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"Small government:" a useless over-generalization
2008-01-26 11:40:00
Recently I heard John McCain once more use the conservative favorite slogan, “The Democrats want to increase the size of government.” Republicans, on the other hand, are supposedly for small government.Yes, the discussion regarding small vs. big government may be one of the grandest displays of meaningless, empty, yet thoroughly pompous political rhetoric. Speaking of big or small government is a useless generalization.One of the reasons I am a liberal, is liberalism’s temperament is pragmatic. The goal of economic policy is to provide people with effective freedom, that includes guaranteeing the provision of positive rights, such as health care, education and a clean environment, counter-act the unjust distribution of rewards that inevitably results and prevent the accumulation of power in the hands of a few.The key to accomplishing these goals is a pragmatic approach. Decisions need to be made as objectively as possible, on a case-by-case basis. At times a new government reg...
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Not all tax cuts are created equal
2008-01-25 02:24:00
Browsing the web I came across an interesting conservative rant; "Let’s see if I can follow this lib logic… their standard policy position is higher taxes... But now they are advocating a lower taxes to spur economic growth."True, we do advocate more redistribution and a progressive tax system. We oppose supply-side economics in the sense that we oppose tax cuts for the rich, as the rates applying to top earners are far below the threshold were such cuts would be effective stimuli. And therein lies the key, which the above right-wing commentary is missing: we advocate higher taxes on the rich, not the middle and working classes who are getting a tax cut right now. These groups spend a far larger share of their income then the rich; thus, they will inject this money into the economy through consumption (the difference in the share of income the rich and bottom 99% spend on consumption is also the reason why anything besides an income tax is regressive). The rich, on the other han...
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FDR on real freedom
2008-01-23 09:33:00
"Necessitous men are not free men.’ Liberty requires opportunity to make a living – a living decent according to the standard of the time, a living which gives a man not only enough to live by, but something to live for." - FDR
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Krugman on economic risk faced by Americans
2008-01-23 08:47:00
Princeton economist Paul Krugman talks about the risk faced by individuals in the American political-economy.
More About: Risk , Economic , Americans

McCain is a Real conservative
2008-01-20 20:30:00
Many close followers of American politics, including yours truly, would identify McCain as a centrist moderate or an "Old-guard" Republican, like Eisenhower; the types that dominanted the party before the vuglar libertarianism of Friedman, the rise of supply-side economics and the Christian right. Yet, after reading his platform for the 2008 presidential race, it becomes apperant that McCain is no moderate, but a true conservative: He plans to make the Bush tax cuts on rich American permanent in what he calls a pro-growth policy. In reality, and most economists would agree, the tax cuts for the rich Bush handed out have done nothing to spur growth. Why? Because tax cuts for the rich only work when taxes are sufficiently high enough. They weren't high enough under Clinton. As a matter of fact most economists beleive that taxes on the rich could be considerably higher without risking slower growth - as there would still be sufficient monetary, not to mention social incentive. By any ...
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Libertarianism from a liberal perspective
2008-01-19 14:27:00
John McGowan, in his book American Liberal ism (2007, North Carolina University Press), gives a perfect definition of libertarianism (well, at least from a liberal perspective):"We all must submit to the harsh realities of the market because that is the way to secure freedom – a freedom that will be lost if make any deliberate attempt to better our lot in life. Under such terms, what is freedom good for? Work hard, compete against all others, eke out a living if you are lucky, and die. But at least you can know that you were free. Others didn’t impose their will on you, only the existential conditions of human life and the market did. That’s just the way things are’ there’s no one to blame. So buck up and face it like a man." (pp. 115-116)And then people wonder why less than 1% of political scientists and sociologists are libertarian! It should also be noted that the above is based upon an understanding of libertarianism as expressed through thinkers such as Friedrich Van H...
More About: Libertarianism , Perspective

A good idea
2008-01-19 07:04:00
The stimulus plan is a good idea. It will give middle and working class families - and them only (the cut off line is $85,000 for single earner households and $110,000 for dual earner households), more cash on hand, which they, unlike the rich, are more likely to inject back into the economy. The Democrats' idea to temporarely increase well-fare benefits for the poor and unempoloyed will provide a safety net for those who are most likely to be affected by a possible recession. This bi-partisan agreement will prevent uneeded suffering and help the public during an economy slow-down; shielding them from the adverse consequences that could occur if we do head into a recession.
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Why is inequality increasing?
2008-01-18 08:23:00
It is established fact, agreed upon by social scientists, that the top 1% has been pulling ahead of the bottom 99%. That makes the U.S. one of just four developed countries that saw inequality increase (others, like Canada and Norway, actually saw their inequality decrease). But why? On page 169 of Flat World, Big Gaps a collection of academic essays on inequality, poverty and globalization published in association with the UN, economist John Weeks of London University provides an answer:"In the four OECD countries in which inequality significantly increased, the proximate cuases are clear...Reducation in the progressivity of national tax structures, including a shift from direct to indirect taxes (from corporate and personal income taxes to sales, or VAT, taxes), s fall in the average income tax rates by reducing taxes at the top of the distribution, and reduction in corporate taxes and taxes on unearned income;Reducations in expenditures on universal social progreammes (e.g., unem...
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California Ballot Measures
2008-01-17 04:02:00
In the Golden State there are 4 ballot measures on the ballot. Here the recommendation by a) the Democratic Party, b) the League of Women’s Voters (LVW) and c) yours truly with short reasons:Prop 91: Requires that funds from tax on gasoline are used on roads. Opposed by the Democrats, the LWV and myself. Why? Most funds derived from these sources are used for infrastructure anyways. This measure merely makes it more difficult to balance the budget by not allowing legislatures to borrow funds from gasoline taxes for the general fund.Prop 92: Lowers fees at Community Colleges to $15 per unit and requires mandatory funding for Community Colleges, which educate ca. 60% of California 's college students. Neither supported nor opposed by the Dems, opposed by the LWV, supported by me. Why? Education needs to take a higher priority in our budget; the benefits of spending on education are tremendous, ranging from higher wages for Californians, to more jobs for the professionals who educate...
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Half-baked thoughts (aka libertarianism)
2008-01-15 08:58:00
Jason Reidman is a libertarian and his movie, Thank You For Smoking, supposedly advocates a libertarian point of view. Reidman articulates his thoughts as follows: "People should be left to their own devices. If people want to put a gun to their head and kill themselves, that's fine with me, and if they want to do it slowly by smoking cigarettes, that's their choice, too." I suppose, if asked Reidman would say that he believes in the harm principle, the idea that unless an individual's action are shown to cause harm to someone else, government must not infringe upon individual liberty. Yet, the harm principle actually advocates aggressive government intervention in order to deter and limit smoking. Why? Because a smoker does not merely harm him or herself, but others as well. By damaging his or her health, he or she is more likely to end up in a hospital bed - costing society thousands (especially if he or she suffers from smoking after retirement when on Medicare), be a less pro...
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Why a flat tax in inherently unjust
2008-01-11 00:37:00
While reading through the economic policy proposals by presidential candidate, Mike Huckabee, I came across the statement that a flat tax, unlike a progressive income tax, would not punish people for working hard. At first sight, but only upon first sight, does that seem plausiable. There are good reasons why the vast majority economists endorse a progressive income tax structure and would disagree with Mr. Huckabee's take on social justice and taxation. Here are three (note that there are more reasons, some of which may well be more compelling than those below) why the assertion that a progressive income tax punishes people for working hard is misleading and, quite frankly, nonsensical:Hard work and material prosperity do not always go hand in hand. Even the prominent libertarian Friedrich van Hayek realized that the distribution of rewards in capitalism is not always just. Thus, we need to consider that the rich are not rich merely because they work harder; many do work hard, but...
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Why libertarianism is a form of conservatism
2008-01-09 06:52:00
Libertarians would of course take severe umbrage with this claim. They see themselves are the "true liberals," believing that since they advocate laissez-faire capitalism instead of the mixed economy, they are greater advocates of liberty than liberals (they, do, however, rely on a vastly over-simplified definition of freedom when making this statement).Truth is that both libertarianism and traditional conservatism are bound together through several traits that differentiate them from liberalism. First, libertarians, like traditional conservatives, accept, and urge others to accept, the concentration of power and wealth in the hands of a few. Traditional conservatives believe that such concentration is needed to keep the social order. Libertarians believe that there is no remedy for such concentration of power; any remedy, they believe, even those who like Friedrich van Hayek who know that capitalism does not produce just outcomes, will fail and produce nothing but negative external...
More About: Conservatism , Libertarianism , Form

Libertarianism's red herring
2008-01-08 21:57:00
Friedrich van Hayek was one of libertarianism's greatest advocates, using grand, though often quite misleading rhetoric, to convert people to libertarian train of though - despite the fact that he was in a very small minority among economists and social scientists, as empirical evidence simply does not support a libertarian approach to economic policy. As my end-commentary suggests, the quote also exemplifies the main differenced between liberals and libertarians; the former relying on a much more comprehensive definition of freedom, one that includes positive rights, than the latter. The following excerpt features a great rebuttal to Hayek by John McGowan.Exceprt from American Liberalism (University of North Carolina Press, 2007), by John McGowan on pages 113 & 114:[Friedrich van Hayek is quoted stating:]"From the fact that people are very different it follows that, of we treat them equally, the result must be inequality in their actual position, and the only way to place them...
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Greenspan's dirty little secret
2008-01-06 09:16:00
From the blog of Robert Reich, Secret ary of Labor under Clinton and professor of public policy at UC Berkley:...by the time Clinton came to office, the federal budget deficit had grown so large he had to trim his ambitions. Ironically, that deficit had ballooned largely because Ronald Reagan had cut taxes and increased spending, mostly on the military... It seems more likely that Greenspan agreed with Reagan and others in his administration that deficit spending as Reagan undertook it would serve to “starve the beast”, forcing any subsequent Democratic President – such as Bill Clinton – to offer less support to the downtrodden.The question we faced at the start of the Clinton administration was how much deficit reduction was necessary, and how much of Bill Clinton’s original agenda would have to be jettisoned as a result. Greenspan urged Clinton in no uncertain terms to make deficit reduction the priority and sacrifice everything else. “The path to a beneficient future, ...
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Is going into debt a choice?
2008-01-04 02:59:00
Sometimes, but not always. Moreover it is not a simple yes or no question. Many do not have a choice but go into debt, those who require extensive medical treatment, not completely covered by their HMO, those who lose their job and cannot find another one quickly enough, those who become disabled and cannot earn enough to support themselves, etc... There a wide variety of serious problems people may encounter that are beyond their control and without an extensive safety net, they do not have choice but go into debt. Yet, even those who go into debt for conspicuous consumption cannot be held completely responsible, society is responsible as well. Our society allots prestige to wealth; it is highly desirable to be rich, not just because being rich affords one a higher standard of living but also because it is admired. The poor on the other hand are seen with pity and too often regarded as losers. Thus, many of poor or working class people who go into debt for seemingly frivolous consu...
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Arizona's new law: the facts
2008-01-01 20:31:00
Arizona has followed a highly conservative and restrictive approach regarding unauthorized immigration. If an employer is found to have hired an undocumented worker, he or she will have his or her business license suspended for 10 days and permanently revoked on the second infraction. Here are some facts to consider: In Arizona, illegals comprise 59% of farm workers, 51% of gardeners, 46% of textile workers, 33% of domestic workers, 27% of construction workers, 26% of hotel and 23% of restaurant employees.Their net fiscal impact on the state is a net gain of $940 million.Unfortunately, considering the above facts there seems to be little doubt that bigotry is the true motivation of this new law. Of course, if the law is fully enforced, Arizona will feel the pain of having shunned a large and essential part of its labor force, along with nearly a billion dollars from its annual budget. This in turn, causes me to believe that this new law will never be fully enforced; the consequences...
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Why is America so divided?
2008-01-01 06:55:00
Because of the New Right's ascendency. Until the late 1970s and early 1980s, the U.S. followed a largely liberal approach to fiscal policy and moderate approach to social issues. Liberalism ruled supreme, even during Republican administrations. As Lionel Trilling in the 1950s put it, "liberalism is not only the dominant but even the sole intellectual tradition... there are no conservative or reactionary ideas in circulation..." Today's conservatives, yesterday's Goldwater adherents and those following the Friedman Gospel were on the fringe of the political spectrum, while the mainstream remained largely progressive. The backlash of the political right, symbolized by the election of Ronald Reagan, marked a new era, where rightist ideas, once confined to the far right, become part of the political mainstream, splitting it between liberals and conservatives. While liberals and conservatives have always comprised two ideologically antagonistic groups, liberals ruled and conservatives...
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Reasons for taxing the rich
2007-12-24 09:21:00
The harm principle offers a compelling justification. Let's take into account to two main reasons for taxing the rich and redistributing wealth, something that is advocated by the vast majority of economists and just about all political scientists:Efficiency Social services, such as public education, health care and infrastructure are necessary to guarantee the universal provision of basic human rights, increase peoples' ability to actualize their potential and make individual well-being more security by lowering socio-economic risk faced by individuals. Thus, funding social services is a wiser allocation of resources than giving a high-powered executive the resources to buy a 35,000 sq. ft. mansion and a two Ferraris. Of course, the rich don't waste all their money on conspicuous consumption, which does generate jobs. Yet, unless one tax the rich excessively, over 70%, society will likely derive greater benefit from taxing the rich and using the funds for investment in social se...
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The poorest and richest '08 candidates
2007-12-20 21:31:00
Just for the sake of it I have posted the net worth and income of the 2008 candidates. One should not, of course, vote for a candidate depending on their net worth. Mitt Romney is by far the richest candidate in terms of both income and net worth. He is worth nearly four times as much as John Edwards and earned 37 times as much in 2006 as Barack Obama, the poorest candidate.Mitt Romney: $202 million net worth; $37.6 million in gross income, 2006John Edwards: $54.7 million net worth; $3.7 million in gross income, 2006Robert Guiliani: $52.2 million net worth; $17 million in gross income, 2006John McCain: $40.4 million net worth; $3.9 million in gross income, 2006Hillary Clinton: $34.9 million net worth; $12.1 million in gross income, 2006Fred Thompson: $8.1 million net worth; $9.4 million in gross income, 2006Barack Obama: $1.3 million net worth; $0.99 million in gross income, 2006
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Something to think about
2007-12-07 01:32:00
In an op-ed for current edition (December 3) of Newsweek, Charles Peters (a self-described liberal), offers the following critique of liberals and conservatives; it is quite well-reasoned:Conservatives refuse to face the fact that free markets need to be regulated to guard against chicanery and to protect the health and safety of consumers, workers and the public in general. Liberals are too prone to see government as the solution, which of course it can be, and not as part of the problem, a role in which it has also demonstrated impressive potential. I have yet to find a conservative who acknowledges that our lowest uneqmployment rates since World War II have come in years when we had the highest income-tax rates, but it is fact. And I have yet to hear a liberal express regret that it was not one of our own who had the courage and imagination to challange Societ leaders "to tear down this wall." (p. 41)
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Can neighbors differ in wealth?
2007-12-05 03:37:00
Yes. I recently came across the comment that "If you live right next to them, how can you be richer than them?" Note that the comment does not refer to me. Nonetheless it is possible for neighbors to enjoy differing standards of living, even if the houses they live in are identical tract homes. Here's how:Houseing boom: In certain areas, such as Coastal California, house prices have risen dramatically, much faster than inflation. In some areas prices increased four to five fold within four to five years. As a result, a family making $120k can likely end up living next to a family making $40k? How? The former moved into the neighborhood after prices had risen. In 2000, the poorer family was able to afford their home at a price of, say, $150,000. When the latter family moved in, they had to pay $600,000 in 2004. Thus, these two families may live right next to each other, in identical homes; but as the latter paid four times as much for their house, it should not come as a suprise if ...
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Growth, but no prosperity?
2007-11-26 04:07:00
Conservatives sometimes argue that the America outpacing Europe in terms of GDP growth since the 1970s vindicates neoliberal ideas. Yet there are two main problems with these thesis:1) The U.S. experience faster economic growth during the liberal consensus and the 1990s, than the 1980s and 2000s.2) The average American has not shared in much of the increased economic "prosperity." According to economists Gary Burtless in an article for the Canadian Public Policy Journal, "It is not clear that the sterling performance of US output growth has been as helpful for the median American, however. Because so much of the growth in total income has been enjoyed by a small fraction of high-income families, middle- and lowincome Americans have enjoyed more modest income gains than those enjoyed by middle- and low-income residents in some other rich countries. Thus, one's assessment of US economic performance depends crucially on the point in the income distribution where the assessment is made...
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What is the elctorate thinking
2007-11-22 20:28:00
A new AP poll of 2,500 individuals seeks to answer this question. Summary: Conservatives outnumber liberals but Democrats outnumber Republicans with a majority or plurality of the electorate supporting many key points on the liberal agenda. Americans may indeed be more liberal than they beleive they are. Here are some highlights:Party (Question: Do you consider yourself a Democrat, Republican, an Independent, a supporter of some other party, or none of these?):Democrat: 47%Republican: 37%Independent: 8%Other party: 1%None: 7%Refuse: 0%Your vote in 2008:Democratic canidate: 42%Republican canidate: 27%Neither: 4%Don't know: 27%Refused: 0%Issues (Support / Oppose):Repeal Bush tax cuts (51% / 27%)Government health insurance (63% / 22%)Income redistribution (42% / 33%)Use of stem-cell research (52% / 24%)Abortion, legal? (55% / 45%)Path to citizenship (51% / 45%)Ideology:Very liberal: 5%Liberal: 17%Moderate: 42%Conservative: 25%Very conservative: 10%Refused: 1%To see the survey for ours...
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Why intellectuals are liberals
2007-11-17 22:10:00
Recent publications have once more revived the debate of “liberal academia." As a liberal, raised in an intelligentsia background and a student of Political-Economy, I will not refute claims that modern liberalism is the most prominent ideology among established and aspiring scholars nationwide. A recent study, for example, found that conservatives comprise less than 10% of social science and humanities professors.Conservatives like to believe that this liberal dominance is the result of discrimination – a claim clearly contradicted by the remarkable success of many conservative scholars, such as Samuel P. Huntington.Ignored, however, is the most obvious and logical explanation: the more profound one’s knowledge of society the more likely one is to embrace liberalism. People arrive at their political viewpoint through a process of learning and understanding. The political ideology of scholars is the result of vigorous thought, not a conspiracy geared towards silencing conserva...
More About: Liberals

Just for the sake of money?
2007-11-15 23:17:00
Recently I came across the comment that "if you pay everybody the same, you will have a load of janitors but no professors." While I do not believe that everyone should be paid the same, the above argument is fundamentally flawed. Members of the high professions (e.g. professors, lawyers, doctors, etc...) are not only more satisfied with their jobs, than janitors because of relatively high pay, i.e. being among the top 15% of earners. Their jobs are intrinsically more rewarding; they have greater autonomy, are allowed to use their imagination, test their skills and thrive on intellectual stimulation and challenges. Moreover, people do not become professors and doctors merely for the sake of pay; quite a bit of altruism and idealism is involved. People are not driven solely by monetary incentive and prestige. While money is definitely an important incentive, for some more than for others, assuming money to be the sole driving force behind the choices people make, be it regarding thei...
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Inequality hitting record high
2007-11-15 05:56:00
According to IRS data, the top 1% has now the largest share of income since 1929: To see the data IRS data I used to create this graph, see this spreadsheet prepared by UC Berkley economics professor Emmanuel Saez.
More About: High , Record , Inequality , Ality , Cord

Welfare state spending and development...
2007-11-13 06:42:00
According to UN and OECD data shows a positive correlation between welfare spending as a percentage of GDP and human development index (HDI) rating as well as GDP per capita in pucharsing power parity (PPP). Yet, these results ought to be taken with a grain of salt since: a) GDP per capita is not representative of living standards differentials among high income nations and b) welfare spending as a percentage of GDP is not neccessarily indicative of the comprhensiveness of social services a nation's citizens enjoy.HDI (GDP per capita, adult literacy & life expectancy) and welfare spending:GDP PPP per capita and welfare spending:
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Progressive Urban Planning's Success
2007-11-12 22:20:00
While the liberal consensus on economic policy may have ended in the late 1970s, progressive ideology continued to be a driving force behind many developments in our country. One of them is urban redevelopment. From Portland, to San Francisco, to New York, cities have been enacting stringent zoning laws, regulations on businesses, working hand in hand with developers and building plazas, parks and other amenities in order to revive once desolate areas. A city near my home, Monterey, is a good example.In the 1930s fishing and canning were the community's economic center. Without government regulation business went wild, literally fishing all the fish in the sea. In the 1940s, the industry collapsed as the local waters had been dangerously overfished, bringing some sea species, such as the famed California Sea Otter near extinction. With the industry in shambles, the city was left with vacant lots, decrepit warehouses, run-down brothels, seedy bars and abandoned canneries.In the 1970...
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Kudos to the House
2007-11-11 07:10:00
The House just passed a tax bill (239:196) that would replace the Alternative Minimum Tax (AMT), which would hit middle class households this year, with a tax on the rich. Here's the tax proposal in a nutshell:21,000,000 middle class Americans get a tax cutsThe top 50,000 will pay for itAccording to most recent economic research the tax increase for the rich will not hurt economic growth (taxes for the rich are too low - to adversely effect the economy - and any decrease in investment by the rich would be made up for by increased investment from the middle class), but redistribute income justly while saving millions of middle class families thousands of dollars each year.I am glad to see a sense of fairness and social justice return to Washington D.C.
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Giuliani on health care
2007-11-08 04:10:00
Here's an expert with Guiliani quote from Jonathan Chait's TBR column in the current edition of The New Republic:"Guiliani... is not indifferent to the plight of the uninsured. He actually seems to revel in it:'I don't like mandating health care. I don't like it because it erodes what makes health care work in this country - the free market, the profit motive. A mandate takes choice away from people. We've got to let people make choices. We've got to let them take the risk-do they want to be covered? Do they want health insurance? Because, ultimately, if they don't, well, then, they may not be taken care of....Of course, this analysis is insane, unless you think most of the uninsured lack coverage because they'd rather splurge at Best Buy than spend money on health insurance. Alas this appears to be exactly what Giuliani beleives...Guiliani also thinks that insulating people from the costs of sickness or injury will make them more likely to get sick or injured. 'There is n...
More About: Health , Health Care , Care , Heal