Guilty pleasure

I recently downloaded Tommy James and the Shondells' Crimson and Clover - the album version, of course.

Not that I'm proud of myself for this ...

No good economist should support a stimulus bill

Let's think in terms of the actual bill we would get, not the hypothetical bill one might design.  It will be late, a Christmas tree loaded with lobbyists' garbage, larded by both parties since otherwise it wouldn't become law, and full of bad new stuff that will just stay on as the business cycle changes.

Latest Rudy follies

Our boy has apparently decided that the way to get back in the Republican race is to offer the biggest, most pandering tax cut of all. An unnamed fiscal policy expert has been quoted in blogs elsewhere as saying that Rudy's tax cut package is "huge," about 4 percent of GDP, or more than twice the size of the Reagan or Bush tax cuts.

Since the present value of all future US GDP under current projections is probably a bit over $800 trillion, this implies that the Rudy tax cuts would add more than $30 trillion to the fiscal gap. This is about 50 percent bigger than Medicare prescription drugs and 3 times bigger than the Social Security shortfall.

Who's crazier?

Bush says he expects a Mideast peace treaty by the end of his term. Isiah Thomas says the Knicks are headed towards an NBA championship soon, and that all members of his 9-25 team are untouchable.

The Bush Administration pays for the Iraq war!

Jason Furman just sent me the following article from the Congressional Quarterly:

CQ TODAY - BUDGET

Jan. 9, 2008 - 1:31 p.m.

Sparing Trees, Saving Money: The Fiscal 2009 'E-Budget'

By David Clarke, CQ Staff

There will be no delivery truck pulling up to the White House next month to unload freshly printed copies of President Bush's fiscal 2009 budget proposal, which is likely to total more than 2,000 pages.

The White House estimates it would need to order more than 3,000 copies of the books this year in order to provide copies to its own staff, lawmakers and the news media as it has done in the past.

Instead, it will send those eager readers to an Office of Management and Budget Web site (www.budget.gov) on Feb. 4, the day Bush will submit his new budget to Congress.

The move is an effort to save money and spare some trees, budget director Jim Nussle said Wednesday. "This step will save nearly 20 tons of paper, or roughly 480 trees," Nussle said in a statement. "In terms of fiscal savings, we estimate the E-Budget will save nearly a million dollars over the next five years."

For those who just can't live without the paper version, the four-volume set can still be ordered from the Government Printing Office. But Nussle urged all potential readers to embrace the E-Budget.

The budget has been online for several years, but this year OMB is hoping to publicize its availability more effectively. "Having an E-Budget also aligns well with the president's E-Gov initiative, which focuses on utilizing technology to make the Federal Government more efficient and to improve transparency in order to better serve citizens, businesses and agencies alike," Nussle said in his statement.

[END OF ARTICLE]

As Jason clearly recognized in sending this to me, it offers an ideal set-up for numerous and diverse punchlines. He offers one, asking whether the $200,000 annual saving "make[s] up for Bush's other fiscal and environmental policies."

For mine, I note that a New York Times article nearly a year ago (available at http://www.nytimes.com/2007/01/17/business/17leonhardt.html ) suggests that the Iraq war had cost about $1.2 trillion to date. Call it $240 billion a year. No one seems to have realized that the Administration entirely paid for this - even before the e-budget initiative - simply by NOT printing an extra 3.6 million copies per year of its annual budget. (I assume for simplicity a fixed per unit cost.)

When is the press going to give Bush full credit for this? Liberal bias liberal bias liberal bias.

Freedom is slavery

The Iowa contests have me watching CNN for a couple of nights, which I don't often do (unbearable fatuousness and vapidity, and that's not even counting the politicians).  But in watching discussion of the Republican race, I was struck (though I've noticed this for a while) about how "fiscal conservative" now means someone who favors huge budget deficits.  More specifically, a "fiscal conservative" favors huge and unending tax cuts while having no obligation whatsoever to address the outlay side other than through very vague and general rhetoric.   Thus requiring huge and ever-growing deficits as a matter of simple arithmetic.

Interesting way to use the English language.

2008 NYU Tax Policy Colloquium

The spring semester Tax Policy Colloquium that I have been co-running at NYU since 1996 starts up again on Thursday, January 17, with a 4-6 pm session at Furman Hall, room 120, at NYU Law School. My co-conveners will be Kevin Hassett of the American Enterprise Institute for the first seven weeks, and Mihir Desai of the Harvard Business School for the last seven weeks. The schedule of speakers is as follows:

1. January 17 – Lily Batchelder, NYU Law School, “The Superiority of an Inheritance Tax Over an Estate Tax or No Wealth Transfer Tax.”

2. January 24 – Daniel Halperin, Harvard Law School, “Deferred Compensation Revisited.”

3. January 31 – Kevin Hassett, American Enterprise Institute, “Taxes and Wages.”

4. February 7 – Chris Sanchirico, Penn Law School, “The Tax Advantage to Paying Private Equity Funds Managers With Profit Shares: What Is It? Why Is It Bad?”

5. February 14 – Sarah Lawsky, George Washington University Law School, paper to be determined.

6. February 21 – Brian Galle, Florida State University Law School, “Fairness and Federalism in Taxation.”

7. February 28 – Jason Furman, Brookings Institution, “Dynamic Distributional Scoring.”

8. March 6 – Mihir Desai, Harvard Business School, paper to be determined.

9. March 13 – Ruth Mason University of Connecticut Law School, “The Federal Interest in Structurally Coherent State Taxes.”

10. March 27 – Andrea Louis Campbell, MIT, paper to be determined.

11. April 3 – Jonathan Barry Forman, University of Oklahoma Law School, “Making Social Security Work.”

12. April 10 – Alan Auerbach, Berkeley Economics Department, “Long-Term Objectives for Government Debt.”

13. April 17 – David Gamage, Boalt Law School, "On Capital Income Taxation: Refuting the Cases for Consumption Taxation and for Reduced Capital Gains Tax Rates."

14. April 24 – Daniel Shaviro, NYU Law School, “The Optimal Relationship Between Taxable Income and Financial Accounting Income.” (Unless I substitute a chapter or two from my Urban Institute Press book in progress, "The U.S. Corporate Tax: What Is It, and Where Is It Headed?")

Latest reading

After finishing the William Randolph Hearst biography that I noted in an earlier post, I sprinted through two novels, slacker-ironist Benjamin Kunkel's Indecision and dour Ian MacEwan's On Chesil Beach. The latter, though painful, is really good, and makes the former feel in retrospect a bit like amateur hour (though that's too harsh about a largely enjoyable read).

Next week I will begin a semester's hard labor on my school's appointments committee. This may doom my reading for a while, given the tree-slaying tomes by potential hirees or invitees that I will need to spend my weekends slogging through.

Good news from Iowa

At least, that's how I see it. On the Democratic side, I just hope Obama (if elected) doesn't actually believe that he can work "together" with Republican revanchists. But perhaps this is to a degree just astute packaging. And I am hoping he will be elected.

On the Republican side, to backtrack for a moment to 2000, one lesson some people take from the campaign that year is that you shouldn't focus on personality in the shallow, superficial way that the press did in preferring Bush to Gore. But another, very different-sounding lesson (not necessarily inconsistent, however) is that the individual's campaign, including what it tells you about his or her personality, is actually highly pertinent.

Thus, Krugman keeps noting that Bush's campaign platform in 2000 showed how reckless and dishonest he is. I'd add that Bush's odious personal qualities were already on full display, although I along with others didn't fully grasp this. An example is his sadism, which came out in the debate with Gore when he gloated about giving people the death penalty. And of course the ignorance, smirking, arrogance, sense of entitlement, etcetera.

All this is prelude to asking about Romney: Just how bad is he, and how disastrous would it be if he were elected? (As now seems a lot less likely.) The prior might have been that his record suggests adequate competence and intelligence, and the fact that he's pandering so shamelessly is just a matter of rationally chosen political tactics. But I have come to think that it bespeaks more grievous defects that we hopefully will never get to learn about the hard way. Encouraging about the process if he and Rudy fail because the truth about them emerged through it.

One hard thing for me about the last seven years is that I believe in nuance and shades of gray. I don't like utterly despising people and finding them completely without any decency or redeeming qualities. But sometimes that is what you get. Next question, just how bad is McCain. He has done some bad things, such as the torture sell-out to Bush, but often appears to have good as well as bad qualities. And if the Rovean grip on the party is weakened, he might have an easier time expressing them. Then again, if he believes in endless war and a 100 years occupation of Iraq, along with endless tax cuts, the good may not matter enough.

Huckabee is actually a likable person in some ways. I have old friends whom I would tremble to see as president, and whom I wouldn't even recommend as, say, a spouse or parent, but who are enjoyable in the right context due to their having some nice qualities. Whatever one thinks of Christianism in politics or his hostility towards gays, rejection of evolution, etcetera, I have enjoyed his deft skewering of the Republican leadership's arrogant elitism. Plus I am hoping he's on a trajectory to destroy the coalition that has brought us where we are today - and in the best case scenario to lose like Goldwater or McGovern, but with the subsequent tail of George's loss, not Barry's.

Retail sales tax versus value-added tax

Bruce Bartlett argues against the Fair Tax here: http://taxprof.typepad.com/taxprof_blog/files/bartlett_fair_tax.pdf

I generally don't bother discussing the Fair Tax, as it appears to be a dead horse both intellectually and politically. Even assuming one wants a flat rate consumption tax with no zero bracket, why use the retail sales tax model instead of a value-added tax (VAT)? The latter can lead to the same overall result but with better enforcement capabilities since the revenue authorities can cross-check rebates against taxes remitted on inter-business transactions, and since it can be embarrassing for a business to claim rebates on purchases without admitting to any sales on items that are no longer observable in inventory.

That said, I have learned more recently from people in VAT nations that the tradeoff is not quite as clearcut as I had thought. E.g., Europe has had fun lately with "carousel fraud," in which one side to an inter-business transaction claims a rebate, while the other side disappears before paying tax on the offsetting receipt. Also, U of Sydney law prof Graeme Cooper won, to my mind, the 2007 tax article title-of-the-year contest with his SSRN-posted piece, "The Discrete Charm of the VAT," available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1027512, in which he argues that the administrative tradeoffs are closer than various of us had been inclined to believe.

Shadow forgets the rules again; Buddy gets into the holiday spirit

Shades of O.J.?

Nice to see that Clemens is doing his own investigation of the steroid reports.

The movie versus the book

I recently saw Citizen Kane again, for the first time in quite a few years, to show it to my kids (one of them anyway).  When I then came across a William Randolph Hearst biography on a Christmas shopping foray to a Barnes & Noble, my interest was piqued.  The book is "The Chief," by David Nasaw, and I strongly recommend it if this sort of thing appeals to you.

I must say, the actual story is considerably more interesting and complex than the one in the screenplay, leaving aside those amazing deep focus shots and the jump cuts.  E.g., at 40 he married, not the President's niece, but a 21-year old chorus girl he had been seeing for five years.  And, as is somewhat better known, the "Susan Alexander" figure actually was the accomplished and independently successful Hollywood comic actress Marion Davies.

I've gotten to 1904, when Hearst, having conquered the newspaper markets in SF & NYC, was seeking the Democratic nomination for President.  Though running as a radical (decades before supporting Joe McCarthy), he differed from Charles Foster Kane in focusing on "trusts" (corporations accused of wielding monopoly power) and union issues, rather than on the likes of Boss Jim Gettys.

An amusing quote I want to share, from an anti-Hearst editorial alarmed by his candidacy:

"It is not a question of policies, but of character.  An agitator we can endure; an honest radical we can respect; a fanatic we can tolerate; but a low voluptuary trying to sting his jaded senses to a fresh thrill by turning from private to public corruption is a new horror in American politics."

Other than in the writing style, why do I almost feel this is about another NY-based Presidential candidate, 104 years later?

On Romney's claim that he saw his father march with Martin Luther King

The Romster has been taking quite a bit of abuse on this one, especially given the added revelation that in 1978 he told the Boston Globe: "My father and I marched with Martin Luther King Jr. through the streets of Detroit."

He has been defending himself by saying that "saw" means "was aware of," not literally "saw," a defense that I gather he will not try to extend to the 1978 claim.

All the same, I am reminded of that bit - is it from Monty Python? I can't quite remember - that goes something like this:

"Is it for the likes of you that I lost my leg in the War?"

"But James, you have both your legs."

"I was speaking metaphorically, you fool!"

Double standards

It's kind of interesting how the very same Senate Republicans who were threatening to invoke the "nuclear option" and destroy filibustering if the Democrats used it even a tiny bit, have now set the all-time 200-year record for filibusters in a single two-year Congressional term, in just eleven months.

This brings to mind the game they were going to play in California, trying to make it apportion electoral votes by Congressional district while Republican-majority states such as Texas would remain winner-take-all.

Or the fact that, in 2000, they were all set to launch a huge PR campaign if Bush lost the electoral vote but won the popular vote, demanding that the people's will be honored by giving him the 270. Then of course when it went the other way (leaving aside that Bush actually lost both), not a peep was heard of this.

The press plays along with this as well.

Quotations of the year

These are arguably the ten most memorable quotations of the year (U.S. only). I didn't find them myself - seven are from Fred R. Shapiro, editor of the Yale Book of Quotations, as reported on-line in today's New York Times, and three are from an article by James Parker, posted on 12/18 at http://thephoenix.com. But well worth passing on:

--1. ''Don't tase me, bro.'' Andrew Meyer, a senior at the University of Florida.

--2. ''I personally believe that U.S. Americans are unable to do so because some people out there in our nation don't have maps and I believe that our education like such as in South Africa and Iraq and everywhere like such as and I believe that they should our education over here in the U.S. should help the U.S. or should help South Africa and should help Iraq and the Asian countries so we will be able to build up our future for us.'' Lauren Upton, South Carolina contestant in the Miss Teen America contest, when asked why one-fifth of Americans cannot find the U.S on a map.

--3. “You must have meant something more intelligent.” Christopher Hitchens, responding to an audience member in Madison, Wisconsin during his book tour for God Is Not Great.

--4. “My view is, we ought to double Guantanamo.” Mitt Romney.

--5. ''I don't recall.'' Alberto Gonzalez (repeatedly).

--6. ''There's only three things he (Rudolph Giuliani) mentions in a sentence: a noun and a verb and 9/11.'' Joseph Biden.

--7. ''I'm not going to get into a name-calling match with somebody who has a 9 percent approval rating.'' Harry Reid, referring to Dick Cheney.

--8. ''(I have) a wide stance when going to the bathroom.'' Larry Craig.

--9. “I’m here with the members of the NRA – would you like to say hello?” Rudolph Guiliani, purporting to answer his wife’s call on his cellphone during a speech.

--10. ''I think as far as the adverse impact on the nation around the world, this administration has been the worst in history.'' Jimmy Carter.

Evidence from the crime scene

I'd like to see Shadow and Buddy offer an innocent explanation of this little number. They know perfectly well that counter-top visits, and our food, are off-limits. Not that they care particularly, as one can see, but it is something they know.

A bit too convenient

OK, a baseball aside admittedly reflecting my anti-Yankee bias.

First Andy Pettitte is named in the Mitchell report for using human growth hormone. Then he promptly apologizes for using it just twice. So sorry about those two days, he says, "if what I did was an error in judgment." (Interesting use of "if.") Then Mitchell says yup, that's what we heard, he did it twice. Today Mariano Rivera praises him for being so forthright.

Admittedly, Pettitte still has a leaner build than you see on some of the big time abusers. But this seems awfully pat and convenient. He trained with Roger Clemens for years. And he did seem to add a couple of miles to his fastball after having elbow problems in his early 30s. He's reportedly been named by Jason Grimsley.

If he's admitting to two days right off the bat, I'm bidding - oh, maybe 150 times over four or five years. Just a guess.

You know what they say - the opening bid is never the final offer. But that goes for us both.

Worth every penny?

The U.S. Treasury has just issued the 2007 Financial Report of the U.S. Government, available here.

Money quote, from page 32 of the document:

"[The report's measure of the long-term U.S. fiscal gap] totaled approximately $53 trillion as of September 30, 2007 ... an increase of more than $32 trillion from about $20 trillion as of September 30, 2000. This translates into a burden of about $175,000 per American or approximately $455,000 per American household."

Of the entire U.S. historical total, more than 60 percent arose under Bush. A bit of it comes from simple accrual of interest on the preexisting fiscal gap, plus changed assumptions may have had some impact. But the bulk of it comes from massive tax cuts, spending increases, and the Medicare prescription drug abomination.

These figures arguably are grossly under-stated relative to Bush's actual policy, because they ignore the revenue cost of making his tax cuts permanent (as he urges, admittedly it seems ineffectually) and fixing the alternative minimum tax. I couldn't quickly find a contemporaneous estimate for those changes, but the ten-year (2008-2017) estimate for extending the tax cuts and fixing the AMT is $3.5 trillion according to a report by the Center for Budget and Policy Priorities, available here. This report also states that extending the Bush tax cuts would double the expected size of the national debt relative to the economy in 2050.

Just to make the Bush share of the overall fiscal gap more tangible, even without these changes in the current baseline that he is urging, developments on his watch, which overwhelmingly are the fruit of his policy moves, have run up the tab by about $106,000 per American or $275,000 per household.

That is quite a tab for a not very enjoyable bash.

Don't play for money, folks - he's a ringer

On a lighter note, here is a new photo of my cat, Buddy, which has just been posted, but fairly far down the page, at stuffonmycat.com