TODAY’S LINKS—APRIL 23, 2012

In the “Even More Reasons to end the Stupid War on Drugs” Department.

There is no question but that drug use presents many problems for the nation. But  due to the senseless war on drugs, several industries profit. Four in particular are cited here.

http://reason.com/archives/2012/04/22/4-industries-getting-rich-off-the-drug-w/2

The drug testing industry benefits the more drug testing takes place. Employment or welfare screening is increasingly advocated.

The addiction treatment industry benefits by pushing more people into treatment. In fact, its representatives want the government to order druggies into treatment rather than jail and to force insurance companies to cover it.

The alcohol industry fears marijuana as a rival and spends goodly sums to lobby against legalization.

The private prison industry benefits from filled prisons. What better way to keep them filled than to hand over the bodies of drug users/sellers?

I thought Jon Huntsman was an intriguing prospect as a candidate for the Republican nomination. I disagreed with a number of his policies based on his statements and record as Utah governor. But at least he appeared to be sane.

Here are some of his own views on his former rivals and the GOP itself.

http://www.huffingtonpost.com/2012/04/22/jon-huntsman-gop_n_1444529.html?ref=mostpopular

Allen West recently made noise accusing about 80 Democratic members of Congress of being communists. He may have been watching this video just prior to that declaration.

http://www.youtube.com/watch?v=SkYl_AH-qyk&feature=related

If you watch that video, which is only a minute long, you will find links to anti-drug promos, SNL satires on drugs, anti-homosexual propaganda films from the fifties and a bunch of other interesting/fun stuff.

Arizona’s two-year-old immigration (or anti-immigration) law is before SCOTUS this week. Paul Kramer of Slate looks to a case from the 1870’s as a possible guide, where the state of California attempted to exclude 22 “lewd” Chinese women from entry.

In that instance the Supreme Court found that there was a combination of, as Kramer puts it:

A legislative recipe for extortion; a capricious exercise of perception and power; a dangerous usurpation of federal control: What was not wrong with California’s immigration law?

http://www.slate.com/articles/news_and_politics/jurisprudence/2012/04/arizona_s_immigration_law_at_the_supreme_court_lessons_for_s_b_1070_via_the_case_of_the_22_lewd_chinese_women.single.html#pagebreak_anchor_2

Kramer believes the Arizona law in question is analagous. This story is worthwhile reading even if only to see how the term “pestilential immorality” is applied.

This next item interests me since some aspects discussed became topics on the late, lamented Reg On Wry blog in the Post-Gazette. It is a book review, from The National Review, of a new Ross Douthat book Bad Religion: How We Became a Nation of Heretics.

http://www.tnr.com/book/review/bad-religion-ross-douthat

Michael Sean Winters’ review begins

ROSS DOUTHAT’S ANALYSIS of religion in America is more sophisticated than the analysis of, say, Rick Santorum—but not by much. There are many ways to be simplistic and coarse. In contending against what he sees as an America afflicted with too many heresies, Douthat’s book, like Santorum’s speeches, is riddled with mistakes of fact and interpretation that would make any learned person blush.

Winters then proceeds to provide examples.

I find this last item of great value since it offers perspective from the author of, and a not strict adherent of, The Great Divergence, the 10 part series on income inequality from  Slate in 2010 that I have cited many times.

It’s author, Timothy Noah, and Matthew Yglesias who writes on economics for Slate currently, exchange views on the meaning of income inequality and how it should be viewed.

http://www.slate.com/articles/arts/the_book_club/features/2012/tim_noah_s_the_great_divergence/the_great_divergence_book_matt_yglesias_and_timothy_noah_discuss_.html

Noah, when asked why we should care, responds in part

Why is it necessary to reward so much more today than in 1979 the effort and skill (and dumb luck) that gets you into the top 1 percent of incomes (i.e., above about $350,000)? In 1979 the top 1 percent consumed about 10 percent of the nation’s collective income. In 2010 it consumed about 20 percent. (That includes capital gains.) Sure, the economy was in lousy shape in 1979. But the top 1 percent contented itself with 9-12 percent of the nation’s collective income for three decades prior to 1979, during the great post-World War II economic boom. Indeed, income share for the top 1 percent fell a little during that period. From the early 1930s through the late 1970s incomes in America didn’t become more unequal; they became more equal. So clearly the top earners can get by on much less without undermining capitalism.

On his behalf Yglesias offers this:

It gets very easy for me to become cynical about these points of emphasis. The conservative writers seem to be sycophants to the 1 percent, assuring the investment bankers and hedge fund managers of the world that they have nothing to do with the plight of the American worker—that it can all be laid at the feet of ineffective middle-school teachers and lazy principals. On the other hand, a lot of the progressive types who complain most about inequality seem to be relatively well-compensated professionals who are rather conveniently trying to redefine an egalitarian economic agenda in such a way as to include someone at the, say, 85th percentile of the income distribution as one of the oppressed.

To me the most important aspect is that this wealth and income disparity is real, it is damaging, and we cannot relent on our focus on it and the ways to address it that are not unfair or oppressive to any segment but instead fully enable our people to strive for success. Not all will accomplish this on the same level.

 

WEALTH REDISTRIBUTION? IT’S ALREADY A REALITY

                  Wealth redistribution is a term that represents either a desirable ideal or a socialist plot depending on the political leanings of who is discussing it.

Redistribution of wealth is the transfer of income, wealth or property from some individuals to others caused by a social mechanism “such as tax laws, monetary policies, or tort law”.^[1] Most often it refers to progressive redistribution, from the rich to the poor, although it may also refer to regressive redistribution, from the poor to the rich.^[2] The desirability and effects of redistribution are actively debated on ethical and economic grounds.http://en.wikipedia.org/wiki/Redistribution_of_wealth

                In legend Robin Hood was the epitome of wealth redistribution, robbing the rich to give to the poor. Then again, in his day, it wasn’t worth robbing the poor, no matter the ultimate destination of the loot.Today, that does not appear to be a problem.

                 This notion of moving wealth from one segment of society to another through government manipulation has remained a hot button issue and was truly manifested in the 2008 Presidential contest by Barack Obama’s encounter with “Joe The Plumber” on the campaign trail in Ohio. There, Joe Wurzelbacher, purportedly a plumber on the verge of buying his own plumbing firm complained that he was going to face higher taxes. Obama’s response was that if Joe had income above a certain level he would be paying a higher marginal rate under Obama’a tax proposals, but the people under that income threshold would be paying less in taxes and thus better able to afford Joe’s services. And the candidate said his method would “spread the wealth around”. Those words got contorted to “wealth redistribution”. Here’s a video of the exchange:http://www.youtube.com/watch?v=PUvwKVvp3-o The fact that Joe was neither a licensed plumber nor capable of buyingb his own firm seemed not to matter to those who loved the sound bite.

                 Now Obama has used the precise term in other contexts. My fellow blogger here noted his language during the signing of the new health care law earlier this year.

http://andiquote.wordpress.com/2010/04/03/president-obamas-health-care-bill-achieves-wealth-redistribution-goal/#comment-82

                The New York Post viewed the conversation with Joe and Obama’s statement as if he were “firing a Robin Hood shot”.         http://www.nypost.com/p/news/politics/item_iQRtIQHjYPcEoMZ00hI

                 Reality, as is the norm, trumps perception. That reality is that there has been and continues to be wealth redistribution on an unprecented scale in the United States and there’s no Robin Hood taking money from the rich and giving to the poor or even the middle class. The truth is that those with the highest, narrowest percentage of income control more wealth than ever and the disparity keeps growing, with relatively little growth in incomes or wealth at the lower parts of the spectrum in real terms.

                   Timothy Noah of Slate.com terms this “The Great Divergence”, the title of his ten part exposition of this phenomenon in September of this year. http://www.slate.com/id/2267157/

              In that series Noah explores the statistical data exhibiting this inequality, as well as a number of possible causes for it. In one part he presents data which shows the difference in income growth across various percentile segments of our population under both Democrat and Republican presidents since 1945.

            These percentiles were 20 %,  40 %, 60 % 80 % and 95%  of the levels of income. That is, the lowest represents those in the lowest 20% of income and the top is those in the highest 95% of incomes. Interestingly, under Democrat presidents, average income growth for each segment was higher than it was for Republican presidents, even for the richest. This growth for the segments in ascending order was

           Democrats                                            Republicans

               2.64 %                                                     0.43%

                2.46%                                                      0.80%

                2.47%                                                       1.13%

                2.38%                                                        1.39%

                 2.12%                                                        1.90%

                  What this means is that while income grew in all segments under either party, the over all growth was greater under Democrats for each segment while the greatest disparity between the segments was under Republicans.

                   I offer this as an example of Noah’s findings and interesting in itself, but nowhere totally conclusive. There are other factors at play than merely the party in charge. But it is instructive in at least a minor way to show that even the rich have done better under Democrats than under Republicans.

              One notion that is constantly advanced by Republicans is that tax cuts, particularly among the wealthy, stimulates job growth. Job growth presumably translates into increased wealth for those gaining those jobs. However, such thougfht flies in the face of reality again when you consider that since job growth under each presidential administration has been tracked since 1945, the eight years of George W, Bush’s presidency produced fewer jobs than under any other president, measured by the number of jobs created per year. His total job creation was only slightly better than his father who only served one term and not quite twice as many as Gerald Ford who served about 2 1/2 years. Even the often reviled Jimmy Carter had over three times as many jobs created during his one term as W. did in two.

                Why is this significant? There were two huge rounds of tax cuts under George W., in 2001 and 2003. By contrast, Bill Clinton had more jobs created under his watch than any other president while raising taxes. The second best record was under Ronald Reagan who, despite much rhetoric opposing tax hikes, ushered in several rounds of hikes during his eight years.

                Here is the full record courtesy of that ultra-liberal publication, The Wall Street Journal.http://blogs.wsj.com/economics/2009/01/09/bush-on-jobs-the-worst-track-record-on-record/

                 A very telling study finds that Americans underestimate the current wealth disparity. Further, the vast majority accept that some disparity is ok but favor a distribution scheme such as found in Sweden to ameliorate much of the disparity.http://www.rawstory.com/rs/2010/09/poll-wealth-distribution-similar-sweden/

               The party truly seeking wealth redistribution to the detriment of the vast majority of Americans are the Republicans. Nowhere will you find them using that term but simply looking to their public proclamations of policies they advocate or intend to push in the new Congress is revelatory.

                The noted liberal economist Paul Krugman who can be somewhat over the top at times, makes some salient points here :http://economistsview.typepad.com/economistsview/2010/09/paul-krugman-downhill-with-the-gop.html His take is that any GOP efforts to balance the budget by 2020 with their stated objectives of permanent tax cuts for the wealthy among others essentially means eliminating most of the rest of what our federal government does, including such benign things as National Parks.

            But one need not explore in depth to find the Republican agenda for the continued wealth redistribution to the haves. They are putting up a united front against extending unemployment benefits for those who effectively lost that lifeline this week. They reason that the cost is not covered by a corresponding cut in spending elsewhere. And they are tying reversing this opposition to renewing the Bush tax cuts for the wealthiest 1 or 2 % of taxpayers, most of whom are millionaires. Yet they don’t have any plans to cover the cost to the U.S. Treasury.

              I have received unemployment a couple of times. Generally one is in survivor mode and welcomes a return to work which results in much higher income. Few recipients have the luxury of twiddling their thumbs while collecting their checks and being able to maintain their fully employed lifestyle. They do tend to spend almost all of their unemployment pay out of sheer necessity.

               On the other hand the GOP, while resisting keeping the tax cuts only for those earning below a fairly high threshold, ignore the fact that even if the upper income marginal tax bracket is restored to its pre-2001 level, that top tax rate is still quite a bit lower than it historically was in this country until it began to be lowered under Reagan.

              My counsel is to pay attention to talk of wealth redistribution by any politician, look past the rhetoric, learn the details of any proposals concerning taxes or other  finance matters that will affect you, and determine what will hurt or harm you. I guarantee the vast majority of you will ascertain that Republican policies will truly benefit only those already holding an irrational portion of the nation’s wealth.

             I don’t believe we should steal from the rich to help the poor or anyone. I do believe we should end the thievery the rich are perpetrating against the rest of us.

TAX THE RICH—THEY HAVE THE MONEY

              A lot of rhetoric has been expended over the past several months arising from the fact that the two major tax cuts passed under President George W. Bush in 2001 and 2003 are set to expire at the end of this year, which means the tax rates existing prior to those dates will be restored barring any action by Congress.

               Much of the rhetoric originates on the right from Republican quarters urging that the cuts be extended for all taxpayers while President Obama and some Congressional Democrats have spoken of extending the cuts for those making under a certain threshold, generally $200,000 to $300,000 and restoring the old rates to those above that level.

               Surprisingly many folks who make nowhere near that amount oppose those so-called tax hikes even for the “rich”. Many figures are tossed about as to how these upper income Americans already pay the lion’s share of personal income taxes in this country and further argue that restoring the cuts to those earning above the suggested levels will adversely affect small businesses and stifle job creation, which inarguably has been lagging.

           My position is evident from my title….tax the rich…they have the money. The assertions that this is somehow class warfare, job stifling and unfair are either exaggerated or outright false based on quite verifiable facts.

                 The threshold figure of, say $250,000 in income to pay higher taxes has been attacked as picking on people who are not rich. Daniel Gross sends that attack into retreat.

http://www.slate.com/id/2267287/

                Actually class warfare is an accurate characterization is that the richest class is waging war on the rest of us and winning. While we piss and moan about high unemployment, mortgage foreclosures and no cost of living increases for social security recipients for two years (and I am one of those SS folks), those at the upper end of the income spectrum have only been getting wealthier.

               On Slate.com last month Timothy Noah produced a remarkable ten part series on The Great Divergence, the phenomenon that means in the United States right now we have the largest differential between the haves and have-nots in our history. He explains how this phenomenon is measured and what its causes are, notably not necessarily laying blame at the feet of the usual suspects.

http://www.slate.com/id/2267157/

                And this late report demonstrates how the very super rich have increased their wealth while real income for most Americans has fallen.  This article from the Huffington Post highlights the depth, more precisely the width of the gap in earnings between average people and the super rich.

http://www.huffingtonpost.com/2010/10/25/income_inequality_statistics_tax_code__n_773392.html

               The simple conclusion to be extracted from this phenomenon is that the rich are getting richer on the backs of everyone else. And I am simple enough to do so.

                One admittedly imperfect example of how the rich take advantage is the report that the CEO’s of the 50 companies with the largest number of layoffs have increased their pay at a higher rate than have the CEO’s of the Standard and Poors 500.

http://ee.dominionpost.com/Repository/ml.asp?Ref=RFBvc3QvMjAxMC8wOS8xOCNBcjAxMjAx&Mode=Gif&Locale=english-skin

                A major contention of those advocating that any renewal of the Bush tax cuts include all income levels is that lower taxes result in job creation. Odd then, is it not, that during George W. Bush’s two terms in office which included the two rounds of tax cuts cited resulted in fewer jobs being created during his terms than were created under any other President since this statistic has been tracked beginning in 1945. That includes under JFK who served only three years and Jimmy Carter, a one-term President who has been widely vilified as an inept executive. In fact, Clinton had the highest total of jobs created under his watch despite RAISING taxes.

              http://blogs.wsj.com/economics/2009/01/09/bush-on-jobs-the-worst-track-record-on-record/

                Note the source here is The Wall Street Journal, hardly a bastion of liberality.

                Further, the argument goes, small business owners will be adversely affected by a tax hike at the levels proposed. Two problems with that assertion is that a relatively small number of taxpayers would come under this hike, and many of the “small businesses” Republicans are trying to protect are small only in U.S. tax code nomenclature while many are multi-million or billion dollar enterprises, such as the Koch Brothers energy conglomerate. Even John Boehner admits this.

(On CBS’ “Face The Nation” on Sept. 12, Rep. John Boehner, R-Ohio, conceded that a nonpartisan Joint Committee on Taxation found that 3 percent of small-business people would be impacted if Bush tax cuts for the rich would expire.)
               And many of these “small” businesses have hundreds of millions if not billions of dollars in income. They are classified as small only because of tax laws. http://www.msnbc.msn.com/id/39317328/ns/politics/
 
                 As the Bush tax cuts came simultaneously with the onset of two costly wars and rapidly turned an inherited budget surplus into a huge deficit which has only gotten worse at least some small measure of tax increase is very much warranted. True, other work needs to be done to balance the budget. But the claims that to do so is unfair, that it is class warfare and that it will prevent job creation are like the old bucket out at the well that is no longer useful. they just won’t hold water.