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Political Modesty

truman

Politics in the Modest Age by Peggy Noonan in The Wall Street Journal

Why are we talking about Harry Truman? You know.

We live in a time when politicians relentlessly enrich themselves. We are awed and horrified by the wealth they accumulate, by their use of connections, of money lines built on past and future power. It’s an operation to them. They are worth hundreds of millions. They have houses so fancy the houses have names. They make speeches to banks and universities for a quarter-million dollars and call their fees contributions to their foundations. They are their foundations.

They grab and grub. They never leave. They never go home. They don’t have a “home”: They were born in a place, found a launching pad, and shot themselves into glamour and wealth. They are operators—entitled, assuming. They “stand for the people.” They stand for themselves.

So I just wanted to note how it used to be, when leaders thought they had to be respectable. When they were respectable.

“Harry Truman, not a money-grubbing slob.” Who, years ago, imagined that would come to be remarkable?

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Myths of Capitalism

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Illiberalism

From the Editors at National Review, Progressive Illiberalism

The prevailing view in Democratic circles is that Americans enjoy constitutional and legal rights when acting alone but not when acting jointly — i.e., not when it matters most to public affairs. Under this model, the owners of Hobby Lobby enjoy First Amendment religious protections, and RFRA protections, when they are kneeling in prayer by their bedsides, and perhaps, with certain limitations and IRS oversight, when they are in their church pews. But if they make a decision together, as a group of business owners with a particular vision of the good life and their own duties as people of conscience, then the Democrats believe that their legal and constitutional rights should be set aside, as though human beings and American citizens acting in concert with one another were less than human beings or less than American citizens because of that act of coordination.

That is morally and constitutionally illiterate, but it is the prevailing view on the Left — especially when it comes to the First Amendment. Once again vexed by the likes of Antonin Scalia and his Cro-Magnon insistence that words mean things, Senate Democrats have rallied behind Harry Reid’s attempt to repeal the First Amendment’s free-speech protections, proposing to effectively disembowel the Bill of Rights. Once again, the theory is that while individuals enjoy free-speech rights, associations do not — except for Democrat-friendly associations such as labor unions and the New York Times. Ordinary citizens acting together and pooling their resources to engage in political discourse are to be denied free-speech protection.

There is an ongoing debate on right about what to call our antagonists on the left. “Liberal” is the traditional word, and one that we still employ out of habit, but the Left is anything but liberal — in the matter of contraception as in the matter of free speech, it is fundamentally and incorrigibly illiberal. The word “progressive” has some appeal in that it does not invest the Left with the merits of a liberalism that it detests, but that term presents a problem, namely the question of: Progressing toward what? If Senators Reid, Murray, and Udall are any indication, the answer is an enlarged state under the management of a diminished intelligence.

HKO

There is a large intellectual gap between rights such as free speech and freedom of religion which are a recognition of your state of freedom and your right to acquire  services and products at someone else’s expense.  Such poorly named rights can not be both none of my business and remain my responsibility to fund.

It is very politically shortsighted to designate power to deliver political outcomes desired at the moment.  You need to visualize that power being in the hands of your worst nightmare.

 

 

 

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Subsidizing Consumption vs Production

kevin williamson

“As with the Connecticut parking spaces, we have through the entitlements (and through the tax preferences given to employer-based medical benefits) done a great deal to encourage the consumption of health-care services while doing nothing to encourage the production of them. In fact, various political efforts at health-care reform going back decades have made it less profitable, less prestigious, and less enjoyable to be a doctor, with the result that our best and brightest no longer even consider medicine to the extent that they once did, preferring jobs in finance. About one in four U.S. doctors today is an immigrant, meaning that without high levels of immigration the number of medical professionals would be nosediving relative to the population. Life as an American doctor looks pretty good to a recent med school graduate in Bombay or Karachi, but not to a Harvard-bound valedictorian at an American high school. But even with immigration, the number of physicians in many specialties has stagnated, and new policies in the PPACA, such as punitive taxes on manufacturers of medical devices, will contribute toward stagnation in other sectors of the health-care industry if they are enacted.

“And while there is some concern nationally about the number of doctors in the general profession, there is acute concern about the number of doctors who are willing to see patients enrolled in Medicare, Medicaid, and other government-run programs. Medicare ends up being a great deal on insurance to pay doctors who will refuse to see you. Medicaid is of course even worse: The quality of the doctors and institutions that will take Medicaid patients is so low that they have worse health outcomes than do those with no insurance or coverage at all. Subsidizing consumption of a good does not necessarily ensure that production will keep up with demand; it merely replaces the most efficient and fair form of rationing (market pricing) with inefficient and politically biased forms of rationing. Even before the passage of the PPACA, about half of all health-care spending in the United States was government money. (For that reason, if for none other, the conservatives’ cries of “socialized medicine” during the PPACA debate were odd.) New Deal policies that tied workers to employer-based insurance programs, and later policies such as the creation of the HMO simply resulted in the rationing duty being handed off to insurance companies, as they no doubt will continue to be under the PPACA, should the program survive.”

“What happens when you subsidize consumption rather than production? Understanding that is key to understanding the entitlement problem.”

Excerpt From: Kevin D. Williamson. “The End Is Near and It’s Going to Be Awesome.” HarperCollins, 2013-05-01. iBooks.

This material may be protected by copyright.

Check out this book on the iBooks Store: https://itunes.apple.com/WebObjects/MZStore.woa/wa/viewBook?id=569207288

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More Piketty Distortions

from Why Piketty’s Wealth Data Are Worthless by Alan Reynolds in The WSJ:

Tax reporting. Tax laws were changed from 1981 to 1997 to require that more capital income of high-income taxpayers be reported on individual returns, while excluding most capital income of middle-income savers and homeowners. This skews any purported increase in the inequality of wealth.
For example, interest income from tax-exempt municipal bonds was unreported before 1987—so the subsequent reporting of income created an illusory increase in top incomes and wealth. Since 1997, by contrast, most capital gains on home sales have disappeared from the tax returns of middle-income couples, thanks to a $500,000 tax exemption. And since the mid-1980s, most capital income and capital gains of middle-income savers began to vanish from tax returns by migrating into IRAs, 401(k)s and other retirement and college savings plans.

Balances in private retirement plans rose to $12.4 trillion in 2012 from $875 billion in 1984. Much of that hidden savings will gradually begin to show up on tax returns as baby boomers draw them down to live on, but they will then be reported as ordinary income, not capital income.

Tax law changes, in summary, have increased capital income reported at the top and shifted business income from corporate to individual tax returns, while sheltering most capital income of middle-income savers and homeowners. Using reported capital income to estimate changing wealth patterns is hopeless.

Switching from corporate to individual tax returns. When individual tax rates dropped from 70% in 1980 to 28% in 1988, this provoked a massive shift: from retaining private business income inside C-corporations to letting earnings pass through to the owners’ individual tax returns via partnerships, LLCs and Subchapter S corporations. From 1980 to 2007, reports the Congressional Budget Office, “the share of receipts generated by pass-through entities more than doubled over the period—from 14 percent to 38 percent.” Moving capital income from one tax form to another did not mean the wealth of the top 1% increased. It simply moved.

Tax rates and capital gains. There were huge, sustained increases in reported capital gains among the top 1% after the capital-gains tax was reduced to 20% from 28% in 1997, and when it was further reduced to 15% in 2003. Although more frequent asset sales showed up as an increase in capital income, realized gains are no more valuable than unrealized gains so realization of gains tells us almost nothing about wealth. Similarly, a portfolio shift from municipal bonds, coins or cash into dividend-paying stocks after the tax on dividends fell to 15% in 2003 might look like more capital income when it was merely swapping an untaxed asset for a taxable one.

HKO

Much of this has been reported in the blog previously.  Piketty’s work is so flawed that it is amazing that such credentialism is tolerated by the profession. I remains disappointed, but not surprised , that the major media has spent no effort to voice any of the criticism the work merits so much.

My Piketty comments in American Thinker, Everything that Counts.