Minor Thoughts from me to you

Austin Frakt, at The Incidental Economist, leads his readers through an exercise demonstrating that total employee compensation is a mix of salary and healthcare benefits. He demonstrates that if healthcare costs went away, employers would have to offer a higher salary.

Of course, the reverse is also true: if health insurance gets more expensive, employers will offer a lower salary (or just postpone raises indefinitely). Salary stagnation, then, is an artifact of increasing health insurance costs, not a sign of a poor economy.

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The Tax Foundation just posted a ton of super-informative, myth-dispelling charts on the U.S. tax system. Here are a few that popped out at me, but there are plenty more at the Tax Foundation website.

1. The U.S. income tax code is very progressive.
2. And it is more progressive than what it used to be.
3. Even with tax breaks, the system is progressive.
4. The rich pay twice as high a tax rate.
5. Want to tax millionaires and and billionaires? Better be quick about it.
6. Income inequality? This explains some of it.
7. Also, the aging of America skews income distribution.
8. Education also plays a huge role in income inequality.
9. Oh, by the way, tax hikes on the rich are also tax hikes on business.
10. Taxing the rich won’t solve the debt problem.

Those charts are very interesting.

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Personalized medicine is the future. It is where the science is going. It is where the technology is going. It is where doctors and patients will want to go.  Yet unfortunately for many of us, this is not where the Obama administration wants to go.

John Goodman gives several examples of how personalized medicine has saved lives and improved health. This truly is exciting, cutting edge stuff. But it's not where the government wants to steer the healthcare industry.

ObamaCare's premise rests on the idea that everyone can be given the exact same treatments and medicine can be standardized in order to cut costs. So, it has no provisions for personalized medicine.

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So when does a human being have a right to life?

Shall we say size matters? Is the unborn child too small to deserve our protection? Are big people more valuable than little people? Are men more human than woman? Do offensive linemen have more rights than jockeys? Is the life in the womb of no account because you can't hold him in our arms, or put him in your hands, or only see her on a screen?

Shall we make intellectual development and mental capacity the measure of our worth? Are three year-old children less valuable than thirteen year-olds? Is the unborn child less than fully human because he cannot speak or count or be self-aware? Does the cooing infant in the crib have to smile or shake your hand or recite the alphabet before she deserves another day? If an expression of basic mental acuity is necessary to be a full-fledged member of the human community, what shall we do with the comatose, the very old, or the fifty year-old mom with Alzheimer's? And what about all of us who sleep?

Kevin DeYoung asks a lot of good questions.

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Like a pot of bratwurst left unattended at a Lambeau Field pregame party, simmering tensions in the strife-torn Midwest boiled over once again today as rioting mobs of green-and-gold clad youth and plump farm wives rampaged through Wisconsin Denny’s and IHOPs, burning Texas toast and demanding apologies and extra half-and-half.

The spark igniting the latest tailgate hibachi of unrest: a Texas newsletter's publication of caricatures of legendary Green Bay Packers coach Vince Lombardi.

Protestors demonstrated against the images throughout the Badger State yesterday, with violent egging and cow-tipping incidents reported in Oconomowac, Pewaukee, Sheboygan, Ozaukee, Antigo, Oshkosh, Waubeno, Wauwautosa, Waunewoc, Wyocena, Waubeka, and Washawonamowackapeepee.

Fantastic. Another great piece from Iowahawk.

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This is an interesting study, from the Tax Foundation.

The record growth in the percentage of Americans who pay no federal income taxes because of the generosity of the credits and deductions in the tax code has received much attention recently.

We find that the growth of nonpayers is strongly associated with increases in transfer payments and the national debt. Indeed, the twenty-year growth in nonpayers is associated with more than $213 billion in increased transfer spending and a 14 percentage point increase in the debt-to-GDP ratio in 2010 alone. These findings imply that when voters perceive the cost of government to be cheaper than it really is, they demand ever more government benefits because they either don’t feel the cost directly or believe that others will be paying those costs.

Our results indicate that the dire fiscal straits we are now in, and which much of Europe is struggling with as well, can only be responsibly addressed through a more balanced tax burden. In particular, so long as income taxes fund the largest part of government spending, exempting half the population from income taxes is not a sustainable fiscal model. Debt accumulation and eventual default await those democracies that fail to connect a majority of voters to the cost of government spending.

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The invaluable Eric Lipton over at the New York Times has another excellent article pointing out to the many ways that well-connected companies benefit from government favors. This time, he looks at the case of an Illinois-based energy producer, Exelon Corporation.

The company’s ties with senior officials in the Obama administration are important and extensive: Board member John W. Rogers is a friend of the president, Obama adviser David Axelrod worked at Exelon as a consultant, and Rahm Emanuel helped create the company. Exelon executives and administration officials held a large number of meetings at the White House, and ultimately, the executive branch enacted a number of policies and regulations that favored the company at the expense of its competitors.

Veronique de Rugy points provides extra background and details how the Obama administration is using the power of government to reward big businesses.

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But the education system is not powerless in the face of high unemployment—as long as employers are partners. What’s clear is that there are a few, relatively small sectors of the economy in which there are real shortages of trained workers. Some of those sectors require an advanced degree or very high-level skills, such as in engineering or computer programming. But not all of them do. One of these sectors is mid-skill manufacturing. There is a shortage of machinists who can operate the new, computer-programmed, robotic assembly lines that build cars, turbines, generators, steel and iron plumbing products, armaments, and shipping and packing equipment. There may be as many as 600,000 unfilled manufacturing jobs of this type, but compared with their European counterparts, American companies have shown little willingness to invest in training workers to fill these positions.

At last a small group of employers are importing the Northern European apprenticeship model to the United States. These programs combine classroom learning, typically at community colleges, with paid worksite training, and guarantee successful graduates a job.

Very interesting.

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Legere said his daughter felt an expensive school was a given. Instead, he was pushing for her to attend a state school close by, the University of Buffalo, maybe, which cost only $17,000. Though he could afford the higher tuition, he gave her a choice: He’d pay the full cost of a state school, but if she attended the costlier college she’d have to take out loans.

Legere, a businessman, sat his daughter down and ran the numbers. He explained she would need to take out about $30,000 in loans a year. He estimated that paying a total of $120,000 in loans for 10 years at 4 percent interest would cost her $1,200 a month, or the first $9.00 an hour from her salary for 10 years.

"It's like buying a new car, driving it into a river at the end of the year, and having nothing to show for it," Legere recalls saying. "I told her it would be fiscally irresponsible of me to let her assume that debt." The day after that conversation, the young woman texted her mother: Please send a deposit to the University of Buffalo.

Contrast this bit of budgetary wisdom with President Obama's campaign pledge: "No family should have to set aside a college acceptance letter because they don't have the money". President Obama's campaign peddles the myth that a more expensive education is a better education. His desire doesn't reduce the cost of college. It just makes other people pay for it, on the theory that you're entitled to have anything you want.

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Mark Hemingway examines the accuracy and objectivity of the nation's "fact checkers". The checkers don't fare so well.

If these examples are laughably transparent attempts by the AP to weigh in with its own opinions against the opinions of the GOP candidates​—​thinly disguised as “fact checking”​—​they’re not unusual. And the rare occasions where fact checkers deign to deal with actual facts and figures inspire little more confidence.

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For decades the environmental movement has used NEPA, and its CEQA-like state equivalents, to block key energy development and infrastructure projects. Seeing Obama’s signature transportation initiative killed by this same tactic is some sweet poetic justice.

Ha ha.

Maybe the reason that America doesn't do anything great anymore is that we have too many regulations and too many ways to stop projects from getting started?

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Before Rep. Paul Ryan had a chance to sell his budget ideas to the American people, the Wisconsin Republican first had to persuade his own party.

The initial version of his "Roadmap for America's Future," in summer 2008, was treated as an afterthought by party leaders, and some were openly hostile. Fearful of political backlash, just eight Republicans signed up for his conservative wish list: rewrite the tax code, scrap employer-based health care, rework Medicare and Social Security.

Today, many of Mr. Ryan's ideas have become the de facto Republican Party platform.

The Wall Street Journal paints a nice profile of Paul Ryan's work, over the past 4 years, to sell his budget plan. There are those that argue that the plan doesn't go nearly far enough. I agree. I also think that his plan is on the bleeding edge of what's politically possible. It's impossible to pass an overnight overhaul of anything in American politics. But this is a good (and very ambitious) first step.

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Far from being gloomy, perhaps there’s a positive story here. A story that over the last forty years there has been significant movement by income category among American adults, as would be expected in a dynamic economy, with movement going in both directions. But on net, the changing income dynamics have been positive overall, with about 150 Americans moving up for every 100 Americans who moved down.

There seems to be a lot of effort expended to paint the last 40 years as a period of bleakness and despair. That's not really that true. For a lot of people, it has been a period of upward mobility.

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It is really unfortunate that President Bush’s 2003 tax cuts were not followed by serious spending cuts. I do believe that well-designed tax cuts have a very positive impact on the economy. However, no tax cuts can compensate for the damage caused by the dramatic increase in spending that we experienced during the Bush years (a 60 percent increase in spending above inflation over eight years, compared to Clinton’s 12.5 percent; two Keynesian stimuli in 2001 and 2008; bailouts; and more.)

And if spending is mainly responsible for our current deficit, it should play a large role in addressing the problem — there aren’t many other ways to go about it.

Truth. Veronique de Rugy also mentions that the Washington Post’s Glenn Kessler gave President Obama four Pinocchios for his claim that he was only responsible for 10% of the deficit. According to the data, President Obama was responsible for nearly 40% of the budget deficit. "It was President Bush's fault" is an excuse that's wearing very thin.

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The Wall Street Journal editorial board on Israel and Iran.

Note that word—"eliminated." When Iranians talk about Israel, this intention of a final solution keeps coming up. In October 2005, Mr. Ahmadinejad, quoting the Ayatollah Khomeini, said Israel "must be wiped off the map." Lest anyone miss the point, the Iranian President said in June 2008 that Israel "has reached the end of its function and will soon disappear off the geographical domain."

This pledge of erasing an entire state goes back to the earliest days of the Iranian revolution. "One of our major points is that Israel must be destroyed," Ayatollah Khomeini said in the 1980s.

Former Iranian President Akbar Rafsanjani—often described as a moderate in Western media accounts—had this to say in 2001: "If one day, the Islamic world is also equipped with weapons like those that Israel possesses now, then the imperialists' strategy will reach a standstill because the use of even one nuclear bomb inside Israel will destroy everything. However, it will only harm the Islamic world. It is not irrational to contemplate such an eventuality."

So for Iran it is "not irrational" to contemplate the deaths of millions of Muslims in exchange for the end of Israel because millions of other Muslims will survive, but the Jewish state will not.

The world's civilized nations typically denounce such statements, as the U.S. State Department denounced Mr. Ahamadinejad's on Monday. But denouncing them is not the same as taking them seriously. Sometimes the greatest challenge for a civilized society is comprehending that not everyone behaves in civilized or rational fashion, that barbarians can still appear at the gate.

The tragic lesson of history is that sometimes barbarians mean what they say. Sometimes regimes do want to eliminate entire nations or races, and they will do so if they have the means and opportunity and face a timorous or disbelieving world.

As much as I like Ron Paul's foreign policy positions, this worries me. A lot. Getting Iran wrong is deadly. If it is "just rhetoric", I feel like it would be appropriate for the rest of the world to send a strong signal that there's no such thing as "just words". Rhetoric matters and deadly rhetoric may need to be responded to with deadly force.

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CNN reported on the personal journal of slain American ambassador Christopher Stevens over objections from his family, a State Department spokesman said Saturday.

... In its online story, CNN said it found the journal on the "floor of the largely unsecured consulate compound where he was fatally wounded."

Uhm. Why was the Ambassador's diary still laying on the floor for CNN to find and pick up? Shouldn't the State Department or CIA or somebody from the government have been through that place before CNN got there? Is the State Department more upset that CNN broadcast the diary or that CNN broadcast the fact that the Ambassador was concerned about security threats—threats that the State Department did nothing to defend against?

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A group of Tea Party activists has spent the last several months getting public input (including an open website vote) on ways to cut the federal budget. They recently unveiled a draft version of their plan.

It's quite ambitious. The group spends the first 9 pages of the document laying out the history of the project and the principles it was organized by. Then they dive into the specifics of the budget proposal.

I like their methodology and I think it shows that the Tea Party is capable of generating serious proposals, that it's not a know-nothing, knee-jerk reactionary movement.

Now we are ready to spell out the specifics of our plan. Before we do, we want to highlight some of its big-picture benefits. Here’s how the Tea Party Budget dramatically changes Washington:

1. Balances the budget in 2015, and keeps it balanced. Almost all of the proposed reforms take place in the first year, 2012, rather than after a phase-in, because it’s legally impossible to bind future Congresses. The best way to ensure reforms never happen is to postpone them till “tomorrow.”
2. Reduces total federal outlays by about 15 percent in the first year. This may sound like a deep cut, until we recall that spending went up by 19 percent in 2009.
3. Shrinks the government by 30 percent, relative to current law. Outlays shrink from today’s 24 percent of GDP to a more affordable 16 percent of GDP.
4. Reduces gross debt from 99 percent of GDP to 75 percent of GDP.
5. Reduces the publicly held portion of the debt from 68 percent of GDP to 47 percent of GDP. Reducing the debt is extremely important, because it’s the key to ensuring lower future interest rates and more robust economic growth.

Warning: the link goes to a PDF file.

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This is why I worry about government spending levels. Wisconsin either needs to cut spending or raise taxes (or both) an average of $1522 more per household, per year. For the next 30 years.

Wisconsin voters know they are struggling. They sense that unchecked growth of local and state governments will grind them down even more. Government as usual was not an option.

But they need to know how bad things really are.

For example, without major reforms, the public pensions officially accounted at 100 percent funded actually need $1,563 more from the average household every year for 30 years just to pay benefits already promised, according to an updated study for the National Bureau of Economic Research by Robert Novy-Marx and Joshua Rauh.

Public retiree health-care funding is more than $2.3 billion short, according to the Pew “Widening Gap” study, and the state only paid 45 percent of the last payment due. Somebody is going to have to make up the difference.

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I like James Taranto, in the Wall Street Journal, on feminism, fertility, and choice.

"Family planning is good for families," she insists, ignoring the sharp rise in divorce and illegitimacy since 1960, when the Food and Drug Administration approved the pill for contraceptive use. In fairness, maybe she means to make a more modest claim--that for the subset of the population who have been able to form and sustain marriages despite the social dislocations of the past half-century, birth control has on balance been beneficial.

But in any case, why does it so bother Miller that the Romneys, Santorums and Pauls (and also the Palins, whom she mentions in another paragraph) made the choice to have large families? If she cared about choice, she would recognize it's none of her business. But contemporary feminism does not actually value choice, except as a means to an ideological end, which is the obliteration of differences between the sexes. The biggest such difference consists in the distinct and disparate demands that reproduction makes on women. Thus in order to equalize the sexes, it is necessary to discourage fertility. Implicit in contemporary feminism is a normative judgment that having children is bad.

He also takes on the argument that "birth control is cheaper than unwanted babies".

Yes, in the short term, contraception is cheaper than fertility. In the long term, however, a war on fertility is an act of cultural and economic suicide. Today's low fertility is tomorrow's shortage of productive citizens--of the taxpayers who would have to pay for the ever-expanding entitlement state.

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I like the way Jerry Pournelle puts this.

Sandra Fluke’s solution is to demand that taxpayers pay for her contraceptive pills and devices. She can’t afford to have sex because of the risk of pregnancy, and it is up to us to provide her with the wherewithal for contraception. She hasn’t spoken about protection from STD’s but I think it safe to assume she believes we ought to pay for her insurance for treatment of those when they fail. Of course there are contraception means that are also somewhat effective against STD’s, and they are considerably cheaper than the ones Sandra Fluke demands; but apparently the choice of what we pay for is not up to us. Sandra Fluke has a right to indulge in sex when and however she wants, and to the means of contraception that she wants, and it is up to the taxpayers to pay for it.

The real question here is simple: how do you acquire the obligation to pay for Sandra Fluke’s birth control devices and pills? But in the great flap over her virtue that question seems to have been lost.

We need to go back to it. Even if insuring Sandra Fluke’s health is an obligation that the rest of us must assume, when did contraception pills become health insurance? What illness are we preventing? Must we then insure her against being eaten by sharks when she insists on swimming in shark infested waters? Can her life insurance include provisions that she will not be covered if she goes hiking on the Iranian border? Must we pay for any activity that might result in death, dismemberment, pregnancy, etc.?

Leave alone the freedom of religion issue of requiring a Jesuit college to provide contraception. Where did the government get the right to require that we the people pay for anyone’s contraception? How did we acquire that obligation and can we not find some way to be shut of it?

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