A Second Hand Conjecture

Under McCain and Obama's tax plans 43% and 44% would pay no income tax respectively

Fewer and fewer people are paying income tax and even less will be with either candidates tax plan. I don’t think this would be such a problem if we didn’t have such high spending, growing entitlements, and if so many of these zero income tax filers weren’t getting additional handouts from the government (especially under Obama’s tax “cuts” ie. handouts).

It has been said by an unknown author “[Democracy] can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury…” and this is where we’ve been heading for awhile. I think just as a tax plan can be too regressive, it can be too progressive in that it places too high a burden on “the rich” resulting in them leaving (atlas shrugs) or seeking tax shelters, and at the same time having too much of the population with no civic tax obligation leaving them no incentive to constrain public spending (hey, it’s not their money right?)

(HT Greg Mankiw)

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Intellectual Conservative
“What they all seemed to have, however, was gobs and gobs of money from
leftist foundations and millionaires who wanted to change the world by
supporting one or more of the myriad issues they embrace as their
penance for being successful, thanks to capitalism.”

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She raised less than $500k for the Alaska governor’s race in 2006. But as McCain’s running mate, Palin’s inaugurated a seven million dollar surge in donations to the McCain campaign. Given the excitement (near ecstasy, really) on the political right over the selection, it’s not difficult to see why. Put her on a stage anywhere near conservative donors and collect, John.

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FROM: Dr Ben Bernanke
Central Bank of United States of America
01-658-555-1234

TO: CEO
Lagos, Nigeria

Dear Friend:

I have been requested by the regional members Federal Reserve of the USA to contact you for assistance in resolving a matter. The Federal Reserve of the USA has recently concluded a large number of contracts for credit derivative investment vehicles “CDIV” in the Wall Street region of the USA. The contracts have immediately produced moneys equaling US$40,000,000. The Federal Reserve of the USA is desirous of CDIV in other parts of the world, however, because of certain regulations of the USA Government, it is unable to move these funds to another region.

Your assistance is requested as a non-USA citizen to assist the Federal Reserve of the USA, and also the investment bank community of Wall Street USA, in moving these funds out of USA. If the funds can be transferred to your name, in your Nigerian account, then you can forward the funds as directed by the Federal Reserve of USA. In exchange for your accommodating services, the Federal Reserve of USA would agree to allow you to retain 10%, or Nigerian $4 million of this amount.

However, to be a legitimate transferee of these moneys according to USA law, you must presently be a depositor of at least $100,000 in a USA bank which is regulated by the Central Bank of USA.

If it will be possible for you to assist us, we would be most grateful. We suggest that you meet with us in person in New York, NY USA, and that during your visit I introduce you to the representatives of the Wall Street USA, as well as with certain officials of the Central Bank of USA.

Please call me at your earliest convenience at 18-555-1234. Time is of the essence in this matter; very quickly the USA Government will realize that the Central Bank is maintaining this amount on deposit, and attempt to levy certain depository taxes on it.

Yours truly,

The Esteemed Arch-Chairman

Credit: Barry Ritholtz

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One of the sadder aspects of Ronpaul’s candidacy is how many people (who can barely afford to do so), have been convinced to give well over their means to his campaign. My friend Jason has a co-worker who he believes took out a second mortgage solely to give more money to Ronpaul, convinced that he was “America’s LAST CHANCE!!!” A commenter on a Vaughn Ververs post at CBS News isn’t sympathetic to their plight, but he does tell the truth: “LOL. Ron Paul pulled off the perfect swindle of his fawning disciples. He took them for $30 million, most of which he did not spend, and now will two-step on back to Texas with the rest of the loot.” What do you suppose he will do with that enormous windfall? We might soon see “Director of Ronpaul Institute” appearing under Lew Rockwell’s name.

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photo: Tal Bright

Thomas Barnett bemoans the grotesque state of economics education in Europe, which often ranges from the anti-capitalist to the simply fatuous. But consider this item he cites:

Great French HS textbook: “Globalization implies subjugation of the world to the market, which constitutes a true cultural danger.”
(Thomas P.M. Barnett)

Somewhat bemused by this, Barnett asks “why is Europe so antagonistic on capitalism?” Perhaps the better question is why is Europe so antagonistic toward economics, because the item above isn’t really criticism of an economic philosophy. By elevating the primacy of culture over the market, we’re looking at the rejection of the economic premise, which is a concern for the material welfare of mankind. This is what Peter Drucker used to call the dream of “noneconomic man” and in his early work The End of Economic Man, he supplied some explanations for this impulse which might be of enduring relevance to Barnett’s question. (more…)

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Michael Shermer examines the bizarre behavior of people in situations where they are forced to choose between relative money awards in social contexts. Remarkably, people will consistently choose less money, if more money would negatively affect their perception of their economic relationship to others.

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Social conservatives and particularly crypto-socialist social conservatives (or “populists” if you prefer), are inevitably going to be a minority faction within the GOP. But to their great credit they themselves recognize this. The implications of that self-awareness are dire for Huckabee however.

Because their interests and perspectives are in many ways peculiar to themselves within the party, historically they’ve always been sensitive to their permanent political vulnerability. Thereby there is a tendency among social conservative voters to desert their insurgent leaders at the first sign of weaknesses (ala Pat Robertson, 1988). Weaknesses which could conceivably imperil their leveraged influence with the eventual broader party nominee and his regime.

As Mick Stockinger at Uncorrelated points out, these odd men out have smelled weakness on Huckabee and must soon begin their desertion from him to the establishment, in order to preserve influence. That’s because what the social conservatives are staring at now, is the prospect of being rendered completely irrelevant for the first time since perhaps 1976. Having supported the overthrow of the prevailing order in the Republican party by an extremist champion with a radical and unpopular agenda, only to watch him fail to seize control of the party, the coup plotters will soon be looking for ways to make themselves indispensable again.

(more…)

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