Don’t Soak The Rich is the headline of an op-ed in the New York Times, written by Edward D. Kleinbard, a professor of law and business at the University of Southern California. In a similar vein, Vox ran an post by Cathie Jo Martin, professor of Political Science at Boston University and a doctoral student at Harvard, Alexander Hertel-Fernandez. Both explain that we shouldn’t impose higher taxes on the filthy rich. Instead, we should tax the hell out of the middle class to pay for programs that benefit the poor. That will solve inequality, these writers say, without disturbing our lords and masters. As Martin and Hertel-Fernandez put it, if you have progressive taxation, you get backlash from the rich and powerful who use their political power to find loopholes and lobby to create new loopholes. They don’t seem to notice that there is enormous anger in the middle of the income distribution about programs that benefit the poorest, anger that the elites use to protect themselves from higher taxes. Mike Konczal and Marshall Steinbaum dismember the Vox post in detail.

Here’s how Kleinbard phrases the tax issue:

It turns out that progressive fiscal outcomes do not require particularly progressive tax systems — just big ones, to support substantial government investment and insurance programs.
…
The better response to income disparity, then, is not to tax the rich more, but to boost revenue over all so that government can invest more, and offer higher quality social insurance programs.

Kleinbard isn’t relying on the arguments of Modern Money Theory to make his case: he says the government needs revenues to support the spending programs he favors. He doesn’t want to soak the rich, so he intends that increased revenues come from the middle of the income distribution. That leaves us with the bizarre notion that a nation that is willing to cut food stamps for the poorest part of the population will happily pay more taxes to fund some other programs that benefits the poor. It’s an astonishing argument.

I suspect that underlying goal of these writers is to impose a value-added tax, a tax on consumption used in Europe. VAT taxes are highly regressive: they increases taxes at the bottom of the income scale, low-income people who currently don’t pay income taxes (but do pay FICA and loads of state taxes already), and people on Social Security, among others, and have a much lower impact on the upper income people who don’t consume as much, and whose consumption of things like lobbying for tax cuts and other legislative favors is not covered. It also leaves untouched their massive increases in unrealized capital gains, which increases their future income and their ability to obtain legislative favors and dominate the rest of us.

Neither of these two articles explains why we shouldn’t raise taxes on the filthy rich. There’s a hint that it wouldn’t be fair to raise taxes on the filthy rich. Kleinbard writes “A chief executive who earns 200 times as much as her typical employee does not get 200 times the benefit from our investments in highways.” That’s true. She gets a lot more benefit than 200 times. Without those highways, she doesn’t have a job. That applies to the entire oligarchy.

Martin and Hertel-Fernandez claim that we can’t raise enough from the rich, but they don’t say why. They claim that “Emphasizing redistribution as the central principle for tax policy is needlessly divisive, leads to smaller government revenues overall, and thus misses the positive benefits that having more revenues can offer if invested wisely in promoting success for all.” The revenue part most likely isn’t true, as we learn from a fascinating paper from Piketty, Saez and Stantcheva. Here’s a discussion of the paper. Neither of the two articles mentions it.

Piketty describes the paper in Capital in the Twenty-First Century.

We found that the elasticity of executive pay is greater with respect to “luck” (that is, variations in earnings that cannot have been due to executive talent, because, for instance, other firms in the same sector did equally well) than with respect to “talent” (variations not explained by sector variables). … Furthermore, we found that elasticity with respect to luck – broadly speaking, the ability of executives to obtain raises not clearly justified by economic performance – was higher in countries where the top marginal tax rate was lower. 512.

That’s econ speak for “the rich get richer at the expense of the poorer”, which is a good reason to raise marginal tax rates immediately. But there’s another and deeper reason. The entire problem facing the US and other advanced countries is that the rich are seceding from the rest of us. They have so much money, and so much power, that they are free to strangle the economy in support of their desire for more money and power. That needs to end.

Neither Kleinbard nor Martin and Hertel-Fernandez are willing to talk about raw power. They apparently think the current distribution of wealth and income is natural and justified. It is neither. It has become an instrument of oppression for the lower class, and is sucking the life out of the middle class. The sooner it ends, the better for all of us, even if it makes the filthy rich sad.

Two U.S. Air Force F-15E Strike Eagle aircraft

Better than anything else I have come across, the two quotes below sum up, in just a few words, the enormous clusterfuck into which the USA is entering in its mission to “degrade and destroy” the ISIS.

I wouldn’t want my country to help the defendants of Kobani because Kobani is held by the PKK, and Turkey has been at war with the PKK for 30 years. Why should we stand in the way of Isis on this particular occasion? After all, Isis has already carried out untold massacres in just about every other Syrian and Iraqi town that it has invaded to date. Why extend a degree of mercy to Kurdish terrorists that has been denied to the Christians of Maloula or Shiite Turkomans of Iraq? Let Isis carry on with its grizzly work. Our soldiers cannot be placed in the line of fire to rescue the same Kurds who were exploding land mines under their feet. Ahmet T. (comment) -  Financial Times

The Sunni states are unable to defend the region from the disciplined, aggressive, but relatively small, lightly equipped forces of IS. Despite lavish expenditures, extensive training programs, and impressive numbers of battalions and squadrons, Gulf armies are deeply flawed by corruption, tribal and sectarian fissures, and poor leadership. There is no reason to expect reform, especially when outside forces are available to provide security. Regional security is also limited by sectarian hostility, which has reached new highs with the demise of Sunni control in Iraq and the rise of Iran’s nuclear program. Shia troops from Iran are unable to act decisively in Iraq without triggering fears and reactions from Sunni states. Sunni troops cannot intervene without triggering the same responses in Iran. Brian M Downing – Asia Times

If this war goes much further and it certainly looks like going much, much, further, it could turn out to be infinitely more dangerous and destructive, for all concerned: humanly, economically and politically, than the war in Vietnam ever was.

The ways that this could all spin out of control are too uncountable for any amateur Cassandra like me to number. Conventional wisdom is that after the demise of the USSR, World War Three is unthinkable, but I think that if anyone in Hollywood were trying to dream up a way of starting it, America’s entering this whirlpool would make for quite a believable scenario.

Cross posted from David Seaton’s News Links

Cross posted from the Frederick Leatherman Law Blog

Sunday, October, 12, 2014

Good morning:

The Oscar Pistorius sentencing hearing starts tomorrow in Pretoria at 3:30 am EDT. I say ‘starts’ tomorrow because prosecution and defense may each take up to a day or more to present evidence and argument in support of their respective recommendations.

Judge Thokozile Masipa, who found Pistorius guilty last month of culpable homicide for killing Reeva Steenkamp by mistaking her for an intruder and shooting through the door of the toilet cubicle in the bathroom of his upstairs master bedroom suite, can sentence him up to 15 years in prison.

Culpable homicide under South African law is similar to our negligent homicide or manslaughter statutes. Basically, the mental state for this offense is gross negligence, which is committing an act that creates a substantial risk of harm to another person where the failure to be aware of that risk is a gross deviation from the legal duty to exercise due care to avoid harming other people.

Shooting at someone through the closed door of a small enclosed area with no place to hide, such as toilet cubicle in your bathroom, is at least a grossly negligent act, regardless if the person on the other side of the door is an intruder or someone you know. Difficult to imagine that someone who squeezed off four shots through the door did not intend to kill the person on the other side of the door; yet, that is exactly what Judge Masipa decided when she acquitted Pistorius of murder.

Her decision was and continues to be controversial. No doubt the controversy will flare up, if she sentences Pistorius to prison for some number of years but suspends the sentence on condition that he satisfactorily complete a term of supervised probation. Terms of probation typically include no law violations and an obligation to perform community service. Counseling may also be required, if needed. In the United States, judges also can impose up to a year of confinement in a county jail.

If the defendant violates a condition of probation, the judge can revoke probation and impose the prison sentence that she suspended.

In determining what sentence to impose on Oscar Pistorius, Judge Masipa also will consider a presentence report and recommendation by an official of the court based on a review of the police investigation file and research of his past, including any prior convictions and contacts with law enforcement. In the United States, the presentence division of the probation department prepares that report and recommendation.

Only Judge Masipa knows what she is likely to do, but I imagine she will impose an 8 to 12 year prison sentence. Whether she admits it or not, she must be concerned about public criticism of her decision to acquit Pistorius, and as a black person, no one should be more aware than she of the disparity in punishment for blacks compared to privileged whites.

Tell us what sentence would you impose and why you would impose it.

Do you believe he has an alcohol and/or anger management problem?

Why or why not?

Economics: The User’s Guide

Chat with Ha-Joon Chang about his new book, hosted by Jodi N. Beggs. Today at 5pm ET, 2pm PT.

In his bestselling 23 Things They Don’t Tell You About Capitalism, Cambridge economist Ha-Joon Chang brilliantly debunked many of the predominant myths of neoclassical economics. Now, in an entertaining and accessible primer, he explains how the global economy actually works—in real-world terms. Writing with irreverent wit, a deep knowledge of history, and a disregard for conventional economic pieties, Chang offers insights that will never be found in the textbooks.

Unlike many economists, who present only one view of their discipline, Chang introduces a wide range of economic theories, from classical to Keynesian, revealing how each has its strengths and weaknesses, and why there is no one way to explain economic behavior. Instead, by ignoring the received wisdom and exposing the myriad forces that shape our financial world, Chang gives us the tools we need to understand our increasingly global and interconnected world often driven by economics. From the future of the Euro, inequality in China, or the condition of the American manufacturing industry here in the United States—Economics: The User’s Guide is a concise and expertly crafted guide to economic fundamentals that offers a clear and accurate picture of the global economy and how and why it affects our daily lives.

Ha-Joon Chang, a Korean native, has taught at the Faculty of Economics, University of Cambridge, since 1990. He has worked as a consultant for numerous international organizations, including various UN agencies, the World Bank, and the Asian Development Bank. He has published 11 books, including Kicking Away the Ladder, winner of the 2003 Myrdal Prize. In 2005, Ha-Joon Chang was awarded the 2005 Leontief Prize for Advancing the Frontiers of Economic Thought. (Bloomsbury Publishing)

Day 2 #FergusonOctober Tweets and links can be found here.  The protests had been peaceful all day, with estimates of 3,000 people from all over the country in attendance.  There were teach-ins, dancing, music, and moments of silence for Michael Brown and all those who’ve been mercilessly killed by police.  A group of eight New Black Panthers were there helping with security, but there seemed to have been no ‘broken windows’ by protestors or deliberate provocateurs to cause police to clamp down, make arrests, tear gas folks…all people were quite disciplined if still angry that Darren Wilson still hasn’t been arrested or indicted after weeks of waiting.  There were rumors of a few (ahem) ungracious chants aimed at Wilson, but that was all, as far as I could make out.

When I shut down last night, Elon James White of TWIB Nation had just asked where everyone had gone; he’d heard the Canfield march had been dispersed.  And one photo was up with a line of perhaps ten cops in riot gear.  I’ll try to piece together what I can *after the fact*, but I reckon the timeline will be a  bit haphazard.  You all can fill in some of the blanks, I’m sure.

LiveStream coverage was iffy at best, and Bella Eiko blamed it on too many cameras for the cell towers; I have no idea.  But at least this time cell phones seemed to work.  Apparently some protestors had earlier planned to engage in civil disobedience.

Pumpkin Cake

(Picture courtesy of Elaine Ashton at flickr.com.)

This weekend is Pumpkin Fest here, and when I came upon a recipe that called the product tacky, that seemed fitting.  Selling pumpkin is the purpose this weekend, and that should include some tastelessness along with the tasty appeal.  Here it is:

Ingredients:

1	29 oz. can pumpkin (or use fresh)
12 ounces	evaporated milk (1 can)
4	eggs
1 cup	sugar (brown sugar is OK too)
2 teaspoons	cinnamon
1/2 teaspoon	nutmeg
1 teaspoon	allspice
1 package	yellow cake mix
1 cup	melted butter
1 cup	chopped nuts (walnuts, pecans)

 

Preparation Directions:

1. Pre-heat oven to 350 degrees.
2. Mix first 7 ingredients well.
3. Pour into 9 x 13 pan (greased with towel and margarine).
4. Sprinkle dry cake mix on top of mixture.
5. Sprinkle nuts over cake.
6. Sprinkle butter over cake.
7. Bake at 350 degrees for 1 hour, or until cake tester comes out clean.

Enjoy your munching.  Of course, I do hope you also have a large, lovely pumpkin somewhere on the porch or front yard. You may paint a face on it or carve it, but any pumpkin is a good touch.

If some naughty kid comes along and kicks it in, well, you’ve contributed to some enjoyment of the season. I’ve got a friend who deliberately puts out pumpkins unattended for that purpose. That’s the ‘tricks’ part of the season, and we’re all still kids sometimes.

(Picture courtesy of Rodney Campbell at flickr.com.)

Pick your pumpkin

(Picture courtesy of Steve Easterbrook at flickr.com.)

We’re all kids when carving pumpkins.

Posted by greydogg, 99GetSmart

Source: TED

“He who does not move does not notice his chains.”   – Rosa Luxemburg

VIDEO @ http://youtu.be/pcSlowAhvUk