Tag Archives: harvard professor

What Ferguson tells us about America

Images from Ferguson

For the last two weeks, Ferguson, Missouri has been nightly entertainment. We have watched CNN, Fox News, MSNBC for the latest updates. Has the violence continued? Have peace and quiet been restored? What is wrong with those people in Ferguson? Could this happen here?

For two weeks, I have been avoiding the nightly news. I truly did not want to know what the latest update was. As a trauma surgeon, I hate loss of life. It is in my DNA. I hate it when someone needlessly gets gunned down in the streets. We saw that in Ferguson. We also saw it in the Trayvon Martin case.

In the United States there are several truisms. One of those truisms is that you simply don’t talk back to police. I was taught, growing up in the ’70s, that I needed to show police respect whether they deserved it or not. Why? Because that’s the way it is in the United States. My parents never explained it that way. But that’s the way it is. We can sit down and discuss the merits of the system and thoughtful ways of changing the system so the system works more for everybody, but the way the system is today… and the way it has been for more than 100 years, you must show police officers respect or there are dire consequences. Simply put, if you do not show police the respect that they, themselves want, you increase dramatically your chances of dying.  Continue reading What Ferguson tells us about America

Sunday Evening News Roundup

  • It is hard for me to be disappointed in the US women’s soccer team. I’m not sure who thought they were going to the finals of the World Cup, I certainly didn’t. I’m sorry they lost. I’m glad they played as well as they did. What with baseball mired in what Roger Clemens’ says on-again and off-again trial and with football and basketball neck-deep in labor disputes, it was nice to see some United States court in which the athletes excelled. (Oh, I should add the British Open, in which Rickie Fowler, Phil Mickelson and Dustin Johnson were all within striking distance and all faded at the end. Congratulations to Darren Clarke.)
  • Being close to President Karzai seems to decrease your life expectancy. Another close advisor has been killed in Afghanistan. We need to get out of there.
  • A leading herbicide promoted as environmentally friendly seems to be killing trees. That’s not good.
  • The News Corp scandal continues to grow. Even Fox News talked about it today. The head of Scotland Yard has resigned. Rebekah Brooks has been arrested. Somebody get me some popcorn, please. I’m gonna sit back and watch this.
  • It appears the president is not going to nominate liberal favorite, Harvard professor Elizabeth Warren to head the Consumer Financial Protection Bureau. Instead, he’s nominated someone I’ve never heard of. This time, the president has rolled with the political wind and we all are going to suffer for it. It is hard to imagine anyone who is as smart and as tough as Elizabeth Warren. We knew that she would actually look out for the American People.
  • How is it that Michele Bachmann only raised $3.6 million? I don’t understand. Herman Cain only raised $2.6 million.
  • Dallas was going to give 100 families vouchers for low-income housing. Over 5000 people showed up. It was chaos and sad; only by the grace of God did no one get seriously hurt. It reminded me of the general admission seating to a Who concert at which 11 people died as eager fans pushed their way in to the arena.
  • Finally, in the category of you really can’t get much dumber than this – Dallas Cowboys receiver Roy Williams sent a $75,000 engagement ring through the mail. She said no and kept the ring. First of all, how do you buy a $75,000 ring for somebody if you don’t know the answer is going to be yes? Secondly, how do you send a $75,000 ring through the mail? You don’t deliver that bad boy in person? If you can afford to send a $75,000 ring to a woman who’s going to turn you down, you need your head examined.

Don’t raise my taxes (Update)

The NFL was somewhat of a downer yesterday. I don’t know what to think of the league. Besides my Dallas Cowboys laying a Texas size egg, Houston getting punched in the nose and the St. Louis Rams getting blown out of the building by the lowly Detroit Lions, I’m trying to turn my attention back to economics and politics.

Professor N Gregory Mankiw is simply somebody we should know. He tells us he is somebody we should know. He’s a Harvard professor and was part of George W. Bush’s economic team. He published an op-ed in the New York Times on Saturday. He lets us know that he is in the upper tax bracket. He’s going to try to make the same tired argument that many on the Right have made about taxes on the rich. He lets us know that he doesn’t want to buy a bigger house or a Ferrari. He simply wants to put money aside for his children. Isn’t that nice?

Professor Mankiw goes into a nauseatingly detailed description of why he’s not going to work more if taxes are raised. Currently the top marginal tax rate is 35%. If we let the Bush tax cuts expire on the top 1% (Professor Mankiw’s tax bracket) the top marginal rate will go back to 39% as it was during the Clinton administration. The professor talks about a fictitious job which is going to pay him an extra $1000. He talks about this money over 30 years as if he’s not to make another dime. He then factors in the estate tax, something which conservatives simply hate, and magically his children will be able to take home only $1000 after 30 years.

So, this is the take-home lesson. If you’re extremely rich, you should not take on a job that’s going to pay you an extra thousand dollars because after 30 years you will only be able hand your kids $1000. Really? That’s his argument. Let me vomit. This is an excellent example of how to make an argument with smoke and mirrors. When you compound multiple different problems into one argument you end up with garbage. The estate tax is one argument. Increasing the top marginal tax rate is another. The bottom line is that he’s going to get paid a thousand dollars for not doing too much. This is good. Currently $350 would be taken out in federal income tax. The Obama administration would like to change that so that the federal government would take $390. That’s the argument. That’s the difference. What you do with that money over the next 30 years has nothing to do with this.

Finally, let’s inject a little reality into Professor Mankiw’s article. The fact that the good professor worked for the Bush administration means that he is on the inside of the conservative movement. Economic opportunities come to him that are not available to you and me. Therefore, he’s able to invest his $1000 in places that we probably cannot. He will know of some stock like Google or Facebook or Microsoft that is about to take off. He will be able to invest his thousand dollars and it will double or triple over a matter of weeks to months. He will then move this money to something less risky and pocket the capital gains. He will make similar moves over the next 30 years. So, his original $1000 will grown substantially and he will only have had to pay $350 at the end of the first year. Remember, conservatives would like to pay no capital gains tax. Therefore, his kids will be able to inherit the tens of thousands of dollars that he’s made off his initial $1000 investment. Conservatives would also like to have no estate tax. But now, I’m doing the same thing that he did, compounding my argument (pun intended).

Maybe EmptyWheel said it better:

So if we raise taxes, less of this kind of transparent bulls#@t with numbers will appear on the NYT op-ed page.

WIN!

Moreover, if Mankiw stops writing these crappy op-eds, it’ll open up an opportunity for someone else to write op-eds for the NYT. That person, according to Mankiw’s logic, would have to be someone less wealthy than him (because Mankiw shows no sane rich person would write an NYT op-ed for only $523 of savings). And since that person is by definition not rich, she will probably spend more of the $1000 the NYT would pay her right away, rather than pass it on to her kids as Mankiw says he will do with his pay for writing this NYT op-ed.

WIN!

I’ve seen no more compelling, succinct argument for why we should raise taxes. Not only will it result in more money flowing through the economy immediately, but it’ll save us from having to read the ramblings of rich people like Mankiw, David Broder, and Tom Friedman.

It is kind of funny. Many progressives noted the porous arguments of Professor Mankiw. Kevin Drum added:

Do you see the card he palmed? Basically, the effect of letting the Bush cuts expire is so tiny that the only way to make it noticeable is to compound it over 30 years, which reduces the eventual payout of his writing assignment from $2,000 to $1,700. (And even that’s probably overstated, since it assumes Mankiw pays all his taxes at their full statutory rate, which virtually no one does.) The rest of the reduction down to $1,000 comes solely from the estate tax. But even on the heroic assumption that you should take this year’s zero rate as the baseline for comparison, the estate tax has an exemption of several million dollars. Unless Mankiw leaves his kids a helluva lot more than they need for a down payment on a house, they won’t pay a dime of estate tax.

This is why the tax posse has such a habit of wildly overstating things. If they don’t, there’s no there there. It turns out that the effect of letting the Bush tax cuts on the rich expire is so minuscule that the only way to make it look sensational is to pick a scenario in which you (a) overstate effective tax rates, (b) compound those tax rates over 30 years, (c) slash the final number nearly in half by ignoring the estate tax exemption, and (d) use this year’s highly unusual zero rate as your baseline. It’s a virtuoso performance.