Monthly Archive for August, 2004

The Numbers Behind The Bush Tax Cuts

Many liberals claim that Bush’s tax cut went primarily to the wealthy. Tavares Forby, a good friend of mine who runs blackpundit.com, created an easy to read graph detailing the before and after tax brackets to show how this tax cut was implemented. He writes,

Many liberals claim that the Bush tax cut only benefits the wealthy. Anyone with basic math skills can prove this is not true. Actually, “President Bush tax cut” cuts the most on the lowest income bracket.

The graph clearly shows how in terms of percentage the poor benefited much more than the rich. A worth while read.

The ‘Poverty Line’

The Economist comments on the current poverty line report just released, it writes,

Whatever crude logic it possessed at the time, the Orshansky poverty line is by now quite arbitrary. Its originator calculated the cost of meeting a family’s nutritional needs and then multiplied this figure by three, because families in the early 1960s spent about a third of their income on food. The Census Bureau does not repeat this exercise to determine today’s poverty line; it does not recalculate the cost of an adequate diet or remeasure the share of income spent on food. It simply adjusts Ms Orshansky’s figures for inflation. Thus today’s dollar thresholds do not tell us how much a family or individual needs to get by in today’s America; they simply restate the cost of feeding a family in the 1960s in today’s prices, and multiply it by three.

The Census Bureau has already experimented with such measures, and is probably itching to finally retire the Orshansky line. But its political masters in the Office of Management and Budget are nervous of any innovation that would raise the official poverty number. To the bureau, the poverty line may be a mere “statistical yardstick”, but to the administration, it is a political stick its opponents might use to beat it with.

The article also mentions several expenses and incomes that are not accounted for in the ‘poverty line’ now used.

For those of you that would like to get a better understanding of the expenses/incomes that are not accounted for, I’ve found the latest report by the Heritage foundation to be very helpful.

If you want to get even deeper, and would like a general understanding of poverty in America, I would recommend reading ‘Understanding Poverty In America’, also by the Heritage Foundation. It matches my experience of growing up in Compton, California better than any other report I’ve read on the topic.

Prices As The Great Equalizer & Trade Deficits

Economist Don Boudreaux has two very informative blogs.

The first one deals with prices and how they are the true equalizer. In direct contradiction to those who use the poor as an excuse for price controls. He writes,

Any practical, realistic method apart from rationing by price hikes will involve arbitrariness at least as great (I think greater) than whatever arbitrariness there is in income distribution.

One great advantage of rationing by market prices is that they reduce to a minimum the role of arbitrariness. Price are, in other words, a great equalizer. Anyone who is willing to pay the market price for a good or service is just as likely to get that good or service as is the seller’s mother, neighbor, or bowling buddy.

The second one addresses the often misunderstood ‘trade deficit’. He writes,

But the trade deficit is no cause for concern. It reflects foreigners’ preference to invest in American assets rather than to cash out all of their dollar holdings immediately for goods and services. This fact means not only that more investment than otherwise takes place in the U.S., but also that more foreigners have real reasons to wish the American economy well.

Your newspaper would help to end this needless fretting by referring not to the “trade deficit” but to the “capital-account surplus.” The two are the same thing, except that the former sounds oh so very ominous.

Two blogs worth reading.

Changing The Electoral Vote?

Colorodo is currently deciding on whether to split its electoral votes to be distributed as a proportion of the voters vote, instead of winner takes all, like is currently the case.

Personally, I think it’s a bad idea. Especially, for the small states. Here is a good article explaining why.

Update: Other arguments to be against it.

Mexico Economics Blog

I am the first member of my family born in the United States. Most of my family comes from a small town in Guerrero, Mexico. This area of Mexico is extremely poor. The farm that my father grew up on doesn’t even have hot water or very much electricity.

Needless to say, this has always puzzled me. How could a country with so many natural resources be so poor? Don’t get me wrong, I’ve heard the general answers, answers like “there needs to be more Capitalism”, or “there is too much corruption” etc. But I want more specifics. I want actual legislation problems or specific things that can be done.

That is why I was thrilled to find out that Tyler Cowen, Professor of Economics at George Mason University, is in Mexico and occasionally finds time to blog about Mexico specific things. You can find his blogs on his observations in Mexico at Marginal Revolution. A couple that I found interesting is the most recent one of his visit to a small town in my Father’s home state and the one about Kidnapping in Mexico. He’s also commented on the large amount of internet cafes in Mexico and about their judiciary system.

The blog is overall a good read and something worth keeping an eye on. I’ll probably also buy his book that deals specifically with Guerrero, Mexico. It is due to come out next year.

Partial Birth Abortion Ban Struck Down

It is little known among Americans that in the United States abortion is legal for all nine months of pregnancy. A women can decide to ‘terminate’ her unborn child for any reason she desires, at any stage in the pregnancy. All with the full consent of the law.

Republicans were finally able to pass a common sense ban that prohibited late term abortions. A ban that if the Democrats had controlled any part of congress, or the presidency, would have never allowed to pass. In fact, this partial birth abortion ban, named after the gruesome method the abortion is performed, was voted against by more than half of the Democrats in the senate. Republicans had to control all three houses of congress, the House Of Representatives, the Senate, and the Presidency to have a chance to pass it.

Well now that ban has been struck down, twice. The article writes,

Louise Melling, director of the ACLU’s Reproductive Freedom Project, said her group was thrilled by the ruling.

U.S. District Judge Richard C. Casey — one of three federal judges across the country to hear simultaneous challenges to the law earlier this year — faulted the ban for not containing an exception to protect a woman’s health, something the Supreme Court has made clear is required in laws prohibiting particular types of abortion.

Casey, who was appointed to the bench by President Clinton in 1997, was considered by some observers to be the best legal hope for the law’s supporters.

Of course, whenever a common sense law is struck down, you can always find liberals behind it.

Also, don’t let this whole “health of the mother” exception fool you. Even the Catholic Church, the most ardent pro-life group around, allows ‘abortion’ if the mothers life is at risk. The reason pro-life people are against this ‘health of the mother’ clause is because it can be used by the patient for any reason. There is no objective measure of whether her health is jeapordized. For example, the mother can walk into an abortion clinic and say that the pregnancy is causing her stomache problems, and nausea, things typical of normal pregnancies. And that can be reason enough to perform the nine month abortion.

This is a very sad day.

The Job Numbers That You’re Not Hearing About

If you asked the average person on the street how the Economy was doing, what do you think his response would be? Probably negatively. Economists call this a late indicator, meaning that by the time the average joe on the street changes his perception of the economy, it is because the economy has already been performing well for quit sometime.

This is the case today. For example the unemployment rate in the United States is at about the same level that it was when Bill Clinton was running for re-election, and Bill Clintons economy didn’t have 9/11 and two wars behind it. So it is clear that with all things considered, this economy is doing great.

Than whats with all the bad news lately? Well USA today has an article putting them in context. The article states,

The U.S. Bureau of Labor Statistics (BLS) recently snuck out a telling confession beneath everyone’s radar: Its flagship payroll survey is likely undercounting hundreds of thousands of jobs.

In his July 20 testimony to Congress, Greenspan cited measures from the payroll and household surveys. Then the Federal Reserve, led by Greenspan, voted unanimously to raise interest rates. It said the economy is “poised to resume a stronger pace of expansion” and noted that labor-market conditions continue to improve.

Update: For those that would like more on this topic, Arnold Kling, Phd in Economics from MIT, discusses the supposed ‘Middle Class Squeeze” and various issues dealing with the Economy here.

‘Stolen Honor’ And New Ad By Swift Boat Veterans

You will constantly hear the media and Kerry claim that nobody from the Swift Boat Veterans For Truth served on Kerry’s patrol boat during the war. That all the people who served with Kerry endorse him, and these Vietnam Vets running ads against him are people that weren’t with him in combat. That is a lie. In fact, Steve Gardner, a member of the Swift Boat Veterans for Truth, served on one of Kerry’s patrol boats during the war. He claims to have spent more time on his boat than anybody else.

To dispel this lie the Swift Boat Veterans For Truth have come out with another ad.

The Swift Boat Vets For Truth also consists of 17 of the 23 officers who served with Kerry, most of his chain of command, and most sailors. In fact, even by pure numbers the Swift Boat Veterans For Truth win. Kerry could only produce 14 Vietnam Veterans supporting him for Presidency. The Swift Boat Vets For Truth have 254 Vietnam Veterans that say Kerry is a fraud. It would be a lot harder to get 254 Veterans to falsify their statements than to get 14 to falsify their statements.

Maybe now we can get the media to actually investigate their claims? I won’t hold my breath.

‘Stolen Honor’

“Stolen Honor” investigates how John Kerry’s actions during the Vietnam era impacted the treatment of American soldiers and POWs. Using John Kerry’s own words, the documentary juxtaposes John Kerry’s actions with the words of veterans who were still in Vietnam when John Kerry was leading the anti-war movement.

A documentary about John Kerry’s Vietnam era that is to be released soon. Some clips can be found here.

Update: Another article dispelling some of the myths behind John Kerry’s Vietnam record and his purple hearts. The article was written by a Vietnam Vet that was a surgeon in the war. He is also calling for Kerry to release his military record, if he has nothing to hide.

Modest Needs

One of the arguments against social programs like welfare is that whenever government steps in, the private sector steps out. And since everybody knows that the private sector is much more efficient than the government, you are left with an overall net loss for the people in need.

That is why it is so great to see organizations like “Modest Needs” helping those in need. There is an article in Fox News detailing their work,

Modest Needs was conceived, built and still operates on simple concept — a small investment to help an individual or a family with a utility bill, rent check or health-care invoice reaps huge rewards if it keeps its recipient employed or prevents an eviction.

Proponents of laissez-faire capitalism often point to organizations like Taylor’s when arguing against the need for social safety nets such as welfare and Social Security. It’s in our own self-interest to look after one another, the thinking goes, and in the absence of a state-funded social welfare system, we’re more likely to come to one another’s aid before letting someone slip through the cracks.

Aid that comes from friends, family or organizations like Taylor’s is always more efficient, targeted, and ultimately more beneficial, than aid taken from taxpayers that’s then filtered through bureaucracies at the local, state, and federal level.

Modest Needs, for example, sends its checks directly to the creditors of its beneficiaries, not to the beneficiaries themselves. That’s a small innovation, but it prevents grant recipients from abusing the system — a problem most government aid programs haven’t been able to overcome in a half-century or more of operation.

A program that should be encouraged.

Campaign Finance Reform And Lessons Learned

The greater lesson to be learned in this election, with all the 527’s (named after the part of the tax code under which they operate) attacking each candidate, is that all those people that supported the Mc Cain-Feingold Campaign Finance Reform have egg on their face(including GWB for not vetoing it!). As predicted by those who were against it, Campaign Finance Reform will not stop soft money, it would just push it back one more step , to 527’s. So now, thanks to ‘Campaign Finance Reform’, we have a scenario where soft money is pouring into the campaigns, but now through unaccountable 527’s, and giving the contributors a tax break where there was none before, all in all, creating a worse scenario.

There is no way to stop soft money. If you try to fix the current problem by regulating 527’s, than you start trampling on religious freedom and all that goes with it. The most one can do is make all contributions known and documented. And let them flow where they may. Because the minute you try to force them away from a certain objective, they will find there way into something else. Regulation requires more regulation and more regulation ad infinitum.

Swift Boat Vets Caught Kerry In Another Lie?

The Washington Times writes,

“John Kerry’s own wartime journal is raising questions about whether he deserved the first of three Purple Hearts, which permitted him to go home after 4½ months of combat. “

That would make it 2-0, Swift Boat Vets.

You would think by now that the Swift Boat Vets For Truth would have earned enough credibility to at the very least have their claims investigated. However, instead of investigating the merits of the claims the media seems to be focused on who is funding who. Does the media honestly think that Democrats would fund the Swift Boat Veterans For Truth? Than why are they surprised when they discover its people with Republican leanings? And as for who is working for who, the answer is clearly that everybody seems to be working for the 527’s of their own political party, for example the Washington Post writes,

…two prominent Democratic lawyers are doing the same thing. He said Robert Bauer, the top legal counsel for the Kerry campaign, also is the attorney for an independent group, America Coming Together, that has been mobilizing voters in support of Kerry. In addition, Ginsberg said, Joseph Sandler is a lawyer for both the Democratic National Committee and for the independent group MoveOn.org, which has run advertisements attacking Bush.

And the media didn’t see a problem earlier when MoveOn was working with primarily Democrat supporters and getting funding from Democrat backers. The cooperation between the two was even posted on the Democrat website. In fact, even if you assume the Swift Boat Vets For Truth is a Republican 527, you still have the overwhelming majority of 527’s supporting the Democrat cause. Where Democrat supporters have spent in the millions through 527’s, the Swift Boat Vets For Truth have spent close to $200,000. But only now do 527’s receive attention. Go figure.

To recap, let me be clear on this, I am not arguing that Kerry lied, I don’t know enough to say one way or the other*. I am merely saying that the claims the Swift Boat Vets are making should at least be investigated. That is all. I find it hard to believe that 264 vets are making this stuff up. The media seems to be completely ignoring them. That is what I dislike. They have a right to be heard, they also paid for that right with their blood.

*honestly, I tend to side with Kerry, in cloudy cases like this its best to give the person with the original claim the benefit of the doubt.

John Kerry, ‘The New Soldier’

John Kerry has been trying desperately to prohibit the public from getting a hold of the book, The New Soldier, that he wrote right after coming back from the Vietnam war.

However, due to the miracles of the internet, a copy of the book can be found online. Enjoy.

Did Karl Marx Get Anything Right?

I have blogged on here before about how the elite left is still obsessed with Karl Marx and thinks he should be given another chance. This fact is even more mind boggling when you consider that economically speaking Karl Marx is seen as a complete failure. A simple basic economics course will dispel any hope that Karl Marx can be successfully implemented.

He is such a failure that a couple economists are having a hard time listing his positives. To see this exchange read Brad Delongs post, Professor of Economics at UC Berkeley. He asks simply for five one-sentence bullet points listing his positives.

Tyler Cowen, Professor of Economics at George Mason University, tries to list some positives here. Although he concludes with,

Of course marxism, as a political program, remains dangerous nonsense. Marx’s blind spots were enormous, and I still cannot understand how generations of the intelligentsia were taken in by the whole thing.

Can somebody please convey this message to those liberal elites who still believe in Karl Marx?

The Importance Of Kerry’s Cambodia Claim

As I have posted on this blog before, The Swift Boat Vets against Kerry have already caught Kerry in at least one lie; the claim that he was in Cambodia on Christmas of 1968.

Joshua Muravchik, writing in the Washington Post explains why that lie is so significant, he writes,

After his discharge, Kerry became the leader of Vietnam Veterans Against the War (VVAW). Once, he presented to Congress the accounts by his VVAW comrades of having “personally raped, cut off ears, cut off heads, taped wires . . . to human genitals . . . razed villages in a fashion reminiscent of Genghis Khan . . . poisoned foodstocks.” Later it was shown that many of the stories on which Kerry based this testimony were false, some told by impostors who had stolen the identities of real GIs, but Kerry himself was not implicated in the fraud. And his own over-the-top generalization that such “crimes [were] committed on a day-to-day basis with the full awareness of officers at all levels of command” could be charged up to youthfulness and the fevers of the times.

But Kerry has repeated his Cambodia tale throughout his adult life. He has claimed that the epiphany he had that Christmas of 1968 was about truthfulness. “One of the things that most struck me about Vietnam was how people were lied to,” he explained in a subsequent interview. If — as seems almost surely the case — Kerry himself has lied about what he did in Vietnam, and has done so not merely to spice his biography but to influence national policy, then he is surely not the kind of man we want as our president.

Addendum: For those interested in a good summary of the history behind the swift boat vets against Kerry, Larry Sabato, Director for University of Virginia Center for Politics, gives one of the best summaries I have seen.

Kerry Cartoon

Young Lean More To Right Than Before

Young Americans are pushing their own generation to the political right of their parents. The article writes,

Cultural and political observers have been declaring a conservative groundswell for at least 15 years.

A 2001 survey done by the University of California at Berkeley found that young people today are substantially more likely to support conservative social initiatives such as prayer in school, federal support for faith-based charity, and limits on abortion. Of 1,250 people aged 15-92 surveyed, 60-70 percent of college students and teenagers supported such initiatives, compared with about half the adults surveyed.

The Keys To Happiness Unlocked

The happiest people surround themselves with family and friends, don’t care about keeping up with the Joneses next door, lose themselves in daily activities and, most important, forgive easily.

That is the formula for happiness, according to a new breed of psychologists.