Politics


Clarifying Middle Class

Here is a chart that makes clear exactly what being middle class means in terms of income: an average annual household after tax income for the middle fifth of households in 2006 of $52,100. Simple interpolation suggests that the top of the middle income group is around $62,950.
Yglesias thinks the chart as a whole implies that:

…the trend is unmistakable. Higher taxes, more transfers, and more government services.

This is undoubtedly true as long as so many believe that government’s role, as our politicians state repeatedly, is focused on protecting and assisting those in the lower 2-3 quintiles.
The chart makes makes a pretty good case, though, that government actions have been around protecting and enhancing the wealth and power of that upper 20% and most particularly the upper 1%.
More taxes, transfers and services are palliatives applied to win votes and do little, if anything, to fix the structural problems that lead to such a poor distribution of income.

The only effective way to make the results among the quintiles more equal will be to change the structure of the economy so that the top 1% is no longer favored. This will require eliminating the extensive government interventions that feed the wealthy on the backs of the poor; on the backs, if you will, of the lower 90+%.


Demand for Sleeping Pills to Plummet

The manufacturer’s of prescription and over the counter soporifics were shocked at today’s news:

Fred Thompson, whose career has ranged from showbiz to politics, including a presidential run this year, is signing on for a gig that promises to draw on his talents in both fields: talkradio.

You might remember that this is the same dynamic Fred Thompson that wowed folks on the presidential campaign trail earlier this year:

But as Mr. Thompson campaigned across Iowa this week, he was something other than the dynamic presence that some in his party have been yearning for. Iowans saw a candidate who is subdued and sonorous, a laconic presence who spoke in soft monotone, threw few elbows and displayed little drive to distinguish himself from his opponents.
Mr. Thompson told few jokes and, while an easygoing presence, he did not appear to have much interest in the small talk that is a staple of retail campaigning. As he defined his candidacy, Mr. Thompson spoke in broad generalities about the conservative principles that he said had informed his political views — in particular, federalism and cutting government spending — and led him to run for president.
In the process, he often lulled audiences into the kind of stillness that engulfed the room when he finished talking at the “Lunch with Fred Thompson” in Marshalltown

He might make an amusing YouTube video and work well in a scripted environment…but, luckily, we will not have to watch him nor will we have to listen to him…unless, of course, we are looking to take a nap.


Who Should Bail Out the Auto Industry?

The other day Laurie David, writing at the Huffington Post, suggested that the oil industry rather than the us government should bail out the auto industry:

“The best idea I’ve heard in the last few days comes from an unlikely source, the actor Ashton Kutcher on the Bill Maher show, who repeated the suggestion that the auto industry go meet with the oil industry – their partner in crime – and ask them for a bailout. At least we know ExxonMobil can afford it.”

Laurie and Kutcher are partially correct. The oil industry is a partner but, alas, it is not the only partner and not even the main partner.
The big 3 were at their normal and largest trough, congress. The difference now is that the play is visible to the rest of us. Normally the industry’s subsidies are indirect, yet massive, and by some strange perversion of perspective we do not typically lay the consequences at the feet of the auto industry which is much broader than the big 3, the oil industry or their federal, state and local government accomplices.
A subsidy example: like it or not, the thousands of miles of concrete spread across previously fecund land that the vehicles require to be useful are massive subsidies to the auto industry.
A consequence example: over 40,000 people/year die in the US as a result of traffic accidents. Unfortunately, these deaths are diffuse; one or two or three at a time and widely dispersed geographically. We ignore them. Yet, after a concentrated 3,000 die in the World Trade Center the country goes to war.
This is not the only subsidy nor are the fatalities the only consequence.
The appropriate approach begins with not a bailout but eliminating all subsidies at all levels of government…starting with, but not ending with, auto industry subsidies.
In time we will, then, start seeing the best results socially and economically. Amongst other things the former fat cats will no longer get to feed at the public teat; income disparities will start diminishing; legislative types will spend most of their time at home; lobbyists will go in search of real work; government can get back to basics, e.g., providing an accessible judicial system.