Thursday, May 23, 2019

How Much Can We Tax the Rich?   Actually, A Lot.

Rep. Alexandria Ocasio-Cortez really set the cat among the pigeons with her recent remarks about taxation. Asked how she would pay for everything in the proposed Green New Deal, she said:

You look at our tax rates back in the ’60s, and when you had a progressive tax rate system your tax rate, let’s say, from zero to $75,000 may be 10 percent or 15 percent, et cetera. But once you get to the tippy tops — on your 10 millionth dollar — sometimes you see tax rates as high as 60 or 70 percent. That doesn’t mean all $10 million are taxed at an extremely high rate, but it means that as you climb up this ladder you should be contributing more.

Feathers flew. Rep. Steve Scalise tweeted that Democrats want to  "[t]ake away 70% of your income and give it to leftist fantasy programs," to which Ocasio-Cortez tartly replied, "You’re the GOP Minority Whip. How do you not know how marginal tax rates work?" For those of you who find yourselves in the same boat as Scalise, the marginal tax is the amount of tax you pay on the next dollar of income; it's relevant when we're looking at your incentives. The average rate is the tax you pay divided by your income, or in other words, the share of your income that goes to taxes. Ocasio-Cortez is quite explicitly talking about marginal rates; Scalise's tweet mixes up marginal rates and average rates.

But in defense of Scalise, it's quite possible under Ocasio-Cortez's proposal for someone to end up paying very close to 70% of their income. Consider, for example, the 25 highest-earning hedge-fund managers and traders profiled by Forbes. They earned an average of more than $670 million each in 2017; if they were paying 70% on income above $10 million, virtually all of their income would have been taxed at 70%. If this strikes you as the job for you, by the way, don't be shy. Fully half of them, including some making $900 million or more, performed worse at picking investments than you could expect if you were choosing at random.

Rate Amnesia

In any case, Ocasio-Cortez is if anything understating the history of high marginal rates. From 1951 through 1963 the top marginal tax rate never went below 91%. From 1964 through 1980 it never went below 70%, and not until 1987 did it get below 50%.

Today, though, this (relatively recent) history seems to have been all but forgotten, as  attested by this clip from a discussion of the Ocasio-Cortez proposal at the World Economic Forum in Davos, Switzerland. An economist finally speaks up about the actual history of tax rates in the U.S., to incredulity from the interviewer. And even he understates the case: as we have seen, a 70% rate persisted through 1980. (Don't miss Michael Dell's smug performance as Davos Man.) 

Those rates were in effect during some of the strongest periods of economic growth in U.S. history, which suggests they weren't a huge burden on the economy. Yet the idea that high marginal tax rates have big negative effects on incentives is one of the most cherished beliefs of American conservatism. How much should we be worried about the economic consequences of raising rates?

As it happens, some extremely distinguished economists have just weighed in on that question. Two recent papers attempted to estimate the incentive effects of high marginal rates and to find the economically optimal top rate. Both find that the effect is small, and their estimates of the optimal top rate are correspondingly high: one estimate is 72%, the other 84%. 

It seems pretty reasonable, then, to tax the income of the rich at high rates. Yet Democrats have so far been quite bashful about proposing any changes to income taxes, even members of the progressive wing of the party, like Bernie Sanders, Elizabeth Warren, and Kamala Harris. To fund various ideas they have proposed an increase in the estate tax (Sanders,Warren, Harris), a tax on financial transactions (Sanders), and a tax on wealth (Warren).

There's nothing wrong with any of these taxes (with the possible exception of the wealth tax, whose constitutionality will surely be challenged, bringing it before a conservative-dominated Supreme Court). But it's long past time to reestablish the norm of taxing the rich and the ultra-rich at high rates. There doesn't appear to be any political downside: a poll in January showed 59-41 support for a top tax rate of 70 percent.

Raising Income Tax Rates on the Rich

Let's see what the revenues might be from an increase in tax rates at the top. The boundaries of the top 1%, 0.1%., and .01% 
make convenient tax bracket cutoffs: roughly $500,000, $2,000,000 and $10,000,000 in a year  (Table I, p. 575). Using information about those three income classes, I've done some rough estimates of the added revenue from relatively "moderate" increase in tax rates to 50%, 58%, and 65%. (I've posted an explanation of my methodology here.)  I get an estimate of $222 billion

To be sure, $222 billion is not enough to put much of a dent in the cost of Medicare for All, which runs to more than $2 trillion a year. But $222 billion is enough to fund some things that could have a really dramatic impact on people's lives. Leaving aside items that have already been proposed by one or another Presidential candidate, here's one cut:
  • Spend $150 billion per year eliminating America's infrastructure spending shortfall;
  • Treat with buprenorphine the 2.1 million people with prescription-opioid use disorder at $5980/year each, for a total cost of $13 billion.
  • Increase the salary of each of the 3.6 million public school teachers by $10,000, for a total cost of $36 billion;
  • Increase by 50% the budgets of the National Science Foundation ($3.9 billion) and the IRS ($5.8 billion
That still leaves us more than $13 billion in the black. And we haven't raised taxes on anyone in the lower 99% by one cent.

And don't worry that we'll be leaving the 1% destitute.  They're currently paying 27% of their income in taxes (Table 1, last row); this increase would raise that to 38%.

It's All About the Base

It's easy, though, to be hypnotized by the controversy about tax rates and miss an equally important question: What is the income base to which those rates are being applied? If we say the top rate is 70%, we need to remember to ask: 70% of what?

When it comes to taxing the rich, there are two big items in the definition of the base.  The bigger of the two is tax treatment of capital gains. Capital gains are what you net when you sell an asset for more than you paid for it; the difference, the capital gain, is taxable income. But if you held the asset for more than a year, you are taxed at rates much lower than those on ordinary income. The usual justification is that it encourages long-term, and discourage short-term, investment. But this claim is controversial

The other and more recent tax break is the special treatment of "qualified" dividends. The idea is to extend the reduced rate on capital gains to dividend income as well. Both these tax breaks are, to some extent, used by the non-rich as well as the rich. 

But they are used a lot more by the rich: this table shows that these two tax preferences were used for more than three-quarters of the taxes paid by those with incomes over $1 million. In no other income class did those tax breaks account for even ten percent of taxes paid, and in no class making less than $100,000 did they account for as much as two percent. A repeal of those provisions would thus be nearly as well targeted as a rate increase.

The Treasury Department has estimated (items 69 and 70) revenue loss from the qualified dividend provision and the capital gains provision to be $29 billion and $110 billion, respectively.  Adding that revenue to our estimate of the revenue from raising marginal rates gives a total of just over $360 billion-- or, as they would say in the Washington style of talking in ten-year chunks, $3.6 trillion.

This is a lot of money. It's enough to fund what you could either call a leftist wish list or a transformation in the lives of ordinary people. Take a moment to contemplate, for instance, the Brown-Khanna bill to dramatically increase the Earned Income Tax Credit. At a cost of $140 billion, it would raise the incomes of more than a third of working households in the US and reduce the poverty rate by a third. 

Bear in mind, too, that the revenues we've been discussing here are only those from the personal income tax, and not the corporate "income" tax (which no longer is based on corporate income). That's way too complicated to get into now, but a selective undoing and alteration of some of the changes of the 2017 tax legislation could produce revenue of at least $170 billion a year, with very likely a net gain in economic efficiency.

In his inaugural address in 1989, President George H.W. Bush said, "We have more will than wallet." That wasn't true then, and it's even less true today. There's plenty of wallet. What's been lacking is the will.


Note on Methodology

Start at Table 1, the first column, "Top 1%".

Take "Number of Returns" (first row) and multiply it by $466,950 , which I got from here, as the boundary for the top marginal rate. Fortunately, it's very close to the cutoff for the top 1% (second row from bottom). I used the rate for "married filing jointly." I take the product of those two numbers to be that income of the top 1% which is taxed at less than the top rate.

Subtract that number from Adjusted Gross Income. I take the result to be that income of the 1% which is subject to tax at the highest rate. I'm using 35% as the highest rate; I use 2016 data because it was the newest I could find. This will create a small inaccuracy (one of many).

I now have $1.345 trillion. Now we add to that the additional revenue from the higher rates, which I'll take to apply to the .1% and the .01%, as I indicated in the post. Table 3 gives 966 billion  for the 0.1%. I don't have a count of revenue for the top group, but looking at Table I on p. 575 under "Pretax national income/Income share" it is apparent that there is a strong tendency for the top 10% of any group to get about 45% of the income for that group. So take 45% of $966 billion to get $434.7 billion for the top .01%.

I next included a small allowance for negative incentive effects of the tax. Romer and Romer estimate the elasticity of supply at at 0.2. The percentage change in the after-tax wage times the elasticity gives the percentage change in the supply. I got estimated changes of -5%,-9%, and -12% for the three new rates, so I reduced the revenue in each bracket accordingly. I thought this was just barely worth the trouble.

Then I subtracted 23% from each row as an allowance for deductions. I got 23% here. It's the approximate average deduction in both the second and the third highest income groups, taken at the midpoints. I didn't use the highest group because there's no midpoint.

Finally, multiply those numbers by the increment in tax rate for each row (that is, .15, .08, and .07) to get the additional revenue from the higher rates. I get $222 billion.

I've done this wrong about six times up to now, so if you see what looks to you like a major error, please email me at

Tuesday, February 19, 2019

Themes for the Democrats I: Equality

A party as large and varied as the Democrats needs some themes that people can use as a shorthand for what the party stands for, and that make sense out of a welter of policy  positions. I'll be making some suggestions; here's my first.

I. Equality

"We hold these truths to be self-evident, that all ... are created equal..."

Equality is a founding value of the American republic, the first of the "self-evident" truths in the Declaration of Independence. Yet while we hear a lot these days about inequality, it's hard to find anyone talking about equality as a political issue. When we're talking about wealth and income, the argument is over how unequal they should be, and whether they've become too unequal.

But the promise of the American Revolution was of a nation where people, whatever their differences in position or privilege, had equal rights as citizens. How are we doing?

Equality of Political Power

The fact is, most people do not feel they have a say in our political life equal to that of people with money. A recent New York Times/CBS poll found that 66% of Americans think that "wealthy Americans have more of a chance to influence the electoral process than other Americans." And not just the electoral process but the whole political process: A poll last year found that 75% thought that people like them have too little power and influence in Washington (with similar percentages for working people and, to my surprise, poor people), while 82% thought that wealthy people have too much power and influence (69% for large businesses).

Here's the thing: they're right. A startling recent piece of academic research looked at the outcomes on almost 1,800 policy issues, and concluded: "... analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence."

There are a lot of ways the rich and corporations could exert influence, but surely the main one is through campaign contributions. Any doubts people might have had about this were surely removed by the Republican panic around their recent  tax bill, when a congressman from New York made the memorable statement, "My donors are basically saying, ‘Get it done or don’t ever call me again.’ "

Public patience with the situation has worn thin. In a 2015 poll, 85% (including 81% of Republicans) say either that the system for funding political campaigns needs fundamental changes or that it needs to be completely rebuilt.

Yet at the same time, the Supreme Court  has handed down a series of rulings, beginning with the famed Citizens United v. FEC decision of 2010, that have seemingly made it nearly impossible to restrict the role of money in politics. The Citizens United case, as you may recall, involved an organization that wanted to air a film critical of Hillary Clinton shortly before a  primary. In that decision and later ones, the  Court, while upholding the right of Congress to restrict contributions to candidates, has essentially said that any attempt to restrict independent expenditures for or against a candidate is an impermissible infringement of freedom of speech. Some of the rulings seem bizarre--for example, the Court has held that providing matching funds to a candidate who is being outspent places an unacceptable burden on free speech.

So it has increasingly seemed impossible to stop the flood of big money into politics. Fortunately, we don't need to.


Actually, we don't need to keep big money out of politics-- we just need to get small money in. Let's do the arithmetic. In 2016 a total of $4 billion was spent on Congressional races, and another $2.4 billion on the Presidential race.  There are roughly 250 million voting-age people in the US, and around 93% are citizens-- call it 230 million. A campaign contribution of $50 per person would yield more than $11 billion, completely swamping big-money contributions.

Now, how do we get 230 million people to contribute $50 each? Several variants on a solution have been proposed by me and better-known people. My preferred version is to simply give everyone a $50 tax credit for contributions to a candidate for Federal office. A tax credit, not a deduction: the first $50 of any contribution would from the donors viewpoint be free. The credit would be refundable, meaning that even those with no tax liability would be eligible to receive $50. Some minor tweaks would be necessary to prevent fraud.

But, you object, even though the contribution costs the donor nothing, surely not everyone will be interested enough to contribute. True. Let's assume that after advertising to inform people about the law, half contribute. So divide expected contributions by two. But there is only one Federal election every two years, so multiply by two. Result: more than $11 billion.

A law like this could have powerful effect on the way politics is practiced. In theory, politicians could go on trying to supplement their small-contribution funds with large contributions from wealthy donors, but those who did would be vulnerable to attacks from rivals who promised not to accept large contributions. To be sure, those who went the small-money route would have to develop new strategies for fund-raising. Instead of spending hours every day on the phone with wealthy people--unconsciously soaking up their view of the world--they would have to (and now could!) spend more time in touch with their constituents. As for voters, contributions would no longer be an elite activity for the wealthy and the ideologically committed, but could become as commonplace as voting.

Combine the voter hunger for a solution with the intuitive appeal of this approach (and add a catchy name-- my suggestion is the "U.S. Grant," after the face on the $50 bill, but maybe "The Fifty-Buck Plan" gets the idea across better) and this could be a very strong campaign issue for the Democrats.

Equality Before the Law

If equality means anything, it means that the law--specifically, the criminal-justice system-- should treat everyone equally. And this seems not to be true for some people. Most notably, it seems not to be true for African-Americans.

It is difficult for lifelong whites like me to wrap our minds around how differently blacks view the prospect of an encounter with police. I found anecdotal reports like this one to be the most illuminating.

But there is ample survey evidence of differences in attitudes to back it up. In a 2015 Gallup survey, for example, that asked, "Thinking about the community where you live and work, do you think the local police treat minorities more harshly, less harshly, or just as they do anyone else?" 19% of whites said "more harshly;" so did 54% of blacks. (This may partly reflect the fact that they live in different communities.) And asked, "Do you agree or disagree: These days police in most cities treat blacks as fairly as they do whites," 31% of whites disagreed; so did 76% of blacks. Most poignantly, when Gallup asked, "Have you ever warned your children to be careful when dealing with the police?" 32% of whites said yes, as did 74% of blacks.

It is, of course, the spate of videos of police killing unarmed black men and boys that raised this issue to public (meaning white) notice. Are police really more likely to shoot unarmed blacks than unarmed whites?  When I took a look at this question a few years ago, I found that, while armed blacks and whites were killed by police at similar rates, blacks were greatly overrepresented among the unarmed who were killed by police. More recent research has come to a similar conclusion.

It's unlikely that this mostly represents racist killers on our police forces. But there are situations where cops have to make very quick decisions weighing the threat to their own lives against the risk of killing an innocent civilian. Those situations might be turning out worse for blacks because cops unconsciously view them as more threatening than whites. Or they might be turning out worse because cops unconsciously think lives of innocent blacks matter less than lives of innocent whites.

Notice how framing the issue as "equality," instead of "identity politics" (whatever that is) changes the debate. The response of many whites to the shooting of an unarmed black man is to focus on what the victim should have done differently. For example, Timothy Russell and Malissa Williams would undoubtedly be alive today if they had not led police on a high-speed chase. But undoubtedly there have been unarmed white couples that did that. The question is, have any of them ended up being shot by police a total of 47 times? If so, I haven't heard about it. In a society where people are equal, we should not tell a subset of citizens, "Behave perfectly all the time, and we'll let you live."

But, perhaps with one nervous eye on the white working class, Democrats have had a hard time talking about this issue-- witness the strange, flustered response of Nancy Pelosi to a question about Black Lives Matter. Here's all she needed to say:

"I think there's been a lot of confusion among whites about what the phrase 'Black Lives Matter' actually means. As I understand it, it's saying that that the life of a black should matter as much as the life of a white-- it's about equality. And as a principle, I don't see who could be against that."

Equality of Opportunity

If the American Revolution was anything, it was a rejection of the European idea of a hereditary ruling class; the Constitution even says explicitly, "No Title of Nobility shall be granted by the United States." Yet today, the chance that someone born in the bottom 20% of the income distribution will end up in the top 20% is higher in Britain than in the U.S., and in our New World neighbor Canada it's almost twice as high as in the U.S.

Consider that passport to the top 20%, Harvard.  Two-thirds of its undergraduates come from the top 20% of the income distribution. A startling two in five come from the top 5%, and 15% from the top 1% By age 34, Harvard grads from poor backgrounds are doing nearly as well as people from wealthy backgrounds, but there were few from poor backgrounds to begin with.

The story is similar at other Ivy League schools: Dartmouth, Yale, Princeton, Penn, and Brown all had more students from the top 1% than from the bottom 60%. I doubt it's because admissions officers prefer to admit people of their own social class. Rather, it's because of the accumulation of privileges of upbringing and schooling that parents in the upper 20% are able to bestow on their children.

Finighan and Putnam talk about a "growing opportunity gap in America." They point out that someone from a disadvantaged background with high test scores has about the same chance (around 30%) of graduating from college as someone from an affluent background with low test scores; that over the 35 years from 19725 to 2007, the top income decile doubled the amount it spends on its children, to around $6,000, while spending by the lowest deciles remained flat at around $1,000 (to be completely clear, I am not blaming poor parents for this-- it mirrors what happened to incomes over this period); and so on.  In particular, while the more affluent find it increasingly difficult to cover the cost of high-quality child care, working-class families find themselves priced out of the market altogether, and must settle for lower-quality child-care, such as with unlicensed providers.

If we want to avoid--or undo--the development of a de facto hereditary aristocracy,we need to take some serious steps at both ends of the existing public school system. The first step would be to come closer to equalizing the early childhood environments of children from different income classes by establishing universal preschool. This would also be a bread and butter issue for many middle-to-low-income families, for whom child-care expenses are a significant burden. The second step would be to offer free or nearly free college, so that students get used to thinking of college as something achievable.

This is going to cost some money, much more than the U.S. Grant plan I discussed above. The cost of providing universal "quality preschool education" has been estimated at $34 billion for 4-year-olds and $35 billion for 3-year-olds. Bernie Sanders estimates the cost of his plan to cover 2/3 of the cost of tuition at state colleges and universities  (with states paying the rest) at $47 billion-- it's unclear to me whether this number includes other parts of his plan, such as the reduction in student loan payments.

So for the full two years of preschool plus the Sanders plan, the total is $116 billion per year. That's around 9% of the total US discretionary (i.e., excluding thing like Social Security, Medicare, and Medicaid) budget, or around 19-20% of the non-military discretionary budget, which seems like a lot. On the other hand...

On the other hand, the recent Republican tax cut is projected to add $1.9 trillion to the debt over ten years, which averages out to $190 billion per year, for something that had very little effect on the economy other than making some rich people much richer. Should we not spend a third less than that for something that promises to increase U.S. productivity, improve life for struggling families, take seriously the promise of equal opportunity regardless of social background, and maybe make a start on healing the cultural chasm that is America today? I think we should.

Addendum: Elizabeth Warren has just gone public with her day care proposal. Her estimated cost is close to the cost I cited above, but it includes children younger than three. She makes up the difference by having a sliding scale rate for parents making more than 200% of the poverty line. Parents' contributions are capped at 7% of income, which, as best I can tell, means that virtually everyone will get some degree of subsidy. Tentatively,I prefer her plan.

Tuesday, March 15, 2016

Comments on the Democratic Debate in Miami

This was truly the most bizarre debate I've ever seen. The level of questioning from the three interviewers, two from Univision, a Spanish-language network, and one from the Washington Post, was beyond belief.

Here are some samples:

Where did you fail last night in Michigan? followed by What went wrong in Michigan? What went wrong in Michigan? What failed in Michigan specifically?

She has 1,221 delegates, including superdelegates, and you have 571. What is your pathway to make up the deficit, and can you realistically catch up?

So who specifically gave you permission to operate your email system as you did? Was it President Barack Obama? And would you drop out of the race if you get indicted? followed by Secretary Clinton, the questions were, who gave you permission to cooperate? Was it President Obama? and If you get indicted would you going to drop out?

Secretary Clinton, is Donald Trump a racist?....Senator Sanders, do you think it's fair to call Donald Trump a racist?

And then, believe it or not, a question about Benghazi, which included a video clip:

Hillary and Obama and Panetta and Biden and all of -- and Susan Rice, all told me it was a video, when they knew it was not the video. And they said that they would call me and let me know what the outcome was.

followed by:

Secretary Clinton, did you lie to them?

And there was much, much more. What were they thinking? Is this their idea of hard-hitting questioning? I looked for pundits remarking on this, but the only things I saw were people commenting on how Univision showed it could be "tough on both sides." The only critical coverage I saw was from the left-snarky news site Wonkette, which headlined its story Dear Univision: Show Us On The Doll Where Hillary And Bernie Hurt You, with the subhead what the hell did we just watch?!

All that aside, I as a Clinton supporter was depressed by Hillary's performance, particularly her persistent failure to push back on the issue of her supposed corruption. Don't her advisers know what a big issue this is? At one point, Sanders accused her of saying that the big banks were her constituents, and she let it slide, instead of saying something like this:

"I certainly never thought big banks were my constituents, and I think you may have misunderstood me. Here's what I was trying to say: I was a senator from New York. There are almost 400,000 people in New York who work in the financial industry. Those people were my constituents. Some of them are Democrats, some Republicans. But if any one of them gives me money, Senator Sanders will say, 'Aha! You're taking money from Wall Street!' If you look at a list of my contributors, you will see the names of some banks with some big sums of money beside them. But those banks didn't give me that money. Almost all of it is from individuals who work for those banks. Some of them may be trying to influence me, but a lot of them are just supporting my campaign, like people who give money to Senator Sanders.

"If you want to see whether I'm in the pocket of the big banks, here are two tests. First, look at what the banks want. What the banks really badly want is the repeal of Dodd-Frank. They have literally hundreds of lobbyists working on it. All the Republican candidates have promised it. I'm against the repeal of Dodd-Frank. It's made the banking system a lot safer, and it's actually starting to make some banks smaller. Senator Sanders thinks it's not important, but all the money the banks are spending says otherwise.

"The second test is to ask who the billionaires are afraid of. Senator Sanders thinks it must be him. Maybe, but I haven't seen any sign of it.  All the Republican Super PAC spending has been against me, except for this latest ad that praises Senator Sanders. I don't think the Koch brothers really want Senator Sanders to be President, but they certainly want him to be the Democratic nominee." 

Granted, it's not clear that the moderators would've let her say all that.

I'm writing this before the results of today's primary are in. We'll see how much difference any of this made.

Update: Evidently, not much. Perhaps those of us watching from afar underestimate how much difference actual campaigning makes. In any case, I think Hillary still needs to deal with the campaign-finance issue if she wants to win over Bernie voters for the general.

Monday, February 29, 2016

Why I'm Voting for Hillary, and Why I'm Not Voting For Bernie

Why I'm Voting For Hillary

The reasons to vote for Hillary are pretty clear, once you get through all the supposed reasons to vote against her. She has a long record of supporting progressive causes; she is also clearly the most qualified candidate in either party, with experience in the White House, in Congress, and in managing a large bureaucracy. I would have much more confidence in her ability to get things done than in Bernie Sanders's.

But what about her Super PAC? What about all those ties to Wall Street?

There are two reasons people give money to candidates: to buy influence, or to help someone get elected. The second is the reason most people give money, and most rich people too. The Koch brothers and their friends will probably give hundreds of millions of dollars to Super PACs this year, and I doubt they care much about buying influence. They do it because they want Republicans to be elected. They're not buying politicians; they're buying elections. That's the real problem with Citizens United, and with Super PACs. That's why Clinton has been against them from the beginning.

But here they are, and the Koch brothers and their friends are doing their best to buy the 2016 election. That being so, should Democrats accept large contributions from the few Democratic billionaires there are (like the $7 million the pro-Clinton Super PAC got from George Soros)? Why on earth not? I don't see how it's a sign of progressive virtue to say that only Republican billionaires will be allowed to make huge contributions.

Here are the top contributors to Hillary's Super PAC. Topping the list is Soros, who is hated by the right for his support of liberal causes. Also included: the Operating Engineers Union, the Plumbers/Pipefitters Union, and the Laborers International Union, at $2 million each, the Carpenters and Joiners Union, at $1.5 million, and the American Federation of Teachers at $1 million. This does not strike me as a sellout of progressive values.

As for the ties to Wall Street, Clinton was a senator from New York. The finance industry employs more than 300,000 people in New York. (Many fewer, I imagine, in Vermont.) Some of those people have contributed to Hillary-- not to her Super PAC, but to the campaign committee, with its $2,700 limit. This does not make Hillary a corrupt tool of Wall Street. If you want to see what a tool of Wall Street would do, look at where Wall Street firms are spending their lobbying money. They are all fighting tooth and nail for the repeal of the oversight law known as Dodd-Frank. Hillary supports Dodd-Frank. The Republican candidates have vowed to repeal it. Bernie seems to regard it as an irrelevance.

Then we have the rest of the cats and dogs. What about all the skeletons in her closet? Friends, the Republicans have spent two decades, and considerable resources, trying to find skeletons in Hillary's closet. Remember Whitewater? Remember Benghazi? They haven't found anything. Possibly, though, they have succeeded in creating a vague sense of unease that there must be something there. But she's a liar! Well, no, she isn't; she's pretty good for a politician. By one imperfect measure, she's comparable to Bernie, and much better than any of the Republicans.

Why I'm Not Voting for Bernie

My Bernie problem started with his supporters, the people I call the Bernistas. I was, and am, stunned by the rage and vitriol they direct at Hillary. As someone who remembers the nineties, and who occasionally reads crazed right-wing websites, I couldn't help but wonder why they seem to have adopted Republican language: She's a liar! She's corrupt!  Oh, and by the way, she's not a real feminist! (Presumably, they were born too late to know about this.)

And my problem with the cult of St. Bernard doesn't end with their attitude toward Hillary. Anyone who disagrees with them--Paul Krugman, for example--is assumed to be in the pay of the banks, or at least, to be afraid of losing their privileges when the Revolution inevitably comes.

Well, OK, maybe they get carried away. But surely Bernie himself is waging a high-minded campaign about the issues. Right?

Actually, I'm not so impressed. True, the Democratic debates have been more substantive than the circuses on the Republican side. But a lot of the Clinton/Sanders conflict has not been over policy, or even personal history, but over Hillary's supposed ties to Wall Street, and her use of a super PAC for fundraising. "I do not know a progressive," said Bernie at a town hall, "who has a super PAC and takes $15 million from Wall Street."

But as we have seen, the contributors to Hillary's Super PAC are progressive by any standard. And no, she didn't go to an ATM marked "Wall Street" and take out $15 million. These are donations from individuals, former constituents, who may be trying to influence her, or may just be Democrats. Number 3 on the list of big donors to her campaign committee is the University of California. How can a public university make political contributions? It can't, of course. What that represents is donations from individuals who work at the university. And by the way, where does that $15 million figure come from? I can't find it anywhere.

The latest from Bernie is an ad singling out Goldman Sachs by name. "How does Wall Street get away with it?" the ad asks. "Millions in campaign contributions and speaking fees." Not mentioning any names there, of course. Exactly how Hillary's speaking fees contributed to Goldman Sachs getting away with it is not specified. The whole thing strikes me as a bit sleazy. I'm really starting to dislike Bernie.

What About Policy?

But what about policy? There are some things I like better about Bernie. I think free public college education for all is a good idea, for the same reason I think it would be a bad idea to make Social Security means-tested: programs that are universal are politically stronger and don't stigmatize people. Hillary's argument that this will permit children of billionaires to get free education is a bit disingenuous: billionaires are unlikely to send their kids to state universities, and in any case there aren't very many of them.

I also prefer Bernie on taxes. Hillary raises taxes on the rich by quite a bit, but she could go a lot higher. On the estate tax, her top rate rate of 45% strikes me as timid; even Bernie's rate of 65% strikes me as timid. If we want to strike a blow against aristocracy, estates over, say, $100 million should be taxed at 90%. (That's not very onerous; the Koch brothers could still leave their heirs several billion dollars. Each.)

On single-payer health insurance I'm a lot more troubled. I don't think Bernie has been terribly honest about the costs or what it would be like. There has been a lot of criticism that the numbers don't add up. Even more disturbing, the campaign responded to one such study by calling it a "hatchet job," the kind of thing one would expect from the Bernistas.

Finally, if you scroll down this, you will find Bernie's views on the Federal Reserve, which are alarmingly crankish. Here's a sample: When Wall Street was on the verge of collapse, the Federal Reserve acted with a fierce sense of urgency to save the financial system. We need the Fed to act with the same boldness to combat unemployment and low wages. Um, Bernie, they didn't just save the financial system; they saved the whole economy from going into another Great Depression, with a lot of opposition from Republicans. Fighting unemployment  is part of the Fed's statutory mandate, and they did about the best they could without any help from Congress. It is alarming to see a Presidential candidate with such a confused idea about such an economically central institution.

One last point: what is it with Bernie and Wall Street, anyway? Yes, they're an easy target, because they did in fact crash the economy. But they're far from the only culprit in inequality. They're about 8% of the economy. We've still got McDonald's and Walmart and GM and Verizon. What are we doing about them? Wall Street is not single-handedly responsible for the fact the median wage has stagnated.

So I'll be voting for Hillary tomorrow. Good luck with that whole revolution thing.

Thursday, October 15, 2015

Good News About the Good News: It's Real

If you're not a regular reader of The New York Times, you may have missed this column by Nicholas Kristof. It makes a startling point: The world has gotten dramatically better, and most Americans don't know it. For example, the number of people living in extreme poverty has "fallen by more than half, from 35 percent in 1993 to 14 percent in 2011." But 95 percent of Americans think the number has either gone up or remained the same.

I began to wonder, though, about that poverty statistic. I knew that China's industrialization had reduced poverty there by a lot. And China, as you may know, has a very large population. How much of the reduction was just China pulling down the average? Is this a real phenomenon in other parts of the world ?

I went to the World Bank data set that Kristof used, and looked at results broken down by region. Here are some (in evenly spaced years):

Percentage in extreme poverty ($1.25/day or less)
E Asia Eur, Ctl Asia Lat Am, Carib. M East, N Afr S Asia Sub-S Afr Total
1984 65.6 2.3 13.4 6.6 57.7 56.3 47.5
1990 57.0 1.5 12.6 5.8 54.1 56.8 43.4
1996 38.3 4.2 10.6 4.8 48.6 59.7 35.9
2002 27.3 2.1 10.2 3.8 44.1 57.2 30.5
2008 13.7 0.5 5.4 2.1 34.1 49.7 21.9
2011 7.9 0.5 4.6 1.7 24.5 46.9 17.0

Yes, this looks pretty real. The decline in East Asia is the most dramatic, a reduction of 88% over the period shown. But poverty in South Asia (India, Pakistan, Bangladesh, etc) has fallen by more than half, and in Latin America by two-thirds.

And what about within East Asia? Surely that must be just the effect of China. Actually, no. There are huge reductions in Cambodia, Indonesia, Vietnam. There is a smaller but still dramatic reduction in the Philippines.

Does this just mean that there are a lot of people making $1.30/day? No, worldwide the number of people making $2/day or less has fallen by almost half. It's real.

Kristof, unfortunately, says nothing about what brought this about. But if China is representative, globalization, the shifting of production to the Third World, played a big role in raising Third World incomes. This is a rather uncomfortable conclusion for liberals; one has to ask, "Are decades of wage stagnation for the middle class in the developed world too high a price to pay for lifting billions of people out of extreme poverty?"  (If the answer is that it's not too high a price, of course, we can still do better about asking the rich to bear some of the burden.)

Finally, it is disturbing that progress has been so slow in sub-Saharan Africa. Undoubtedly, a big part of the explanation is war: Extreme poverty is at 97 percent in Congo, for example, and 95 percent in Liberia.  And a part of that, in turn, is the resource curse.

Friday, July 10, 2015

Southern Crybabies Start War; Slaughter Ensues

As you may have noticed, there has been a lot of public discussion of the Civil War recently. One point that has been made often is that yes, the cause the South was fighting for really was slavery (and not, say, "states' rights"), and that this is quite evident when we read the states' Declarations of Secession.

So I was looking at South Carolina's Declaration of Secession. It was the first in the nation, and South Carolina is the state that fired the first shot of the Civil War. South Carolina is also the state that's been the focus of the recent news.

Now, recall that this was the bloodiest war in U.S. history, killing about 620,000 people (the equivalent of around 6 million today), ending slavery, and permanently impoverishing the South. You would think, then, that they would not make this decision lightly.

You'd be wrong. What is most striking about South Carolina's reasons for secession is how trivial they are. They complain at great length that Northern states are not returning fugitive slaves, as the Constitution requires:

In many of these States the fugitive is discharged from service or labor claimed, and in none of them has the State Government complied with the stipulation made in the Constitution...In the State of New York even the right of transit for a slave has been denied by her tribunals; and the States of Ohio and Iowa have refused to surrender to justice fugitives charged with murder, and with inciting servile insurrection in the State of Virginia. 

Annoying, of course, if you're a slaveowner--but annoying enough to start a war? Surely not. And how exactly is secession going to make things better? One would think, in fact, that being a separate nation makes the  problem worse; for instance, you might not be allowed even to enter the neighboring state. (Notice, by the way, that the secession was actually a revolt against states' rights. The association of the Civil War with states' rights, like the public display of the Confederate battle flag, dates to the era of school desegregation.)

So you're seceding over this? Oh no, there's much more:

Those States have assumed the right of deciding upon the propriety of our domestic institutions..they have denounced as sinful the institution of slavery; 

Ma! Jimmy's calling me sinful!

...they have permitted open establishment among them of societies, whose avowed object is to disturb the peace and to eloign the property of the citizens of other States. They have encouraged and assisted thousands of our slaves to leave their homes; and those who remain, have been incited by emissaries, books and pictures to servile insurrection.

Again, annoying; but how is secession supposed to help? (By the way, great oxymoron: "servile insurrection.")

And finally, we get to the nub

A geographical line has been drawn across the Union, and all the States north of that line have united in the election of a man to the high office of President of the United States, whose opinions and purposes are hostile to slavery. He is to be entrusted with the administration of the common Government, because he has declared that that "Government cannot endure permanently half slave, half free," and that the public mind must rest in the belief that slavery is in the course of ultimate extinction.

So the trigger for South Carolina's secession is, in fact, the election of Lincoln.  Mind you, Lincoln hasn't even been inaugurated yet, let alone done anything against slavery. But he is "hostile" to it. The slaveowners feel unloved.

Those are their reasons for starting a war. In fairness, they probably never imagined that because of them, one American in fifty (or, I suppose, one American male in 25) would die.

Sunday, June 14, 2015

Police Killings and Racial Bias

The Guardian newspaper, which has been keeping count, announced Wednesday that fatal shootings by police in the U.S. in 2015 had reached 500, and that's only through the end of May. That seems like a shockingly large number.

The article points out that a disproportionate number of African-Americans were killed, using statistics that I've put into this table:

Police killings US population
White 49.6% 64.2%
Black 28.2% 13.2%
Hisp. 14.8% 17.1%

Yes, clearly, a disproportionate number of African-Americans are killed. But is that evidence of discrimination by police? After all, there are more arrests of African-Americans, and if there are more arrests, then surely we would expect more gunplay:

Police killings  Arrests
White 49.6% 68.9%
Black 28.2% 28.3%
Hisp. 14.8% 16.6%

The numbers in the right column add to more than 100, because "Hispanic" is not considered a separate racial category in government statistics. But if we assume that 90-95% of Hispanics are white, and reduce the totals for "white" and "black" in the second column accordingly, then the number of shootings seems roughly in line with the number of arrests.

But that just pushes the question back a step. Why are more African-Americans arrested? Is it because they commit more crimes, or is the statistic itself a sign of police bias? There were complaints in New York City, for example, that blacks were arrested more than whites for marijuana possession, not because they were more likely to smoke marijuana, but because of discriminatory use of "stop-and-frisk" searches.

This, however, doesn't seem to be true for arrests in general. African-Americans make up 30% of all drug arrests, and 26% of all vandalism arrests, but 52% of all murder arrests. It seems unlikely that discriminatory enforcement is more common in murder cases than in drug cases.

So far, the facts don't seem to bear out a claim of police bias. But wait... here's an odd thing.

More than one in every five people killed so far in 2015 – 108, or 21.6% – were unarmed. A significant disparity in the proportion of black and white people killed who were unarmed, which was reported last week by the Guardian, has since narrowed slightly. While 30.5% of white people killed were unarmed, 16.1% of black people killed had no weapon.

Apparently, whites were a lot more likely than blacks to be unarmed when they were killed. Does that mean whites were more likely to be killed when they were unarmed? That would be surprising.

I decided to take look at The Guardian's data set. The data set is actually quite admirable. In addition to demographic information, it has a brief narrative and often a photo for each case. And it will provide counts using various filters, including race of victim and how they were  armed.

The first thing I discovered is that they got the numbers reversed: it's actually 30% of blacks and 16% of whites who were unarmed when they were killed. [Update: The webpage linked above now notes and corrects this error.] Playing just a little more with the data, I find that The Guardian has kind of missed the big story here. Rather than presenting the data as in the first table above, they should have presented this:

Police killings:
Armed people Unarmed people
White 53.5% 36.7%
Black 26.9% 40.4%
Hisp. 15.3% 15.6%

Let's recap. Blacks are disproportionately likely to be arrested. Probably that's mostly because they commit more crimes. While racism undoubtedly is part of the ultimate explanation for that, racism on the part of the police doesn't seem to explain why blacks are arrested more. And if you're armed, your chances of being killed appear about the same for blacks and whites.

But if you're unarmed, the chance of being killed is much greater for blacks than for whites. That does start to look like racism. It needn't mean that the police hate blacks; it could mean they're more likely to perceive blacks as threatening. But of course, that's not much consolation to the familes.

"Hands up, don't shoot" indeed.

Wednesday, May 20, 2015

Question for Ted Cruz and Rick Perry

"Q: The 2014 Platform of the Republican Party of Texas says, 'Homosexuality is a chosen behavior that is contrary to the fundamental unchanging truths that have been ordained by God in the Bible, recognized by our nation’s founders, and shared by the majority of Texans.... ' Do you agree with this statement?"

At that, the statement represents a degree of moderation from the 2010 platform, which says, "We believe that the practice of homosexuality tears at the fabric of society, contributes to the breakdown of the family unit, and leads to the spread of dangerous, communicable diseases." It then goes on to talk about the fundamental unchanging truths, etc. I always hoped that someone would ask Ron Paul about this in 2012.

By the way, does anyone know where they're getting this stuff about our nation's founders?

If you start looking the 2014 platform, though, you can find all kinds of statements that a national Presidential candidate would probably prefer not to deal with, at least during the general election:

"We support eliminating bureaucratic prohibitions on corporal discipline and home schooling in foster homes."

"We support an immediate and orderly transition to a system of private pensions based on the concept of individual retirement accounts, and gradually phasing out the Social Security tax."

"We urge the legislature to end censorship of discussion of religion in our founding documents and encourage discussing those documents, including the Bible as their basis. Students and district personnel have the right to display Christian items on school property."

"We oppose any sex education other than the biology of reproduction and abstinence until marriage."

But why go on? This is the full right-wing-crank stuff. Supporting those positions probably wouldn't damage Cruz or Perry at all in the Republican primaries. But that's interesting in itself, no?

Saturday, May 2, 2015

The Myth of the "Ten Commandments"

The Ten Commandments have been in the news again; the Christian right has been saying silly things in their effort to convince people that the Founders intended the U.S. to be a Christian nation. There is, for example, the Texas school textbook that says the Constitution was influenced by the Ten Commandments. This is like saying that my Honda owner's manual was influenced by "Hamlet"; there is simply no overlap between the two. Put the two documents side by side and see if you can find any resemblance.

But that brought up another question: Why do Christians attach such importance to the Ten Commandments? It seems awfully, shall we say, Old Testament. Out of all the Old Testament, why is this the part that Christians want to carve into two-ton sculptures?

Actually, not everyone believes that Christians need to follow the Ten Commandments; some hold out for faith alone. But among those who do think they must be followed, many sources, including the Catechism of the Catholic Church, cite this passage from Matthew 19:

16And behold, a man came up to him, saying, “Teacher, what good deed must I do to have eternal life?” 

17And he said to him, “Why do you ask me about what is good? There is only one who is good. If you would enter life, keep the commandments.” 

18He said to him, “Which ones?” And Jesus said, “You shall not murder, You shall not commit adultery, You shall not steal, You shall not bear false witness, 19Honor your father and mother, and, You shall love your neighbor as yourself.”

Christians conclude that "Keep the commandments" means "Follow the Ten Commandments." But that creates some puzzles. First, there's the man's question "Which ones?" Seriously? Ten is too many? Second, why does Jesus put in that sixth item, about loving your neighbor? The usual explanation is that this is a sort of summary of the others. But it's certainly not a summary of the missing ones, which include not worshiping idols and observing the Sabbath.

To an observant Jew (I'm not one, but seemingly Jesus was) this is all way off the mark, a misunderstanding. Any observant Jew knows what "Keep the commandments" means. It refers to the hundreds of commandments (mitzvot) in the Five Books of Moses. So the question "Which ones?" makes perfect sense. How important is eating matzoh on Passover? Not mixing wool and linen? Wearing fringes on your garments? Jesus then lists six that he considers important. The sixth is not his own invention; it's another one of the mitzvot, found in Leviticus 19:18.

In fact, Jesus could not have been talking about those ten things written on the two stone tablets, because in Hebrew they are not even called "the Ten Commandments." They're called something like the Ten Words or the Ten Utterances (hence the Greek Decalogue). Jews consider the first one to be "I am the Lord your God who brought you out of the land of Egypt," so only the remaining nine are actual commandments.

The Ten Utterances are considered to be God's covenant with Israel. Remember "Raiders of the Lost Ark"? The box in which the Israelites carried the two stone tablets was called the Ark of the Covenant, not the Ark of the Commandments. And Jews believe that only some of the commandments in the covenant are binding on non-Jews. Notice that in the First Utterance, God says "...who brought you out of the land of Egypt." Brought whom out of the land of Egypt?

Things I don't understand, o my Christian brethren:

(1) Christians are quite emphatic that Jesus gave them a New Covenant to supplant the Old Covenant that Jews had with God. So why would you adopt the Old Covenant in its entirety?

(2) A man asks the central figure in Christianity--the Son of God--what laws to follow. The man is given a list of six laws. Christians do not respond by writing them on the walls of their churches. Instead, they put aside the sixth one, and add five others that Jesus doesn't mention. Why?

Well, for whatever reason, that's what the Christians did. And so the Ten Commandments became "the very cornerstone of Western Civilization, and the basis of our legal system here in America." Surely no one can dispute that.

I do dispute it. Take a look at our nation's prisons.  You will find no one convicted of Sabbath-breaking, adultery, making graven images, coveting, or talking back to their parents. The Puritans, certainly, might have locked up such people, but that's never been part of "our legal system here in America." (Yes, I know, Massachusetts used to have blue laws.) The only Commandments whose violation is a felony in America are those against murder, theft, and perjury, and probably those were felonies in Zhou Dynasty China and Egypt under the Pharaohs. Conversely, we managed to come up with laws against rape, sale of narcotics, child molestation, prostitution, and many other things not mentioned in Ten Commandments.

So there you have it. If I were a believing Christian, I'd just try to follow the Six Commandments. And I'd object vociferously if anyone tried to tell me the Ten Commandments are the basis for American law.