A major theme for opponents of Mitt Romney has been his huge change on many issues - moving from being a very moderate Republican to a very conservative one. There has been some debate recently about whether consistency really matters to voters.
Before I get to whether I think it affects voters actual decisions, I will say that it certainly affects my thinking and I think it is worth the press covering the fact that positions have changed. It matters because it gives a sense of the candidate's character. For example, President Obama recently changed his position on same sex marriage. Many people though wondered how genuine his position has been on this.
There is some evidence he favored same sex marriage while a state senator, then changed his position when he had more national ambitions. And his comments that his position is "evolving" seemed just ridiculous. So many believe that he changed his mind to support same sex marriage only when it was right politically.
John Kerry faced bad press over his changed position on the Iraq War, and maybe rightly so. He supported it before he opposed it.
Mitt Romney is also facing questions about his changed positions on gun control, abortion, gay rights, health care, auto industry bailout and more that I am probably forgetting. All of this reinforces the image of someone who will change any position if it means becoming president. If he can go from becoming a moderate to a "severe" conservative, than what does he really stand for.
So I think all of these examples say something about the character of the candidate. But it also says something about being an elected leader in a representative democracy. Voters want to elect someone who agrees with them. But they also want to elect someone who has real convictions and strong character.
Ideally, they want both. In the GOP primary, Romney won because the only candidates that were more consistent had other much bigger flaws. I think if there had been someone more consistently conservative and with good credentials, they would have chosen that person.
The question is which do they prefer when those two cannot go together? I agree with the Monkey Cage that ultimately they want someone that agrees with them now. Democrats are happy that Obama finally supports same sex marriage and Democrats were happy when Kerry changed his mind on Iraq - as Democratic and independent voters had done. And Republicans would far prefer a Romney that changed all of his positions to follow a party that is turning hard right than if Romney had stood fast to most of his moderate beliefs. (Which is why Huntsman had little chance).
The problem is that candidates often have to follow the voters. When voters change their minds, we blame the politicians for being just as fickle as the voters are. Maybe that isn't fair. Or maybe it is. Maybe it makes sense to chose someone whose judgement is sound and doesn't have to change their minds and is right from the beginning. Probably a bit naive, but a good goal, I think.
Saturday, June 02, 2012
Jobs Numbers: Ouch
I am so depressed about the really bad jobs numbers released yesterday. I know that one data point doesn't tell a full picture. But this is one bad data point - or set of data points. The number of jobs added were half what was predicted and previous months numbers were reported down.
If things don’t really speed up in the coming months, there is a good chance Romney will be our next president. And what really depresses me is that Romney has worse, not better plans, to help the economy.
I understand that the economy hasn't gotten better under President Obama, and he deserves his fair share of the blame. He has been silent on monetary policy and extremely meek on fiscal policy. He must know that more fiscal stimulus will help, but he assumes it is unpopular and unlikely to pass and so he won't call for it. So the voters don't know why the economy isn't getting better.
So the voters will punish the current president - somewhat fairly - but in return get a president who's ideas to help the economy are much worse. Our only hope is that Romney - and other Republicans are more Keynesian than they let on.
There is some evidence of this. Romney said he doesn't want to cut the budget too much too soon and put us back into a recession. And it seems like other Republicans want to prevent stimulus to prevent Obama's re-election. Disgusting as this all is, there is hope that when in power, Republicans might actually do the right thing (as they have in the past). So that is our best case scenario right now. Pretty unfortunate, no?
If things don’t really speed up in the coming months, there is a good chance Romney will be our next president. And what really depresses me is that Romney has worse, not better plans, to help the economy.
I understand that the economy hasn't gotten better under President Obama, and he deserves his fair share of the blame. He has been silent on monetary policy and extremely meek on fiscal policy. He must know that more fiscal stimulus will help, but he assumes it is unpopular and unlikely to pass and so he won't call for it. So the voters don't know why the economy isn't getting better.
So the voters will punish the current president - somewhat fairly - but in return get a president who's ideas to help the economy are much worse. Our only hope is that Romney - and other Republicans are more Keynesian than they let on.
There is some evidence of this. Romney said he doesn't want to cut the budget too much too soon and put us back into a recession. And it seems like other Republicans want to prevent stimulus to prevent Obama's re-election. Disgusting as this all is, there is hope that when in power, Republicans might actually do the right thing (as they have in the past). So that is our best case scenario right now. Pretty unfortunate, no?
Monday, May 28, 2012
Taxes and Fairness
I heard someone say recently that it isn't fair to tax money twice. This person is of course referring to taxes on dividends and investments. The theory is that the income from the company is already taxed, and that income is then used to pay dividends to investors. So the investors should not then be taxed.
I feel like there is some nuance as to when the income is actually being taxed twice - in other words only when it is dividends and not when the stock value appreciates and the stock is sold, but I need to think that through some more. But that isn't even the real point. The real issue is over how we understand fairness.
Now, on one level, I could just say that we have different understandings of this very subjective term "fair" and leave it at that. But you know I can't really do that. So let's look at what is fair or unfair about taxing investments.
First of all, who would this tax be unfair to? Who gets hurt by being taxed twice? The money is being taxed twice, but money is inanimate, so it can't feel oppressed or burdened. So it must be unfair to the investor. The person who is investing is typically wealthy, so why is it unfair to tax their money? Is it more fair to tax what someone earns through work than what someone earns without doing work but by giving someone money? I would think it the other way around. I would rather tax the investor than the worker - the teacher, the police officer, the farm worker, the construction worker, the miner, etc. Or I would rather tax them both and at the same progressive rates.
In fact, let's compare apples to apples. Say there is someone who goes to work everyday as a Wall Street trader and makes $5 million a year in salary and bonuses. And there is someone else who has a trust fund or made a ton of money they earned previously and makes $5 million a year from investments. Why should the investor who stays home everyday while his money is working pay less taxes? I can't think of a good reason.
But does the person really think it is unfair to the investor? Maybe what they really mean is that it provides a negative incentive to the investor. I am sure there are some more detailed analysis by economists on how a higher tax rate - or a tax at all - on investments will affect the level of investment. But let's look at one simple example instead.
Imagine someone with net worth of $250 million. Let's say his name is Bitt Nomrey. Now, would he refuse to invest that money just because there were taxes on the income? A 15% tax rate didn't stop Mitt Romney from investing. Would a 30% tax rate stop him?
Sure if the taxes were 90% he might not invest. But if the taxes were the same as our current income tax rate, he would definitely invest the money. He makes income, pays some taxes, but still retains the overwhelming amount of what he earned from the investments.
So I ask again, who is this unfair to? Or how does it affect investor choices?
I feel like there is some nuance as to when the income is actually being taxed twice - in other words only when it is dividends and not when the stock value appreciates and the stock is sold, but I need to think that through some more. But that isn't even the real point. The real issue is over how we understand fairness.
Now, on one level, I could just say that we have different understandings of this very subjective term "fair" and leave it at that. But you know I can't really do that. So let's look at what is fair or unfair about taxing investments.
First of all, who would this tax be unfair to? Who gets hurt by being taxed twice? The money is being taxed twice, but money is inanimate, so it can't feel oppressed or burdened. So it must be unfair to the investor. The person who is investing is typically wealthy, so why is it unfair to tax their money? Is it more fair to tax what someone earns through work than what someone earns without doing work but by giving someone money? I would think it the other way around. I would rather tax the investor than the worker - the teacher, the police officer, the farm worker, the construction worker, the miner, etc. Or I would rather tax them both and at the same progressive rates.
In fact, let's compare apples to apples. Say there is someone who goes to work everyday as a Wall Street trader and makes $5 million a year in salary and bonuses. And there is someone else who has a trust fund or made a ton of money they earned previously and makes $5 million a year from investments. Why should the investor who stays home everyday while his money is working pay less taxes? I can't think of a good reason.
But does the person really think it is unfair to the investor? Maybe what they really mean is that it provides a negative incentive to the investor. I am sure there are some more detailed analysis by economists on how a higher tax rate - or a tax at all - on investments will affect the level of investment. But let's look at one simple example instead.
Imagine someone with net worth of $250 million. Let's say his name is Bitt Nomrey. Now, would he refuse to invest that money just because there were taxes on the income? A 15% tax rate didn't stop Mitt Romney from investing. Would a 30% tax rate stop him?
Sure if the taxes were 90% he might not invest. But if the taxes were the same as our current income tax rate, he would definitely invest the money. He makes income, pays some taxes, but still retains the overwhelming amount of what he earned from the investments.
So I ask again, who is this unfair to? Or how does it affect investor choices?
Foreign Policy Platform
I feel that coming of age during eight years of a George W. Bush presidency and four years of an Obama presidency (and having learned a bunch about Bill Clinton's eight years), has provided some great tests on foreign policy ideas. And from those tests, I think we should have learned much better what we should and should not do in the foreign policy arena. Below is my foreign policy platform based on what we have learned in the last decade or two (though really going back as far as Korea and Vietnam as well).
To summarize, I think we should take a long view of history. Making dramatic changes in the short term is extremely costly and difficult. Instead, we should do what we can to alleviate suffering, prevent massive human rights abuses, and support oppositions to oppressive governments while realizing the new government may not be perfect. And when change isn't as fast as we want, we should not lose heart and give up on future chances for change. We should always try to understand the feelings on the ground. And when something requires too much resources, we should seek containment.
So let's look at some examples. First, human rights abuses. I think we should have been involved in Rwanda, Bosnia and Kosovo, South Sudan, Darfur, Libya, and now Syria. In each case, human rights abuses were happening or likely to happen.
Of course, how much help we can and should give is an issue. I agree with Samantha Power (as you probably know if you have read this blog before) that we could have done far more in Rwanda. It may or may not have required boots on the ground, though I think we could have done that with a small amount of international troops. Syria though may be a little more difficult. I feel like we are doing too little right now. Though since I am not immersed in the details, I should say that maybe real change would require too much support and focusing on the long term and not over-committing in the short term is justified.
In Tunisia, Egypt, and Libya, we supported real movements that were seeking change. But we are not committed to creating real democracy right now so we don't have to provide a lot of resources.
Compare that to Iraq where we invaded - originally because of WMD but changing the rationale to creating democracy and overthrowing a tyrant. And because we invaded, we were responsible for creating a very positive outcome. The resources required to even get to something close to that were enormous: 5,000 American soldiers died, many more injured, and billions in deficit spending.
Some of these (Tunisia, Egypt, Libya) might not become democracies right away. In fact, in Egypt, the choices are sad - a former Mubarak supporter or a more radical Islamist / Muslim Brotherhood member. If Egypt goes backwards, we shouldn't lose heart. This rebellion was a step forward and should be creating conditions for Egypt to eventually - today or further down the road - establish lasting democracy and rule of law. Same goes for Libya.
In places like North Korea and Iran, I think we should focus on containment. There is little threat of immediate action from either of those governments and the possibility of a very costly conflict once one starts - Korea even more so than Iran. And yet there are folks in the Romney team - notably the crazy John Bolton - that desperately want war in Iran and probably North Korea as well.
Instead, if we focus on the long term, on preventing them from attacking other countries and focusing on making their regimes difficult and create conditions for democracy down the road, we can avoid large short term costs and pave the way for big long term benefits.
I know this sounds kind of vague. But let's look at the Soviet Union. In many cases, we focused on preventing the spread of communism as much as we could. In some cases, we tried too hard (Vietnam). In some cases, we did a lot then walked away (Afghanistan). and in some cases we did the absolute wrong thing (Iran, Chile, Cuba, etc) by supporting capitalist murderous dictators over more democratic but leftist oppositions. But over the long term, the Soviet Union eventually collapsed. And we should have faith, while proactively creating the conditions, for the same things to happen in North Korea and Iran (or at least for Iran to be more democratic and more focused on the rule of law).
This platform contrasts with a few things. First, it contrasts with the opposition against Obama's efforts (supporting European leadership) in Libya and delayed support in Egypt, which suggested that we shouldn't have done anything because it might not turn out to be democratic (or more might not be as open to US influence). I reject both of these. The two candidates in Egypt might not be perfect, but having choices is better than having no choices and no liberty. Or at least it should be to a country that claims to be a model for the world.
It also contrasts with those that think genocide and mass murder in other countries are not our concern. Every time we say "never again", and every time we let it happen anew. And we let it happen because we let those who say it isn't our business align with those who want to pretend it isn't happening because they are too weak to do something.
Finally, it contrasts with major conflicts like the ones we saw in Vietnam and Iraq (and maybe even Afghanistan and Korea). The costs were far too high and the benefits too small. We should avoid these conflicts as much as possible. And yet, I fear we might not be able to. It is much easier to convince the public that there is a threat and that war is necessary. And with a Republican administration - especially one that can't decide whether it likes warmongers like Bolton or more moderates like Colin Powell - possible in 2012, we might be headed to more big conflicts. If so, that will be very sad indeed, and many young Americans will pay the price. And the benefits will be small indeed.
To summarize, I think we should take a long view of history. Making dramatic changes in the short term is extremely costly and difficult. Instead, we should do what we can to alleviate suffering, prevent massive human rights abuses, and support oppositions to oppressive governments while realizing the new government may not be perfect. And when change isn't as fast as we want, we should not lose heart and give up on future chances for change. We should always try to understand the feelings on the ground. And when something requires too much resources, we should seek containment.
So let's look at some examples. First, human rights abuses. I think we should have been involved in Rwanda, Bosnia and Kosovo, South Sudan, Darfur, Libya, and now Syria. In each case, human rights abuses were happening or likely to happen.
Of course, how much help we can and should give is an issue. I agree with Samantha Power (as you probably know if you have read this blog before) that we could have done far more in Rwanda. It may or may not have required boots on the ground, though I think we could have done that with a small amount of international troops. Syria though may be a little more difficult. I feel like we are doing too little right now. Though since I am not immersed in the details, I should say that maybe real change would require too much support and focusing on the long term and not over-committing in the short term is justified.
In Tunisia, Egypt, and Libya, we supported real movements that were seeking change. But we are not committed to creating real democracy right now so we don't have to provide a lot of resources.
Compare that to Iraq where we invaded - originally because of WMD but changing the rationale to creating democracy and overthrowing a tyrant. And because we invaded, we were responsible for creating a very positive outcome. The resources required to even get to something close to that were enormous: 5,000 American soldiers died, many more injured, and billions in deficit spending.
Some of these (Tunisia, Egypt, Libya) might not become democracies right away. In fact, in Egypt, the choices are sad - a former Mubarak supporter or a more radical Islamist / Muslim Brotherhood member. If Egypt goes backwards, we shouldn't lose heart. This rebellion was a step forward and should be creating conditions for Egypt to eventually - today or further down the road - establish lasting democracy and rule of law. Same goes for Libya.
In places like North Korea and Iran, I think we should focus on containment. There is little threat of immediate action from either of those governments and the possibility of a very costly conflict once one starts - Korea even more so than Iran. And yet there are folks in the Romney team - notably the crazy John Bolton - that desperately want war in Iran and probably North Korea as well.
Instead, if we focus on the long term, on preventing them from attacking other countries and focusing on making their regimes difficult and create conditions for democracy down the road, we can avoid large short term costs and pave the way for big long term benefits.
I know this sounds kind of vague. But let's look at the Soviet Union. In many cases, we focused on preventing the spread of communism as much as we could. In some cases, we tried too hard (Vietnam). In some cases, we did a lot then walked away (Afghanistan). and in some cases we did the absolute wrong thing (Iran, Chile, Cuba, etc) by supporting capitalist murderous dictators over more democratic but leftist oppositions. But over the long term, the Soviet Union eventually collapsed. And we should have faith, while proactively creating the conditions, for the same things to happen in North Korea and Iran (or at least for Iran to be more democratic and more focused on the rule of law).
This platform contrasts with a few things. First, it contrasts with the opposition against Obama's efforts (supporting European leadership) in Libya and delayed support in Egypt, which suggested that we shouldn't have done anything because it might not turn out to be democratic (or more might not be as open to US influence). I reject both of these. The two candidates in Egypt might not be perfect, but having choices is better than having no choices and no liberty. Or at least it should be to a country that claims to be a model for the world.
It also contrasts with those that think genocide and mass murder in other countries are not our concern. Every time we say "never again", and every time we let it happen anew. And we let it happen because we let those who say it isn't our business align with those who want to pretend it isn't happening because they are too weak to do something.
Finally, it contrasts with major conflicts like the ones we saw in Vietnam and Iraq (and maybe even Afghanistan and Korea). The costs were far too high and the benefits too small. We should avoid these conflicts as much as possible. And yet, I fear we might not be able to. It is much easier to convince the public that there is a threat and that war is necessary. And with a Republican administration - especially one that can't decide whether it likes warmongers like Bolton or more moderates like Colin Powell - possible in 2012, we might be headed to more big conflicts. If so, that will be very sad indeed, and many young Americans will pay the price. And the benefits will be small indeed.
Romney Will Gut, Not Streamline Government
David Brooks had the most ridiculous column last week. In the column, he claimed it was people like Romney - private equity folks - that took an inefficient American business system and turned companies around and made them and the system more streamlined. Brooks then claims Romney plans to do the same thing with the federal government.
Paul Krugman takes Brooks to task on his point about private equity making America more efficient. I don't know who is right about the history, but I don't think that is the main point.
Even if we can accept that Romeny and the rest of private equity vastly improved efficiency in American business, it is clear that this isn't Romney's goal with government.
Actually, I don't know what Romney's real goal is, other than to be president for the sake of being president. But anyway, if we look at his policy and budget proposals and his support for Paul Ryan's budget, it is clear he doesn't want to streamline government. Mitt Romney wants to gut government. Read this post by the Center on Budget and Policy Priorities, or almost any recent post by Ezra Klien on the Ryan / Romney budget. The cuts necessary to meet all of his goals are draconian.
But the worst part about Brooks' column is that he attributes something to Romney that I have never heard Romney say. In other words, Brooks is trying to soften Romeny's plans in a way that Romeny isn't trying. Romney has never said his cuts will streamline and improve service provision. Instead, Romney makes it clear he wants a smaller government that does a lot less - less for veterans; less for low income seniors, families and children; and less for public education and investment.
What makes this particularly disappointing is that Brooks had in the past criticized Republican's budget plans that are hurting our future by disinvesting in our youth while investing too much in our seniors. I think we should be doing both (taking care of seniors and investing in our future), but the point is that there was a time that Brooks understood how bad at least part of the Republicans plans were. For some reason, Brooks is no longer talking about that and worse, is pretending that somehow these draconian cuts will actually make things better. So disappointing.
Paul Krugman takes Brooks to task on his point about private equity making America more efficient. I don't know who is right about the history, but I don't think that is the main point.
Even if we can accept that Romeny and the rest of private equity vastly improved efficiency in American business, it is clear that this isn't Romney's goal with government.
Actually, I don't know what Romney's real goal is, other than to be president for the sake of being president. But anyway, if we look at his policy and budget proposals and his support for Paul Ryan's budget, it is clear he doesn't want to streamline government. Mitt Romney wants to gut government. Read this post by the Center on Budget and Policy Priorities, or almost any recent post by Ezra Klien on the Ryan / Romney budget. The cuts necessary to meet all of his goals are draconian.
But the worst part about Brooks' column is that he attributes something to Romney that I have never heard Romney say. In other words, Brooks is trying to soften Romeny's plans in a way that Romeny isn't trying. Romney has never said his cuts will streamline and improve service provision. Instead, Romney makes it clear he wants a smaller government that does a lot less - less for veterans; less for low income seniors, families and children; and less for public education and investment.
What makes this particularly disappointing is that Brooks had in the past criticized Republican's budget plans that are hurting our future by disinvesting in our youth while investing too much in our seniors. I think we should be doing both (taking care of seniors and investing in our future), but the point is that there was a time that Brooks understood how bad at least part of the Republicans plans were. For some reason, Brooks is no longer talking about that and worse, is pretending that somehow these draconian cuts will actually make things better. So disappointing.
The Socialist
Since Obama became president, conservatives started calling him a socialist. It is so absurd it almost doesn't deserve a response. And yet it persists. And worse, I have seen people I know actually make this claim (mostly through Facebook). So I have to respond.
Here's the thing. I am far more liberal than Barack Obama. And I am definitely not a socialist. So by the laws of logic, Obama cannot be a socialist. I hope that clears things up.
Here's the thing. I am far more liberal than Barack Obama. And I am definitely not a socialist. So by the laws of logic, Obama cannot be a socialist. I hope that clears things up.
Gotcha!
There is no such thing as a "gotcha question". I know everyone knows this. But I can't help writing about it. So far, I have only heard Republicans use this phrase. Hopefully Democrats know better.
When Republicans claim this, it is either in situations where they don't know the answer and are embarrassed that they don't know the answer, or it is questions they don't want to answer. Sarah Palin often used the phrase for the former reason. Many Republicans use it for the latter reason when they want to hold a position that the base likes but the general population wouldn't like. Or if they have changed their position on something and don't want to talk about it.
The bottom line is that Republicans use this to try to avoid answering questions - to avoid transparency on what they know and / or what they believe.
Having said all of that, I can think of only one small exception. When the press asks if someone is interested in being vice president or in running for president / higher office in distant elections. This is such an uninteresting question that at best provides information that is not that useful and at worst almost no likelihood that the person answering is being completely honest.
In fact, I think that is why the press likes the question so much. They like making politicians squirm, but only on meaningless issues that don't really inform voters. Which is why they will spend so much time asking every Republican under the sun if they want to be VP but won't ask them how they will speed up the recovery and which economists support them.
When Republicans claim this, it is either in situations where they don't know the answer and are embarrassed that they don't know the answer, or it is questions they don't want to answer. Sarah Palin often used the phrase for the former reason. Many Republicans use it for the latter reason when they want to hold a position that the base likes but the general population wouldn't like. Or if they have changed their position on something and don't want to talk about it.
The bottom line is that Republicans use this to try to avoid answering questions - to avoid transparency on what they know and / or what they believe.
Having said all of that, I can think of only one small exception. When the press asks if someone is interested in being vice president or in running for president / higher office in distant elections. This is such an uninteresting question that at best provides information that is not that useful and at worst almost no likelihood that the person answering is being completely honest.
In fact, I think that is why the press likes the question so much. They like making politicians squirm, but only on meaningless issues that don't really inform voters. Which is why they will spend so much time asking every Republican under the sun if they want to be VP but won't ask them how they will speed up the recovery and which economists support them.
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