Detailed Abstractions

Well, we’re a week out from the terrorist attack launched by one lone individual on a small political gathering in Arizona and the trend is clear:  idiocy continues to press forward, non-exploitation of this tragedy seemingly illusory.

This time up, it’s Representative Peter King of NY.  Not to be outdone by Paul Krugman’s idiocy, Mr. King is trying to parlay one lone gunmen into a brand new set of gun control laws (here):

Rep. Peter King (R-NY) called for the gun-free zone in the immediate vicinity of federal officials…. he planned to introduce legislation next week incorporating his proposal….

It should seem obvious that this legislation has little chance of preventing or even acting as a deterrent to another such terrorist act, but not surprising the legislation is being pushed anyway.

As is usual with any legislation, it existed prior to the ‘crisis’ which was used as reasoning to pass it right now.  Truly the only way in which this is related to the Arizona shooting at all is in timing (article cont’d):

But many lawmakers have been concerned about the safety of themselves and their aides since Saturday’s shootings in Tucson and might be more open to King’s proposal than they would have been a week ago.

In a more perfect world, maybe we could point to this as the exception of a reasoned public debate, unfortunately this is just one of the idiotic ideas being pushed.

Their commonality?  Almost all arguments brought to the public so far ignore the very essence of a society: its culture.

Which is insulting to a degree; to think that given the wrong language or opportunity to carry a weapon near any sacred politicians, the average citizen might well use violence as a standard debate tactic.  However in America, and indeed most civilized societies, a basic thought is held by the vast majority of citizens is that the proper response to speech is speech.

For instance, we all know exactly what it means to say “sticks and stones” and as a society, we have a pretty firm belief that no matter what someone says to you, no matter how disgusting, no matter how insulting, violence is never an appropriate response to words.

To juxtapose, let’s look at the Islamists.

Their  religious and moral leaders constantly tell followers that violence is an appropriate solution to perceived or real slights.  They argue not just that violence is an answer, but specifically that it is a respectable solution even when it’s being used against those who are only using speech.

Remember the Mohammed cartoons?  That was 2005, but even in mid-2010 (more…)

A DA Post earlier this week (here) wondered if the level of rhetoric during the tax debate, like calling for pitchforked mobs or referring to the GOP as terrorists, seems a little odd now that we have President Obama’s compromise which includes continuing the same tax basis for all.

The President has even argued in that no so distant past (2009) that raising taxes during a recession was bad policy, but apparently he is now against the policy he was sort of for, but then again against….

Speaking on Monday he explains what really, really, might, sort of be true, depending upon whether he’s for it or against it… (whole thing here):

…A few minutes later, Chuck Todd of NBC News asked the president what he had to say to fellow Democrats. That prompted a different analogy – that he was trying to prevent harm to the American people, who were essentially being held hostage in the tax debate.

Quick side bar – I wonder how the voters who just sent this group of legislators to Washington DC feel about being associated with hostage takers?  Meh, probably nothing.  Continuing:

“I think it’s tempting not to negotiate with hostage-takers, unless the hostage gets harmed,” Mr. Obama said. “Then people will question the wisdom of that strategy.”

With all due respect, I think people should be questioning the wisdom of a sitting President who seems to be so insecure about a recent decision, that he feels the need to use inflamatory rhetoric in order to distance himself.

Though seen through this light, the Democrats’ prior inflamatory statements probably fits into the overall strategy for re-election.  When the President can “trumpet” the tax deal, while other top Democrats talk about the inevitable “screwing” without the deal, then you can see a basic strategy to take credit for the deal most Americans agree with, while simultaneously distancing himself from the deal his backers don’t like (poll info here).

But the best part of the President’s discussion on this issue has to be this:

“I don’t think there’s a single Democrat out there, who if they looked at where we started when I came into office and look at where we are now, would say that somehow we have not moved in the direction that I promised,” he said. “Take a tally. Look at what I promised during the campaign. There’s not a single thing that I’ve said that I would do that I have not either done or tried to do. And if I haven’t gotten it done yet, I’m still trying to do it.”

Which for those playing the home game means, “I know I haven’t done everything I said, but my intentions are in a good place.”

Just like the world’s worst surgeon saying something like, “I know I keep killing patients, but honestly I’m trying desperately not to”, the President is telling us directly, all that matters are his intentions.

If only it were that easy.

An excellent publication overall, the Economist, is using their online debates to ask a question which doesn’t seem to have any useful answer (here):

This house believes that America’s political system is broken.

The current debaters are Matthew Yglesias, defending the motion and Peter Wehner arguing against.   In their second round of the debate, the house is winning with a full 75% agreeing to a broken US political system.

I say it doesn’t seem to have any useful answer as the most likely result from such a poll will be based mainly upon emotions.  Since most lay people don’t typically sit around and try to analyze political systems, the answers from the majority of respondents will have to fall back on other knowledge and human behavior demoonstrates this is likely to be emotions.  IE – if I like what’s going on, no fixing.  If I don’t like what’s going on, it needs fixing.

Reminds me a little of an argument I’ve seen a number of times in the health care debate.  Invariably, someone will put up a poll telling me how many people think their health care costs are too high.  & my retort stays the same, with some variation of Socratic questioning like… ”So?  Did you expect to see a poll that said most Americans want to pay more for anything?”

But I digress, the question has been asked and for Mr. Yglesias, things aren’t going well.  His baisc argument starts something like this:

American political institutions are in a period of crisis. The source of the crisis is relatively simple. Our institutions work only when leaders can reasonably expect broad bipartisan co-operation, but the emergence of more ideologically rigorous parties makes such co-operation extremely unlikely…

Which might make for a good thesis, assuming you can prove that broad bipartisan co-operation is indeed a requirement (hell, prove it’s useful…) as well as proving that more ideologically rigorous parties have come into existence.

His proof?  In the short, yet varied history of the US, he points to the last few election cycles – excluding all information about 9/11 and two wars and the nominal fact that the higher the consequence of any legislation the more ferocious the public debate – he starts his historical research by going all the way back to President Bush the younger; who entered the presidency with:

…an unprecedentedly weak electoral mandate. More voters marked their ballots for Al Gore than marked their ballots for Mr Bush. The median voter in the election supported Mr Gore. But thanks to a combination of litigation, stubbornness and the perversity of the electoral college, Mr Bush succeeded in prevailing and becoming president….

Just a quick note here – is it a little odd to start an arguement to theoretically prove that idealogically rigirous institutions are harming us, by being idealogically rigid… but whatever.

He contends that the result of the weak mandate  and an inability to overcome a Senate fillubuster worked well:

…This led to a fair amount of legislative co-operation in the first Bush term. A series of important changes to the Elementary and Secondary Education Act were approved; an extremely costly new prescription drug benefit was added to Medicare; income taxes were steeply cut—all on an at least somewhat bipartisan basis….

Somewhat bipartisan?  Like idealogically rigirous, “somewhat bipartisan” is undefinable in any concrete terms, but a quick look on just the tax cuts seems to indicate consistent partisan fighting.

What we know?

The cuts themselves were passed in two bills.

1. Economic Growth and Tax Relief Reconciliation Act of 2001 &
   1. Senate vote here, House vote here
2. Jobs and Growth Tax Relief Reconciliation Act of 2003.
   1. Vote totals here

In 2001: only 1 Republican voted against it in the Senate out of 33 nay votes (the other nays were Democrats), and in the House, all but one of the 154 nay votes were cast by Democrats.  & of course out of the yea votes, while less one sided, still doesn’t appear to be bipartisan.  In the Senate, 12 of the 58 yea votes were cast by Democrats and in the House 28 votes our of 240 yea votes were cast by Republicans.

& 2003?  I guess Mr. Yglesias would also be surprised to learn that in the 2003, the tax debate was even more lopsided (more…)

For good news – we have more research helping to confirm what true free trade advocates have always believed.  We don’t see a decrease in wages or living standards by trading with developing countries.  Via NBER here:

Concerns that (1) growth in developing countries could worsen the US terms of trade and (2) that increased US trade with developing countries will increase US wage inequality both implicitly reflect the assumption that goods produced in the United States and developing countries are close substitutes and that specialization is incomplete. In this paper we show on the contrary that there are distinctive patterns of international specialization and that developed and developing countries export fundamentally different products, especially those classified as high tech….

Which translated means, the US, one of their main agents in their research, has an economic dynamism (here & here)which results in the US never directly competing with other countries’ lower paid labor:

…Judged by export shares, the United States and developing countries specialize in quite different product
categories that, for the most part, do not overlap. Moreover, even when exports are classified in the
same category, there are large and systematic differences in unit values that suggest the products made
by developed and developing countries are not very close substitutes—developed country products
are far more sophisticated….

& this of course isn’t the only research making such conclusions (here & here).

But that’s not all.  We’ve seen historically that creating obstacles to free trade can hurt us severely (here):

One of the major causes of the Depression was Congress’s passage of the Smoot-Hawley Tariff, which was signed into law on June 17, 1930. Smoot-Hawley placed tariffs on more than 20,000 imported goods. It halted the recovery from the 1929 downturn and resulted in retaliatory tariffs from U.S. trading partners and a decline in U.S. imports and exports of more than 50 percent….

Though not all would say cause (here):

“The best estimates are that the multiplier is roughly 2. In that case, real GDP would have declined by about 3.4% between 1929 and 1931 as a result of the decline in real exports. Real GDP actually declined by about 16.5% between 1929 and 1931, so the decline in real exports can account for only about 21% of the total decline in real GDP.”

Irregardless, the research and economist communities agree on the benefits of free trade (here):

A 1990 survey of economists employed in the United States found that more than 90 percent generally agreed with the proposition that the use of tariffs and import quotas reduced the average standard of living….

Congress’ answer to all of this? A trade war with China (here):

The Democrat-backed bill passed by 348 to 79, and targets countries that hold down the value of their currencies, as many accuse China of doing….

The Senate’s answer?  A trade war with China (here): 

The chairman of the Senate Finance Committee said Wednesday that the upper chamber is “poised” to legislation meant to hammer China for its currency policies…

To paraphrase an axiom:  With economic heavy weights like this as friends, who need enemies… but I’m sure there’s no way they’ll screw up health care, right?

The President? A trade war with China…. sort of no.  While he’s pushing China just as other presidents have (here):

The Obama Administration believes that China needs to take steps on rectifying its currency value, White House Press Secretary Robert Gibbs said….

He hasn’t stated he would sign anything and other administration officials are pushing different views (here):

Treasury Department Secretary Timothy Geithner said there was “no risk” of a global currency war during a wide ranging interview with Charlie Rose Tuesday evening….

Intelligently, he’s keeping his options open in this very way.  Though I’m not sure I want to bet that he continues down the road of economics considering his approval ratings., but a smart move overall.

Writing in the NY Times, an MIT Professor for the Sloan School of Management, Simon Johnson explains how bad budget deficits will be if we allow the Bush tax cuts to continue.  Basically he tells us, if we fail, it will only be due to the fact that taxes aren’t high enough and we’re not spending enough money on the right things. (here):

According to the Congressional Budget Office, extending all the Bush tax cuts would add $2.3 trillion to the total 2018 debt. The single biggest step our government could take this year to address the structural deficit would be to let the tax cuts expire. Such a credible commitment to long-term fiscal sustainability should reduce interest rates today, helping to stimulate the economy….

According to Mr. Johnson, even though critics say letting the tax cuts expire would retard growth, that money could be used more effectively (he continues):

…If the goal is to boost growth and employment immediately, it would be better to let the tax cuts expire and dedicate some of the increased revenue to real stimulus programs…

You mean, stimulus programs like “Cash for Clunkers” (NBER working paper here)?

…Our empirical strategy exploits variation across U.S. cities in ex-ante exposure to the program as measured by the number of “clunkers” in the city as of the summer of 2008. We find that the program induced the purchase of an additional 360,000 cars in July and August of 2009. However, almost all of the additional purchases under the program were pulled forward from the very near future; the effect of the program on auto purchases is almost completely reversed by as early as March 2010 – only seven months after the program ended….

Or how about the stimulus plan we were told would keep unemployment rates to 8% (DA Post here), while they currently hover around 10% (here):

…in August, and the unemployment rate was about unchanged at 9.6 percent, the U.S. Bureau of Labor Statistics reported today.

Or…maybe the government takeover/purchase of GM (post here):

…in reality, the US Treasury through pressure by the Obama administration spent $50 billion dollars to own 61% of the shares.  With roughly 500 million shares available, this means the US government current owns 305 million shares.  At the current stock price today of .375 dollars, their 50 billion dollar investment is worth roughly 115 million dollars….

Or maybe controlling healthcare costs by passing a bill no one understands…. which has already started failing as insurers have already started raising rates more than goverment predictions (post here):

…The economics and logic of these required rate increases are undeniable.  If someone, in this case the government through force of law, tells a private business that they must increase their spending, under force of law, some, if not all, of those new expenditures will be passed on to consumers…

So to sum up Mr. Johnson, even though evidence, extremely recent evidence, demonstrates what economic thinkers have told us for centuries:  government can not create jobs – the problem doesn’t lie with government spending, but instead in allowing people to keep their own money.

I don’t know when we start understanding what Albert Einstein expressed so eloquently so many years ago, “The definition of insanity is doing the same thing over and over again and expecting different results.” but let’s hope it’s soon.

For more, excellent Cato article The Stimulus: The Government Job Creation Myth

It the state of MO, like other states with large cities, St. Louis & Kansas City both have local earnings taxes.  Meaning, in St. Louis at least, by merely working inside the city limits of St. Louis, you have an additional 1% income tax.

Enter the voter initiative (whole thing here via ):

…Proposition A wouldn’t repeal the tax, but it would give residents in the two cities a chance to vote every five years starting in 2011 on whether to continue the tax. If voters approved a repeal of the tax, it would be phased out over 10 years, at one-tenth of a percent each year.

The measure also bans any other cities from enacting an earnings tax….

Seems pretty benign, though I’m sure legal challenges will surface if Prop A passes…. assuming of course Missourians are allowed to vote at all.

Enter Kansas City government with union backing:

KANSAS CITY (AP) — Kansas City’s city attorney has filed a lawsuit seeking to block a November ballot measure that would allow residents of Kansas City and St. Louis decide whether to keep their cities’ earnings tax….

A group called Let Voters Decide submitted the ballot measure after the petition drive. The suit was filed on behalf of acting Kansas City city manager Troy Schulte and Pat Dujakovich, president of the Greater Kansas City AFL-CIO, both as private citizens….

What’s their main complaint?

…The lawsuit argues that the required elections would cost both St. Louis and Kansas City about $500,000, and neither city would be compensated for the cost.

According to the suit, Proposition A “becomes a de facto appropriation by voters statewide on Kansas City funds for the purpose of this (local) election.”…

But…

…Let Voters Decide spokesman Marc Ellinger said the measure wouldn’t require either city to pay for a local election if they just wanted to skip the vote and let the tax phase out automatically….

Please don’t get me wrong here, Kansas City might have a good legal basis for their arguments, but I’m unsure we should be living in a government which chooses to sue the state in order to specifically prevent voters from casting their ballots.

Maybe I’m off here, but I always thought for a law to be challenged it had to exist first, then harm would have to exist to give any client standing.

Of course don’t tell that to the President or Arizona either, but I’m digressing.

The point is only that when the government seeks to actively prevent your voice from being heard through ballot initiatives, people should be concerned.

As ABC News reports, parts of Arizona’s recently enacted immigration statutes have been suspended by a federal judge (whole thing here):

Arizona’s tough new immigration law was just hours away from taking effect when a federal judge issued an injunction today blocking key portions of the law from being enforced.

Among the provisions U.S. District Judge Susan Bolton put on hold are the “reasonable suspicion” section that would allow police to arrest and detain suspected illegal immigrants without a warrant and a provision making it illegal for undocumented day laborers to solicit or perform work.

Bolton also stayed part of the Arizona law requiring immigrants to carry federal immigration documents.

Based upon the likelihood that these provisions could be used by officers to wrongly detain legal residents.

Next steps? Arizona will likely appeal and lose that appeal at the 9th Circuit Court.  The final arbiter of course being SCOTUS if they decide to take the case upon any further appeals.

Legally speaking, it’s an interesting question.  Basically, one of the powers the federal government holds is over immigration status and therefore it can be legally argued that Arizona has overstepped its authority (regardless of whether legal citizens will be wrongly detained).  However, does this mean a state has no resource against illegal aliens if the federal government is doing a poor job at the very responsibility they are stating they have absolute authority over.

More interesting I think will be the upcoming round of debates on a continuing question:  What is judicial activism and who is and isn’t exactly against it?

& the question isn’t an easy one.   Two fairly recent decisions can illustrate the complexity.  For most of recent memory, conservatives have been leading the charge against judicial activism.  But take a case like Kelo v New London where conservative outrage notwithstanding, the court followed the restraint pattern by enforcing prior precedence.

Move forward to McDonald v the City of Chicago and whether conservatives think so or not, a federal decision has invalidated a law the citizens of Chicago seemed to agree (based upon the fact they have recourse through voting)…. this would be judicial activism.

In most people’s minds it seems judicial activism is only wrong when a law your side has passed met its end through the legal system, otherwise it’s always wise restraint or cautious interference.

But let’s call it what it is:  judicial activism is when the court system invalidates the will of the voters.  This is true whether they invalidate gun laws, marriage statutes or amendments, immigration laws, sodomy laws, marijuana laws, and on and on and on.

Let’s further assume no one is really against all judicial activism.  I think most reasonable people can agree that say if judges were to invalidate the intermittent of Japanese-Americans during WWII, it would’ve been both activist and morally correct.  Even if most people couldn’t agree on that, we can all envision unjust laws which should not stand.

If we can allow for that definition, the maybe we can change the question as well.  Instead of – are you for or against judicial activism – to – how and when should judges be activist; we might begin to move towards a more reasoned debate.

So let’s call this one what it is – judicial activism and ask, should it have been used?  Why/why not?

I for one want to see judicial activism to always err on the side of individual rights and freedoms, not collections, groups, NOGs, nor government agencies.  This case gives me pause either as I am supporting of Arizona’s rights, the freedom of those individual voters to enact the laws they wish, but also am against current immigration policy.  For now, the voters spoke and I would err on the side of those individuals.

Others of course will draw the line in different places.

What’s important however is that we understand the line exists, instead of continuing to pretend it moves based upon our wishes.

more here on the debate: Reason’s July Cover Story Conservatives v. Libertarians

Well, the verdict is in. The Republicans are being cast as the party of no.  The party without ideas.  The party of obstruction.

Please make no mistake about it, this marketing push isn’t really about obstruction, but about the upcoming elections.  Just as President Clinton did brilliantly prior the 1996 elections when he cast all Republicans as following Newt Gingrich and obstructing spending laws, the Obama administration is moving forward in much the same pattern.

This is possible because the White House, regardless of occupant, has historically been able to control the news cycle.  In my opinion, this should be an indictment on journalism as a whole when alternatives which exist aren’t being reported, but simply put:  when the President talks, news happens.  When your normal representative talks, you’re lucky if you even hear about it.

It worked during the Clinton Administration on spending, it worked during the Bush (43) Administration on the Patriot Act, & it certainly might work again this time. Irregardless, the campaign is back and in high gear (here via USA Today):

…”Too often, the Republican leadership in the United States Senate chooses to filibuster our recovery and obstruct our progress,” Obama said. “And that has very real consequences.”…

Or here via NY Times blog, here via WaPo, & on and on and on…

From a critical point of view however, obstructionist should not automatically be a pejorative.   Without analyzing what exactly is being obstructed, this is little more than name calling.

As an example, if say in the 1940s Congress was actively trying to “obstruct” the internment of thousands of innocent Japanese-Americans, this would not only be a moral good, but any thoughts to compromise solely to be seen as a non-obstructionist would be wrong.  What would be a compromised alternative?  House arrest?

Additionally, we have to be on the lookout for the differences between the marketing of bills and their actual language.  Think of the new health care legislation.  President Obama’s promises of more health care for all at cheaper prices, simply don’t seem to be fulfilled by the 2500 page law passed… or maybe they are being fulfilled, but like the Patriot Act, no one really knows what the new legislation actually means (here via Cato):

…The Patient Protection and Affordable Care Act represents the most significant transformation of the American health care system since Medicare and Medicaid. It will fundamentally change nearly every aspect of health care, from insurance to the final delivery of care.

The length and complexity of the legislation, combined with a debate that often generated more heat than light, has led to massive confusion about the law’s likely impact….

Or on yesterday’s Meet The Press Rep. Van Hollen stated (transcripts here via MSNBC):

…The frustration is there are lots of important bills to push for jobs that are sitting over in the Senate.  But it’s not the fault of the Democratic leadership in the Senate.  I mean, frankly, you know, John Cornyn and his allies have been trying to block a whole lot of very important jobs measures.  We in fact sent a piece of legislation over very recently that would remove these perverse tax incentives to ship American jobs overseas, that give American corporations a bonus if they ship American jobs overseas….

Just like health care, the basic idea that our representatives are working on private job creation incentives is a good one.  But just like the Obama Administration’s promises on health care, Rep. Van Hollen is selling us a job creation bill which has little chance of actually creating jobs.

To translate – what they mean by “removing incentives” is to increase taxes on businesses who outsource.  Now, some may want this to happen for various reasons, but the economics are pretty straight forward.  Tax increases have never increased jobs & forcing a tax such as this could actually result in companies simply moving their head quarters as well.

To be fair, there are bills I don’t believe the Republicans should block, for instance the extension on unemployment benefits (though it seems likely to pass soon: here via The Hill).

Yes, the point isn’t that the Republicans are doing the right thing and the Democrats are failing at every single step, the point is only intended to remind us of the old saying about representative governance:

The people will get the government they deserve.

& so long as we allow marketing campaigns to have more force in elections than critical analysis does, we will likely continue to be disappointed.