J.S. at Environmental Economics seems to think so. Maybe. According to a NY Times piece the bill
would revoke $17 billion in tax breaks extended to big oil companies like Exxon Mobil Corp and slap a 25 percent windfall profits tax on firms that don’t invest in new energy sources.
My question is: will the Democrats grow a spine in time to pass such a bill, even in the face of some opposition?
Jared Bernstein (among many many many many many others, including Jonathan, who beat me to the punch below) dissects todays job numbers at EPI’s Job Picture. Particularly telling is this graph:
It shows that year-on-year job growth (a better indicator than the more volatile weekly or monthly job numbers that are widely reported) has been falling dramatically for almost a year now.
Here’s an even bigger picture from Calculated Risk’s entry on the jobs numbers. In addition to the detail on the slump in job growth over the last year, it’s also easy to spot the jobless recovery under Bush’s watch. During no other recovery period has job growth been so consistently low, than under GWB. And that’s with huge deficit spending and two wars! I used to think that no one could match Warren G. Harding. But, I really must say it: Worst. President. Ever!
Here‘s an interesting take (read the whole thing, it’s short!) on the Laffer Curve (the theoretical source of the arguments made by people like Rudy Giuliani, that cutting taxes increases government revenues). One reason is that the higher tax rates are, the more people will try to avoid them.Â Taking the logic, to it’s absurd conclusion:
If you’re the sort of person who is willing to use these tax avoidance schemes – and I would hazard to guess that not that many people in that situation are not – how low do tax rates have to be in order that you do not engage in those schemes? The answer: half a percent. Guess how low tax rates would have to be for someone making $200 million a year not to use the same schemes.
The implication, of course, is that we want to close the loopholes that allow corporations and theÂ wealthy to dodge paying their share, unless you find 0.5% tax rate on Paris Hilton’s income (I do love to pick on her, but fill in the blank with whoever you want that makes more in a year than whole towns will make in their lifetime) to be a reasonable amount. Do you? I don’t.
Is the New Supply Side Better Than the Old? by Austan Goolsbee is getting a lot of play in the econoblogosphere today. It’s an interesting article that points out some of the weaknesses in the supply-side argument for cutting income tax rates on the highest income people. One small point of correction, however: when referencing the fact that top incomes soared after the tax cuts of the 1980s and 2001, but also soared after tax hikes in other periods, Goolsbee says:
Seeing the same pattern when taxes rose as when they fell indicates that tax cuts weren’t responsible. It suggests that cuts for high-income taxpayers likely gave windfalls to those whose incomes were already rising sharply because of broader market forces.
One might note the impact of the policy climate in various periods, as well. Since the 1980s, it hasn’t just been tax policy that has favored high-income earners over their less fortunate fellows, but deregulation and lax enforcement on a broad range of policies including labor and the environment, as well as overt war-on-the-poor measures such as welfare reform.
Hat tip to Mark Thoma.
Check out Lane Kenworthy’s piece on Taxes at the Top. Interesting and timely, given the likely call for making Bush’s high-income tax cuts permanent.
From the ‘going-to-great-lengths-to-prove-the-obvious’ department:
The Historical Origins of Africa’s Underdevelopment, by Nathan Nunn, Vox EU: Africa’s poor economic performance is one of the largest puzzles in growth and development economics. A large literature has emerged trying to explain the source of Africa’s growth tragedy. See for example Easterly and Levine (1997), or Sachs and Warner (1997).
African historians have documented the detrimental effects that the slave trades had on the institutions and structures of African societies. Historical evidence from case studies show how the slave trade caused political instability, weakened states, promoted political and social fragmentation, and resulted in a deterioration of domestic legal institutions.
Read the rest of the article.
h/t to Mark Thoma.
I’ll be writing more later, but for now, just a couple of things I thought make up a good contrast. Not many people would be surprised by the assertion that economic classes receive different treatment before the law in the U.S., but the following two items are certainly remarkable. First, take a look at this story, about a group arrested for feeding the homeless in Orlando. Yes, apparently charity begins and ends at home: “mass feeding in one area” is banned by a city ordinance. Don’t worry though, not everybody suffers from such casual and needless oppression. Gazillionaire hedge fund managers will get to keep their huge tax break: their income is considered capital gains and so is subject to the 15% capital gains tax, not to the regular income tax or to the payroll tax that funds social security benefits. Mark Shields explains why. Thanks to MoJoBlog for the tip on the lack of legislation.
Oh and by the way, Keith Knight tells it like it is.
New World Notes has a story concerning Italian IBM workers in a contract dispute. The twist is, they’re planning a labor action at IBM’s virtual campus in Second Life, the online game world. Apparently this is the first virtual labor action, although Korean “Gold Farmers” (workers that play World of Warcraft in order to sell the virtual gold to wealthier 1st world players) are forming a trade association in response to proposed regulation of their $1 billion a year trade (thanks to story at Ars Technica).
First Life (look outside) labor activists might be excused for wondering what good a virtual picket line will do for the cause. Big Blue, in response to demands of an extra 40 euros pay, slashed compensation by 1000 euros. Perhaps some more tangible action is called for.
(Thanks to How the World Works for the link).
Update (9/27/07): Here is a report from New World Notes on the 12 hour picket in Second Life. Definitely not your usual picket line. Still waiting for a response from IBM.
Just a quick note from Atlanta. It’s the end of the second day of the first US Social Forum. Due to travel ‘difficulties’,Ã‚Â I was not here yesterday. My spies on the ground tell me the march yesterday morning to kick off the Social Forum was 10 to 20 thousand people strong. Always hard to say, exactly, but a quick examination of the program (with over fifty workshops and panels going on at once for three days) and taking in the attendance at the panels I’ve attended, and just the sheer number of people on the streets of downtown Atlanta with their USSF ID badges, this is clearly the largest such gathering I’ve ever seen in the US. Thousands of people together to discuss and strategize a different US, something so necessary for the world as a whole, and no less so for us US’ers.
And the conversations happeningÃ‚Â go farÃ‚Â beyond simple critiques of today’s neoliberal capitalism (too easy, anyway). They’re talking about concrete alternatives that are working on the ground now, and strategizing about scaling them up going forward. Of course there’s still a long way to go, but this forumÃ‚Â represents a most welcome development: the coming together of disparate ‘single-issue’ groups to hammer out common ground and devise strategies to move forward as one. I’m sorry you’re not here!
More specifics later, must sleep….
[Disclosure: I have been trying to sell my own house for ten months]
Kudos to Andrew Leonard at Salon for his insight into many economists’ delusions of perception (see No one wants to buy a home. Whose fault is it?)! He correctly points out that many so-called experts have a skewed view of when human psychology comes into play in their market decisions. So potential homebuyers are now fearful about what the housing market will do in the future (continue to crash, perhaps even burn? Or turn around?). No arguments there, just rueful agreement (in my case; see disclosure, above). But what about when gloom and doom forecasts are not heard far and wide? Well, it turns out people might be just as whacky during the boom as they are during the bust. Feel free to gasp now.