Not Sarah Palin
Sep. 12th, 2008 11:27 am![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
kirisutogomenDon't want to argue about Palin. It'll just piss me off.
So instead I'll ramble a bit about Obama and McCain's so-called "economic policies", which will also piss me off, but at least it might have some redeeming value in addition to irking me. Because I'm lazy, I'm going to use the CNN Money guide to their policies and just comment as I go, doing as little additional research as I can stand.
1. Gas Prices. The McCain/Clinton summer gas tax holiday idea is about $10 billion of stupid gimmick. The $0.54/gallon sugarcane ethanol tariff and similarly sized domestic corn ethanol subsidy are even worse, and combine to be somewhat more than $10 billion of stupid. Obama's nutty "windfall profits" tax tips the scales in McCain's favor here.
Oh, right, close loopholes blah blah blah offshore drilling blah blah blah ANWAR blah blah blah.
2. Driving. Huh? Why is this a different issue than gas prices? Whatever.
CAFE standards are dumb, and I remind![[livejournal.com profile]](https://www.dreamwidth.org/img/external/lj-userinfo.gif)
treptoplax that he owes us a rant on just how dumb they are. Tax credits and subsidies for zero emission vehicles and spiffy battery technology are a little goofy, but there isn't really anything to choose between the candidates on those issues anyway.
3. Energy Security. Somehow this is confused with climate change, as if burning imported fossil fuels magically creates more CO2 than burning domestic fossil fuels. Anyway, the main difference between them I see here is that McCain is in favor of nuclear power and Obama isn't, and if you're serious about the climate change problem you need to include nuclear power in the mix, so points for McCain.
4. Taxing Wealth. Apparently the writers at CNN Money don't know the difference between income and wealth, because everything they're talking about is income. Anyway, the carried interest tax is a tricky problem, but since it's only $2 billion or so I'm going to ignore it. Estate taxes are much less incentive-distorting than most other types of tax, so taxing the hell out of inheritance is pretty sensible. Points for Obama.
But the dividend and capital gains taxes are another matter. Discouraging investment is silly, because investment is what makes the next generation better off than their parents. At the moment we are effectively taxing dividend income twice, once when the corporation pays corporate tax and once when they pay you, and that's silly. My preferred solution would be to switch from a personal income tax to a personal consumption tax, making the question irrelevant. Almost as good would be to eliminate corporate income tax altogether and tax dividends and capital gains as ordinary income, with inflation-indexing for the capital gains cost basis. It would put investment and consumption on a level footing, and be more progressive than our current system. McCain's "leave it alone" policy is better than Obama's "distort things even worse" idea, so I'll give this one to McCain, and call the whole of point 4 a draw.
5. Fighting Foreclosure. This whole issue is a crock of shit. Some idiot borrowed more than they could afford to pay back, bought themselves a Cadillac Escalade, and is whining about "predatory lending". Bullshit. Prey doesn't sign a contract with its predator saying "yes you may eat me". If we start saving everyone from every boneheaded decision they ever make, we might as well throw in the towel and just skip straight to totalitarianism. McCain has unfortunately weakened his position recently, but he still beats the hell out of Obama's insane paternalism.
OK, OK, it's not all the result of irresponsible decisions. A lot of the foreclosures are the result of job loss, divorce, or major medical crises. Before the blossoming of the subprime mortgage market, those same things happened to the same devastating effect, except that the people who got hit by them didn't own houses, because no one would lend them money. Something that gets lost in all the "subprime lending crisis" panic is that the expansion of subprime lending extended access to the capital markets to the disadvantaged members of our society. Frankly, I'm willing to trade a few more foreclosures for many more poor people owning their own homes.
6. Mortgage Giant Rescue. OK, this one's not so cut and dried. There are some tricky nuances to this problem that require some not-at-all obvious judgment calls. To adequately address this issue I would need to devote a lot more time to discussing it, and I'm not going to. Of course, that's true for every item on this list, but fortunately there isn't much difference between Obama and McCain on this anyway.
7. Mortgage Fraud. OK, fraud is bad. Anyone disagree? No, I didn't think so. Put down your hand, Phil, you don't get a vote.
8. Social Security. I'm going to award 10 trillion points to McCain here, because opposing voluntary private investment accounts and opposing raising the retirement age are dangerously irresponsible positions. The size of this problem dwarfs all the puny little $10 billion problems I've been going through. It also closely resembles the problem of climate change, except that the parties switch roles on who is the clear-eyed soberly realistic party and who is the moronic head-in-the-sand la la la I can't hear you imbeciles.
9. Medicare. Holy crap, an even bigger problem than Social Security. Let's see, paying more for Part D makes sense, negotiating drug prices not so much, closing the doughnut hole is sensible but absurdly expensive, eliminating the payments to Medicare Advantage plans is silly (and calling them "subsidies" is even sillier. When I pay a barber for a haircut, that's not a subsidy, that's a payment of a fee for a service he provided). Importing prescription drugs is an absurd situation on the face of it and for complicated reasons is a bad solution to a problem that desperately needs some sort of solution, and even a bad answer might be better than no answer. So....honestly, none of the espoused policies are really going to be too helpful, so they both get zeroes here.
10. Personal Taxes. Eh, boring issue. Gets lots of press attention, but until someone puts together a credible consumption tax proposal they're just arguing over the color of paint to put on a burning house. Allowing the AMT to kick in for as many people as possible would be a fascinating backdoor tax reform, but unfortunately no one seems willing to suggest that.
You know, I was pretty psyched when Obama named Austan Goolsbee his chief economic adviser. Goolsbee is a very smart, very sensible, moderate Democrat with a lot of innovative thinking.
11. Corporate Taxes. Close loopholes blah blah blah promote enterprise blah blah blah.
12. Health Care. First off, anyone who tells you that they know how to fix health care is delusional. It's the single most complicated sector of the economy with all kinds of crazy convoluted intricacies. None of the suggested ideas from either candidate are much use. We're not going to get a handle on this until we understand why health care costs so much, realize that on balance it's a good thing that we spend a higher and higher portion of national income on it, figure out how to align incentives properly, and learn that you can separate questions of efficiency from questions of equity and treat them independently.
13. Bankruptcy. The 2005 bankruptcy reform was a pretty good thing with some annoying but not fatal flaws. Obama's stuff here is mostly populist garbage.
14. Savings. McCain apparently was going to "release details of his savings proposals later this summer" but I haven't been paying enough attention to notice whether he actually did. Automatic enrollment is fine if we're just talking about switching from an opt-in system to an opt-out system, and I believe that's what both of them are suggesting.
It may not seem obvious at first, but Obama's matching funds idea would actually reduce overall saving.
I should point out here that there is a fundamental problem with the idea of employers providing retirement savings plans and health insurance. Unless you work for an outfit like Fidelity or Prudential, your employer has no more reason to have relevant expertise than does your bowling team. Or rather, we have no more reason to expect them to be any good at it -- they are forced to acquire expertise by our weird laws that arbitrarily link health insurance and retirement savings to an employer. The absurdity was not so obvious when everyone had 40-hour jobs and worked for the same company for their entire lives, but with the increase in non-traditional workers, independent contractors, frequent job changes, and a large group of people simply outside the system, the problem gets more obvious. There are some good reasons why health insurance got glued onto employment, having to do with the nature of insurance and adverse selection effects, but even that doesn't apply to retirement savings.
16. Free Trade. I'm going to try hard not to start foaming at the mouth here, but politicians' statements about trade drive me up the wall, probably worse than any of the other boneheaded stuff they spew. Obama called NAFTA "devastating" and a "big mistake", but he has since admitted that it's not so bad and that he was just saying that to et some votes from the lunatic fringe of the left wing during the primaries. Beyond that, I'll confine myself to saying that everything in the McCain column is correct and everything in the Obama column is wrong except for the last item.
17. Budget Deficit. Well, neither of them is actually going to balance the budget, not least because the President doesn't control the budget. But I do know that McCain has been the chief opponent of earmarks since before Obama was entering puberty, so I believe his assertions regarding his intentions. However, while earmarks are indeed obviously stupid, the real savings will have to come from serious reform of the big entitlements, and Obama does not seem to have anything to say about that, while McCain does.
18. Jobs and Wages. I'm starting to get sick of the gobs of pablum that are instinctively emitted by politicians any time words like "jobs" are mentioned. Anyway, the minimum wage is possibly the worst anti-poverty measure ever conceived, and unions are a giant waste of space.
19. Wall Street. Boy, there are a lot of different headings. Three more to go.
OK, let's skip this one. Now there's only two more to go.
20. Small Business. You know, most of this stuff was covered in one way or another in previous headings. And for good reason, too -- small business is not qualitatively different from any other economic enterprise, so the same stuff that works for any type of commerce will probably work for small businesses, and the same stuff that's cheesy gimmicks for other types of commerce are still cheesy and still gimmicky for small businesses. Making it easier for people to run their businesses with minimal interference is good, fixing market failures is good, random complication of the tax code with yet another credit for this and deduction for that is just making a mess.
21. Hey look, there is no 21! Yay!
So instead I'll ramble a bit about Obama and McCain's so-called "economic policies", which will also piss me off, but at least it might have some redeeming value in addition to irking me. Because I'm lazy, I'm going to use the CNN Money guide to their policies and just comment as I go, doing as little additional research as I can stand.
1. Gas Prices. The McCain/Clinton summer gas tax holiday idea is about $10 billion of stupid gimmick. The $0.54/gallon sugarcane ethanol tariff and similarly sized domestic corn ethanol subsidy are even worse, and combine to be somewhat more than $10 billion of stupid. Obama's nutty "windfall profits" tax tips the scales in McCain's favor here.
Oh, right, close loopholes blah blah blah offshore drilling blah blah blah ANWAR blah blah blah.
2. Driving. Huh? Why is this a different issue than gas prices? Whatever.
CAFE standards are dumb, and I remind
treptoplax that he owes us a rant on just how dumb they are. Tax credits and subsidies for zero emission vehicles and spiffy battery technology are a little goofy, but there isn't really anything to choose between the candidates on those issues anyway.3. Energy Security. Somehow this is confused with climate change, as if burning imported fossil fuels magically creates more CO2 than burning domestic fossil fuels. Anyway, the main difference between them I see here is that McCain is in favor of nuclear power and Obama isn't, and if you're serious about the climate change problem you need to include nuclear power in the mix, so points for McCain.
4. Taxing Wealth. Apparently the writers at CNN Money don't know the difference between income and wealth, because everything they're talking about is income. Anyway, the carried interest tax is a tricky problem, but since it's only $2 billion or so I'm going to ignore it. Estate taxes are much less incentive-distorting than most other types of tax, so taxing the hell out of inheritance is pretty sensible. Points for Obama.
But the dividend and capital gains taxes are another matter. Discouraging investment is silly, because investment is what makes the next generation better off than their parents. At the moment we are effectively taxing dividend income twice, once when the corporation pays corporate tax and once when they pay you, and that's silly. My preferred solution would be to switch from a personal income tax to a personal consumption tax, making the question irrelevant. Almost as good would be to eliminate corporate income tax altogether and tax dividends and capital gains as ordinary income, with inflation-indexing for the capital gains cost basis. It would put investment and consumption on a level footing, and be more progressive than our current system. McCain's "leave it alone" policy is better than Obama's "distort things even worse" idea, so I'll give this one to McCain, and call the whole of point 4 a draw.
5. Fighting Foreclosure. This whole issue is a crock of shit. Some idiot borrowed more than they could afford to pay back, bought themselves a Cadillac Escalade, and is whining about "predatory lending". Bullshit. Prey doesn't sign a contract with its predator saying "yes you may eat me". If we start saving everyone from every boneheaded decision they ever make, we might as well throw in the towel and just skip straight to totalitarianism. McCain has unfortunately weakened his position recently, but he still beats the hell out of Obama's insane paternalism.
OK, OK, it's not all the result of irresponsible decisions. A lot of the foreclosures are the result of job loss, divorce, or major medical crises. Before the blossoming of the subprime mortgage market, those same things happened to the same devastating effect, except that the people who got hit by them didn't own houses, because no one would lend them money. Something that gets lost in all the "subprime lending crisis" panic is that the expansion of subprime lending extended access to the capital markets to the disadvantaged members of our society. Frankly, I'm willing to trade a few more foreclosures for many more poor people owning their own homes.
6. Mortgage Giant Rescue. OK, this one's not so cut and dried. There are some tricky nuances to this problem that require some not-at-all obvious judgment calls. To adequately address this issue I would need to devote a lot more time to discussing it, and I'm not going to. Of course, that's true for every item on this list, but fortunately there isn't much difference between Obama and McCain on this anyway.
7. Mortgage Fraud. OK, fraud is bad. Anyone disagree? No, I didn't think so. Put down your hand, Phil, you don't get a vote.
8. Social Security. I'm going to award 10 trillion points to McCain here, because opposing voluntary private investment accounts and opposing raising the retirement age are dangerously irresponsible positions. The size of this problem dwarfs all the puny little $10 billion problems I've been going through. It also closely resembles the problem of climate change, except that the parties switch roles on who is the clear-eyed soberly realistic party and who is the moronic head-in-the-sand la la la I can't hear you imbeciles.
9. Medicare. Holy crap, an even bigger problem than Social Security. Let's see, paying more for Part D makes sense, negotiating drug prices not so much, closing the doughnut hole is sensible but absurdly expensive, eliminating the payments to Medicare Advantage plans is silly (and calling them "subsidies" is even sillier. When I pay a barber for a haircut, that's not a subsidy, that's a payment of a fee for a service he provided). Importing prescription drugs is an absurd situation on the face of it and for complicated reasons is a bad solution to a problem that desperately needs some sort of solution, and even a bad answer might be better than no answer. So....honestly, none of the espoused policies are really going to be too helpful, so they both get zeroes here.
10. Personal Taxes. Eh, boring issue. Gets lots of press attention, but until someone puts together a credible consumption tax proposal they're just arguing over the color of paint to put on a burning house. Allowing the AMT to kick in for as many people as possible would be a fascinating backdoor tax reform, but unfortunately no one seems willing to suggest that.
You know, I was pretty psyched when Obama named Austan Goolsbee his chief economic adviser. Goolsbee is a very smart, very sensible, moderate Democrat with a lot of innovative thinking.
11. Corporate Taxes. Close loopholes blah blah blah promote enterprise blah blah blah.
12. Health Care. First off, anyone who tells you that they know how to fix health care is delusional. It's the single most complicated sector of the economy with all kinds of crazy convoluted intricacies. None of the suggested ideas from either candidate are much use. We're not going to get a handle on this until we understand why health care costs so much, realize that on balance it's a good thing that we spend a higher and higher portion of national income on it, figure out how to align incentives properly, and learn that you can separate questions of efficiency from questions of equity and treat them independently.
13. Bankruptcy. The 2005 bankruptcy reform was a pretty good thing with some annoying but not fatal flaws. Obama's stuff here is mostly populist garbage.
14. Savings. McCain apparently was going to "release details of his savings proposals later this summer" but I haven't been paying enough attention to notice whether he actually did. Automatic enrollment is fine if we're just talking about switching from an opt-in system to an opt-out system, and I believe that's what both of them are suggesting.
It may not seem obvious at first, but Obama's matching funds idea would actually reduce overall saving.
I should point out here that there is a fundamental problem with the idea of employers providing retirement savings plans and health insurance. Unless you work for an outfit like Fidelity or Prudential, your employer has no more reason to have relevant expertise than does your bowling team. Or rather, we have no more reason to expect them to be any good at it -- they are forced to acquire expertise by our weird laws that arbitrarily link health insurance and retirement savings to an employer. The absurdity was not so obvious when everyone had 40-hour jobs and worked for the same company for their entire lives, but with the increase in non-traditional workers, independent contractors, frequent job changes, and a large group of people simply outside the system, the problem gets more obvious. There are some good reasons why health insurance got glued onto employment, having to do with the nature of insurance and adverse selection effects, but even that doesn't apply to retirement savings.
16. Free Trade. I'm going to try hard not to start foaming at the mouth here, but politicians' statements about trade drive me up the wall, probably worse than any of the other boneheaded stuff they spew. Obama called NAFTA "devastating" and a "big mistake", but he has since admitted that it's not so bad and that he was just saying that to et some votes from the lunatic fringe of the left wing during the primaries. Beyond that, I'll confine myself to saying that everything in the McCain column is correct and everything in the Obama column is wrong except for the last item.
17. Budget Deficit. Well, neither of them is actually going to balance the budget, not least because the President doesn't control the budget. But I do know that McCain has been the chief opponent of earmarks since before Obama was entering puberty, so I believe his assertions regarding his intentions. However, while earmarks are indeed obviously stupid, the real savings will have to come from serious reform of the big entitlements, and Obama does not seem to have anything to say about that, while McCain does.
18. Jobs and Wages. I'm starting to get sick of the gobs of pablum that are instinctively emitted by politicians any time words like "jobs" are mentioned. Anyway, the minimum wage is possibly the worst anti-poverty measure ever conceived, and unions are a giant waste of space.
19. Wall Street. Boy, there are a lot of different headings. Three more to go.
OK, let's skip this one. Now there's only two more to go.
20. Small Business. You know, most of this stuff was covered in one way or another in previous headings. And for good reason, too -- small business is not qualitatively different from any other economic enterprise, so the same stuff that works for any type of commerce will probably work for small businesses, and the same stuff that's cheesy gimmicks for other types of commerce are still cheesy and still gimmicky for small businesses. Making it easier for people to run their businesses with minimal interference is good, fixing market failures is good, random complication of the tax code with yet another credit for this and deduction for that is just making a mess.
21. Hey look, there is no 21! Yay!
![[identity profile]](https://www.dreamwidth.org/img/silk/identity/openid.png){kind=small}
no subject
Date: 2008-09-14 03:37 am (UTC)no subject
Date: 2008-09-14 01:22 pm (UTC)And those changes, by the way, still don't make it not-a-Ponzi-scheme. As long as you're playing a shell game with the money it's a Ponzi scheme, even if it currently appears indefinitely sustainable.
no subject
Date: 2008-09-14 02:42 pm (UTC)If your definition of "Ponzi scheme" doesn't include "and then it collapses", then yes, we're using different definitions of Ponzi scheme. By your definition, there's no way to make it not a Ponzi scheme, since we were making payouts in the 30's and 40's that we can't take back. At that point, your choice is "do we let it collapse, or not?" and I vote for not.
(I am totally unclear, by the way, how implementing independent retirement accounts keeps it from collapsing. It seems that at best says we should collapse the scheme now and take our lumps, because we think it will do less damage if it collapses now.)
no subject
Date: 2008-09-15 03:17 am (UTC)Fundamentally, yes, it's been doomed to be a Ponzi scheme ever since it started, but there is a third choice beyond collapse and not-collapse. We can convert it into an actual pension plan, with sufficient assets to cover its promises. It takes a long time to actually get there, because we need to grow the assets faster than the promises until they actually cover them, and that requires a lot of compounding of a rather slim margin, which is why we need to start now.
Anyway, I've had Social Security conversations over and over for years now, and I'm getting tired of them. I will admit that if we could get that tax hike and benefit cut passed it would help a lot, but it doesn't fix the fundamental mistake of having an underfunded pension plan with a constantly degenerating ratio of contributors to beneficiaries.
I have a question for you, though. Why is the opposition to individual accounts so strong? I mean, I understand that some people don't think there's a problem that needs solving, but that doesn't account for the violence of the resistance.
But regardless, I think this is the unproductive version of the Social Security conversation. It seems to me that the better version is the one I had with