Greg Mankiw’s Idea to Raise Taxes on the Poor

Greg MankiwJohn Whitehead wrote a very interesting article, Are All Tax Increases a Bad Thing? He started by quoting conservative economist Greg Mankiw who had written that he’s in favor of Pigovian taxes. These are taxes designed to correct for economic externalities. So, for example, a tax on lead pollution would deal with the fact that lead is toxic but that this fact is not included in its market price. But Mankiw claims that such tax increases can only be acceptable if they are revenue neutral. So if the lead tax raised a million dollars, other taxes would have to be reduced by a million dollars.

I have a major problem with this. (So does Whitehead, but that isn’t the focus of his article.) Is it the case that we should still have lead in gas, but that gas should be more expensive? Isn’t the remaining gas still spewing lead into the air and stunting the brain development of children? Doesn’t it make sense to use that money to keep children away from lead filled air? Or to encourage development of non-lead alternatives? Why is it that taxes must stay exactly the same other than the fact that Mankiw ultimately believes that taxes can only ever go in one direction: down?

One reason, I think, is that this is all part of a cunning conservative plan. Taxes on consumer products fall most harshly on the poor. The rich don’t use proportionally more gas than the poor. So the poor will end up paying a far higher percentage of their incomes on any new Pigovian taxes. But given that our existing tax system is barely progressive, we can depend upon the offsetting tax cuts going mostly to the rich. Thus: what Mankiw is advocating is for taxes to go down on the rich and up on the poor. What a surprise!

But Mankiw wasn’t happy with just proposing a tax system that does exactly what he is always in favor of. He had to use it to attack liberals. It’s funny that he provides a value judgement that he thinks is some kind of law of physics: increasing taxes must be offset with decreasing taxes. Therefore, the liberals who don’t want to do this are irrational or providing a “stalking horse for a broader, big-government agenda.” But given that the taxes will not be increased on the same people that the taxes will be decreased on, this is not valid. If it is the case that the poor (as usual) are going to get screwed, then a truly fair system would be to give some of the tax savings to them — or design the tax such that it doesn’t shift income from one class to another.

Whitehead brought up another aspect of this. Conservatives might be concerned that liberals just want to increase tax revenues. (But it is ridiculous to say that liberals want big government.) Just the same, liberals are very right to be concerned that conservatives will make this deal, and then later eliminate the tax increase. But is that really what Mankiw has in mind? Well, he’s a very smart guy. And given he’s pushing a system that clearly shifts the tax burden down the economic ladder, I can only assume that he doesn’t mind the idea that the conservatives might be able to get rid of the Pigovian tax, and end up with lower overall taxes that fall more heavily on the poor. That’s pretty much the history of the modern conservative movement.


I know in this article that I am very harsh on Mankiw. The problem is that this is not the first time I’ve written about him. This is the main thing that I associate with him:

Look at Greg Mankiw — by all accounts a great economist who is conservative. Under Bush Jr, he was all for stimulus. Under Obama, he came up with some complicated ideas as to why stimulus wouldn’t work. And then, as the 2012 election was approaching (he was Mitt Romney’s economic adviser), suddenly he was walking back his anti-stimulus rhetoric to prepare for more Keynesian stimulus once Romney was president. It’s a game that all politicians play. But it is one that only conservative economists play.

This is what we are dealing with. In the economics profession, he has a great reputation. But I don’t care about that. He’s put himself out as a public intellectual. And as such, he talks about politics and uses his economics expertise in a very slippery way. I don’t doubt that he’s self-deluded. I’m sure that he thinks if only we did as he wishes, all would be well. But who cares? He’s still just an apologist for the power elite.

Lawns Are Dumb

Erik LoomisI will agree that lawns are dumb. I mean, there’s nothing wrong with a lawn if you want one, but the idea that you are somehow awful if you let your yard go wild and attract a variety of wildlife instead of conforming to a chemically-induced monoculture of grass that serves no real purpose is ridiculous. But people freak out if they see a yard that doesn’t conform to the norm. So they crack down to the point of using law enforcement against the hippies who want frogs and snakes and other natural creatures on their property.

—Erik Loomis
Things That Are Dumb

The Rage of the Republican Base

Tea PartyI’ve been thinking a lot about Tom Clancy Combat Concepts. That was the name that actual long-time military and intelligence people gave the thinking of the Bush administration’s neophytes. After 9/11, these people wanted to be “hard” in their fight against terrorism. And we definitely saw that once the documents about the torture program were released. It wasn’t about being effective and getting intelligence. It was about showing the chickenhawks of the Bush White House than they were “strong” and willing to do whatever was required. It’s pathetic. But it is entirely in keeping with what the Republican Party is all about.

Jonathan Chait made a good point recently, Donald Trump, Affect, and the Conservative Mind. In the article, he pointed out that there are two parts to the conservative mind: ideological and emotional. That can be said about liberals too, of course. The critical issue is what the emotions are. And for conservatives it is mostly anger about their loss of privilege. This is a result of conservatism being backward looking. You can’t stand athwart history yelling stop without resenting the fact that history is, in fact, moving along quite well without you.

Chait argued that Donald Trump appeals to this emotional aspect of conservatism. He noted that the Republican Party has constantly appeased the base with ever and ever greater ideological purity. But in the end, it doesn’t really matter. A large part of the base doesn’t actually care about ideology. They are just mad as hell and they don’t want to take it anymore. But they aren’t mad at the power elite, who are the ones who have actually hurt them. They are mad at the minorities and the Muslims. And the Republican Party is the one that is best at demagoguing these issues. But Chait nailed the effect of Trump’s current popularity, “It must be galling for the party regulars to prostrate themselves helplessly before the base, purging any hint of independent thought, only to watch a formerly pro-choice, libertine if not liberal, Democratic donor waltz into the lead.”

I’m not at all interested in Donald Trump as a candidate. I certainly expect him to flame out. It reminds me of the 1988 Democratic presidential election. Early on (in 1987), I decided that there were two candidates I could support: Joe Biden and Michael Dukakis. I picked Biden. But after he flamed out, I looked at Dukakis and found that he was an excellent substitute and that I could easily have supported him from the beginning. That’s what I expect to happen with Trump supporters. They will find that they don’t like some of his positions and they will move from him to Ted Cruz and eventually to Jeb Bush or Scott Walker. Because that’s the thing: in the end, there isn’t any difference with regard to general outlook.

But early decisions are based more on the gut. You “like” a particular candidate. And the Republican base really likes Donald Trump. He is everything that they want in a candidate: he’s rich, belligerent, and not terribly bright. I suspect that the elite opinion against him is mostly just because they don’t think that he can win the general election. That is to say: they too like his style. And why not? He is “hard” in the sense of Tom Clancy Combat Concepts. If you listen to Republicans on the Iran nuclear deal, you will hear this. The deal is not bad because of any specifics, but rather because of some gauzy idea that a “stronger” or “harder” president would get a better deal.

I hope that the Republicans do nominate Trump. If he happened to win the general election, he would be a far less frightening president than all the “establishment” Republicans — Jeb Bush, Marco Rubio, Scott Walker — who we are supposed to think would be just fine.

Conspiracy Theories and the Yield to Real Power

Alex JonesThis last week, there were two episodes of someone shooting at soldiers involved in the Jade Helm 15 war games that many people have worked into a conspiracy theory that claims it is designed to take over Texas and initiate martial law so that the government can take all the guns away from all the real Americans who have been stockpiling them for the last several decades. You would think that some idiot who is taking this all much too seriously and is starting to use violence would cause people to rethink their conspiracy theories. But I’m sure they won’t. I’m sure instead, they will use the old standby of the “false flag” attack.[1] You know, “It’s just the government using violence as an excuse to call for martial law!”

For the kind of people who read Frankly Curious, this is probably bizarre. After all, Jade Helm 15 is hardly a big subject of discussion in the normal world. But in a particular subculture, it’s huge. That subculture is most associated with Alex Jones and his related media. It seems to also be getting some play on RT, but that outlet generally maintains a certain level of responsibility. On the plus side (I guess), Alex Jones actually seems to believe all the nonsense that he pushes. I know Jones and his followers just think that I’m a stooge, so let me address that for a moment.

I know you are, but what am I?! Really. Because the worst thing about the conspiracy theorists is that they totally miss the very real dangers that the power elite pose to us in their fanciful ideas about black helicopters and martial law. Really, what do these people think is going on? Do they really think that their guns have to be taken away or that the “patriots” have to be sent away to FEMA camps for the power elite to get everything it wants?! I have no idea how they can think that given that those in the power elite already have what they want. Why cage people when they are willing to do it themselves? And the InfoWarriors are caging themselves in a network of nonsense. The power elite don’t have a thing to fear from them!

At Salon Bob Cesca put the whole Jade Helm 15 conspiracy into the context the Alex Jones’ longtime prediction of a civil war between the US military (and police) and the “patriots” with their little gun stockpiles. Check out this little bit that Jones was ranting about a year ago:

[The government] needs the police and the military to wipe out the liberty movement, and we wipe them out… I estimate in the civil war, 300,000 police will die. I estimate that if the military marches out against the gun owners, half a million dead. Two million dead on the side of the patriots. Won’t matter, we’ll have another 10 million where that came from. But it’ll be a real war once they start it.

God, do I ever know where this guy is coming from — and the people who listen to him. These are people who think it would be fun to have a nice little guerrilla war against the forces that are destroying America. In this case, these forces are, well, America itself. But wouldn’t that give these guys a feeling of purpose in the world? In decades past, they would have been members of a union — they would have felt part of something. Now, they are just adrift. You can hardly blame them. But this is a pathetic way to express it. It’s a kind of virtual treason — hoping that your country will turn fascist so that you can fight against it. How about doing a little political organizing?

But no. That’s because the vast majority of the people who listen to Alex Jones are conservatives. So the last thing they want to do is counter the powerful. Instead, they plays these games, just like they played war when they were children. And that’s the problem: they haven’t matured. They probably also fantasize about capturing Bigfoot and becoming Carl Kolchak — two things I was very keen on when I was 10 years old.

[1] I wrote that before learning from Bob Cesca about this InfoWars article, Marines Fired on Near Jade Helm Training Site: Training Exercise Gone Awry? Or as Planned? Because, you know, it couldn’t be some InfoWars loon doing it.

Morning Music: Elvis Is Everywhere

Bo-Day-Shus!!!In order to outdo yesterday’s silly Elvis, we really must go up a quantum level. And that means we must move onto Majo Nixon. (H/T to James Fillmore for the reminder!) In 1987, Nixon released an album with Skid Roper, Bo-Day-Shus!!! And on that album was the first Mojo Nixon song I’d ever heard, “Elvis Is Everywhere.” I didn’t really discover him as an artist until 1990, Otis.

Just to be clear, the song is a celebration of Elvis. It also makes good natured fun of the cult of Elvis, but I’m sure that Mojo Nixon is, like all right thinking people, also a member of that. And the song also makes fun of Michael J Fox, although I think the actual target is the stuffy Alex P Keaton. The best line in the song is, “Elvis is in Joan Rivers, but he’s trying to get out, man!”

Anniversary Post: Robert E Lee’s Resignation

Robert E. LeeOn this day in 1863, General Robert E Lee sent a letter of resignation to Confederate President Jefferson Davis. It was in response to criticism about Lee’s judgement in the Battle of Gettysburg. Davis refused to accept the resignation, and it is hard to see Lee’s offer as anything but petulance, “You wanna fire me? Let’s see how you do without me!” As regular readers know, I’m no fan of Lee. He had the option to lead the Union army, but he refused. That doubtless cost a few hundred thousand lives there. And then he went on to run a good campaign the first couple of years of the war, giving the Confederacy the mistaken impression that it had a chance in hell of winning. He is a tragic hero in the strict sense of the term: he had a tragic flaw. Sadly, it did a lot more than just damage him.

But I’ve always thought that Gettysburg was an interesting battle because it destroys the image not just of Lee’s military brilliance, but of all men’s. The best you can say of a brilliant military leader is that he makes good use of random opportunities. That’s what William Wallace did at the Battle of Stirling Bridge. He never had similar success because he never had similar opportunities. And at Gettysburg, Lee did what all military leaders do: funnel their men into the meat grinder and hope something good comes of it. Nothing did.

A good example of of the hero worship of Lee can be found on the History Channel’s website. (I know: they talk about history on their website?!) It says with regard to the resignation letter, “The modest Lee took the failure at Gettysburg very personally.” That’s a contradiction. Either the entire battle was all about him (taking it personally) or he was modest. But there really is no apologia for Lee that doesn’t go too far. His Wikipedia page is filled with lots of stuff about how he was against seceding, and how he mocked the Confederacy. It even mentions the following information about Lee’s managing slaves, without irony, “He found the experience frustrating and difficult; some of the slaves were unhappy and demanded their freedom.” Uppity slaves!

It would be nice to think that if Lee had been allowed to resign, it might have made a difference. But all of Lee’s “magic” was spent in the first part of the war. What happened from then on would have been done by lesser generals. So he’s a tragic figure, sure. But he’s no hero. People need to get over that. But sadly, many Americans still look up to Jefferson Davis. And even I’ll admit Lee was a better man than he.