a presidential candidate to challenge President Obama in November’s general election.

The once-crowded GOP presidential field has narrowed to the “Final Four”– Mitt Romney, Rick Santorum, Newt Gingrich, and Ron Paul. In keeping with my previous assessment of those candidates, I am somewhat dismayed by their lack of electoral prowess. In particular, these Final Four candidates compare quite unfavorably to the Republican Final Four from four years ago. In 2008, the Final Four were Mitt Romney, Mike Huckabee, John McCain, and Ron Paul. While Romney and Paul are essentially offering the same set of leadership qualities and issue positions as they did four years ago, Santorum is a poor imitation of the charismatic Huckabee as the religiously-inspired social conservative in the race, and Gingrich can’t measure up to McCain’s record of military and government service even as he tries to fill the same role of a maverick, shoot-from-the-hip, idea- and principle-driven candidate.

With the presidential primary race almost half-over, Ron Paul has yet to win a single state, and Newt Gingrich has only won two (South Carolina and his native Georgia). In contrast, the front-runner Mitt Romney has prevailed in fifteen states and four US territories. To the extent that anyone could theoretically beat Romney, only Rick Santorum even has a shot. Santorum has won primaries or caucuses in ten states. However, the conventional wisdom holds that Santorum can’t possibly win enough of the remaining states to actually win the GOP nomination. Santorum and Gingrich hope that by earning enough delegates in primaries and caucuses they can prevent Romney from winning the 1144 delegates needed to clinch the nomination outright. Presumably Santorum and Gingrich think that one of them would then be chosen at what is known as a “brokered convention“, where backroom deal-making and not a simple vote of the delegates determines the party’s presidential nominee. There has not been a true brokered convention since 1932, and no GOP primary race has been indecisive (as Santorum and Gingrich hope this one will be) since 1976.

There are fifty-four GOP delegates at stake in today’s Illinois primary election, but they are not awarded on the basis of the statewide popular vote. Instead, each US Congressional District directly elects GOP delegates loyal to one of the candidates. Due to organizational missteps, the Santorum campaign was unable to file slates of delegates in four Congressional Districts, depriving them of the ability to earn ten of the fifty-four delegates.

Polls suggest that Romney will win big in the “Chicagoland area”, the region consisting of Cook County, which contains the city of Chicago, as well as the “collar counties” that surround Cook County. However, Santorum could easily pick up delegates “downstate”, in the central and southern regions of Illinois that are often politically opposed to Chicagoland interests and that bear more socioeconomic similarity to neighboring states of Missouri, Indiana, and Kentucky than to northern Illinois.

The Illinois GOP primary looks like it will be a close race, with many delegates at stake (the most since the January 31 Florida primary) and some significance to the national primary race. Check the cable news channel of your choice for updates on the Illinois results throughout the evening.

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The GOP 2012 Presidential Field

Posted by Eliot Weinstein on January 2, 2012

The first actual voting in the 2012 United States presidential campaign will take place tomorrow evening in Iowa (the immediate neighbor to the west of my home state of Illinois), which hosts the Iowa Republican Presidential Caucuses. I am long overdue for some commentary on the 2012 GOP presidential candidates, so I have written this extremely long post (helpfully divided into sections) explaining my thoughts.

After following the major media coverage of the Republican presidential candidates, and especially after watching the televised debates, I am very disappointed with and dismayed by the GOP candidates lining up for the chance to challenge President Obama in the 2012 presidential election. I don’t like any of the major candidates, and with only one exception (Jon Huntsman) I don’t like any of the minor candidates either. When I was watching a televised debate (which was held on Thursday, August 11, 2011), I tweeted that the candidates were “losers and nutcases”, by which I meant that some are losers and some are nutcases, not that all are both. I will give two rundowns on the candidates and my opinions of them, one brief, and the other more detailed.

Brief Rundown:

Mitt Romney (Businessman/former governor)– panderer, flip-flopper, inauthentic, some good policy ideas, mixed record as governor, VERDICT: competent and not crazy but an overall weak candidate

Rick Perry (Governor)–Tea Party supporter, some highly extreme comments, mixed record as governor, VERDICT: dangerously extreme and unintelligent

Michele Bachmann (Congresswoman)–Tea Party leader, many extreme comments and positions, paltry legislative record, no executive experience, VERDICT: dangerous extremist

Ron Paul (Congressman)–supporter of Austrian economics, many extreme comments, possible racist, no executive experience, VERDICT: dangerous extremist

Herman Cain (Businessman)–some extreme comments, possible racist (against Arabs & Muslims), no executive experience, VERDICT: semi-dangerous extremist

Newt Gingrich (Former Speaker of the House)–smart but not that smart, showed poor leadership during later Clinton years, very poor campaign management, VERDICT: intelligent but dangerously incompetent

Rick Santorum (Former Senator)–social conservative, many extreme comments and positions, possible homophobe, mixed legislative record, VERDICT: semi-dangerous extremist

Jon Huntsman (Former ambassador & governor)–substantial resumé, many sound domestic policy proposals, questionable foreign policy, positive record as governor, VERDICT: competent, not crazy, but not extreme enough or pandering enough to win primaries

My detailed rundown is after the break.

Read the rest of this entry »

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No Hiding Place

Posted by Eliot Weinstein on December 15, 2011

…for Jacques Chirac. The chauvinistic, anti-American, womanizing, corrupt former president of France was convicted of embezzlement and other political malfeasance earlier today. Chirac’s crimes date back to his tenure as mayor of Paris, between 1977 and 1995, during which he was found to have embezzled public money and abused his office by creating fake jobs. Chirac diverted the salaries for these made-up jobs into a fund that backed him in the French presidential elections, which he won, serving two terms as French president from 1995 to 2007. For his offenses, the 79-year-old Chirac was given a two-year suspended sentence. Chirac is the first French head of state to face criminal trial since Philippe Pétain, the decorated military leader who served as president of pro-Nazi Vichy France, was tried and convicted of treason in 1945. While Chirac’s actions do not even remotely resemble those of Pétain, Chirac’s misdeeds are par for the course in modern France’s extremely corrupt political system, and not, as some have claimed, a case of a single greedy old man tarnishing his party’s (and his country’s) sterling reputation.

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Timeless Wisdom

Posted by Eliot Weinstein on November 30, 2011

Economists are quick to speak of ‘market failure’, and rightly so, but a greater threat comes from ‘government failure’. Because it is a monopoly, government brings inefficiency and stagnation to most things it runs; government agencies pursue the inflation of their budgets rather than the service of their customers; pressure groups form an unholy alliance with agencies to extract more money form taxpayers for their members. Yet despite all this, most clever people still call for government to run more things and assume that if it did so, it would somehow be more perfect, more selfless, next time.

That is from The Rational Optimist: How Prosperity Evolves by Matt Ridley (page 182 of the US paperback edition), which I recently finished reading, and which economist David Henderson likes for other reasons. World-renowned economist Gary Becker expounds upon these same ideas on his blog.

Ridley’s astute observation could and should be a rallying cry for today’s free-market economists, moderate libertarians, economic conservatives, and centrist pro-market incrementalists. It’s certainly a much better starting point for lovers of liberty than the scorched-earth, radical sham-libertarianism of Ron Paul and his followers. Unfortunately, Ron Paul’s version of libertarianism is currently receiving much national attention, and as Will Wilkinson discusses in this article for The New Republic, the Paulite creed is both embarrassing and counterproductive to the cause of liberty (incrementalist or otherwise). Do read the whole thing, but Wilkinson is right on the money when he says,

If you were an evil genius determined to promote the idea that libertarianism is a morally dubious ideology of privilege poorly disguised as a doctrine of liberation, you’d be hard pressed to improve on Ron Paul.

I’m sure to get some flack for condemning Ron Paul (or I would, if anyone actually read this), but between Wilkinson’s TKO of the Paulite ideology and Ridley’s positive alternative, I am content to do so.

If, on the other hand, you enjoyed this criticism of Ron Paul, stay tuned for my upcoming post on what I think of the Republican Party’s 2012 presidential candidates, which will be posted in time for the start of the primary election season.

Posted in Economics, Politics | 2 Comments »

Obama’s Tax Proposals

Posted by Eliot Weinstein on October 30, 2011

President Obama has been touring the country to promote his “American Jobs Act“, along with a package of tax increases designed to pay for that jobs bill. Pundits have been debating Obama’s proposals for the last few months, but the best commentary on the president’s tax plan comes from the September 24 issue of the British newsweekly The Economist.

On taxes, Mr Obama has stapled together a clutch of previous proposals: returning tax rates on the wealthy to where they were before Mr Bush cut them in 2001, and curbing deductions such as those for municipal-bond interest, mortgages and charitable giving. He proposes a new “Buffett” tax, named after the billionaire investor who has protested against the injustice of paying a lower tax rate than his secretary. It would require anyone earning more than $1m to pay a tax rate equal to that of the middle class, though how that could be done is completely obscure.

Republicans accused Mr Obama of class warfare; he responded that “this is not class warfare. It’s math. The money is going to have to come from someplace.” But that is disingenuous. Maths demands that substantial money should be raised, not that it should all come from the wealthiest 2% of citizens, nor that Mr Obama should stick to his promise that 98% of households must never pay higher rates.

[emphasis added]

As I will (probably) say several times in future posts over the next few years, America is in deep fiscal trouble and to get out of it we will all have to bear some of the burden of higher taxes and reduced spending. Those on the left shout that we can’t “balance the budget on the backs of the poor”, but it is equally true that we can’t balance the budget on the backs of the rich. (As this article explains, it is not only true that we shouldn’t balance the budget on the backs of the rich, for reasons of economic efficiency and growth, but it is also true that we literally can’t balance the budget by hiking taxes on the rich, as the amount that would be raised by Obama’s potential tax increases is only a small fraction of what is needed to close the US budget deficit.) While wealthier Americans will pay proportionally more under any revenue-increasing tax reform (just as they pay proportionally more under our current system), Obama’s idea is to force high earners, small-business owners, and large corporations to bear virtually all of the burden of paying for our nation’s out-of-control spending. As The Economist continues,

Billionaires and secretaries will both surely have to pay more taxes; record deficits have long since replaced the surpluses of 2001, thanks in large part to Mr Bush’s across-the-board tax cuts. Yet Mr Obama is going about it in a clumsy way. Consider those millionaires he is insisting should pay more: there are 433,000 of them, or 0.3% of all taxpayers, according to the Tax Policy Centre, a non-partisan research outfit. On average they pay 20% of their income in federal income and payroll taxes, while the median taxpayer pays 11%. Just under a quarter of the millionaires pay as little, or less, than that median, a phenomenon almost entirely due to the lower rate levied on capital gains and dividends.

A far more efficient way to collect more taxes would be a genuine tax reform that maintained or lowered marginal rates while curbing the exemptions, credits and deductions that cost $1 trillion a year, including the lower rate for capital gains and dividends. This would boost productivity by making the tax code more efficient, while shifting more of the tax burden to the rich who now benefit disproportionately from such exemptions and account for Mr Buffett’s sub-secretarial tax rate. A lower corporate rate would offset the harm of higher capital gains and dividend taxes.

Or, as they will teach you in any public economics class, the solution is to “broaden the base and lower the rate”. While I don’t agree completely with The Economist‘s prescription (Milton Friedman persuasively argued that corporate income should not be taxed at all), it is far more reasonable than Obama’s proposals. The president can say a million times that his ideas represent “common sense” or the “balanced approach”, but that doesn’t make it true.

Posted in Economics, Politics | 1 Comment »

And the Rock Cried Out, “No Hiding Place”

Posted by Eliot Weinstein on May 2, 2011

Last night, President Barack Obama announced that Al-Qaeda founder Osama Bin Laden has been killed in Pakistan by US forces.

Osama Bin Laden, reportedly in poor health and no longer the operational director of Al-Qaeda, was nevertheless the inspiration behind the 1998 US Embassy Bombings in East Africa, the attack on the USS Cole, and of course the 9/11 hijackings and suicide attacks.

The peoples of the West as well as residents of free, democratic, capitalist societies across the world will rest easier knowing that this unfathomably ruthless butcher is dead. While the universe may not have an inherent sense of justice, there does seem to be reversion-to-the-mean, and whether you call it karma, luck, or something else, no one can evade the tides of fortune forever. Osama Bin Laden and his army of deranged fanatics are on the losing side of history, and it was only a matter of time before justice of some form caught up to him.

I will leave you with an excerpt from an old gospel song (based on the Book of Revelation 6:15-17), as transcribed by author and screenwriter J. Michael Straczynski, from which I have derived a series of posts on this blog entitled “No Hiding Place”.

Well I went to the rock to hide my face

But the rock cried out, “No Hiding Place”

The rock cried out, “No Hiding Place”

“There’s no hiding place down here”

Posted in Politics, Religion | 3 Comments »

The Guns of Charleston and the House Divided

Posted by Eliot Weinstein on April 12, 2011

150 years ago today, the American Civil War began when forces loyal to the Confederate States of America bombarded United States federal troops garrisoned at Fort Sumter, in the harbor of Charleston, South Carolina. That event, known as the Battle of Fort Sumter, is considered to be the first military engagement of the Civil War, and it was both a cause and a consequence of increasing tensions between the newly-seceded Southern states, and the federal Union government headed by recently-inaugurated President Abraham Lincoln.

As Lincoln himself prophesied in a speech given in Springfield, Illinois on June 16, 1858,

“A house divided against itself cannot stand.” I believe this government cannot endure, permanently, half slave and half free.

Although Lincoln went on to pay the ultimate price for his resolve in preserving that government, he left as his legacy a house that was no longer divided by the question of human enslavement. Unfortunately, the United States was divided by the legacy of slavery, the Civil War, and Reconstruction, as deep social and economic differences between the North and the South persisted for over a hundred years, well into the Twentieth Century. These divisions, and how they have recently begun to heal in earnest, are the subject of an excellent article in The Economist from two weeks ago.

It is also worth noting that the question of slavery in the United States was only resolved through the deaths of 620,000 soldiers (from the Union and the Confederacy combined), including 3,654 dead on a single day at the Battle of Antietam. While these counts are dwarfed by, say, the number of Russian deaths during World War II, they represent a staggeringly large fraction of the population of the United States at the time of the Civil War (total Civil War deaths amounted to around 2% of total US population, by my quick calculations).

Today, and for the next four years, we remember the American Civil War and those who died to settle the differences between the North and the South over slavery and states rights.

If anyone cares to comment, what does the legacy of the Civil War mean to you? What does it suggest to you about the way substantial political, social, and economic divisions, like those between the North and the South circa 1861, can be resolved through discourse or violence?

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Festival of Links: The Best of March

Posted by Eliot Weinstein on March 31, 2011

The top stories from this past month that you probably didn’t hear about from your other blogs:

1. The King James Version of the Bible turns 400.

2. Will Wilkinson gives “A Scornful Review” to the new David Brooks novel The Social Animal.

3. “Illinois has 11 working nuclear reactors at six sites, more than any other state [in the USA]…”

4. Soon there will be no hiding place for Jacques Chirac.

5. Megan McArdle argues that “We Don’t Need More Stigma for Overweight Kids“. Excerpt:

But it seems to me that we frequently mix “healthy” up with “thin”.  Most people who switch to eating an actual healthy diet–little processed food, a lot of fresh fruits and vegetables, less salt and sugar–won’t end up thin.  Most people who exercise won’t lose much, if any weight without calorie restriction.  And most people who try to restrict their calories below what their body wants fail over the long term–eventually, their appetite wins.

6. A study released by a think-tank affiliated with the German Social Democratic Party (Germany’s large center-left party) reveals that nearly half of Germans believe that Israel is attempting to exterminate the Palestinians, and a slightly larger proportion of Germans agree with the statement “Jews try to take advantage of having been victims during the Nazi era”. As Tyler Cowen would say, “Yikes!”

7. Scott Adams gives his assessment of Charlie Sheen. That’s all the Charlie Sheen blogging you will get from me.

8. Rabbi Richard Jacobs is elected as the next president of the Union for Reform Judaism.

9. Economist Steven Horwitz, whose writings on cell phones I have previous blogged, cites telephone service as an example of an industry where cost has fallen and quality has risen (both dramatically). In other words, there is no great stagnation.

10. Vanity Fair’s offbeat interview with Paul Simon.

11. Very short Newsweek interview with Larry Summers. As some other bloggers have noted, the best line from Summers is, “I’m one of the few people who went to Washington to get out of politics.”

Posted in Arts and literature, Economics, Festival of Links, Music, Politics, Religion, Technology | Comments Off on Festival of Links: The Best of March

More Kling on Social Security

Posted by Eliot Weinstein on October 24, 2010

Last month, I highlighted the comments of economist Arnold Kling regarding the Social Security (and Medicare) trust fund. I recently finished reading Kling’s book Unchecked and Unbalanced: How the Discrepancy Between Knowledge and Power Caused the Financial Crisis and Threatens Democracy. Chapter 1 of that book contains the best discussion of the causes of the financial crisis that I have read, and I highly recommend it, even though I do not endorse all of Kling’s diagnosis of or prescription for what is wrong with American democracy. Today, I am more interested in his comments on Social Security, which appear on pages 99-100 of the hardcover edition of Unchecked and Unbalanced.

Social Security does not incur investment risk. That is because Social Security taxes are not invested at all. They are paid to beneficiaries. Until this point, taxes have exceeded benefits, and excess revenues have been spent on other government programs. This excess spending is tracked in an account called the Social Security Trust Fund, which can  be thought of as a collection of IOUs from the rest of the Federal government to Social Security recipients.

Within a few years, Social Security benefits will start to exceed tax revenues, and the government will have to make good on its IOUs. Later this century, depending on how demographic and productivity trends play out, the Trust Fund will be exhausted, and the government will have to raise additional taxes to pay for Social Security benefits.

I would go so far as to say that thinking about Social Security with the image of money (or bonds) in a trust fund somewhere is downright pernicious. There isn’t any money stored away to pay for Social Security–just a promise by the government to repay the money it “borrowed” from Social Security excess revenues and in fact spent on other things. As I wrote in my previous post on this subject, Thomas Sowell once said that no one can borrow and save the same money simultaneously. To the extent that the Social Security Trust fund exists, it is a promise by the government (specifically Congress) to take money out of general revenues and spend it on Social Security benefits when the time comes that–as Kling described–benefits start to exceed revenues. I will conclude by stating what many others have written, namely that if you’re in your twenties or younger, don’t expect the government to keep its Social Security promise to you. One or both of the following will be the experience of my generation: 1) substantially higher taxes during our peak earning years as we (via the government) pay for the retirement and health care of our Baby Boomer parents, and 2) drastically reduced benefits from government programs like Social Security and Medicare when we’re old enough to receive those benefits.

ADDENDUM: Gregg Easterbrook lays out the facts on Social Security here. Also, in the October 2010 issue of The Atlantic, Michael Kinsley argues that the Baby Boomers should redeem themselves by turning down the Social Security largess about the be lavished on them and by helping to pay the way out of our nation’s fiscal hole.

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Remark of the Week

Posted by Eliot Weinstein on September 5, 2010

This week’s Remark of the Week comes from economist Arnold Kling, who previously won Remark of the Week in June of last year. Kling writes, regarding the Social Security and Medicare trust funds:

In fact, we could immediately put $100 trillion gazillion dollars in the trust funds from the general budget, and then they would have enough money to pay Social Security forever. Supposedly.

The trust fund is a measure of what we are promising to pay future Social Security recipients. To me, it is nothing more than that. But what is going to fund Social Security down the road is not the promises that we pour into it today. It is the taxes that people will pay in the future.

Kling simply and eloquently makes a point that I have often found myself struggling to articulate–that the trust fund is an accounting fiction. As for Kling accusing Paul Krugman of not understanding the overlapping generations model, remember that–to paraphrase Thomas Sowell–no entity, not even the government, can borrow and save the same money simultaneously.

Posted in Economics, Politics, Random Thoughts | 1 Comment »

Paul Ryan is not a fraud

Posted by Eliot Weinstein on August 9, 2010

Paul Ryan is a Republican United States Congressman representing Wisconsin’s 1st congressional district. Over the past two years, he has become a leading voice among the Republicans on the subject of fiscal policy (government taxation and spending). Yesterday, superblogger Andrew Sullivan echoed economist Paul Krugman by accusing Ryan of being a fraud, writing:

I have to say that Paul Krugman made a very strong case that the young GOPer is still drinking supply-side Kool-Aid.

…I remain pretty much persuaded by Krugman’s broad critique, however. Cutting taxes at this point in American history, in the face of this much debt, strikes me as loony.

From my vantage point, it is Sullivan who is drinking Krugman’s hyper-partisan left-wing Kool-Aid. I understand that Sullivan is angry about Republicans who propose tax cuts without recognizing the need for substantial spending cuts and tax increases to put America’s fiscal house in order (and on that account I agree with him). But that’s not what Ryan is doing. Ryan developed his plan for across-the-board reductions in government spending as a way to ease the US debt burden without having to employ extremely high tax rates. Ryan further contends that we can climb out from under the debt through economic growth if we stimulate the economy with carefully-targeted tax cuts. There is a legitimate debate to be had about whether we could bolster economic growth and help claw our way out of the current recession with tax cuts, just as there is a continuing debate about the need for additional stimulus in the form of increased government expenditures (some in the form of aid to the states, which Congress is considering this week). While I am probably closer to Sullivan than to Ryan on the subject of whether or not we need tax cuts right now, it inefficient, ignorant, and just plain rude to label anyone who favors tax cuts as “loony”–we are, after all, still reeling from the effects of one of the largest recessions in history. It may be silly to think that we can tax-cut our way out of a recession, but from the standpoint of economic theory it’s no sillier than thinking we can government-spend our way out of a recession, which has been the policy of the Obama Administration and the Democrat-controlled Congress for the past two years.

Furthermore, Paul Krugman’s attacks on Ryan are at least somewhat spurious. Krugman alleges that Ryan was being disingenuous by having the Congressional Budget Office (CBO) only score the part of Ryan’s “Roadmap” involving spending cuts, while ignoring Ryan’s proposed tax cuts, which would understandably eat away at much of the savings that Ryan’s spending reductions would create. The only problem with this line of attack is that the CBO doesn’t, as part of its operations, score tax cuts. As Megan McArdle, the business and economics editor for the Atlantic, points out in an excellent blog post entitled “Krugman is Wrong on Ryan and the CBO”, scoring tax cuts is the responsibility of the Joint Committee on Taxation (JCT). And Ryan did ask the JCT to score his tax cut proposals, although the JCT turned him down–possibly due to its heavy workload scoring the tax provisions of healthcare reform.

As an aside, I should say that I agree with a few of Krugman’s criticisms of Ryan’s plan, notably that Ryan fails to specify precisely what programs he would cut to achieve some of his spending reductions, and that other spending reductions rely on cuts in politically-sensitive Medicare, which are unlikely to ever be enacted.

However, Krugman writes:

The Ryan plan is a fraud that makes no useful contribution to the debate over America’s fiscal future.

This, of course, is just partisan vitriol. Ryan’s plan makes several useful contributions to the debate, even if it is not the most realistic or workable plan that has ever been proposed. Paul Ryan may not be the fiscal prophet that some on the right wish him to be, but he certainly doesn’t fit Paul Krugman’s caricature of a scammer, charlatan, or “flimflam man”.

Posted in Economics, Politics | 1 Comment »

Remarks of the week

Posted by Eliot Weinstein on April 11, 2010

While both of these stories have already seen some coverage on more popular blogs (most notably on my favorite blog Marginal Revolution), they both express important points about social change.

1. The aging of humanity, from NewScientist:

In 19 countries, from Singapore to Iceland, people have a life expectancy of about 80 years. Of all the people in human history who ever reached the age of 65, half are alive now. Meanwhile, women around the world have half as many children as their mothers. And if Japan is the model, their daughters may have half as many as they do.

2. Avoiding nostalgia for a mythical age of lost liberty, essay by David Boaz at Reason.com:

If you had to choose, would you rather live in a country with a department of labor and even an income tax or a Dred Scott decision and a Fugitive Slave Act?

Boaz’s exhortation to remember the freedom-crushing injustices of the past–like slavery–is even more relevant in light of the controversy over Virginia Governor Bob McDonnell (R) declaring April to be “Confederate History Month”, without making any reference to slavery.

As they say, “Demography is destiny”, and “Those who cannot remember the past are condemned to repeat it”.

To cite my sources, Tyler Cowen at Marginal Revolution linked to story 1 here and to story 2 here.

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The deed is done

Posted by Eliot Weinstein on March 23, 2010

After its passage by the House of Representatives Sunday night, President Obama signed the health care bill into law earlier today, declaring,

We have now just enshrined, as soon as I sign this bill, the core principle that everybody should have some basic security when it comes to their health care.

Meanwhile, fourteen states have filed suit in federal court to challenge the constitutionality of the new law, and the Republican National Committee has already raised over $1 million in donations by vowing to unseat congressional Democrats who voted for the bill, and to regain control of the House in the November elections.

Reuters has a good fact sheet on the provisions of the health care bill. Even more interesting are the predictions made by some of the leading lights of the economics blogosphere.

Bryan Caplan predicts that the health reform package will essentially not work, as families and firms game the system.

In contrast, Tyler Cowen predicts that the law, while working, will lead to a series of unintended consequences.

Megan McArdle offers eight predictions (more here) about how some of the putative goals of the new law will not be met.

Last but not least, Greg Mankiw muses on the trade-offs inherent in the health care legislation, and concludes,

My judgment is that this health bill adds significantly to our long-term fiscal problems.

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Opportunity costs

Posted by Eliot Weinstein on January 26, 2010

From Reuters:

Bill Gates worries climate money robs health aid

Discussing the money pledged at the Copenhagen climate change summit last month, Gates wrote,

“I am concerned that some of this money will come from reducing other categories of foreign aid, especially health…If just 1 percent of the $100 billion goal came from vaccine funding, then 700,000 more children could die from preventable diseases.”

Also,

Taking the focus away from health aid could be bad for the environment in the long run, said Gates, “because improvements in health, including voluntary family planning, lead people to have smaller families, which in turn reduces the strain on the environment.”

Another discussion of Gates’ letter can be found here.

For more information about the trade-offs inherent in trying to solve global problems, read How to Spend $50 Billion to Make the World a Better Place, edited by Bjorn Lomborg.

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Remark of last week

Posted by Eliot Weinstein on December 20, 2009

Although I’m somewhat late in posting this, here is an excellent passage from Megan McArdle, pondering the future of the Democratic Party:

I was talking to a libertarian friend yesterday who is a professor in the midwest, and we were marvelling at just how delusional many Obama voters seem to have been about what he was going to accomplish.  Don’t get me wrong–I certainly don’t approve of everything Obama has done.  But the guy got elected to be president of the United States, not Prime Minister of Sweden.  Anyone who seriously entertained the notion that the procedural obstacles to enacting legislation in the United States would suddenly fall away–along with the essentially center-right politics of the American voter–is probably not mature enough to be driving.

I should note that McArdle often wrote approvingly of Barack Obama during the 2008 election. As someone who was deeply troubled by the fanaticism of many Obama supporters (especially here in Chicago) and the cult-like belief in “Hope” and “Change”, I should say “I told you so”, but that would be rude. Instead, I will say that I think President Obama is doing about as well as could reasonably have been expected given the problems he inherited from the Bush administration and the constraints of the office. In fact, my opinion of Obama is higher today than on election night last year, because of the many highly competent moderates he appointed or retained in crucial economic and national security posts. But as the passage quoted above illustrates, the problem is that the expectations placed on Obama going into his presidency weren’t reasonable, and the Democrats must now re-acclimate themselves to political reality.

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Obama’s Nobel Peace Prize

Posted by Eliot Weinstein on October 19, 2009

What do people around the world think of President Barack Obama being awarded the Nobel Peace Prize? According to a Wall Street Journal article on the fallout from Obama’s win, this might be a sign of the times:

When David Beckham was named “man of the match” in England’s World Cup qualifying soccer game this week despite playing for just 30 minutes, his coach, Fabio Capello, mocked the honor as being “like Obama getting the Nobel Prize.”

Megan McArdle adds:

Call me crazy, but I think that maybe to earn the Nobel prize, a million dollars, and all the associated prestige, you ought to have made efforts somewhat more heroic than chairing a meeting in which you said that you thought we ought to have fewer nuclear arms–even one in which you said that the US also thought we ought to have fewer nuclear arms.  You should, I don’t know, deliver a deal or something.

For a more measured consideration of this particular issue, here are some arguments against and for Obama deserving the prize, courtesy of The Economist‘s Democracy In America blog.

Well, at least John McCain has no problem with Obama winning the Nobel Peace Prize…

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The Baucus health care bill

Posted by Eliot Weinstein on October 7, 2009

A few weeks ago, Senator Max Baucus (D-Montana), the chairman of the Senate Finance Committee,  introduced a wide-ranging proposal to reform the US health care system. Today, the independent Congressional Budget Office released their score of the Baucus bill, as Marc Ambinder reports. The upshot is that the bill will cost $829 billion. That is less than expected, and if implemented, the Baucus plan would actually reduce the federal deficit by $81 billion.

Sounds like a great deal then? Not so fast, says leading macroeconomist Greg Mankiw. Mankiw and Jim Capretta note that the Baucus plan structures subsidies to purchase insurance in such a way as to impose an effective tax on middle-income families. Under the Baucus plan, all individuals without health insurance would be required to purchase health insurance or pay a fine. The subsidies are designed to alleviate the financial strain of this requirement on the poor, but the subsidies phase out as family income increases. This creates a marginal tax on income, which Capretta calculates could reach 30% for families with incomes equal to twice the poverty line. Add that to existing income taxes, and the result is a strong disincentive towards higher income-earning for middle-class workers.

Do the benefits of covering millions of uninsured Americans at a reasonable price outweigh the costs of imposing a large tax burden on middle-income families? Decide for yourself, but let’s hope that the members of the Senate are being so measured in their deliberations.

Posted in Economics, Politics | 1 Comment »

More healthcare tidbits

Posted by Eliot Weinstein on July 27, 2009

1. Greg Mankiw points to a CBO report regarding the impact on the deficit of the healthcare reform bill currently working its way through the House of Representatives.

2. Marc Ambinder reports on Bill Clinton’s criticism of the CBO’s recent healthcare analysis, and on the new US obesity findings.

3. Bryan Caplan explains why health insurance companies don’t, as a rule, cheat–or provide substandard care to–the very ill.

4. Megan McArdle questions the conventional wisdom that adverse selection causes market failure for health insurance.

Posted in Economics, Politics | Comments Off on More healthcare tidbits

Remark of last week

Posted by Eliot Weinstein on June 21, 2009

Last week’s Remark of the Week should have gone to Arnold Kling:

Getting people to reduce their use of medical services is the spinach of health care reform. Expanding insurance coverage is the dessert. The Democrats want to enact dessert now, and worry about spinach later.

Just something to keep in mind as you read or watch coverage of the incipient health care reform bill. Kling’s co-blogger Bryan Caplan adds more here.

Posted in Politics, Random Thoughts | 2 Comments »

Obama and McCain agree

Posted by Eliot Weinstein on May 22, 2009

Earlier today, President Obama signed the Weapons System Acquisition Reforms Act, which overhauls the military procurement process to prevent waste and reduce cost overruns.  As the president acknowledged in his remarks, the individual who most strongly advocated for this new law was his election opponent, Senator John McCain. McCain has worked to reduce waste in military spending for virtually all of his 22-year senatorial career, and he found agreement from Obama when he raised the issue during the 2008 presidential election campaign.

Obama estimates that procurement reform will “save taxpayers tens of billions of dollars”. Calling the reforms “long overdue”, the president argued that outdated and inadequate military spending rules would be replaced without compromising national security.

After signing the bill, Obama traveled to Annapolis, where he delivered the commencement address at the U.S. Naval Academy’s Class of 2009 graduation. Senator McCain was a member of the 30,000-person audience, as his son John Sidney McCain IV (known as “Jack”) was one of the graduates. Jack McCain received a Bachelor’s of Science and a commission as an ensign in the United States Navy, becoming the fourth McCain to graduate from the Naval Academy. Like all of the other graduates, the younger McCain shook hands with the president during the ceremony.

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Remark of the Week

Posted by Eliot Weinstein on April 26, 2009

One of Andrew Sullivan‘s readers writes:

The idea that eradicating the drugs will solve the drug problem is the lie at the root of the War on Drugs. Drug addiction is never about the drug, it’s about people coming to grips with the pain of existence.

As they say, read the whole thing.

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