WingRight

The New York Times had a long piece on Obamanomics today.

I’m going to blog about other parts of the article, but I found a distortion in paragraph 2:

The fact that the economy grows — that it produces more goods and services one year than it did in the previous one — no longer ensures that most families will benefit from its growth. For the first time on record, an economic expansion seems to have ended without family income having risen substantially. Most families are still making less, after accounting for inflation, than they were in 2000. For these workers, roughly the bottom 60 percent of the income ladder, economic growth has become a theoretical concept rather than the wellspring of better medical care, a new car, a nicer house — a better life than their parents had.

One of the favorite tricks of sky-is-falling reporters and editors is to speak of “household” or “family” income. A household (and usually a family) is defined as “a social unit living together.” One person of any age living alone is a household. A single mother with a single child is a household. A father and mother and five children is a household.

The number of households is growing faster than the population as a whole because marriage has declined. A family consisting of married parents and any number of children has a significantly higher average income than a single mom/dad and kid(s). A single mom living with a child and the father of that child living separately is two households, not one as would be the case if the parents were married. More single parents = lower average “family” income. Longer life expectancy = more retired people (many living alone) = lower average “family” income.

A better (although not perfect) measure is per capita income. Under that standard, the NYT economic analysis is incorrect.

In 2000, the average U.S. per capita income was $29,845. In 2007, the average per capita income was $38,611.

If you adjust the 2000 per capita income for inflation, you will find that $29,845 in 2000 dollars is equal to $35,935.67 in 2007 dollars. Thus the actual per capita income of $38,611 is significantly higher. On a per capita basis, the average person made substantial income gains over that seven-year period.

Tags: Economy, Politics by Publius
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There is much talk among the Democrats these days about raising taxes. Barack Obama has said that he is going to “let the Bush tax cuts expire,” which will result in the largest tax increase in the history of the United States. Top-bracket tax rates will increase, the marriage penalty will return, millions of people who now pay no income taxes will pay taxes again, capital gains tax rates will increase, dividend tax rates will increase.

Obama quickly amended his tax plans. He’ll only really raise taxes for rich people, the top 1%, maybe the top 5%, and he’ll keep a lot of the Bush tax cuts after all. Oh, by the way, Obama also speaks of taking the cap off employment taxes that fund Social Security, which results in another big tax increase on “the rich” who earn salaries.

Saint Barack and the Democrats believe these actions will generate a gusher of tax revenues (from “the rich” who won’t really miss the money) that will flood the government with cash, providing funds for all sorts of big government programs.

They are wrong.

I have inserted a couple of links to articles that provide details, economic theories, etc., that support my discussion, but I am going to frame this post on tax increases in simple, human dynamics terms that even liberals can understand.

A friend of mine in college was the son of an extremely wealthy man. This was an era during which income tax rates were higher than they are now and during the course of various discussions with my friend, I learned that his father constantly had 3-4 years of tax returns being audited by the IRS. As a naïve student, I thought this was unusual and asked a question something like, “Why doesn’t your father file his returns so he doesn’t get audited?”
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Tags: Economy, Politics, Taxes by Publius
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Sometimes a picture is worth a zillion words.  Via Powerline.

Tags: Economy, Environment, Liberal Hypocrisy, Oil, Welfare by Publius
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I am a big fan of Victor Davis Hanson and always enjoy his work, but sometimes he hits a home run.

He’s done it today with America Is Not a Post-Anything on Real Clear Politics.

Experts proclaimed that the United States had evolved into an “information society” of “high-tech jobs.” The traditional sources of American strength — manufacturing, the production of food and fuel, and the assembling of cars and trucks — were apparently passé. Instead, others less fortunate abroad were to do those more grubby tasks, while Americans, with their BlackBerrys and laptops, funded, organized, lectured and critiqued them.

Illegal aliens might cook our meals or change our children’s diapers to free us up for far more important tasks of litigation, finance and environmental review. The Chinese would make everything from our shoes to our phones. The Japanese would supply us with quality high-end goods like cars and cameras. The Africans, Arabs, Iranians, Russians and Venezuelans would drill oil in nasty, dirty places so we wouldn’t have to.

and

Refined Americans became more concerned over questions of gender, race and class justice in our universities and courtrooms, as if the chief problem were only dividing the American pie equitably, rather than expanding it.

The real source of American wealth apparently was the mere fact that we were Americans. Therefore, the rest of the world should naturally loan us money to sustain our envied lifestyle. Our homes got bigger, and we bought and sold them more as investments than as places to raise our families.

Our top graduates opted for Wall Street, insurance, law, journalism and academia. Why not, when laws made it more conducive to invest and trade, but harder and less lucrative to build, drill, farm and manufacture?

and finally

A new, hungrier generation of Americans will have to want to reclaim our pre-eminence and change the national attitude. It must be ready to pay off generations of debt rather than borrow, build rather than sue, and drill rather than whine.

It’s time to honor rather than avoid and outsource physical labor. Our children are healthy enough to cut our own lawns and pick our fruit. Let’s also hope they want to hear a lot more about Gen. David Petraeus’ success, and a lot less of Madonna’s latest psychodramas.

But just as importantly, what Americans need now is leadership to get moving again — rather than more platitudes about hope, squabbling about race and gender, and endless rhetoric about who is really a maverick or a true conservative or the most liberal. What we need to know from our two presidential candidates are specifics about how to jumpstart America.

I’m not a big McCain fan, but he appears to have the exact personality to be able to deliver this kind of message. I do worry that he has spent too many years running as an incumbent senator and has lost his campaign chops. He needs to dial up the intensity and speak these kinds of truth to Americans.

Tags: Economy, Energy, Political Correctness, Victor Davis Hanson by Publius
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Lame-duck Senator John Warner (R?!?-VA) has asked the Energy Department to investigate the potential costs and benefits of a federally-mandated 55 mph speed limit everywhere.

One of the problems with having a geriatric legislature of life-tenured incumbents is that its members spend a lot of time thinking about the good old days. From 1974-1995, an identical law was in force. This was a bad idea of Richard Nixon (who also imposed wage/price controls in a futile effort to limit inflation) designed to get the U.S. through an oil crisis.

This law was universally broken, beginning with mild violations along the Eastern seaboard and increasing as one traveled westward with the highest speeds generally present in Western states like Nevada (which “enforced” the national speed limit with a $5.00 waste-of-resources fine for a period of time).

The practical question for drivers was not whether they would drive 55 or not (everyone drove faster), but rather how much faster could they drive without receiving a ticket. 5 mph over was a safe bet everywhere. West of the Mississippi, 10 mph over almost never caused problems and 15 mph over was frequently observed.
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Tags: Economy, Energy, Environment, Liberal Hypocrisy, Liberal Quirks, Liberalism, Oil, Welfare by Publius
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Interesting letter in today’s Wall Street Journal - print and online - about the ways in which global warming is like a religious cult.  This responds to Brett Stephens’ opinion piece entitled Global Warming as Mass Neurosis that I blogged about here. It doesn’t look like I can do a permalink to the letter, so I’ll reproduce it in full.

Here are the global warming movement’s cultic parallels, many of whose characteristics can be found in Walter Martin and Ravi Zacharias’s famous 2003 book, “The Kingdom of the Cults”:

(1) Leadership by a New Age prophet — in this case, former Vice President Al Gore.

(2) Assertion of an apocalyptic threat to all mankind.

(3) An absolutist definition of both the threat and the proposed solution(s).

(4) Promise of a salvation from this pending apocalypse.

(5) Devotion to an inspired text which embodies all the answers — in this case Mr. Gore’s pseudo-scientific book “Earth in the Balance” and his new “An Inconvenient Truth” documentary.

(6) A specific list of “truths” which must be embraced and proselytized by all cult members.

(7) An absolute intolerance of any deviation from any of these truths by any cult member.

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Tags: Climate Change, Economy, Environment, Liberal Hypocrisy by Publius
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In an interesting column in Forbes, Steve H. Hanke reveals which speculators and hoarders are really driving up the price of commodities.

The answer: Governments (you should have guessed that one)

Scary rice and oil prices have sent politicians to their bag of tricks. Not surprisingly, they have pulled out one that has been a staple since the Middle Ages: blame the speculators and hoarders. But the politicos should be pointing fingers at themselves. Governments around the world buy and store commodities, especially rice and oil, with justifications stressing the value of everything and the cost of nothing. A notable proponent of commodity buffer stocks was John Maynard Keynes. As Keynes put it in 1942: “One of the greatest evils in international trade before the war was the wide and rapid fluctuations in the world prices of primary products.” He recommended that governments use buffer stocks to smooth out price fluctuations by purchasing commodities when prices were thought to be low and selling them when prices were thought to be high.

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Tags: Economy, Liberal Quirks by Publius
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