Category Archives: politics

How to Screw the Poor

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I suspect a lot of people believe that their state has a progressive tax structure.    That belief is wrong.    The well-off do not pay a larger percentage of their income and wealth than do the poor.  There are a very few exceptions, Delaware for example – at least in 2002.  Here’s what it really looks like.

Here for example is my state.

That shows how the mix of taxes effect things.  In Massachusetts it’s the sales tax that really does the damage.  The mix of taxes that implement this lovely situation for the parasitic well-off varys from state to state.  New Hampshire manages to be extremely regressive; using a different mix.

If you want to screw the poor then here some hints:

  • Avoid an income tax
  • If you have to have an income tax be sure it’s flat. (that’s what we do in Massachusetts)
  • Adopt a sales tax and some excise taxes
  • Use property taxes
  • Exclude capital gains from income
  • Use tax credits to counteract progressive taxes; say on federal taxes or certain property taxes
  • Be sure your sales/excise tax includes groceries, smokes, beer, and gas
  • Don’t index to inflation if forced into tax brackets, exemptions, or earned income payments
  • Empower local governments to raise funds using regressive means

No doubt there are much more creative schemes for assuring your tax system screws the poor.  I certainly can think of quite a few without much effort.  This posting is based entirely on the original edition of what is currently  this report, from www.itepnet.org; you can quickly find your own state here.

This is Washington state, which makes me wonder how those Microsoft and other high tech winners feel about this.

Sense of Scale

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One thing I’m finding particularly hard is getting a sense of scale for what’s unfolding in the markets, but here’s a run at the question.

Katrina was maybe a $80 Billion event, and it looks to me like Ike is probably a $30 Billion  one.  The Iraq war’s direct costs are probably 2 Billion a week.  The 9/11 attacks destroyed about $16 Billion in physical assets, and the clean up cost about $11 billion; lots more in the ripple effects.

Microsoft, Apple’s, and Google’s market cap are roughly $230, $119, and $140.

AGI’s market cap a year ago was around $200 Billion, today it’s around 10.  A year ago Fannie Mae, Lehman Brothers had market caps of was around $60 and $40 Billion each.  That’s $300 billion total, about twice the size of the numbers in the 2nd paragraph.

These are big storms. With about 100 million households in the US, $300 Billion is three thousand dollars each.

These estimates are all aweful rough.  I couldn’t quickly find estimates for the wealth distruction in the house markets, but here are a lot of write downs.  Nate Owan takes a run at a similar question.

Billmon

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Billmon used to write on politics at his blog the Wiskey Bar.  He was brilliant.  Like many of the bright angry lights he burnt out; and moved on.  Sad for we who read him, but hopefully good for his mental health.  He has now reappeared with a diary at Daily Klos, which is nice for us.  I hope it’s good for him too.

In his most recent posting he digs into exactly how bloody miserable the hole we find ourselves in with situation in Georgia.

First, recall that NATO is first and foremost a mutual defense pack.  No firewall – if a member is attacked the rest of us go to their aid.  Mutual defense packs are what caused the first world war.  NATO’s reason was to create a clear bright line the Russians would be unlikely to cross.  It is a vistigial organ of that strategic nightmare that seems to have workd – mutually assured distruction.  Joining Nato is not like joining the EU, or the Rotary club.  Each member gets a hand on the cord which can plunge us into that nightmare.

We have been expanding NATO into the former Soviet sphere.  Think about that.

For example Poland joined NATO recently.  The process for this expansion appears to be, well, cavalier.  First the Congress, quite casually, passes a law that allows us to treat a nation as if we have a mutual defense pack with them – but without the pack and without the promise to come to their aid if their attacked.  Mutual defense light – all the arms trading, military bases, joint operations, etc. but yet a bit of the fire wall is retained.

Then if that works out they join NATO.  Apparently at no point in the process do we take to heart what the nature of the promise being made is.  If Slovakia happens to have a disputed border with one of their neighbors that gets heated, we’re there for them.  That’s insane.

If you don’t care what the other guy thinks, and your confident you can get away with this kind of pushing out of our sphere of influence then I guess this makes sense.  But Russia’s not toothless, or are they stupid.  At minimum they hold Europe’s energy supply hostage, at worse they have nukes.  And never ever forget: nationalism always plays well at home.

So having played this process out with countries like Poland, Hungary and others we decided to this with Georgia and Ukraine.  Bleck.

Well I guess it’s nice that Billmon is back.

Spotted Owl?

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This seems like sort of a landmark.  Surely Stalin wishes he were alive today.  The Chinese must do this all the time.

[first name of a candidate] and pre/2 [last name of a candidate] w/7 bush or gore or republican! or democrat! or charg! or accus! or criticiz! or blam! or defend! or iran contra or clinton or spotted owl or florida recount or sex! or controvers! or racis! or fraud! or investigat! or bankrupt! or layoff! or downsiz! or PNTR or NAFTA or outsourc! or indict! or enron or kerry or iraq or wmd! or arrest! or intox! or fired or sex! or racis! or intox! or slur! or arrest! or fired or controvers! or abortion! or gay! or homosexual! or gun! or firearm!

In other news, I find it sad that I notice that intox! appears twice almost instantly.

Overdue Homework

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We have known about these charts for a while now; i.e. there is a sharp difference between how the economy changes under Democratic v.s. Republican presidents.  The economists have apparently made no real progress on explaining why.

Note how the cartoon Republican, i.e. the cigar smoking plutocrat, apparently votes against his interests.

Only $69.95!

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What are you worth?  The Bush EPA thinks we are worth $6.9 Million each.    10% less than the Clinton EPA.  No doubt that makes lots of regulations less, ah, necessary.    I want to assure you; I think you are worth a lot more than that.

Meanwhile I gather that boffins think that a 10% rise in fuels prices drops the highway deaths by 1%; or in other terms that 4$ gas will reduce highway deaths by a thousand a month.

Oh boy.  Arithmetic:  12 months a year; 1,000 deaths a month; $6.9 Million/person … or $82.8 Billion a year.  That’s just the deaths of course, no doubt the injuries, loss of capital equipment and other costs mean we can multiply that by a another 3.  With around a 100 million households in the US, and 365 days in the year that’s $6.81 per household per day.  Feel free to spend the savings on gas.

On the other hand some people think these numbers are just numerology.

Voteview for States

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Recall the counter intuitive result that you can explain the vast majority of all voting behavior with only two metrics, i.e. the vote view model.  The two metrics range liberal to conservative and one is economic, one is social.  There is a mystery, at least to me, about these two metrics.  You don’t really need the social metric to explain most congressional votes.  Yes, the accuracy of the model improves some by adding the social metric; but not tremendously.  So why do we expend so much time ranting about the social dimension?  It’s a disconnect between the talk and the action.

These charts show an average adult (sic) for these two metrics; one point per state.  This data is new to me, I’ve only seen two dimensional vote-view scatter plots for individual legislators.  It would be fun to have error bounds on the points, it would be fun to see the spreads between the voters and the population at large, it would be fun to have dots scaled to electoral votes.

One way to frame up the mystery is to say that we talk about social issues, but legislators act on economic ones to such a degree that we have the same disconnect seen between of signal-value use-value for in sexy but unreliable sports cars.  The sexy bits sell the product, but the actual product delivers something else.  That kind of thing isnt’ unusual, i.e. say/do ~ signal-value/use-value ~ social-values/economic-values.

No doubt there is a framework that explains when the signal-value and use-value of a product tend to diverge.  For example when the feedback loop delivering information about the use value is broken, or when the buy decision is emotional and impulsive.  I bet there is something here that is interesting to be dug out about political activism.

It’s interesting to see charts showing these metrics for the buyer side of the electoral process.

Good for Sears

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More than twenty five years ago we moved from Pittsburgh to Boston and one of the first differences we noticed was the dearth of people of color. More so, we never saw a bi-racial couple. Above is today’s Sears weekly advertisement. Long time coming.