JayB

""The White House issued a statement saying it was against a full repeal of ethanol subsidies, indicating it could use its veto power if the amendment continued to advance in Congress." That is all.

We've covered this ground before in the campaign finance reform thread. The issue isn't "limiting state power", it's dealing with the huge disparity in access to it. It's not about tariffs, subsidies, and tax-exemptions on principle (at various times and places they've been the cornerstone of economic development), it's about who they benefit. As long as there is a need to enact and enforce laws, whether it's through a nation-state or the PTA, there will be incentive to rig the game. Since, at this point in human evolution it's obvious we still need laws and organizational mechanisms to express our collective will, promote our interests, and resolve conflicts, in other words engage in politics, we need government. Sorry, your market utopia is a pipe-dream. Power will exist regardless of the instruments through which it is exercised. Doing away with the modern liberal democratic state doesn't do away with power, it does away with the citizenry's capacity to curb it. Liberal democracies within capitalism at least offer the potential to limit the exercise of power by the economically powerful over the less powerful through oversight, regulation, etc. Drowning our government in the bathtub doesn't dispel power, it abdicates it to those who already have power in society. That our own government has been highjacked by capital doesn't mean government is essentially corrupt in principle, it means that greater balance need to be brought to the political field. But really, what did happen to the role of democracy in liberal thought, Jay? Are so cynical to think that the dysfunctional American system is proof of the corruption of any form of governance or are you so dazzled by the mathematical certainty of your models or convinced by the pure visions of wizened little Austrians that you're incapable of seeing how spectacularly free-market fundamentalism is failing us? I'd be the last guy to argue for dismantling the legal architecture of liberalism/liberal-democracy - it's good stuff. All I'm arguing for is getting rid of or minimizing as many of the instruments that the big monkeys "the powerful" can get their hands on to run to manipulate the market and/or society in a manner that's to their liking. Getting rid of prohibition, various exemptions from competition, and handouts of public money to private economic interests in whatever form would be a good start. I think that the key difference in our perspective is that I don't exclude people who get paid via tax revenues from the list of private economic interests who have an incentive to funnel as much of the public dough as possible into their own hands. Anyone who can look at a legislative session in California and conclude that, say, the Prison Guards Union is any less self interested than ExxonMobil has a primitive innocence about them that would make Rousseau do a double take. Is it *really* surprising that programs that ostensibly started out to help the little guy (in the dubious conventional narrative) - like farm subsidies - wound up being gorged on by massive agribusiness cartels? That programs intended to promote things like "home ownership" metastasized into a financial/construction cartel that siphoned off public money transferred the risk back onto the public till? Etc, etc, etc. Add "Energy Independence," "Home Ownership," "The Children," etc to the list of nostrums that scoundrels hide behind. Large concentrations of economic power can and will manipulate the levers within the political sphere as long as they have access to the control room. As I said, I don't have a problem with subsidies and other forms of protection on principle. No modern nation-state ever successfully industrialized without them. There are any number of fledgling industries and projects that could use the breaks currently turning into money shoveled into Exxon shareholders' pockets. How the money is used is a matter of transparency, oversight, and enforcement. None of these have been high priorities for a government captured, at least partially through campaign financing, by the very industries its supposed to regulate. Why assume the historical inevitability of a wind cartel or an electric car cartel because our oil companies have used policy to their advantage in the past? Look instead of the vast gains those industries made, recognize those resources could be better used elsewhere, limit fraud, abuse, and undue access to the political system, and get this fucking show on the road. I am, admittedly, a partisan. I think we do, as a society, have the capacity and the information available to make good choices in certain areas about where we can make investments in our future and guide industrial policies that can provide broad benefits to our society. It's not necessary to invoke the screaming meemies (CENTRAL PLANNING!) every time someone says this. The Germans have essentially "beat" the race to the bottom by investing in and "protecting" their workers and doing the opposite of what free market utopians told them they had to do. It's hard not to think we got duped. I supposed I'd have to disagree on the chronology. I think that the way things normally happen is that industries normally get big and prosper in the teeth of opposition from entrenched interests and their water-carriers in government - then use the same tools to secure protection for themselves. WRT to Germany - they're doing pretty well but that's generally being the case since the mid 19th century - the only exceptions being when they were busy waging war or happened to be stuck behind the iron curtain. They've cycled through a variety of economic regimes since the Iron Chancellor invented the welfare state as a mode of social control (think contemporary communists saw this for what it was more clearly than anyone else) back in the 1870's. There's quite a bit more to "The Wealth of Nations" than formal economic policy, although there are plenty of examples where the policies are so bad that no collection of humans could ever prosper under them.

One more.. "I have never known much good done by those who affected to trade for the public good." Same as it ever was.

if only the "tolerable administration of justice" didn't cover slavery in all its many forms "From the experience of all ages and nations, I believe, that the work done by free men comes cheaper in the end than the work performed by slaves. Whatever work he does, beyond what is sufficient to purchase his own maintenance, can be squeezed out of him by violence only, and not by any interest of his own." " * There is not a negro from the coast of Africa who does not, in this respect, possess a degree of magnanimity which the soul of his sordid master is too often scarce capable of conceiving. Fortune never exerted more cruelly her empire over mankind, than when she subjected those nations of heroes to the refuse of the jails of Europe, to wretches who possess the virtues neither of the countries which they come from, nor of those which they go to, and whose levity, brutality, and baseness, so justly expose them to the contempt of the vanquished." "This disposition to admire, and almost to worship , the rich and powerful, and to despise , or , at least neglect persons of poor and mean conditions, though necessary both to establish and to maintain the distinction of ranks and the order of society, is, at the same time, the great and most universal cause of the corruption of our moral sentiments." ~same guy. I think you'd enjoy reading his stuff if you haven't already.

Thought Ivan might enjoy this one; "Virtue is more to be feared than vice, because its excesses are not subject to the regulation of conscience." ~Adam Smith

"Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things." -Adam Smith. The converse is also true.

Quite a laundry list there. Seems like they've all been hashed over and over. And over. And over. Many a time. Seems like the key to minimizing tax evasion and avoidance is simplifying the rules, keeping the rates reasonable, and making sure they're used as efficiently as possible. Go too far in the other direction in any of the above parameters - make more complex rules that make it easier to evade or minimize taxes, escalate rates to the point that you maximize the incentives for doing so, and allow the whole enterprise to turn into a grand patronage scheme and you're a long way down the road to Greece.

We've covered this ground before in the campaign finance reform thread. The issue isn't "limiting state power", it's dealing with the huge disparity in access to it. It's not about tariffs, subsidies, and tax-exemptions on principle (at various times and places they've been the cornerstone of economic development), it's about who they benefit. As long as there is a need to enact and enforce laws, whether it's through a nation-state or the PTA, there will be incentive to rig the game. Since, at this point in human evolution it's obvious we still need laws and organizational mechanisms to express our collective will, promote our interests, and resolve conflicts, in other words engage in politics, we need government. Sorry, your market utopia is a pipe-dream. Power will exist regardless of the instruments through which it is exercised. Doing away with the modern liberal democratic state doesn't do away with power, it does away with the citizenry's capacity to curb it. Liberal democracies within capitalism at least offer the potential to limit the exercise of power by the economically powerful over the less powerful through oversight, regulation, etc. Drowning our government in the bathtub doesn't dispel power, it abdicates it to those who already have power in society. That our own government has been highjacked by capital doesn't mean government is essentially corrupt in principle, it means that greater balance need to be brought to the political field. But really, what did happen to the role of democracy in liberal thought, Jay? Are so cynical to think that the dysfunctional American system is proof of the corruption of any form of governance or are you so dazzled by the mathematical certainty of your models or convinced by the pure visions of wizened little Austrians that you're incapable of seeing how spectacularly free-market fundamentalism is failing us? I'd be the last guy to argue for dismantling the legal architecture of liberalism/liberal-democracy - it's good stuff. All I'm arguing for is getting rid of or minimizing as many of the instruments that the big monkeys "the powerful" can get their hands on to run to manipulate the market and/or society in a manner that's to their liking. Getting rid of prohibition, various exemptions from competition, and handouts of public money to private economic interests in whatever form would be a good start. I think that the key difference in our perspective is that I don't exclude people who get paid via tax revenues from the list of private economic interests who have an incentive to funnel as much of the public dough as possible into their own hands. Anyone who can look at a legislative session in California and conclude that, say, the Prison Guards Union is any less self interested than ExxonMobil has a primitive innocence about them that would make Rousseau do a double take. Is it *really* surprising that programs that ostensibly started out to help the little guy (in the dubious conventional narrative) - like farm subsidies - wound up being gorged on by massive agribusiness cartels? That programs intended to promote things like "home ownership" metastasized into a financial/construction cartel that siphoned off public money transferred the risk back onto the public till? Etc, etc, etc. Add "Energy Independence," "Home Ownership," "The Children," etc to the list of nostrums that scoundrels hide behind. On a slightly off-topic note, I listened to Thaddeus Russel's "A Renegade History of the United States" on a recent road trip and thought that there were parts that both you and Ivan would really enjoy.

"Funny how that happens when those factions capture state power..." I trust that you are not "Shocked...shocked" by the above. I can see how the above quote would support an argument for limiting the state's power, but struggle to see how that would work with the opposite argument. That's one more thing that goes back thousands of years. As long as the state has had the power to influence the distribution of rewards in society and divert the gains from commerce on behalf of the favored - that's what has tended to happen. There are literally clay tablets associated with feuds over who got their hands on the frankincense franchise, etc. When there's a gajillion dollars at stake from using the government to rig the game on your behalf of course the interests with the most to gain will pursue that pile of cash, and of course the most powerful monkeys will get their hands on the big bananna. There's libraries full of dense tracts on political economy around the world and throughout history that testify to this fact. How about getting rid of some of the levers the big monkeys are most likely to reach for - like tariffs, subsidies, tax exemptions, etc? A flat tax is a long shot, but I'm not sure it's more utopian than assuming that you can leave those levers in place, much less multiply them and make them bigger, and not have lots more monkey-hands grabbing for them.

Are you talking frequency, magnitude, or both? Rich countries or all countries? If you have the time, link to a comprehensive summary-timeline and we can take a look. It's hard to disentangle the tax-evasion issue from cultural issues. One of the reasons that the Nordic folks can live with high taxes is that they have a relatively high degree of confidence that the money they hand over will be used effectively and efficiently. One theme that comes up again and again with Greeks is that they don't want to pay taxes because they are convinced - with good reason - that they will be essentially stolen and squandered. Not an easy thing to fix. Also one of the reasons why "progressives" who like high tax rates should be more strident advocates for cost-efficiency in the delivery of public services than anyone else.

Better thread on the same topic here: http://scienceblogs.com/insolence/2011/05/motivated_reasoning_and_the_anti-vaccine.php

Partially, perhaps. I'm not sure whether the home-schoolers in Northern Idaho are more numerous than the upscale retards in Vashon island, Ashland OR, Boulder CO, etc but I'm willing to bet there are a whole lot of folks who are as passionately for single-payer as they are against vaccines. I'm not sure that this one tracks nicely along left-right lines, but I do find it amusing that all of the social attributes that Joseph cited are abundant in spades in all of the above anti-vaccination hotbeds. Decent thread on anti-vaccine activism and political affiliations here: http://blogs.discovermagazine.com/intersection/2011/04/20/vaccine-denial-and-the-left/

Fair enough, but these crises have grown in frequency, severity, and scope as a result of the financial liberalization, hot money flows, tax-offshoring associated with neoliberal globalization. Europe is simply the latest to experience what numerous countries in SE Asia and Latin America have already been through just in the last decade and a half that have had global repercussions. It's nice for you to have the Greek welfare state to scapegoat but the structural issues are far broader as you already know. I don't know enough financial history to know if the financial crises are actually more frequent and severe now than they were in, say the 19th century. I'd be willing to bet that the main feature that distinguishes now from then is the willingness/ability of sovereign states to bail out private creditors/enterprises who made bad investments. It's really not the "Welfare State" per se that is the problem with Greece. Sweden and Denmark, for example, seem to be able to run a welfare state without it going bust in the immediate future. Greece is one of many nations that can't. No nation that consistently consumes more real wealth than it produces can. As far as I can tell, the only impact that globalization had on their situation is keeping them plugged into a store of real wealth outside of their borders that kept them afloat and gave them much more breathing room to close the production-consumption gap than they would have had otherwise. I'm not sure that's a bad thing for all nations at all times.

It's been a mainstay of reality since the invention of statehood. States spend more money than they have for wars, pyramids, palaces, etc and default in de facto terms by debasing the currency that their debts are denominated in or in de jure terms by not repaying what they owe. "The basic coinage of the Roman Empire to this time – we're speaking now about 211 [A.D.] – was the silver denarius introduced by Augustus at the end of the 1st century before Christ. Augustus had issued a silver coin, a denarius, that was about 95% silver, and that coin continued for the better part of two centuries as the basic medium of exchange in the empire. By the time of Trajan in 117, it was only about eighty-five percent silver, down from Augustus' ninety-five percent. By the age of Marcus Aurelius, in 180, it was down to about seventy-five percent silver. In Septimius' time it had dropped to sixty percent, and Caracalla evened it off at fifty-fifty. Caracalla was assassinated in 217 and there then followed an age that historians refer to as the Age of the Barrack Emperors, because throughout the 3rd century all the emperors were soldiers and all of them came to their power by military coups of one sort or another. There were about 26 legitimate emperors in this century and only one of them died a natural death; the rest were either assassinated or died in battle, which will give you some idea of the change since this was totally unprecedented in Roman history – with two exceptions: Nero, a suicide, and Caligula, assassinated earlier. Caracalla had also debased the gold coinage. Under Augustus this circulated at 45 coins to a pound of gold. Caracalla made it 50 to a pound of gold. Within 20 years after him it was circulating at 72 to the pound of gold, reduced to 60 at the end of the century by Diocletian, only to be raised again to 72 by Constantine. So even the gold coinage was in fact inflated, debased. But the real crisis came after Caracalla, between 258 and 275. In a period of intense civil war and foreign invasions, the emperors simply abandoned, for all practical purposes, a silver coinage. By 268 there was only five tenths percent silver in the denarius. And prices in this period rose in most parts of the empire by nearly a thousand percent. The only people who were getting paid in gold were the barbarian troops hired by the emperors. The barbarians were so barbarous that they would only accept gold in payment for their services..." Etc, etc, etc, etc. The only new thing here is the politicaly constructed currency mechanism that has transmogrified something that should be a routine default by a small, marginal basket-case country - with bondholders getting reamed and borrowers paying penalty rates for a long period of time into a much larger problem.

Two year yields now at 28% and rising....oops - make that 29.6%... http://www.bloomberg.com/apps/quote?ticker=GGGB2YR:IND

Mmmmm. Smart people. http://www.thestranger.com/seattle/stupid-fucking-anti-vaccine-hippies/Content?oid=8526583 "According to a definitive new study published June 3, Washington State ranks among the worst in the nation in meeting childhood vaccination targets. In the Centers for Disease Control's (CDC) epidemiological newsletter, the Morbidity and Mortality Weekly Report, our state ranges between 88 and 93 percent compliance for "required" vaccinations like polio, whooping cough, measles, hepatitis B, and chicken pox. The CDC's target is 95 percent. But even more embarrassing, our state now leads the nation in parent-signed exemptions for kindergarten enrollees at 6.2 percent, a rate that has more than doubled over the past decade. In other words, Washington is suffering an epidemic of stupid fucking Jenny McCarthy–worshiping anti-vaccine hippies. Only eight states report a lower compliance rate on the measles, mumps, and rubella (MMR) vaccine than Washington's 91.7 percent, while Mississippi leads the nation with 99.7 percent compliance....."

My point when mentioning payroll and regressive taxes was to show that many more people pay taxes despite what your graph showed. It's a classic regressive talking point to only discuss federal income tax as if that was the only way people were taxed, which it isn't. Your "real hourly compensation" doesn't accurately account for real costs of living. One income family used to make the ends meet whereas many 2 income families can't make ends meet today. Their standard of living isn't higher than it used to be either (as shown by Warren's study among other evidence), so there is something wrong with your data, which isn't too surprising considering how many time methodologies have been tweaked to make numbers look better by successive administrations. but none of the above addresses the salient points of my post above: inequalities that are as large as during the age of robber barons, trillions in profit not being taxed, paltry marginal rate of taxation, federal spending on many other things than the "welfare state", etc ... -What data set are you using to define the total "cost of living." Some things cost more than they used to - most things cost less than they used to in real terms. Etc, etc, etc, etc. No one is forcing anyone to adopt a lifestyle that requires two incomes. The fact that people have chosen to adopt a lifestyle that does so is no one's business or problem other than their own. Everyone who overpaid for a McMansion or Luxury condo with an arm was equally free to choose to live in a modest apartment, rent a home in a less expensive neighborhood, or coop themselves up in a unabomber shack. Ditto for living someplace that requires two vehicles. Etc, etc, etc, etc. If I presented you with papers stuffed with crappy data-sets that were full of confounding and/or improperly controlled variables for professional review in your capacity as a working scientist, you'd presumably toss them back to the authors in a nanosecond. Why is it that you don't subject the data put forth to establish these social trends to the same level of scrutiny?

When you factor in the value of transfer payments from the government (people that are paying income taxes) that goes a long way towards eliminating the effect of the "regressive" taxes on the folks at the lower ends of the income spectrum. I've posted various figures that demonstrated this quantitatively in the past. Ditto for the graphs showing that real hourly total compensation per worker has been rising steadily since whatever arbitrary starting point in the post WWII halcyon days that you want to choose. Most plots that show something different either use the statistical smudges like "households," or "income quintiles" instead of real hourly compensation per worker, and/or ignore the value of non-cash compensation and only tabulate money wages. That would make sense if benefits were free, but they aren't, so it doesn't.

You should do a road tour where you visit all these states and tell them how "dumb" they are. Love how progressives claim to care about the common man, but evince such blatant disregard for him in reality, condemning whole swaths of the country as "dumb" and obviously beneath them. If only you could have the State educate these people and put them in their place while ensuring they have a job and a "living" wage. Kind of like taking care of your pets, I suppose, eh j_bot? The "Chevy" effect. Love to bemoan the fate of the midwestern auto worker, but wouldn't be could dead driving anything that they produce, and loathe pretty much all of their tastes, habbits, and beliefs. Sorry "Progressives," - your beloved working man loves smokes, drinks, fast-food, guns, big fast cars, waving the flag, and big 'ol titties.

http://www.npr.org/blogs/money/2011/01/07/132717135/a-theme-park-an-airport-and-the-next-banking-crisis

structural change is parlance for enforcing the neolib agenda of slashing social services while making the peons pay for the crisis engineered by elites and their puppets. I think the more thoughtful response would have been -"Can you provide details on what you mean? you were agreeing with Bill, which means you had to know 'structural reform' involved some sticking it to the peons. The company you keep isn't my responsibility. Good, but you forgot your repeated calls to take it to public employees and your inexplicable "the states are on their own" knowing full well what it meant. what's the problem with elite, peons and neocon? are they so "shrill" they harsh your mellow? As for the rest of these terms: I will not be harassed systematically by goons without payback. If thugs want to continuously attack my person without hardly ever addressing content, they will have to bear these various epithets like trophies around their neck for they are well earned. why didn't you ask some rationale from JayB when he pinned the entire crisis on government spending, when it is abundantly obvious that revenue shortfall due to the economic crisis and failure to tax the wealthy are primary reasons for budget shortfall? I also never claimed that taxing the wealthy would be sufficient, only a necessary first step. "The biggest potential gains for the federal government's tax collections are to be had by going after the where the amount of white space in the chart is the greatest."....because that's where the money is. Which is why all of the Eurostates generate much more of their total tax take from broad consumption taxes than income taxes, and why all of them generate less of their total taxes from income taxes than the US does. Not enough rich people in the US or Greece or anywhere else to foot the bill for the welfare state. You need broad consumption taxes to pay for that. [/img]

Up, up, and awaaaaaaaaay..... http://www.bloomberg.com/apps/quote?ticker=GGGB2YR:IND&n=y#

Answer: "This issue of Mercatus on Policy focuses specifically on Oregon and how it compares to other states in its fiscal, regulatory, economic, and personal freedom. Oregon shows the greatest improvement by any state over the previous version of this index, leaping up 14 places to become the 8th most free state in the country overall and the freest state in the Pacific Northwest. This gain is due mostly to a big improvement in the quality of the state’s court system, a substantial decline in tax collections (from 9.7 to 8.8 percent of personal income), and the enactment of same-sex civil unions. Policy makers from other states seeking to make their states more free would do well to learn from Oregon’s example."

Well - at the end of the day consumption can exceed production only as long as there's a store of real wealth somewhere that can cover the difference - so it doesn't really matter if you're wasting money building pyramids or paying 3x as much as necessary for basic municipal services. The ride may be a bit different, but in the end you'll be swirling down the same drain.

Holy cow. I'll take the horse any day. How the heck are they going to make payments on those bonds with those rates? Yikes. Pretty big hole to dig out of. We may need to tweak our rates soon but this is pretty crazy. That was for the 10-year bonds. Apparently the discount on the two year notes is steep enough that the yield is ~25%. Seems strange that there's a yield disparity at all since short of printing enough Euros to cover pan-European losses on sovereign debt in the PIIGS - anyone that bought Greek bonds is going to take a haircut. Evidently - there's significant CDS exposure to Greek and other sovereign debt on this side of the Atlantic too. Some have said it exceeds the losses that the Eurobanks will suffer when they have to take haircuts on the sovereign debt that we're holding... Good times.