Inequality
According to the historian Walter Scheidel, inequality can be solved by the Four Horseman of Leveling: Mass mobilization warfare, transformative revolution, state collapse, and lethal pandemics. These are the historical solutions to inequality.
Taxing with Malice
This is from an editorial--I think the WSJ--and contains a lot of very concentrated economics thought, clearly presented. It describes the subservience of economics to the group identity-group conflict fetish.
"The Biden administration last week proposed to increase the capital-gains tax rate—currently 20% for most assets held for at least a year—to 39.6% for people making more than $1 million. Since capital gains are also subject to the 3.8% Medicare tax, the new capital gains rate would be 43.4%.
What makes this unusual is that 43.4% is well above the rate that would generate the most revenue for the government. Congress’s Joint Committee on Taxation, which does the official scoring and is no den of supply-siders, puts the revenue-maximizing rate at 28%. My work several decades ago puts it about 10 points lower than that. That means President Biden is willing to accept lower revenue as the price of higher tax rates. The implications for his administration’s economic thinking are mind-boggling.
Even the revenue-maximizing rate is higher than would be optimal. As tax rates rise, the activity being taxed declines. The loss to the private side of society increases at a geometric rate (proportional to the square of the tax rate) as rates rise. The government collects more revenue, but its gains slow as the taxed activity declines. The revenue-maximizing rate is the point at which the government starts losing from higher taxes. Tax rates above the revenue-maximizing rate are punitive: The government is giving up revenue simply to punish the rich.
Punishing the rich is distinct from redistribution. Higher taxes on the rich to finance spending, or to transfer money to lower-income people, may be good for society’s welfare. Economists express this idea in a “social-welfare function,” which weights additional income received by different people, usually based on income. The same sum is considered less valuable if it goes to a high-income person than a lower-income one. The weights are subjective and different analysts will choose different weights.
Still, economists can agree that the ideal is to make someone better off without making someone else worse off. The simplest case is a voluntary exchange of goods for money, in which the buyer values the purchase at least as much as the price, while the seller values the money at least as much as the item being sold. Economists call such an exchange Pareto-optimal after Vilfredo Pareto, the Italian economist who formally framed the concept.
There is no choice in paying taxes, and usually the government is better off and the taxpayer is worse off. But above the revenue-maximizing rate, even the government is worse off. This is called Pareto-pessimal.
Generally, the government can raise tax rates and transfer the money to lower-income people, thereby improving social welfare. The government can do this even after incurring the economic burdens caused by higher rates and the costs of transferring money (known as the “leaky bucket”). The trade-off depends on how much tax rates distort the economy, how big the leaky-bucket effect is, and how one evaluates the difference in value of money going to people in different income groups.
As indicated by other proposals, the current administration rates money going to lower-income people extremely highly relative to higher-income people—higher than has traditionally been the case in U.S. economic policy. It also seems to put little weight on excess economic burdens and leaky-bucket costs. The wisdom of those choices will be tested at the ballot box.
But to an economist, a Pareto-pessimal choice is unwise by definition. There is no set of “weights” one can devise to justify this proposal, because there are no highly prized winners to offset the losses to the low-weighted losers.
The concept of social-welfare maximization has been a cornerstone of economic thinking across the political spectrum for the past century. It dates back at least to Adam Smith in the 18th century, and arguably to the 17th, when Jean-Baptiste Colbert, King Louis XIV’s finance minister, declared “the perfection of taxation consists in so plucking the goose as to procure the greatest amount of feathers with the least possible amount of squawking.”
That’s why it is shocking that this policy got past the economists in the administration, many of whom have had long and distinguished careers. The Biden administration is blowing up one of the key concepts that has united the economics profession: maximizing social welfare. It now believes in taxation purely as a form of punishment and is even willing to sacrifice revenue to carry it out."
I have not heard it said but it is possible that the powers-that-be believe that the failure of taxes to raise point-by-point revenue is that the victims of the tax increases retreat into some illegal subterfuge to avoid their proper tax. Why? Because they don't believe in market forces. They believe only in corruption.
Fear and Trembling
The weird, zombified staggering West is now beginning to settle in to live with the Virus. The rationale for destroying the economies have mutated from protecting the hospitals to herd immunity to Lord knows what.
What have we learned so far?
Well, the Virus is slippery and we know that there are not a lot of real specifics. But announcing all positive cultures regardless of the circumstances seems to be pretty good scare tactics. And the development of mutations in viruses, once thought to be a definition of the life form, has become a shocking revelation.
The politicians and their agents in the press now pursue us from pillar to post.
Some Stats and Graphs
Logic Divided
In the middle of "Romanov and Juliet," a funny Ustinov movie, there is a debate over whether a country should be partitioned. The British decide to support one side--I can't remember which--and the PM gives a speech in the UN around the ringing phrase, "A house divided against itself cannot stand." When later the British decided it would be in their better interest if the partition decision went the other way, the PM, in support of the new position, gives the same speech to the UN.
Last year there was no limit to the efforts we had to go to stop the Virus. The smallest chance of the Virus in the most isolated and statistically safe groups had to be dealt with. We shut down the Western world.
Now a small group has experienced a small number of blood clots after being vaccinated. No effort will be spared to prevent the clots from happening, even if it means allowing some people to get the Virus.
Lexington
April 19, 1775
At about 5 a.m. on April 19, 1775, 700 British troops, on a mission to capture Patriot leaders and seize a Patriot arsenal, march into Lexington to find 77 armed minutemen under Captain John Parker waiting for them on the town’s common green. British Major John Pitcairn ordered the outnumbered Patriots to disperse, and after a moment’s hesitation, the Americans began to drift off the green. Suddenly, the “shot heard around the world” was fired from an undetermined gun, and a cloud of musket smoke soon covered the green. When the brief Battle of Lexington ended, eight Americans lay dead or dying and 10 others were wounded. Only one British soldier was injured, but the American Revolution had begun. The British moved to Concord and found more resistance so they withdrew. They were attacked on their withdrawal through Lexington and were harassed all the way to Boston.
Sixteen Democratic AGs on Jan. 19—a day before Mr. Biden’s inauguration—challenged the EPA’s current ozone NAAQS. Their one-paragraph lawsuit says the standards are “unlawful, arbitrary and capricious and therefore must be vacated.”
Their aim is to hasten a replacement ozone rule that regulates CO2. The Obama EPA often entered into legal settlements with third-parties to bypass procedural requirements of the Administrative Procedure Act and impose extralegal regulations. Acting EPA Administrator Jane Nishida showed the Biden team’s cards on March 4 by notifying the Center for Biological Diversity and 350.org that the agency plans to reconsider “the important issues” in its 2009 petition to regulate CO2 under NAAQS.
To sum up, Democratic AGs, green groups and a top Biden environmental regulator are colluding on a plan to impose the Green New Deal on states through a back regulatory door because they know they can’t pass it through the front in Congress.-
To work around the country's rules to your personal ends takes a special kind of arrogance. To do it to impose your own vision despite the structure of the nation is simply tyrannical. -(some from a wsj article)
Our Plagues are Just Starting
Anyone watching the series "Wolf Hall," a terrific story with a benign handling of Wolsey and Cromwell, was probably jolted by the sudden deaths of Cromwell's wife and two daughters who awoke well one morning and died the next day, a cataclysmic illness of sudden and devastating consequences that, even now, has never been explained. It was a common story at the time. "The Sweating Sickness."
The "sweating sickness" first appeared around the time Thomas Cromwell, later chief minister to Henry VIII, was born, at the end of the dynastic Wars of the Roses, and there has been some debate concerning the possibility that it arrived with the invading army of the first Tudor king, Henry VII, in 1485.
By the time it disappeared in 1551 it had caused five devastating outbreaks. To observers on the other side of the Channel, whose countries had apparently remained miraculously untouched (though a later outbreak did spread to Calais), this disease was Sudor Anglicus, or the “English Sweat”.
Suggestions that have been made over the years include influenza, scarlet fever, anthrax, typhus or some SARS-like pulmonary enterovirus. All, however, have had some clinical or epidemiological aspect that didn’t quite fit the description of the sweating sickness.
Then in 1993, an outbreak of a remarkably similar syndrome occurred among the Navajo people in the region of Gallup, New Mexico. This episode, known as the "Four Corners outbreak" after the region of the south-western USA in which it was located, turned the attention of sweating sickness investigators towards its causative agent: Sin Nombre virus. ("Without Name") Sin Nombre is a hantavirus, a member of a group of viruses that were mostly previously known in Europe for causing a kidney failure syndrome, and a cousin of several tropical fever viruses transmitted by biting insects. The new disease was given the name hantavirus pulmonary syndrome (HPS).
We know that the climate of Europe was becoming progressively colder from the late middle ages onwards. Perhaps some subtle change in rodent ecology made life harder for the virus. For instance, the Four Corners HPS outbreak was linked to the El Niño climatic oscillation.
If you aren't worried yet, you should be. There has been a scary mystery illness in history. The scary mystery illness is associated with heat; it disappeared with cooling. So, in our modern associative world, global warming might well result in the return of a scary disease, maybe the sweating sickness. And the sweating sickness is a disease that, while not understood at all, is scary. Warming. A mystery illness that is scary.
Please don't let any government officials know about this. Especially the CDC or we'll have weeping public officials everywhere. And new, fierce, Chicken Little Legislation.
We'll probably all end up with the military quartered in our homes, just for safety's sake.
True Government
Lincoln
We Americans stupidly recognize this day as the day before taxes are due. So we emphasize money and materialism over greatness of mind and soul, greatness that was both a product of and an influence upon the nation. Taxes are trivial compared to what happened on this day in 1865. President Lincoln was shot by Booth on Good Friday, April 14, 1865 and died the next morning. Secretary of State Seward was brutally assaulted as was his son. There is good evidence that General Grant was stalked to his train the same night by the conspirators. This occurred 5 days after Lee's surrender at Appomattox and doomed the South to a reconciliation with the North shepherded by the usual political wolves. More importantly it deprived the nation and politics of the high standard of mind and spirit Lincoln embodied.
Tolstoy on Lincoln:
“.... how largely the name of Lincoln is worshiped throughout the world and how legendary his personality has become. Now why was Lincoln so great that he overshadows all other national heroes? He really was not a great general like Napoleon or Washington; he was not such a skillful statesman as Gladstone or Frederick the Great; but his supremacy expresses itself altogether in his peculiar moral power and in the greatness of his character.
“Washington was a typical American. Napoleon was a typical Frenchman, but Lincoln was a humanitarian as broad as the world. He was bigger than his country — bigger than all the Presidents together.
“We are still too near to his greatness,” Tolstoy concluded, “but after a few centuries more our posterity will find him considerably bigger than we do.
“His genius is still too strong and too powerful for the common understanding, just as the sun is too hot when its light beams directly on us.”
Anachronistic Thinking
In July the government of Prime Minister Boris Johnson responded by impaneling the Commission on Race and Ethnic Disparities. “We decided to step away from the heat and all that vitriol,” says its chairman, Tony Sewell, “and just take a cold look at the data on racism.” In doing so, “we examined ideas that weren’t to be questioned,” namely “the race industry’s articles of faith.” In its March 31 report, the commission concluded that while Britain isn’t yet “a post-racial society,” neither is it any longer a place where “the system” is “deliberately rigged against ethnic minorities.”
As a result, Mr. Sewell, who is black—only one of the 10 other commissioners is white—has come under blistering attack.
That's not interesting but the numbers are.
Black Caribbean children perform worse in British schools than those of any other group. “For years,” Mr. Sewell says, “it has been said that this is explained in terms of teachers’ racism.” Yet black African students—“same age, same demographic, same classroom”—had academic achievement rates higher than those of whites. In fact, he says, all ethnic groups other than Caribbean blacks perform better than white British students, with the exception of Pakistanis, who are on par with whites.
While 14.7% of all British families are single-parent units, the share is 63% in the black Caribbean community. Britons of Indian origin have the lowest single-parent incidence—only 6%.
“The idea that all ethnic minority people suffer a common disadvantage is an anachronism,” Mr. Sewell says. Forty percent of Britain’s medical clinicians are Indian: “This last fact isn’t celebrated, by the way. This is hidden.”-from the wsj (don)
The "anachronism" quote may be the insightful quote of the week.
The Artist at His Rightful Place At Last
Sunday/Thomas
Today's gospel is the "Doubting Thomas" gospel. It is an insight that unfortunately has become a cliché.
Letting the Gini Out
A Shriek in America's Night
In the future, when everyone, or most everyone, has forgotten the America that was, there won’t be any wrong-thinkers. There will only be shades of right-thinkers. Those who know that the stories Americans once told about themselves were lies, that the great, existential quest, the striving for a more American America, the New Jerusalem, the paintings it painted of itself, the Hudson Valley, the Great Plains, the Great Lakes, the sprawling, harried novels it wrote about this deeply flawed, beautiful, wondrous experiment, the sonorous, dissonant symphonies it composed, the ticker-tape, black and white movies it projected onto its screens — it was all a ruse.
We should be grateful, these post-Americans will tell themselves, that we do not live in this place, that we never knew it. That we have been liberated from the fictions of this bloodied land. That we are finally, at long last, free.--Peter Savodnik
The Emperor Flaunts His New Clothes
The Upside of Asian Criticism
The kerfluffle over racism aimed against American Asians has left me strangely optimistic. (This does not include the self-destructive international image of America as a cruel and bigoted state, an image that is being used by the Chinese in their propaganda war against the West in Asia. That is not optimistic.) But the animosity toward Asians is a different kettle of the usual muckraking stew.
Bigotry exists. People generalize from their own personal experiences to include the larger group that an individual experience does not represent. This is the essence of bad science: large generalities from small samples. But that is not happening with the Asian community. They are not being punished by their fellows because they are seen as a negative subset on the population curve, they are being attacked because their attackers are envious of their familial and economic success. Bigots usually look down upon their targets. In the Asian community, their attackers are looking up.
The Asian community is seen as successful in a competitive environment, successful where their opponents are not. That implies the recognition of success, of a hierarchy that the culture values and appreciates.
So, while some small number of idiots are acting on their limited views, their victims, Freedom's success stories, are being supported by the Left. That's progress.
The Self-sacrifice of the Press
A number of years ago during the hunt for bin Ladin, the American press learned the American military was tracking terrorist leaders through their cell phones. The government asked that the information be suppressed so they could continue to track them surreptitiously but the press, particularly the NYT, said they would reveal it. Nothing like the Truth.
So the press revealed the Americans had the locations of all the terrorists, the terrorists threw away their phones, and the Americans lost a terrific advantage in their conflict with murderous anarchy. But the press, somehow feeling they were immune to murderous anarchy, swelled with pride.
The saintly press is repeating their mistake with the Chinese. They are presenting the Americans as anti-Asian bigots, to the delight of Chinese propagandists who are using this in their efforts to influence the Asia they don't control. Once again, the press acts as if they will not suffer when the rest of us will suffer.
I don't know if they are stupid, but they are certainly unwise.
The Heroes of Baseball
Major League Baseball has taken a moral stand--if coming to a decision after surveying some of your members for their opinion can be called moral. Maybe a moral headcount. Maybe a new take on the moral majority--of those answering the questionnaire. Anyway....
There are many of us that have thought all along that morality was an abstract idea that actually transcended voting. All more the fools we. Anyway....
So the Major League is not going to have the All-Star Game in Georgia. This is because the majority of players polled thought the voting laws that Georgia was voting on are discriminatory on the basis of race. This leads to several simple questions. Which laws are discriminatory and why? And, since discrimination is illegal, how are the miscreants going to escape justice? What has Georgia done that allows them to avoid prosecution? Or ...are the points under debate less definite? Or are some points more...symbolic?
One thing certain, revolutions, like George Bush, don't do nuance.
Easter
Immigration
As the border becomes a discussion topic again, here are some factors.
Building “the Wall” would cost less than half of what we spend to educate illegal immigrants every year
Illegal immigration costs American taxpayers $116 billion a year
62 percent of naturalized immigrants are for the Democrats; only 25 percent are for the Republicans
Competition from immigrants costs American workers $450 billion a year
The Founders wanted to admit only immigrants who would make a net contribution—and assimilate
Millions of nineteenth-century immigrants who couldn’t make it in America went back home
