Equalising incomes lowers total income – Laffer curve confirmed by Krugman

A really interesting point made by James Taranto at the WSJ. Paul Krugman has shown some pleasure in the tax increases that came with the New Year fiscal cliff agreement since it has promoted, in Krugman’s view at least, equality of incomes. Of this, James notes that raising taxes does not affect your income, or at least not in the first instance, only how much you keep for yourself.

If you make $2 million and the government taxes it at 50%, your income is the same as if you make $2 million and the government taxes it at 40%. That is to say that higher tax rates do not directly affect income, they only redistribute it.

Some people argue, however, that higher marginal rates indirectly affect income–that the more of each additional dollar of income the government takes, the less incentive a taxpayer has to make the dollar in the first place. Higher marginal tax rates make workers less inclined to work and investors warier about taking risks. Thus if you raise marginal rates at the top, the wealthiest taxpayers will start earning less, reducing income inequality (but also economic growth and government revenue).

These people, they really don’t care that they harm economic prospects in general since it’s envy and personal greed that tend to drive them.

Environmentalist hit by asteroid

This is quite extraordinary. It is a post about an environmentalist, Mark Lynas, who according to the article had led the fight against GMOs [genetically modified organisms (I’m guessing what the “O” stands for)] who now says he was completely wrong!

I want to start with some apologies. For the record, here and upfront, I apologise for having spent several years ripping up GM crops. I am also sorry that I helped to start the anti-GM movement back in the mid 1990s, and that I thereby assisted in demonising an important technological option which can be used to benefit the environment.

As an environmentalist, and someone who believes that everyone in this world has a right to a healthy and nutritious diet of their choosing, I could not have chosen a more counter-productive path. I now regret it completely.

So I guess you’ll be wondering—what happened between 1995 and now that made me not only change my mind but come here and admit it? Well, the answer is fairly simple: I discovered science, and in the process I hope I became a better environmentalist.

He’s not totally Mr Seen-the-Light since he makes this analogy, “to vilify GMOs is to be as anti-science as climate-change deniers” but it is remarkable all the same. No one on the left does this. Usually, to keep their friends and get invited to all the right parties, they just go quiet. Seldom do they put out 5000 word manifestos about how wrong they had been. Maybe it’s enough that he has swapped over to global warming to stay onside with the rest of his crowd. But still, you must give him credit for this, late to the party though he may have been:

The GM debate is over. It is finished. We no longer need to discuss whether or not it is safe. . . . You are more likely to get hit by an asteroid than to get hurt by GM food.

That’s about the same likelihood as drowning because the seas have risen, but that’s still an issue in play. Maybe twenty years from now we will hear from Michael Mann about how wrong the global warming scares had been (around the time the next ice age begins). In the meantime, this will have to do.

Joshi, have a look at this

It’s about a magician who freaked out Penn of P&T.

A few years ago, at a Las Vegas convention for magicians, Penn Jillette, of the act Penn and Teller, was introduced to a soft-spoken young man named Apollo Robbins, who has a reputation as a pickpocket of almost supernatural ability. Jillette, who ranks pickpockets, he says, ‘a few notches below hypnotists on the show-biz totem pole,’ was holding court at a table of colleagues, and he asked Robbins for a demonstration, ready to be unimpressed. Robbins demurred, claiming that he felt uncomfortable working in front of other magicians. He pointed out that, since Jillette was wearing only shorts and a sports shirt, he wouldn’t have much to work with.

‘Come on,’ Jillette said. ‘Steal something from me.’

Again, Robbins begged off, but he offered to do a trick instead. He instructed Jillette to place a ring that he was wearing on a piece of paper and trace its outline with a pen. By now, a small crowd had gathered. Jillette removed his ring, put it down on the paper, unclipped a pen from his shirt, and leaned forward, preparing to draw. After a moment, he froze and looked up. His face was pale.

‘Fuck. You,’ he said, and slumped into a chair.

Robbins held up a thin, cylindrical object: the cartridge from Jillette’s pen.

Incredible article. Want to see this guy in action.

Beyond irony and past hypocrisy

The left is past all caring about what you or anyone else might think. They protect themselves by wrapping themselves in a miasma of smug complacency about their goodness and virtue and its absence in others. It is a confidence trick on the poor, the young and the productive. Why any of these would vote for parties that only make them worse off while pretending they care oh so much is the great question of our age.

If the parties of the right cannot work out how to explain to the lower half of the income distribution on which side their bread is buttered they will seldom win elections and our social and economic conditions will continue to crumble. The predatory activities of our elites under the name of socialism or progressivism or liberalism or whatever else they decide to call their covering ideologies will pick the bones of our societies clean until there really is collapse.

This is Roger Simon via Instapundit looking at this same problem.

Leftism has devolved into a kind of scam run not only on others but also on the self. Leftists are brilliant at convincing themselves of their own altruism and then broadcasting it to the public, thus providing cover for the most conventionally greedy and selfish behaviors. We see that in our society all the time: the quondam Marxists of Hollywood, the media, and the academy blathering on about economic equality while living lives the Medici could not have dreamed of.

Part of this construct is a ‘prevent game,’ a public persona and system erected so privilege cannot be questioned or undermined. A nomenklatura more successful and sophisticated than anything ever conceived in the Soviet Union. The result of this is a highly stratified society. As is well known but scarcely reported, blacks and Latinos have actually done worse under Obama than other groups. Normally, that would be unconscionable, considering the rhetoric. But as we know, it’s all about the rhetoric. Reality is unimportant — an inconvenience.

Relatively unbridled capitalism has always the best way out of this, the best way to true social mobility, but our nomenklatura doesn’t want to admit this because it might threaten them and their perquisites. It would blow their cover.

Divorced from practical realities

Something of interest to gladden the heart as the New Year begins. Nigel Lawson is a complete global warming sceptic but here he only bets on whether or not there would be a successor to the Kyoto agreement. Only we Australians have shown ourselves stupid enough to take this on. Here is Nigel Lawson v Oliver Letwin concluding a wager made four years ago.

Oliver Letwin, David Cameron’s chief policy adviser, has conceded defeat in a £100 climate policy bet with Nigel Lawson which they had agreed four and a half years ago.

Towards the end of a climate debate between the two Conservative heavy-weights in the July 2008 issue of Standpoint, the following exchange took place:

Oliver Letwin: Nigel can’t know whether there is going to be a successor to Kyoto.

Nigel Lawson: Well, look, there’ll be an international agreement in the sense that there will be platitudes. The acid test is: will there be an agreement to have binding cutbacks for all participants on their carbon emissions? Instead of arguing about it, we could have a wager on it.

Oliver Lewtin: I’d be very happy to have a wager, and I offer you a £100 bet that before either of us is dead, whichever is the first — our estates can pay — we will see a very substantial agreement on carbon reduction.

Nigel Lawson: But I don’t think I want the bet to be ‘in my lifetime’ because I’d like to get the £100. I’m sorry it’s such a modest amount you’re prepared to wager — it shows how unconfident you are — but I would like to be able to collect before I die. So I think we should say ‘by the time Kyoto runs out’, because there is meant to be no hiatus; there is meant to be a successor to Kyoto. So ‘by 2012 we will have the agreement’ — maybe I’ll die before then, of course — but 2012 is the acid test.

Oliver Letwin: On the same basis, Nigel, I’m perfectly willing to take that bet too. The reason I’m willing to take the bet is that I know that the only way it can be made to happen is if we try to make it happen and if we build up the moral authority to make it happen by taking the steps ourselves.

The original Kyoto agreement which set binding CO2 emissions targets for 37 developed nations only ran out on the 31st of December 2012. There has been no new international agreement on CO2 emissions reduction, let alone a ‘substantial’ one. In the meantime, Canada, Russia and New Zealand have officially abandoned the Kyoto Protocol while Belarus, Ukraine and Kazakhstan have threatened to abandon it as well.

Oliver Letwin has now conceded that Lawson has won the bet.

Lord Lawson comments:

I made the bet because I knew I would win. It has always been blindingly obvious that the positions of Europe, the United States and China were much too far apart for a truly global successor to Kyoto to be negotiable.

Oliver Letwin is one of the nicest people in politics, and one of the cleverest. It is, however, disconcerting that UK climate change policy – which makes no conceivable sense in the absence of a binding global agreement – has been based on the advice of someone so totally divorced from any understanding of practical realities.’

We, of course, have a government filled with people divorced from practical realities.

Lessons from the American election

My article on the American election has been published in the January-February issue of Quadrant. It outlines the problems that Mitt Romney faced which are the problems all right-of-centre parties will now have to deal with. It’s long and really needs to be read in full to appreciate just how steep the mountain the Republicans faced actually was. That they lost was a great disappointment to me but it was not unforeseeable. The US is a different country now than it was in Reagan’s time. These, however, are my conclusions as they apply to our own next election this year, but I do encourage you to read the whole thing:

So here is the problem facing Tony Abbott as he tries, as did Mitt Romney, to put together a package of proposals that will deal with the actual problems Australia has. In running against a party of the Left, based on Obama’s re-election campaign these are the problems he will need to keep in mind.

They will use some of the most sophisticated analytical and statistical techniques available to uncover every grievance in every sub-constituency. They will then target these groups with promises to fix whatever problems they pick up.

They will run a precisely targeted campaign of fear based on the threat of losing programs or payments that benefit each of these sub-constituencies.

They will label the Coalition as representatives of a tired, old ideology based on principles no longer relevant in the twenty-first century. Misogyny, reproductive rights, religion, along with any number of issues that their analytics team has identified, will be driven whether or not there is any reality behind these fears. Labor being the party of the path of least resistance is almost never under such threats.

They will promise what cannot be afforded and dare the Coalition not to match their supposed generosity. Criticisms about the affordability of such ideas—where’s the money coming from?—will work just as well for the ALP.

They will invent sources of revenue that will never in reality cover the cost of their programs but which are sourced well beyond their own target constituency.

They not only will have but will expect to have, and will be entirely dependent on, virtually the whole of the media being in their corner at every stage of the way who will cover for Labor to the fullest extent they can while ratcheting up the decibel count on any issue that might harm the Coalition.

Romney was as clear-eyed as I could have hoped given the media problems he faced along with the straight out deceit that was integral to the Democrat campaign. Promise them anything they say they want is a strategy that will only work if the media never attempts to expose your lies. And since the media no longer does, at least for Democrats or the ALP, there is no reason to assume it won’t work again when our own election is finally called.

Obama won. So now he owns the economy whatever else may happen next

Look Obama won. The fiscal cliff has been averted, taxes were upped a bit, some reductions in spending took place, the debt and deficits will keep on rising and everything can continue as before. And like I say, Obama won so the economy is all his. Whatever happens from now on in belongs to the Democrats. Good luck to them.

The front page story in The Australian is Global markets rocket on US fiscal cliff deal. Those in the know must all be really pleased with the outcome, something like a Neville Chamberlain peace-in-our-time moment. Of course there’s this:

While investors were happy to celebrate the compromise, many also expressed disappointment over the reduced scope of the deal, which props open the door for further rancor in the coming months.

Some investors already were turning their focus to looming congressional fights over the budget, pre-programmed spending cuts and the debt ceiling, which limits the US government’s ability to borrow.

So it’s not all beer and skittles, at least not if you’re a Democrat. It never was for the Republicans.

There are the spending cuts which are almost unambiguously a plus but amongst which will be cuts to defence that will take the US expenditure to the same proportion of GDP as it was in 1916 or so I understand. There is, of course, a much larger GDP for defence to be a proportion of, but it doesn’t seem part of an orderly international future, but that’s just me. But at least most of the Bush tax cuts are legislated in and can’t be so easily removed and there are some reductions in expenditure.

Meanwhile all of the problems that existed before continue. With Obamacare suddenly to enter everyone’s calculations, the US is rapidly heading for a kind of third world elites-and-serfs kind of future. You are in the government, good; you work for the government, good; you are on a direct feed from government, good. These are the new elite. Everyone else will struggle. Upwards mobility through one’s own hard work and effort, that will be the toughest road of all, when in the past it was the American way and many many took that route. It is a roadway that has, for the time being, been turned into a single lane pathway. When it will return to how it was is hard for me to say.

But the one moment of these fiscal cliff negotiations I most enjoyed was when the House Majority Leader, John Boehner, told the Senate Majority Leader, Harry Reid, to “go fxxx yourself”. For that alone, I would keep him as the House Majority Leader. There may be something there for Tony to think about the next time Julia calls him a misogynist or whatever.

Who can possibly know what to believe any more?

The story is weird beyond belief, that Hillary Clinton suffered her concussion on a secret mission to Iran three weeks ago. But what I particularly liked was this comment [Number 12] which more or less reflects how I feel about the world I find myself in:

This fantastic rumor gets traction because of the dishonesty of everyone involved, including the politically corrupt U.S. news media. The Clintons have long been world class liars about anything and everything; Obama is such a master of deceit that in a certain sense he does not even exist, being almost wholly a fictional character; the State Department has once again disgraced itself and continues to lie even after being caught red-handed; and the so-called news media can no longer be trusted to report the truth about anything that reflects badly upon the Left.

Who can possibly know what to believe any more, except that the people we are dealing with are capable of anything – and the news media will do their best to help them get away with it?

As for the story itself, here are the final two paras to brighten the New Year:

To what the Americans mission to Iran was about this report doesn’t speculate upon, other than to note that with the Gulf State Monarchies rapidly approaching a union of their oil rich nations to counter Iranian power, and with President Obama signing a new law this past week to strengthen American borders against threats from Iran, and with the highly-publicized ‘Velayat 91’ Iranian military exercises now taking place across a wide area from the Strait of Hormuz, a new and catastrophic war in this region is much closer to being a reality than many realize.

So if Secretary Clinton’s mission was meant to forestall such a war it is not in our knowing, other than to note, that with the United States continued backing of some of the cruelest dictatorships in the world, our entire planet is but one spark away from a fire that could very well consume us all.

A hundred years ago it was 1913. Only a year later 1914 begins a cataclysmic century from which the echos have by no means come to an end.

Dour people with no laughter in their hearts

An interesting article by Roger Kimball picked up via Instapundit. Here is the money quote:

Why do they tend to be dour people with no laughter in their hearts? Because they regard life as a zero-sum game. . . . Leftists are supposed to be the caring, sharing part of the political fraternity. In point of historical fact, it is an easy thing to demonstrate that their caring has always been more a rhetorical than an actual strategy and that their sharing has been accomplished overwhelmingly with other people’s goods. That said, however, there is still the fact that Leftists are hailed by their enablers as the non-crabby politicians, the people who come into office promising two things: More and Free.