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Where the Money Is

220px-Glenn_Reynolds

from USA Today, Glenn Harlan Reynolds writes Middle-class savings like blood in the Water:

When a government is desperate for cash, it goes after the middle class, because that’s where the money is. Yes, the rich are rich, but the middle class is far more numerous. And this has raised other fears. As McArdle also notes, if 529 plans aren’t sacrosanct, what about Roth IRAs? People have worried for a while that the government might go after retirement accounts as another source of income — to the point that there have even been calls for Congress to make such grabs explicitly off limits. But, ultimately, no one is safe, as what is enacted by one Congress can be repealed by another.

The truth is, in our redistributionist system politicians make their careers mostly by taking money from one group of citizens that won’t vote for them and giving it to another that will. If they run short of money from traditional sources, they’ll look for new revenue wherever they can find it. And if that’s the homes and savings of the middle class, then that’s what they’ll target.

HKO

The hard truth is that there are not enough wealthy to fund the welfare state the progressives want.  Taxes will inevitably hit the middle class, just as they have in Europe. Given that two thirds still feel we are in a recession this is an enormously stupid move with little chance of progress in a Republican Congress.  The Middle Class should voice their outrage at the next election.

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Lazy Concepts of Inequality

from Cafe Hayek, Don Boudreaux writes More Evidence of Evidence

excerpts:

Notice that, in one sense, the American middle-class is disappearing – at least as this class was defined, household-income-wise, in the mid-1970s. But it’s disappearing by becoming richer, even when measured in strictly real monetary incomes.  The percentage of American households with what might commonly be regarded to be middle-class incomes is indeed falling – but so, too, is the percentage of American households with what are surely “poor” incomes.  So once-middle-class Americans are not becoming poor.  Instead, they’re becoming rich; their real monetary incomes are rising.  The percentage of American households earning high incomes ($100,000 annually and above) is on the rise – and impressively so.  Let me emphasize: A much greater percentage of households today (compared to 1975) have annual incomes of $100,000 or more (in 2013 dollars).

Here are a few other things to note:

(1) the average number of persons per American household today (2013) is 13.6 percent fewer than in 1975, so each real dollar of household income is today shared by fewer people than in 1975 – meaning that the increase in “per-person-in-household” annual real incomes is even more impressive than these data show;

(2) these data are pre-tax yet post-cash transfers (such as Social Security payments);*

(3) these data include neither fringe benefits (which are a larger portion of the typical American worker’s income than was true in 1975) nor non-cash transfers such as food stamps and energy assistance;*

HKO

Income inequality is harder to quantify that most think.  But the preferred or accepted narrative is constrained by impatient media and its consumers.  What we have is a lazy incomplete picture that is accepted because it fits what we want to hear.

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Natural, Rare and Necessary

Winston-Churchill

From National Review, Lion to the Last by Larry Arnn:

Excerpts:

Churchill agreed with the socialists, partially, on one issue: He helped invent the social safety net. But he looked for ways to implement it without threatening the free-market system, the liberal nature of the society, the advantage of labor over idleness, and the security of property. Churchill’s social safety net relied chiefly on contributions from the beneficiaries and their employers, who paid money into accounts that they could track. Benefits were limited so as not to undercut work or break the treasury. Understanding that human life would always be imperfect as long as it remained human, he did not preach or attempt utopia. The trials of living, raising a family, and following one’s conscience were essential attributes of a fully human life. Churchill believed that if these activities were socialized, life would fall under dehumanizing tyranny, like Hitler’s Germany and Stalin’s Russia.

He balanced these decisions — often between being popular or speaking truth, for allying with socialists during the war and fighting against them in his campaign, for changing political parties twice in his career — all with the artfulness of action called statesmanship. It required gifts “much rarer than the largest and purest of diamonds,” he said. He believed statesmanship is natural, rare, and necessary; it involves the elevation of capacities inherent in human beings and required for high citizenship. All of us must choose. All of us have ultimate purpose and principles that drive what we do, and all of us face necessities that cut in different directions from each other and from our principles.

The classics teach us that this art of choosing involves an intellectual virtue, prudence, and is best learned by studying those who have the reputation for excellence at it. Those people tend to be statesmen, because the questions of politics involve so many people, so many ultimate questions, and so much risk and opportunity. This is why we study Churchill closely.

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The Iraq Amnesia Syndrome

From National Review,  The Biggest Lie, by Victor Davis Hanson

There were all sorts of untold amnesias about Iraq. No one remembers the 23 writs that were part of the 2002 authorizations that apparently Obama believes are still in effect. They included genocide, bounties for suicide bombers, an attempt to kill a former U.S. president, the harboring of terrorists (among them one of the 1993 World Trade Center bombers), and a whole litany of charges that transcended WMD and were utterly unaffected by the latter controversy. How surreal is it that Obama is preemptively bombing Iraq on twelve-year-old congressional authorizations that he opposed as trumped up and now may be relevant in relationship to dealing with Syrian and Iraqi stockpiles of WMD?

We forget too how Harry Reid declared the surge a failure and the war lost even as it was being won. Or how Barack Obama predicted that the surge would make things worse, before scrubbing such editorializing from his website when the surge worked. Do we remember those days of General Betray Us (the ad hominem ad that the New York Times, which supposedly will not allow purchased ad hominem ads, granted at a huge discount), and the charges from Hillary Clinton that Petraeus was lying (“suspension of disbelief”)? As Obama megaphones call for national unity in damning Leon Panetta’s critiques during the present bombing, do we remember the glee with which the Left greeted the tell-all revelations of Paul O’Neill, George Tenet, and Scott McClellan during the tenure of George W. Bush, or how they disparaged the surge when Americans were dying to implement it?

 

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The Biggest Thinking Machine

Switzerland World Economic Forum

From The National Review, Davos’s Destructive Elites-“None of us is as dumb as all of usby Kevin D. Williamson

Conservatives are generally inclined to make a moral case for limited government: that transfers are corrupting, that taxes should be collected only to the extent that they are essential, that regulation is a necessary evil and that as such it should be kept to a minimum. That is generally true and persuasive, but the more important argument is the problem of ignorance. Even if Congress were populated exclusively by saintly super-geniuses, there is only so much that 535 human beings can know and understand. The more that decision-making is centralized in political agencies, or even in elites outside of formal government, the more intensively those decisions will be distorted by ignorance. This is true of market-oriented institutions, too, in the sense that big businesses make big mistakes. One of the lessons of the 2007 financial crisis is that the guys who run the banks do not actually know that much about how banks work, even if they know 100 times what the banking regulators know. Free markets offer a critical, if imperfect and partial, corrective to that in the form of financial losses and business failures, which is why things like cars and computers consistently improve while schools and welfare programs don’t. Big markets with lots of competing buyers and sellers are the biggest thinking machines we have, offering the broadest epistemic horizon that our species has figured out how to achieve.

There is a deep philosophical challenge for progressives in that: Progressives say that they want inclusive social decision-making, but the most radically inclusive process we have for social decision-making is the thing that they generally distrust and often hate: capitalism — or, as our left-leaning friends so often put it, “unfettered” capitalism. And who should decide what sort of fetters are applied to whom? The view from Davos is, unsurprisingly: the people at Davos.

The hypocrisy and material self-indulgence on display at Davos may rankle, but the deeper problem is the unspoken assumption that the sort of people who gather in Davos are the sort of people who have the answers to social problems. Historically speaking, there is little evidence to support that proposition. And that is why conventions like that in Davos end up being so frequently counterproductive. When elites get together to talk about the big issues, the discussion consists mostly of very similar people asking themselves what people like them can do. The answer is: A whole lot less than you think.