Dwayne Day described a bet he had on the progress of commercial human spaceflight, yesterday. The guy who lost the bet to him responds.
Category Archives: Economics
Time To Raise Taxes
Distressingly, neither the president nor the Democrats offer any rigorous account of the optimal level of tax progressivity. Rather, the president seems to think that no matter how high the current marginal tax rates, the correct social policy is to move them upward. As such, he cannot explain why the top marginal tax rate for the rich should not approach 100 percent as they accumulate more and more wealth. After all, why not push the limits if efforts to redistribute wealth do not at some point impede its creation?
My view is the polar opposite of Obama’s. I believe, now more than ever, that the optimal level of progressivity in the system is zero, so that today’s marginal adjustments in taxes should increase taxes on those on the bottom half of the income distribution. To explain why, let us start with the premise that the defenders of any progressive tax have to give some principled account of the optimal degree of tax progressivity. They have to identify which of the infinite number of progressive tax schedules they embrace, and then explain why it is best.
They can’t. It’s all about “fairness,” not rationality or revenue. Or preventing the country from going into a tipping point of entitlement.
[Update a while later]
Are we having a Gettysburg moment in the long cold civil war?
If so, I hope that the Republicans continue to press their advantage, as Meade didn’t.
Exploring The Uncanny Valley
Some interesting brain research at UCSD.
No One Tell Tom Friedman
Chinese bullet trains aren’t all they’re cracked up to be.
That’s true of a lot of things in China, I suspect. Including its space program.
The “Adult In The Room”
…has blown up a bi-partisan plan. Because reelection is more important to him than saving the economy, or country.
[Update a few minutes later]
Our petulant and inept president.
It’s a bad combination. And I think that more and more people are starting to recognize it.
[Tuesday morning update]
Is Barack Obama a has been? I think he’s a never was, and people are finally starting to figure it out.
[Update a few minutes later]
Thoughts on the Obama plan:
As the president faced the nation on Monday evening, he knew his economic legacy was on the line. Historians will judge him for his economic stewardship.
The assessment will not be good. Going deep into his presidential term, he presides over a country that suffers from high unemployment, record home foreclosures, and a no-growth economy. But when the most pivotal issue of our decade emerged — a $16.8 trillion debt crisis — where was the “Obama plan”?
The sad truth is there is no Obama plan and there never has been a plan. The president gingerly approached the debt crisis as he has approached other issues: intellectually, coolly, passively, and with great detachment.
Bill Clinton never had a plan to balance the budget, either. It didn’t happen until the Republicans took over. But not having grown up a red-diaper baby, he was more ideologically flexible than Barack Obama.
[Update mid morning]
Remembering the golden age of Clinton. Accurately, unlike the Democrats who think that the boom was a result of tax increases.
Going Galt
The government’s war against business, energy and jobs continues:
I got a permit to open up an underground coal mine that would employ probably 125 people. They’d be paid wages from $50,000 to $150,000 a year. We would consume probably $50 million to $60 million in consumables a year, putting more men to work. And my only idea today is to go home. What’s the use? I don’t know. I mean, I see these guys — I see them with tears in their eyes — looking for work. And if there’s so much opposition to these guys making a living, I feel like there’s no need in me putting out the effort to provide work for them. So as I stood against the wall here today, basically what I’ve decided is not to open the mine. I’m just quitting. Thank you.
As some have already noted, for some people Atlas Shrugged is a cautionary tale, for others it’s a how-to manual.
[Update a couple minutes later]
Actually, there are parallels on other fronts as well:
“As federal criminal statutes have ballooned, it has become increasingly easy for Americans to end up on the wrong side of the law. Many of the new federal laws also set a lower bar for conviction than in the past: Prosecutors don’t necessarily need to show that the defendant had criminal intent. . . . The U.S. Constitution mentions three federal crimes by citizens: treason, piracy and counterfeiting. By the turn of the 20th century, the number of criminal statutes numbered in the dozens. Today, there are an estimated 4,500 crimes in federal statutes, according to a 2008 study by retired Louisiana State University law professor John Baker. There are also thousands of regulations that carry criminal penalties. Some laws are so complex, scholars debate whether they represent one offense, or scores of offenses. Counting them is impossible. The Justice Department spent two years trying in the 1980s, but produced only an estimate.” Yet we retain the fiction that everyone is supposed to know the law.
From the book: “There’s no way to rule innocent men… When there aren’t enough criminals, one declares so many things to be a crime… that it becomes impossible for men to live without breaking laws.”
We really are living it, and she really was prophetic.
[Update a few minutes later]
This seems related, somehow: the Anglosphere, before the lights went out.
Is The Left Right?
Claire Berlinski is suffering a little cognitive dissonance.
My brief response, without a lot of deep thought. I can’t speak for Europe, which never had anything resembling our Constitution and Bill of Rights, but I think that the biggest flaw of the Founders was in failing to recognize the apparently ductility of the Commerce Clause, which has basically rendered the 9th and 10th amendments moot. They also perhaps didn’t anticipate the degree to which the courts might come to aid and abet to that end. But at bottom, it is not a failure of freedom, but a failure to adhere to the original intent of the Constitution to limit government.
Why The Boehner-Obama Talks Fell Apart
Keith Hennessey explains:
President Obama used the Gang of Six’s plan as an exit strategy. He backtracked on taxes, knowing this would force the Speaker to abandon negotiations, and knowing he could use the Republican Senators in the Gang to argue from a position of increased rhetorical strength in the ensuing debate. It’s a clever strategy but it belies the President’s public posture.
The media narrative about the president being the “only adult in the room” is now, and always was, nonsense.
[Update a while later]
The president tries to panic the markets.
Well, you have to admit, it’s one of his few talents.
[Update a couple minutes later]
A reminder, the problem isn’t the debt ceiling — it’s the debt, and the continuing unwillingness of Washington to take it seriously. The Democrats in particular insist on living in a fantasy world.
[Update a while later]
Per the above, some very worrisome thoughts:
Here’s the position I think we may be in. We’ve been negotiating with the President and The Democrats in Congress on the assumption that they’re sane. It’s okay to play hardball with these guys because eventually, whether they like it or not, reality insists upon itself and they have to cave. It’s a painful process so you expect some tantrum throwing and caterwauling, but eventually they HAVE to accept reality. Except if they’re not sane. If they want five apples and there’s only two plus two but they CAN’T ACCEPT that two plus two equals four. Orwell wasn’t just writing a parable about the eventual end point of IngSoc. He was describing what human psychology can drive Ministers to inflict upon the populace for the sake of “justice.” I’m worried they’ll pull the trigger on default as just one more “political” step in the march towards freedom from want or whatever other principle they’re operating under. They’re playing this game as if they could win, as if taxes in a downturn are a good idea with benign consequences. As if debt equivalent to GDP is survivable for the world’s anchor economy/currency, let alone sustainable.
And so maybe, just maybe, Republican strategy (what little there is of it) has badly misread the opposition. Obama tried to add 400 billion in taxes to a deal he had already agreed with Boehner at the last minute. Boehner walks out cause Obama is negotiating in bad faith and has been all along, but what if Obama is actually incapable of good faith negotiation? I think right now that it’s actually possible we won’t see a deal at all. Because the Republicans are looking at the math and at reality and saying “Okay, Democrat demands can’t be serious because they can’t possibly work” and Democrats are looking at politics and how it works and saying “We don’t have to give in cause that’s not how you win these things. You pin it on the other guy politically and then reap the political dividends.” I wasn’t around for the start of WW I, but I get the feeling I understand Kennedy’s fascination with Tuchman’s Guns of August. I’m not talking about a shooting war, but about leaders overestimating and underestimating and just plain misjudging each other in a brinksmanship scenario. In short, it could be too late to do anything when people finally wake up. The crisis may have already arrived with an economic and fiscal momentum all its own that no amount of dealing or compromise or statesmanship can stop.
They’ve been demonstrating economic lunacy for the past two and a half years (longer, really, but they didn’t have enough power to actually implement it), as things continue to deteriorate. Why would they stop now?
More Shuttle Post Mortem
Amos Zeeberg, over at Discover, says it was a flop, and that we deluded ourselves about it for far too long. It’s actually worse than he says, though. Not sure where he gets these numbers:
The shuttle was billed as a reusable craft that could frequently, safely, and cheaply bring people and payloads to low Earth orbit. NASA originally said the shuttles could handle 65 launches per year; the most launches it actually did in a year was nine; over the life of the program, it averaged five per year. NASA predicted each shuttle launch would cost $50 million; they actually averaged $450 million. NASA administrators said the risk of catastrophic failure was around one in 100,000; NASA engineers put the number closer to one in a hundred; a more recent report from NASA said the risk on early flights was one in nine. The failure rate was two out of 135 in the tests that matter most.
It’s actually a lot worse than that. If you include development costs, we now know that it was about a billion and a half per flight (~$200B in life-cycle costs over 135 flights, in current-year dollars). Even on an annualized basis, it was probably never as low as $450M (again, current-year dollars).
This isn’t quite right, though:
Tellingly, the U.S. space program is abandoning spaceplanes and going back to Apollo-style rockets.
That depends on what you mean by “the U.S. space program.” Yes, Mike Griffin retrogressed down that road, until it became unaffordable, and Congress continues to insist on it for now (until the fiscal situation truly implodes in the coming years, if not months), but the private people aren’t all doing that. For instance, Dreamchaser isn’t an “Apollo-style rocket,” and none of the suborbital people are, so if any of them graduate to orbit in the future, they will be distinctly un-Apollo like.
There are valuable lessons to be learned from the Shuttle, but as I wrote a couple weeks ago, we have to make sure that we learn the right, and not the wrong ones.
Razib has further comments over at Discover.
[Via commenter Paul Dietz]
[Update a few minutes later]
Will McLean makes a good point in comments — the Air Force continues to support X-37B, which is hardly “Apollo like.”
[Mid-morning update]
Mike Griffin: The Shuttle program was oversold.
Nowhere near as much as Constellation was.
S&P’s Warning
A reminder (that Congress should pay attention to) that the problem isn’t the debt limit — it’s the debt ratio.