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

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

Wednesday, May 24, 2017

Personal history: Taxes and growing up

The other night, I was thinking about health care, and about the fairly common practice, as late as the 1950s, of primary care physicians (or, "family doctors," as they were called then) engaging in (informal, and mostly secret) price discrimination.  It was , as I say, common--doctors charged their low-income patients lower prices for office visits and often for simple, routine operations (tonsillectomies, for example), and their higher income patients higher prices.[1]  I was aware of this, even at the time, because my family was, in fact, a beneficiary of that price discrimination--we were low income, my father did not have health insurance through his employer, and my mother did not work outside the home for pay until around 1959 (when I was 11, and the youngest child in the family was 5 and in school half-days).

This led me to think, for some reason, about taxes.  In 1956/1957, my father was working as a credit manager for a wholesale plywood company.  The job was "white collar," but did not require significant skills; someone who could be employed as a bookkeeper could do the job.  At that point, he was 35/36 years old, with a BS (business, with a concentration in accounting) from a well-regarded local university.  He was making $300 a month.[2]  He was married, with four children. My mother, who at that time was not working, had a BA in music (with a minor in English) and an Indiana elementary/secondary teacher's license.  So what was the family tax situation?

He earned $3,600 per year.  At the time, the federal income tax provided personal exemptions of $600 per person for a family which was married and filing jointly.  Our family, then, had no federal income tax liability.  Indiana (where we lived) had a 2% personal income tax, applied to the family's adjusted gross income from the federal return.  Our AGI was $0, so we paid no state income tax.  The state had no sales tax until 1959.  Social Security tax was 2.25% per year, or $81 per year.

That leaves (besides excise taxes on cigarettes, gasoline, and alcohol) the property tax.  When my family moved to Indianapolis in 1952, my parents bought a fairly large 2 story house, for $9,600.  By 1967, the house was probably worth around $12,500, and the property tax rate (f my subsequent experience of living in Indianapolis is applicable) would probably have been (roughly) 2% of the market value of the property, or about $250 per year.  My best guess is that state excise taxes on gasoline, alcohol, and cigarettes probably cost our family another $150 or so per year. 

Adding that all up, I get something like $500 per year in federal, state, and local taxes, or about 14% of the total family income.  We were, in a very real sense, either very, very near the bottom of "lower middle income," or below that...we were most likely poor.  And our family doctor most likely knew that, and so we got a break on his rates.  (We were, I should note, a generally healthy family, so our health care expenses were probably quite low, but definitely not zero; I know that when my father broke his left thumb and wrist, paying the doctor and hospital bills were a big deal.)

There's no big point here, just a little family history...

[1] The practice is described here:
Reuben A. Kessel , "Price Discrimination in Medicine," The Journal of Law & Economics,Vol. 1 (Oct., 1958), pp. 20-53.

[2] The equivalent of about $2,600 per month today.

Sunday, May 21, 2017

Student Debt

I posted a snarky comment on a blog I read  about levels of student debt in the 1970s and decided to take a look at actual data, which are here:

Inflation-adjusted (2012 prices) debt per enrolled student (in 4-year colleges and universities):

Year......Average Debt
1976........$   883

This is the average level of student debt, across all students, and includes students with no debt. The increase is extraordinary--averaged across all students, (inflation-adjusted) debt was about 7 times as high in 2013 as in 1971. The same report from which I extracted the above data also reports:
"Most discussions of average debt levels focus on debt per borrower, setting aside the significant number of college students who do not borrow at all, or at least do not rely on education loans. In 2007-08, 34% of bachelor’s degree recipients, 52% of associate degree recipients, and 37% of those who earned postsecondary certificates did not have education debt. Including these students may obscure some of the potential problems facing borrowers, but it paints a clearer picture of how students finance their education. For example, in 2007-08,median debt for bachelor’s degree recipients who borrowed was $20,000 and 10% borrowed more than $44,500. The median for all bachelor’s degree recipients was $11,000 and the 90th percentile was $39,300."

So in 2007-2008, 2/3 of all bachelor's degree recipients had some student debt. I can find no data for the early 1970s, but my own experience suggests that less than 1/3 of degree recipients in the early 1970s had student loans. So the median in 1971 was probably zero, whereas the median in 2007-08 was, according to t his report, $11,000 (looking only with students with some debt, the median was $20,000).