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Archive for April, 2010

Should Obama Back The AZ Law?

April 27, 2010 5 comments

The modern “conservative” movement and the Republican Party seem to oppose anything Obama supports. Any increase in government power is treated as further evidence we’re becoming the new Soviet Union. Any chance Obama coming out in favor of Arizona’s new immigration law, which The Economist calls “Hysterical Nativism”, would get the Right to repeal this illiberal state-power swelling abomination?  For anyone unfamiliar the new law compels AZ state authorities to check the immigration status of anyone the police “reasonably suspect” of being in the US illegally. The problem of course is that it basically creates a police state where you’re guilty until proven innocent.  Here’s is Andrew Sullivan countering some dissents from his strong criticism and language.

A police state is one where any cop can pull you aside for any reason and demand papers. If you don’t have them, you’re guilty till proven innocent. The overwhelming majority of those “reasonably suspected” of being illegal immigrants will be Mexican. What we have here, regardless of how it came about (and I agree the Feds have a terrible record in policing the Southern border), this is a police state directed at a minority, innocent and guilty. That’s the reality.

Steve Chapman at Reason.com reminds the nativists the results of their past efforts.

Turning the border into a 2,000-mile replica of the Berlin Wall may sound like a simple cure for the problem. But besides being hugely expensive, it would have effects the advocates would not relish.

How so? Massey says the number of people coming illegally has not risen appreciably in the last couple of decades. But the number staying has climbed, because anyone who leaves faces a harder task returning.

I’m for increasing access to legal immigration, but anti-illegal-immigration crusaders should realize fencing illegal aliens in and pushing them further in the shadows of the law makes any problems worse. 

85% Will Be Smarter After Reading This… If My Calculations Are Right.

April 27, 2010 Leave a comment

I spotlighted Steven Strogatz’s New York Times column before and those that took my advice to follow him are being rewarded lesson after lesson. In his most recent installment, he introduces one of my favorite mathematical topics: probability. The counterintuitiveness adds to its intrigue and to the necessity of focusing on it in our schools. The other week a few friends and I spent most of our work day trying unsuccessfully to figure out what percentage chance the Bruins had of landing the 1st or 2nd overall pick in the draft. Eventually I just had my mother contact her colleague: an advanced statistics teacher. Thanks for the help! He and Strogatz, as with all good educators, make the opaque clearer. Ok readers, here is the first problem:

The probability that one of these women has breast cancer is 0.8 percent.  If a woman has breast cancer, the probability is 90 percent that she will have a positive mammogram.  If a woman does nothave breast cancer, the probability is 7 percent that she will still have a positive mammogram.  Imagine a woman who has a positive mammogram.  What is the probability that she actually has breast cancer?

Let me guess. You’re probably like me and have no idea. Well you’re with at least 95 out of 100 of American doctors. Strogatz now reframes the problem in terms of “natural frequencies” instead of percentages. (Have your answers before continuing)




Eight out of every 1,000 women have breast cancer.  Of these 8 women with breast cancer, 7 will have a positive mammogram.  Of the remaining 992 women who don’t have breast cancer, some 70 will still have a positive mammogram.  Imagine a sample of women who have positive mammograms in screening.  How many of these women actually have breast cancer?

Since a total of 7 + 70 = 77 women have positive mammograms, and only 7 of them truly have breast cancer, the probability of having breast cancer given a positive mammogram is 7 out of 77, which is 1 in 11, or about 9 percent.

It is well worth reading his whole post – the importance of this topic seems to be in inverse proportion to the coverage it receives. I hope to correct that. For my law loving readers, he shares some fresh probabilistic thinking on the OJ trial. Also, just enjoy this line from Strogatz – it makes me think of this blog in many ways. 

So we sacrificed a little precision for a lot of clarity.

Don’t Piss Off South Park Fans

April 23, 2010 Leave a comment
I usually don’t like hackers, but, well…
Image from RevolutionMuslim.com
(the site that threatened Matt and Trey)
(h/t Dan Savage)

Hope for Sarah Palin?

April 23, 2010 Leave a comment

Science Daily reports:

Scientists at The University of Nottingham have discovered the gene that enables an extraordinary worm to regenerate its own body parts after amputation — including a whole head and brain.

(h/t RichardDawkins.net) 

Categories: Science Tags:

VAT Watch, ctd: Responses to Critics

April 23, 2010 3 comments

I’m all set to attack George Will’s particularly bad column on the VAT and I get beat to it by more able writers.  Will disparages the idea of a VAT because he thinks adding it on top of the income tax makes our bad tax system worse. I agree with his central premise that having a VAT just replace the income tax would be best but the rest of his argument doesn’t hold up. 


Before I get to my main critique, here’s Bartlett teaching Will a lesson on the 16th Amendment:

The 16th Amendment issue should be seen for what it is: a red herring. If people don’t think we should have both an income tax and a broad-based consumption tax at the national level, fine. That’s a good debate to have and I for one don’t oppose abolishing the income tax and replacing it with a VAT. But the idea that we must repeal the 16th Amendment as a precondition for consideration of a VAT in order to prevent the possibility of having both an income tax and a VAT is not a serious proposal. It’s just a trick to put up an insurmountable barrier to adoption of a VAT without addressing the questions of how we will stabilize the national debt without higher revenues or why a VAT is a better way to raise those revenues than higher income tax rates, which is the default option in the absence of a VAT.

The 16th Amendment just clarified that Congress could tax income with direct and indirect taxes.  It’s a pretty complicated issue because the Founding Fathers never made it entirely clear what separated direct and indirect taxes. What’s important is that Congress can enact an income tax with or without the 16th Amendment.  
Bartlett in Forbes and Clive Crook in National Journal counter the odd argument that we shouldn’t enact a VAT because it works well.
Bartlett:

In my opinion, opposing a VAT means implicitly supporting our current tax system, which imposes a dead-weight cost equal to a third or more of revenue raised–at least 5% of GDP–according to various studies. This is insane. The idea that raising taxes in the most economically painful way possible will hold down the level of taxation and the size of government is obviously false. It just means that the total burden of taxation including the dead-weight cost is vastly higher than it needs to be. If we raised the same revenue more sensibly we could, in effect, give ourselves a tax cut by reducing the dead-weight cost. 

Those who oppose big government would do better to concentrate their efforts on actually cutting spending. The idea that holding down taxes or insisting that we keep a ridiculously inefficient tax system because that will give us small government is juvenile. If people want small government, there are no shortcuts. Spending has to be cut. But if spending isn’t cut, then I believe that we must pay our bills. I think it’s better to do so as painlessly and efficiently as possible. That’s why I support a VAT.

Crook:

But opponents of a VAT are surely under an even stronger obligation to say what spending they would cut, unless they are saying that a deficit of 6 percent of GDP is no problem. Let’s hear from them. Show us how to cut 6 percent of GDP from federal spending — approximately a quarter of the current total — without popular outrage and real economic distress. Show us how to do it without gutting Social Security and Medicare, or seriously compromising national security. And tell us how to make it politically feasible.

[…]

If blocking the growth of the state is your overriding priority, you might oppose a VAT precisely because, as taxes go, it is a good one. By the same logic, of course, you should strive to make the income tax even worse. The rule would be, collect revenue in the most damaging ways possible. That will raise the price of Big Government and tie the liberals’ hands. 

I’ll also continue to stress that despite Will’s claim that “adoption of a VAT would proclaim the impossibility of serious spending reductions” there is little evidence that not raising sufficient revenue by starving the beast stifles the growth of government.  We don’t have a VAT now and it hasn’t seemed to dampen anyone’s enthusiasm for adding new programs.  Maybe, as Crook points out, widening the tax base with a VAT would make more people understand that they actually have to pay for more government. I’d support that, but I’m skeptical of it having that effect. 

I’m also disappointed George Will (who I normally enjoy) has to disparage the motives of the Obama administration.  

Believing that a crisis is a useful thing to create, the Obama administration — which understands that, for liberalism, worse is better — has deliberately aggravated the fiscal shambles that the Great Recession accelerated. During the downturn, federal revenues plunged and spending soared. And, as will happen for two decades, every day 10,000 more baby boomers are joining the ranks of recipients of Medicare and Social Security, two programs with unfunded liabilities of nearly $107 trillion.

Really? There are plenty of respectable arguments for taking strongly different approaches to deal with the recession that wouldn’t have increased spending nearly as much (Mankiw and Ed Glaeser come to mind) but the idea that there aren’t mainstream economic arguments for taking exactly the approach Obama and his economic team took to save the economy (not destroy it) is ridiculous.  Maybe Obama actually wanted to improve the healthcare system to improve people’s lives – I don’t see much reason to believe he only wanted to put the country on a path to bankruptcy in order to raise taxes.  Will, no serious person wants to raise taxes or thinks they are a good thing in and of themselves.  Responsible governors just understand that we have to pay for the government we have not the government we wish we had.   

On a related issue, I want to direct readers attentions to Andreas Kluth’s tax day pitch for the FairTax. Maybe unknowingly he responded to my asking for ideas for a simpler tax: 

If someone has a better idea for a more efficient and simpler tax I’d be happy to support that. 

I remember reading about the FairTax years ago when Neal Boortz’s book came out and liked it then. Kluth makes the case in a way that only Kluth could.  Who else could advocate tax reform with allusions to Croesus and Diogenes!? I don’t want to excerpt any of it because the whole post is really worth reading. A familiar theme on Hannibal Blog is the value of simplicity and here the FairTax, as Kluth stresses, excels. I’d be happy to support a VAT or the FairTax. My main concern is that the VAT has a better political chance of becoming law. It’s been introduced before and at most received only 76 congressional votes. 


Mostly likely, a VAT could be enacted while dialing down the income taxes as necessary. For healthcare reform a new system developed from scratch such as voucher system like Zeke Emmanuel’s or a complete HSA system coupled with a national catastrophic fund would be vast improvements over any reform that keeps our current base model in place.  But that seems to be politically impossible. The lesson from healthcare is that the same is probably true (although I’d love to try) for tax reform. In America, even comprehensive reform has to be incremental. Get a VAT in there and then squeeze out the clutter.  Anyone think that Obama could sell the FairTax to enough on the left and right to pass it while throwing out the rest of the tax code (with all its political giveaways)?  Worth floating, at least.  

New Meaning to the Term Fat Head?

April 23, 2010 Leave a comment

Olivia Judson gives us another good reason (are more needed?) to work out and eat right.

Brains usually atrophy with age, but being obese appears to accelerate the process. This is bad news: pronounced brain atrophy is a feature of dementia.

"Even The Fiercest Free Marketeer Should Accept This"

April 23, 2010 Leave a comment

Martin Wolf argues for the need to regulate our financial institutions and prepare for future problems.  

Does today’s engorged financial system produce gains that justify these costs? In a recent speech, Adair Turner, chairman of the UK’s Financial Services Authority, argues it does not.* Financial systems are important servants of the economy, but poor masters. A large part of the activity of the financial sector seems to be a machine to transfer income and wealth from outsiders to insiders, while increasing the fragility of the economy as a whole. Given the extent of the government-induced distortions in the system, even the fiercest free marketeer should accept this. It is hard to see any substantial benefit from the massive leveraging up of the economy and, above all, the real estate sector, that we saw recently. This just created illusory gains on the way up and real pain on the way down.

Just as Keynes saw the need for government intervention into the economy to save capitalism rather than replace it, we need to reform our financial system so any failure by a bank doesn’t lead to a disruption of the entire economy.  Capitalism depends on creative destruction – we need a system that can deal with 2nd half so we can have the 1st.    

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