Comments on economics, mystery fiction, drama, and art.

Sunday, November 12, 2017

One Day after Armistice Day

  1. This was written by Kurt Vonnegut; it's from Cat's Cradle, one of three books that I think of as his World War II trilogy [Mother Night (1961); Cat's Cradle (1963), and Slaughter-House Five, or the Children's Crusade (1969.] Vonnegut was a POW during World War II, detained in Dresden, and was in Dresden when the allies fire-bombed it (February 13-15, 1945). 135,000 people, more or less, lost their lives those nights. Dresden had no military targets--no war materials facto...ries, no army bases.
    I am about to do a very un-ambassadorial thing ... I am about to tell you what I really feel. ... We are gathered here, friends ... to honor [the Hundred Martyrs to Democracy], children dead, all dead, all murdered in war. It is customary on days like this to call such lost children men. I am unable to call them men for this simple reason: that in the same war in which [the Martyrs] died, my own son died. My soul insists that I mourn not a man but a child.
    I do not say that children at war do not die like men, if they have to die. To their everlasting honor and our everlasting shame, they do die like men, thus making possible the manly jubilation of patriotic holidays.
    But they are murdered children all same.
    And I propose to you that if we are to pay our sincere respects to the hundred lost children of San Lorenzo, that we might best spend the day despising what killed them; which is to say, the stupidity and viciousness of all mankind.
    Perhaps, when we remember wars, we should take off our clothes and paint ourselves blue and go on all fours all day long and grunt like pigs. That would surely be more appropriate than noble oratory and shows of flags and well-oiled guns. ... [I]f today is really in honor of a hundred children murdered in war ... is today a day for a thrilling show? The answer is yes, on one condition: that we, the celebrants, are working consciously and tirelessly to reduce the stupidity and viciousness of all mankind.

Monday, October 23, 2017

The Crporate Tax Cut and the Earnings of American Workers

Kevin Hassett, Trump's selection to chair the President's Council of Economic Advisors, has said “The truth is a tax cut like [cutting the statutory corporate income tax from 35% to 20%--DAC] this very conservatively will increase the median wage about $4,000 a year.”   That would result in earnings increases for U.S. workers of about $616 billion per year (based on the current employment level of about 154 million.  While I cannot find an estimate of the number of workers employed by general corporations, what I have found suggests that only around 50% of US workers work for such firms (or around 77 million workers).  And this would suggest that the average increase in earnings of corporate employees would have to rise by about $8,000 per worker.  So here's what I would say--do not count on Hassett's forecast coming true at any time in the foreseeable future.

If U.S. corporations were, in fact paying the statutory rate, and if their profits continued at their 2016 level ($2 trillion), corporate tax liabilities would fall from about $750 billion to about $414 billion.  Since 2011, however, the average effective corporate tax rate has been...about 20%.  Independent estimates of the effect of restructuring the corporate tax rate along the lines being proposed suggest that corporations would see tax reductions of about $200 billion.  

So there is a real disconnect here.  Hassett's estimate of the effect of the tax cut on worker earnings is about 50% higher than the total receipts from the corporate income tax, and about 3 times the size of other estimates of the corporate tax saving.  Either of those estimates of the relationship between earnings and corporate income tax cuts seems, at best, over-optimistic.  They imply that after-tax corporate income would fall, and no study ever conducted of the incidence of the corporate income tax suggests such an outcome.  And note that this is from a cut in corporate income taxes; the reduction in corporate income tax rates would not directly affect non-corporate entities.

In fact, the number of general corporations in the US has declined by about 1 million since 1986, as alternative forms of organization have increased.  This change has been driven by several factors, but it suggests that corporate income taxes have become of declining importance--and, therefore, that reductions in corporate income tax rates are likely to be less and less important.

We might well conclude that corporate income taxes are an inefficient method or raising revenues.  But to suggest that reducing the existing corporate tax rate would lead to explosive growth in the average earnings of all US workers--or even of the average earnings of corporate employees--is to engage in fantasy.

Sunday, October 22, 2017

"Those who have served..."

There is something I find myself almost forced to say, which is a response to a part of this comment by Kelly at his press conference:

“We don't look down upon those who haven't served,” Kelly said at the end of the presser. “In a way we're a bit sorry because you'll never experience the wonderful joy you get in your heart when you do the kind of things our service men and women do.”

The words "those who have served" the country and "those who haven't served" are *dangerous*, because they imply, even if they do not say explicitly, that only those who have been in the military have "served" America. Consider the public health service doctors who help provide health care in difficult situations. Consider the researchers at the Centers for Disease Control. Consider the people who work to help low income families and the homeless find affordable housing. Consider the people who volunteer in shelters, in soup kitchens, in schools.

Consider the people at the BLS or the BEA who compile and analyze data that help us understand how our country is doing. Consider the lawyers at the DOJ--criminal or civil--who help protect us and our rights. Consider the folks who investigate airline/railroad crashes, trying to make out lives safer...the people working at the Consumer Product Safety the Consumer Finance Protection law enforcement at the national level.

Consider the people whose work, at the Department of Transportation is essential in building and maintaining roads designed for safety as well as speed of transportation...the people at the EPA working to protect peoples lives and health...

To collapse "service" to this country into one very narrow thing is to do a disservice to millions of people whose work does not require them to wear uniforms, but does represent service to this country. By suggesting otherwise, Kelly is, whether he believes it or not, "looking down on," denigrating the work of millions of Americans who have the well-being and, yes, the safety of this country at the core of their lives.

Wednesday, September 06, 2017

Banning the (Confderate) flag

Earlier tonight, I read an article about students at Lapel High School (in Lapel, IN) wearing Confederate-flag clothing to school.  The school reacted by banning such clothing; the students, according to the principal, “said they were trying to support the Southern heritage of the flag and not people’s opinion of what the flag may stand for.”

Leaving aside what is (to me, at any rate) appalling ignorance on the part of the students (or a lack of candor about their intentions)—the Confederate flag is not a symbol of southern heritage—it’s a symbol inextricably tied to the existence of slavery in the south and of a war that was fought to sustain slavery and to create conditions for the geographical expansion of slavery—I find myself oddly ambivalent about the whole situation.  You see, I am old enough to remember how political speech was, in another context, treated in schools across the United States.

In the 1960s, and especially in the latter part of the decade, school officials across the US responded to students who wore clothing displaying the peace symbol, not by discussing it with the
students, but by expelling them.  It took a lot of time, and a lot of trouble, before the courts recognized, and public officials (like school principals) were forced to accept that wearing such clothing was—and is—protected speech.  (So was, it may be remarkable to recall, clothing made from, or displaying the American flag.) 

The only appropriate response to protected political speech is not to try to suppress it; it is to respond to it (or ignore it).  At Lapel, the principal, as he describes it, tried to explain to the students why such clothing was inappropriate:  "We talked about the Southern heritage, and that for many people, that flag stands for racism. We emphasized they need to know what the message (is) they’re sending."  (Although I think he got the message of the Confederate flag wrong—it’s not –just—racism; it’s support for the institution of slavery, and, more specifically, slavery based on race.)  When the students returned the following day, again wearing Confederate flag clothing, the school banned it.  (The students were not personally disciplined.)

I understand the school’s actions.  (I don’t understand the student’ actions, but that’s because I do not share their apparent—as demonstrated by their actions—politics.)  But if we (I) can prohibit political speech of which we (I) disapprove, what grounds do we (I) have for protesting when someone bans our (my) political speech?  In the 1960s, people fought for their right to express their opposition to the war in Viet Nam (which was growing increasingly unpopular, but which still had a lot of support).  I think that, as a society, we now at least sort of agree that it was a war we should not have fought.  And, at least to some extent, we see the protests against that was as justified

Those students are wrong, I think, to believe that displaying the Confederate flag is a benign act.  It’s not.  Their politics are wrong, their beliefs are wrong.  Say I.  But the First Amendment gives people the right to be wrong.  So I wind up not knowing what to do.  Would shunning those students “work”?  I don’t know.  It could just confirm them in their beliefs.  Will banning the Confederate flag “work”?  I don’t know.  It may just drive the whole thing underground, so that it goes unaddressed, unconfronted, unresolved. 

The problem with believing in freedom of speech, unfortunately, is that we have to deal, somehow, over and over again, with things like this.

Monday, July 24, 2017

All those meetings

I am tired of hearing that the famous meeting between the team of Junior, Kushner, and Manafort and the Russian lawyer wound up being about Americans adopting Russian children.

The reason no adoptions are occurring is a Russian law prohibiting them. If Russia wants to resume adoptions, all it needs to do is *repeal that law.*
But, it might be objected, that law exists for a reason.

And what, we ask, is that reason?

It's that the US has a law restricting investments by American companies in Russian oil & gas extraction projects. And Russia insists that the US end those restrictions *before* it will *consider* resuming adoptions.

So that meeting? It was really an attempt to get the US to end economic sanctions against Russia. Nothing more.

Friday, June 09, 2017

"Representative" Government in the United States

I've wondered about this for a while, and the election in the UK finally stimulated me to do the math.  The 5 most populous countries in western Europe are France, Germany, Italy, Spain, and the UK, with a total population of about 316 million.  The US has a population of about 320 million.  So about the same population base.

In the national parliaments of the European countries, each parliamentary member represents, on average, about 112,000 people (ranging from a high of 131,000 in Spain (46.1 million people, 350 MP) to a low of 95,000 (Italy: 59.8 million people, 630 MP.

In the US, the average member of the House of Representative represents about 720,000 people, or abut 6.5 times as many constituents as in Europe.  (The US would been a Congress of about 2,700 members to have the same constituents-to-representative ratio as the US does.)  Just for comparison sake, here are some numbers for the US through its history:

..............Number of
..............Members of................People per


Compared to countries in Europe, this suggests that for at least 100 years US member of Congress have represented significantly larger constituencies that has been the case for European members of parliaments.  We are, in that sense, a "small government" country and always have been.  It seems to me to be impossible for any Member of Congress to know any significant number of the people s/he is representing personally--today, that would mean knowing over 7,000 in some sense personally.  It's even more difficult to believe that a member of Congress knows personally very many people who actually support the other party.

Clearly a Congress of 2,700 people is preposterous (unwieldy, impossible to manage effectively, and way too expensive).  But a Congress of 435 people, it seems to me, is increasingly creating the reality of a Congress composed of people who are literally incapable of knowing whom they represent.  (And, no, I don't have a solution.)

Monday, May 29, 2017

Robert Heinlein, Concerning Stories Never Written: A Postscript to Revolt in 2100

As for the second notion, the idea that we could lose our freedom by succumbing to a wave of religious hysteria, I am sorry to say that I consider it possible.  I hope that it is not probable. But there is a latent deep strain of religious fanaticism in this, our culture; it is rooted in our history and it has broken out many times in the past. It is with us now; there has been a sharp rise in strongly evangelical sects in this country in recent years, some of which hold beliefs theocratic in the extreme, anti-intellectual, anti-scientific, and anti-libertarian.

It is a truism that almost any sect, cult, or religion will legislate its creed into law if it acquires  the political power to do so, and will follow it by suppressing opposition, subverting all education to seize early the minds of the young, and by killing, locking up, or driving underground all heretics.  This is equally true whether the faith is Communism or Holy-Rollerism; indeed it is the bounden duty of the faithful to do so.  The custodians of the True Faith cannot logically admit tolerance of heresy to be a virtue.
Nevertheless this business of legislating religious beliefs into law has never been more than sporadically successful in this country – Sunday closing laws here and there, birth control legislation in spots, the Prohibition experiment, temporary enclaves of theocracy such as Voliva’s Zion, Smith’s Nauvoo, a few others.  The country is split up into such a variety of faiths and sects that a degree of uneasy tolerance now exists from expedient compromise; the minorities constitute a majority of opposition against each other.
 Could it be otherwise here?  Could any one sect obtain a working majority at the polls and take over the country? Perhaps not – but a combination of a dynamic evangelist, television, enough money, and modern techniques of advertising and propaganda might make Billy Sunday’s efforts look like a corner store compared to Sears Roebuck. Throw in a depression for good measure, promise a material heaven here on earth, add a dash of anti-Semitism, anti-Catholicism, anti-Negroism, and a good large dose of anti-“furriners” in general and anti-intellectuals here at home and the result might be something quite frightening – particularly when one recalls that our voting system is such that a minority distributed as pluralities in enough states can constitute a working majority in Washington.
I imagined Nehemiah Scudder [the first Prophet--DAC] as a backwoods evangelist...[who was left] several millions of dollars...on their wat to fame and fortune.  Presently they needed stormtroopers; they revived the Ku Klux Kln in everything but the name...Blood at the polls and blood in the streets, but Scudder won the election.  The next election was never held.
Impossible?  Remember the Klan in the Twenties--and how far it got without even a dynamic leader.  Remember Karl Marx and note how close that unscientific piece of nonsense called Das Kapital has come to smothering out all freedom of thought on half of a planet, without--mind you--the emotional advantage f calling it a religion.  The capacity of the human mind for swallowing nonsense and spewing it forth in violent and repetitive action has never yet been plumbed.
Written in October 1952