Thursday, November 29, 2012

Election Firsts

All the post election news centered around how surprised and bummed out the Republicans were about the election results, and how, once again,  Nate Silver got everything right (I'm beginning to re-think the Niels Bohr observation:  "Prediction is very difficult, especially about the future."  Silver doesn't seem to have any problem.)

So, it's possible that you missed a few election firsts.   We begin with same-sex marriage.  For the first time by popular vote, same sex marriage laws were passed in Maryland, Maine and Washington.  Minnesota, trying to get on the gay marriage bandwagon, voted no to a ballot initiative to change its constitution to deny same-sex couples the right to marry.  Meanwhile, there were other victories for gays.  Rep. Tammy Baldwin (D-Wis.) became the first openly gay senator in United States history.  And while we're on the subject, Spain's highest court voted to uphold the legality of same-sex marriages in that country.  France is moving toward passing a same sex marriage law in 2013.

In another first, Puerto Ricans voted for the first time in that island's history in favor of statehood in a nonbinding referendum.

Puerto Ricans were asked about their preference in two parts. First, by a 54% to 46% margin, voters rejected their current status as a U.S. commonwealth. In a separate question, 61% chose statehood as the alternative, compared with 33% for the semi-autonomous "sovereign free association" and 6% for outright independence.

Who knows where this will lead, but it may be that there will be a 51st state in the near future.  Among other things, this will mean another blue state, and will move us down the road toward bi-lingualism (as psychologists tell us, increasing American intelligence overall and preventing dementia). The United States now has the 5th largest number of Spanish speakers in the world.  Adding Puerto Rico may move us up the ladder.  You might as well get started right now:  estadidad means statehood.

Tuesday, November 20, 2012

The Future of Football (American style)

American football is second only to Nascar racing as the most popular spectator sport in the United States. Statistics are murky, but it's safe to say that oodles of people like to watch the game. The problem is the people who play the game—they don't last like they used to. For whatever reasons, it may be more likely for wealthy NFL players to pay taxes at over a 15% rate than to finish a season. Fans like to identify with the players, but the team at the end of the year is barely recognizable from the one that started. Fans in Pittsburgh now will have to somehow root for one of the most scorned and ridiculed players in recent local history, Plaxico Burress. The team has lost its receivers, linemen, quarterbacks, defensive backs and their uniforms.

There is a solution. Combine the two most popular sports, auto racing and football. At first glance they seem incompatible, but their immense popularity is based on one common event—crashes. By replacing the injury prone players with repairable mechanical engines, we could enjoy spectacular crashes on practically every play. The mind numbing boredom of auto racing gets to keep all its noise and adds incredible robotic strategy. The rules would have to be slightly modified. All 'players' would need to receive instructions from the bench, but the current army of rule making officials in both sports have more than enough expertise to quickly come up with a working formula.

With Carnegie Mellon's robotic prowess, Pittsburgh could have a leg up on the competition.  And there would be no need change the eminently appropriate name of Steelers.

Saturday, November 17, 2012

comment on Increase Tax Rates or Eliminate Deductions

I wanted to add this graph, but I couldn't put it in the comment section:

Someone else showed me this, but I couldn't find it on the site so I'm posting it (again?). I was shocked that the tax cuts drove the deficit much, much more than the wars.

When Patricia N. was here before Halloween, she told me of an economics lecture she attended recently where the speaker basically said, illustrated with fact, figures, charts, bells and whistles, that taxes have not increased since the 50's or 60's, but the services from the government have grown enormously. Eventually, there are no free lunches.

Wednesday, November 14, 2012

Increase Tax Rates or Eliminate Deductions?

The show down between the Republican House and Obama is going to be whether we raise revenue by getting rid of some deductions or raise tax rates.  My question is:  what is the source of the fear of increased tax rates?

In September of this year, the Congressional Research Service published a paper, "Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945 September."   I'm surprised that the paper has not received more attention.  By taking an historical view, it concludes that raising tax rates on the wealthy do not have a negative impact on the economy in any way, but merely increase disparities in income distribution.

Here is the summary:

Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90%; today it is 35%. Additionally, the top capital gains tax rate was 25% in the 1950s and 1960s, 35% in the 1970s; today it is 15%. The real GDP growth rate averaged 4.2% and real per capita increased annually by 2.4% in the 1950s. In the 2000s, the average real GDP growth rate was 1.7% and real per capita GDP increased annually by less than 1%. There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth. Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth. However, the top tax rate reductions appear to be associated with the increasing concentration of income at the top of the income distribution. The share of income accruing to the top 0.1% of U.S. families increased from 4.2% in 1945 to 12.3% by 2007 before falling to 9.2% due to the 2007-2009 recession.

Just looking at the most recent years we see that tax cuts do not equal growth in GDP:

If anyting cuts in tax rates appear to have a negative impact on the economy.

Here are two more charts.  One shows how tax rates for highest income taxpayer have declined over the years, and thje other one shows how the share of total income by the wealthiest has increased over the same time.  One thing is clear:  decreasing tax rates for the wealthy may not help the economy but it helps rich people.

Again, why are Republicans opposing tax increases on the wealthy?

Now, can we get back to doing God's work?

Those of you who think that Christianity is now simply a front for a bunch of conservative culture warriors need to take a look at Faithful America.

Faithful America is an online community of people of faith which seeks to, in its own words, "restore community and uphold the common good in America and across the globe." It sees as its issues ending poverty, promoting human rights, preventing climate change, fighting hate speech and reforming immigration laws.

Ellen in an email entitled "Now, can we get back to doing God's work?" sent me the link below to a petition sponsored by Faithful America which is addressed to the American Catholic bishops. I was trying to think of how I could give this petition the widest possible distribution and immediately thought of In Progress.

And so here it is:

Tuesday, November 13, 2012

Football…, I mean, soccer

Maryland has been ranked first most of the season in soccer. Currently the polls rank them second with Akron first and Notre Dame third. However, the NCAA tournament committee seeded Notre Dame first (either because they won the Big East or they get special bias), Maryland second and Akron ended up seeded fifth. The upshot of all this is, if each team plays as predicted, the Terrapins will be facing the Irish for the championship. (Also, it may be the only time in history you can say Notre Dame football is ranked third and it doesn't matter if you are talking to an American or any other nationality.)

On a completely different note, coaches and sport banquet hosts are always saying sport teaches us lessons. This was illustrated dramatically in the latest Monday Night (American) Football game with the Steelers and Kansas City. The Chiefs performed an excessive group celebration after an apparent fumble recovery and runback for a touchdown. Upon review it was ruled an incomplete pass—no touchdown. But the penalty stands. It gave the Steelers a first down on an otherwise fourth down with the incomplete pass.

The lesson (other than never be too proud of yourself): Fictive things wink as they will; but the penalties remain.

Friday, November 2, 2012

Disclosure: Tom's post on running

I got an email from Tom, who is having trouble posting to the blog. As many emails today, it was mostly concerned with confidentiality, disavowing any information, especially tax information which you may think it contains, and explaining what it is not intended for. But I also discovered it contained a link to an article on running and how fast you may think you are going.

Please note I am not endorsing any information you may think is implied in this post, especially if it constitutes fraud.

Is this post-Reconstruction America?

This is a fascinating article comparing today's political world with post-Reconstruction.

Dear Treaters and Tricksters

Halloween is, like most holidays, focused on children, but guided by adults. The adults make the rules:
• “Don’t run. Look both ways before crossing the street. Be sure to say, ‘Thank you.’”
• “You’re not going out Trick ‘r Treating until you finish your liver and stewed tomatoes.”
• “Roman gladiators also had to wear boots when it was raining.”
• “You can’t bring you’re dad’s loaded shotgun as part of your costume.”
• “You have to be able to see.”

Most adults, although their own childhood memories fade or change as they age, want children to have fun, but their first concern is safety. This is altogether reasonable—after all, they are adults. Children, on the other hand, see things quite differently, and are much more concerned about adventure. It is the child’s responsibility to creatively extract the maximum amount of fun within the adult-set parameters.

Sometimes children just forget the rules, as children are wont to do, such as excitedly running across the street without looking. This is when luck plays a major role in the child’s future growth. More often, however, the child considers the rules, the consequences and benefits of sidestepping them, and makes his or her best choice. This is particularly true for Halloween because practically all choices are out of sight of the parent—or at least until parents started accompanying kids house to house.

On orange and black plastic shopping bags distributed by my local Shop and Save supermarket around Halloween time are “Halloween Safety Tips”. They are reasonable, adult produced principles.

Avoid trick-or-treating after dark. Choose well-lighted familiar streets for your trick-or-treat route.
My child view was the exact opposite. We did not like to go out until dark. What at night is scenic (and scary), may seem cynic (and stupid) by the day. Halloween is all about dusk, dark, and shady. About street lights we had no control. We would go whatever route afforded the most candy per travel time.

Never trick-or-treat alone. Go in a group and share the fun!
The only objectionable part here is the ‘never’. Sure, it generally was more fun to go in groups, but, for whatever reason, it was not unusual to end up alone. This was not a bad thing, and, indeed, being alone at night, ringing strange people’s doorbells, being attacked by strange dogs, helped us grow up a bit. We are all better cold-call salesmen for it.

Wear light covered costumes or decorate your costume with reflective tape so drivers can see you.
A reasonable adult suggestion, but, really, something we never thought about. Didn’t reflective tape develop out of the U.S. space program? Anyway, how does reflective tape harmonize with the fashion statement of the Scarecrow of Romney Marsh?

Wait until you get home before eating your treats and candy.
They may as well have written, “Wait until you get home so you can share your candy with your brothers and sisters.” Strangely, more often than not, this was the one dictum I followed. I’m not sure why, unless I felt that eating candy was wasting valuable time that could be spent gathering more.

That's it from the supermarket regulators. Well, kids, you’re in an adult-run world, despite what your parents think, do the best you can. And good luck.