Congrats to my fellow blogger Jason Pye, who was selected for a roundtable discussion on Neal Cavuto’s show on Fox News. Jason was one of the “Tea Party” protesters in Atlanta. Good job!
Cavuto was somewhat flippant about the limited nature of these protests. I sincerely hope that future protests grow, because this is an issue too important to be dismissed as a “tiny minority” viewpoint.
Ezra Klein, suggesting he’d rather be poorer and more equal than richer and more unequal:
Robert Frank explains this well in his book Falling Behind: How Rising Inequality Harms the Middle Class, but a nice way to think about it is through housing: Would you rather live in a land where you had a 4,000-square-foot house and everyone else had a 6,000-square-foot house, or one in which you had a 3,000-square-foot house and everyone else had a 2,000-square-foot house? Given this choice, studies show that most respondents pick the latter. They’d rather have less home in absolute terms if it means more home in relative terms. That makes housing a positional good.
Being concerned with one’s relative position rather than one’s absolute position is not irrational or merely motivated by envy.
Well, first things first — I’d definitely call it irrational and motivated by envy. It may be common, but that doesn’t make it rational. Rationally, increasing absolute wealth is a good thing, while irrationally, other people’s absolute wealth increasing faster than yours is a bad thing. This is another area where it is not a zero-sum game, so there is no rational reason to feel bad about other people improving faster than you do.
But that’s not where I’m going with this. This is about taxes, and something that Friedrich Hayek said a long time ago:
It would probably be true, on the other hand, to say that the illusion that by means of progressive taxation the burden can be shifted substantially onto the shoulders of the wealthy has been the chief reason why taxation has increased as fast as it has done and that, under the influence of this illusion, the masses have come to accept a much heavier load than they would have done otherwise. The only major result of the policy has been the severe limitation of the incomes that could be earned by the most successful and thereby gratification of the envy of the less-well-off.
He’s saying that the middle class is willing to accept higher tax burdens, as long as those above them are getting absolutely soaked. Is that irrational?
Well, let’s say I work for a living and make the median household income of $50,000/year. I work hard, and every paycheck I see money taken out of my paycheck for taxes — for the sake of argument, $10,000/year. My neighbor, on the other hand, is working very hard at a higher-paying job, making $100,000/year, but is paying the same flat tax rate of 20%, thus $20,000/year.
If Ezra Klein is right about the rationality of positional goods, it makes perfect sense for me to be happy if my taxes are raised to $20,000/year (40%), as long as my neighbor’s taxes are raised to $50,000/year (50%). In what bizarro world should it be rational that I be happier to give up $10,000/year more to the government if I simply think that those making more that me are getting soaked even worse?
I often behave and argue as if government is incompetent. They’re not — they’re just working in their own interest rather than ours. I’m sure that politicians are well aware of the fact that increasing marginal tax rates on the rich will make it easier for the middle and lower classes to expect tax increases as well. They can then hide the high rates on their rich donors through loopholes, while soaking the middle class, where the money is. Politicians are very useful at using psychology: very useful at using it against us.
Despite President Obama’s assertion that “Nobody messes with Joe” in his speech before congress on Tuesday, Reason.tv does just that in this video entitled Real Man of Genius: Joe Biden
Just when we thought that with Bush being replaced by a virtually “parody proof*” Barack Obama would make life difficult for comedians, satirists, humorists, and bloggers, Joe Biden comes through in a big way! Between his goofy grin and tendency to place his foot firmly in his mouth at any moment, our new vice president is the gift which keeps giving.
Far from “No one messes with Joe,” how can anyone NOT mess with Joe?
What would they call this, then?
A new Citigroup deal has finally been announced by the Treasury. The government will convert $25 billion in preferred shares to common shares. The move could give the Treasury close to a 36% stake in the company. The government’s influence is becoming apparent. Citi will eliminate its dividend and is facing pressure to participate in a new foreclosure prevention programme.
The announcement by Eric Holder that I wrote about yesterday regarding the return of the “assault weapons” ban received this very interesting reception from Democratic leaders on Capitol Hill:
Senate Majority Leader Harry Reid will join Speaker Nancy Pelosi (D-Calif.) in opposing any effort to revive the 1994 assault weapons ban, putting them on the opposite side of the Obama administration.
Reid spokesman Jim Manley said the Nevada Democrat will preserve his traditional pro-gun rights voting record.
“Senator Reid would oppose an effort (to) reinstate the ban if the Senate were to vote on it in the future,” Manley told The Hill in an e-mail late Thursday night.
It was not immediately clear whether Reid would block the bill from the Senate, but his opposition casts serious doubt on its chances. Also, Manley noted that Reid voted against the ban in 1994 and again when it expired in 2004.
Reid’s stance joins him with Pelosi, who told reporters Thursday that the administration had not checked with her before Attorney General Eric Holder told reporters the administration would attempt to reinstate the ban. Pelosi gave a flat “no” when asked if she had spoken to Holder or any other administration officials about the issue.
“On that score, I think we need to enforce the laws we have right now,” Pelosi said at her weekly news conference. “I think it’s clear the Bush administration didn’t do that.”
Outside of the dig at the recent Republican president, that phrase is the stock line of those who don’t want to pass new gun control laws, such as the National Rifle Association.
So does this mean that Democrats in Congress are finding some new respect for Second Amendment rights ?
Well, not really:
A number of House Democrats lost their seats after being targeted by the National Rifle Association for voting for the 1994 ban.
Pelosi and Reid do not want this because they don’t want it to become an issue in 2010 they way it was in 1994.
Pure politics, but I’ll take what I can get on this.
H/T: QandO
