Monday, December 31, 2007

Beating the Drum

One thing the Republicans are very good at is reminding the public, again and again and again, of the problems they perceive with Democratic leaders. During the Clinton years, even the smallest scandals -- Travelgate, say -- got mentioned endlessly, again and again, for years on end, even long after they were over.

The Democrats need to take this page out of the Republican playbook. As 2007 comes to a close, the chief scandal of the Bush administration, the Iraq war, seems to be in a somewhat equivocal state. On the one hand, 2007 was the deadliest year of all for U.S. troops, with nearly 900 fatalities; on the other hand, Iraq's security situation has improved considerably over the last few months and the rate of fatalities is down sharply.

But no matter how you look at it, it's still a scandal. The Democrats need to help the public remember:

* In 2003, before the start of the war, Donald Rumsfeld originally said the war would cost less than $50 billion.

* Some weeks later, the Pentagon estimated that the war would cost $60 - $95 billion. Paul Wolfowitz criticized the $95 billion upper end as too high.

* In fact, direct military spending alone already exceeds $368 billion and the total cost may be $1 trillion. Why, the White House just demanded and got another $70 billion.

Perhaps Democrats think the public would get bored if these figures were mentioned over and over again. But if the party situations were reversed, you'd be hearing them every day -- probably more than once.

Sunday, December 30, 2007

What Would We Do?

Pakistan's ruling party says that the country's upcoming elections, scheduled for January 8, may be delayed up to four months in the wake of the assassination of opposition leader Benazir Bhutto.

What would we do if one of our leading presidential candidates were assassinated or otherwise died two weeks before the presidential election? We've been lucky on this score for two hundred years, but even with good security there could always be a plane crash, like the one that tragically killed Senator Paul Wellstone shortly before he was up for reelection in 2002.

The answer is that this is a constitutional accident waiting to happen -- as is the case of the winning candidate's dying shortly after Election Day. The Twentieth Amendment to the Constitution takes care of the case of the death of the President-Elect before his term of office begins, but the successful candidate is not the President-Elect immediately after Election Day, because the real election doesn't take place until the electors (the members of the Electoral College) cast their votes, and even then the candidate is probably not really the President-Elect until the electoral votes are officially counted in Congress. If the apparently successful candidate died before the electors cast their votes, their would be massive confusion and no one would really know what to do or what would happen.

But going back to the case of a leading candidate's dying, by assassination, plane crash, or otherwise, shortly before Election Day, it would on the one hand seem grossly unfair to go forward with the election, but equally unfair to postpone it. Unfair to go forward, because no one would have the slightest idea what to do -- the ballots would already be printed, the computers already programmed, and there would be enormous confusion about the effect of voting for the deceased candidate, whether a replacement could be named, and so on, and even if the legal experts could agree on what should happen (most unlikely), there would be no time to communicate it effectively to the voting public. But unfair to postpone, because campaigns spend hundreds of millions of dollars with the goal of peaking at precisely the right moment. Everything is keyed to the precise date of the election.

And that's not to mention that there's no legal basis for postponing anyway, and no one with the authority to order a postponement. There was some discussion of who could order a postponement in the event of a terrorist attack or natural disaster shortly before the 2004 elections (the U.S. Elections Assistance Commission sent a letter to the Department of Homeland Security asking whether it had a contingency plan), but the subject got everyone so spooked that the discussion was quickly dropped.

Pakistan's terrible assassination should make us rethink this issue. Yes, it's awful to contemplate the possibility. And a postponement authority would be dangerous -- you just know an administration like the current one would trump up some excuse and use it for political gain if it looked like its party was behind in the days before Election Day. Maybe the risk of improper postponement is greater than the risk of having a genuine need for a postponement, in which case we're better off with our traditional strategy of trusting to luck. But it wouldn't hurt to appoint a commission to think about this issue and make some recommendations. The best time would be immediately after the next presidential election, when the issue could be discussed with at least a modicum of neutrality and calm. Meanwhile, cross your fingers and hope.

Saturday, December 29, 2007

Enemies of the State

Just in case you had any remaining doubts about the importance of the writ of habeas corpus, recently declassified documents show that in 1950, FBI Director J. Edgar Hoover floated a plan to detain about twelve thousand people, almost all American citizens, without judicial trial on the ground that they were "potentially dangerous to the internal security of the country." The plan called for suspension of habeas corpus and detention in military prisons. Eventually, those detained would have received a hearing by a Hearing Board consisting of a judge (either federal or state) and two citizens chosen by the Attorney General. The decision of the Hearing Board would be subject to review by the Attorney General, whose decision would be final except for appeal to the President.

Well, isn't that lovely -- throw everyone in jail and allow the Attorney General's handpicked flunkies to decide whether to let them out, with review by the Attorney General.

America's current wave of extrajudicial detentions continues with only muted outcry because it affects people whom most Americans can comfortably regard as the "other." Hoover's extreme plan usefully reminds us that abuse of freedom is everybody's business. Once procedures for locking people up without charge and trial exist, they endanger everybody. The FBI Director had a plan to lock American citizens up en masse. Who knows what plans Alberto Gonzales put together that have yet to be discovered. This isn't just a danger to other people -- our own freedom is at stake.

Monday, December 24, 2007

Weblog Anniversary

Not my blog anniversary or anything like that, but it appears that this is the tenth anniversary of the invention of the term "weblog." (Actually, it appears that the tenth anniversary occurred a week ago but news organizations have just caught up.) The term got shortened to "blog" later.

The anniversary reminds us that weblogs started as, well, logs of what someone was doing on the web. Back in the day, oh so long ago, it was a little harder to find web content than it is now, so people appreciated links to good stuff. And even today a lot of very popular blogs -- certainly many that are thousands of times more popular than this modest effort -- seem to consist largely of links to other content.

The key to success, it seems, is to surf the web, find good content and link to it. My basic error is trying provide content of my own.

In the spirit of the anniversary, here's a little time-waster for you: the top 20 viral videos of 2007. If you only have 10 seconds to spare, be sure to watch "Dramatic Chipmunk."

Yes, I did watch some of them this morning. But hey, it's a University holiday.

Friday, December 21, 2007

Cue Bill Clinton

So Mitt Romney first said that he "saw" his father march with Martin Luther King, Jr. Now he's backing away from that statement. OK, he screwed up. But the most delicious part of the whole thing is that Romeny now says:

"If you look at the literature, if you look at the dictionary, the term 'saw' includes being aware of in the sense I've described. It's a figure of speech and very familiar, and it's very common. And I saw my dad march with Martin Luther King. I did not see it with my own eyes, but I saw him in the sense of being aware of his participation in that great effort."

Could there be a more Clintonesque explanation? (I mean President Clinton here, not Senator Clinton.) Aren't we entitled to one politician who can talk about things in straightforward terms that don't need footnotes and hypertechnical exegesis? Isn't there a politician who's capable of admitting error?

Fair Tax Follow-Up

After writing these posts about the "Fair Tax," which seems mostly like yet another way to repackage a truly stunning tax cut for the very richest, I sent the following question to the "Ask the Expert" section at the Fair Tax website:
You call the Fair Tax "progressive" because the rich would pay more as a percentage of spending. But the rich can save more (which would not be taxed), so wouldn't they likely pay a lower percentage of their income than the middle class?
I sent this in on December 2. No reply yet. Hmmmm . . .

Sunday, December 9, 2007

A Little Strike Relief

If, like me, you're waiting wistfully for the Daily Show to come back following the writers' strike, check this out. And of course come back and follow the blog.

Straining at the Gnat

Yesterday, we took a day off from relentless critique to admit an error of our own. We now return to our regularly scheduled programming.

I don't pretend to understand the national budget, but I do know that President Bush has been one of our most profligate, extravagant spenders ever. The Republicans talked about reining in federal spending for decades, but from 2000 to 2004, when they had control of the White House and both houses of Congress, federal spending increased at twice the rate it had increased under President Clinton (and that's straight from Fox News).

But now, even though Congress looks like it will cave in once again and give him $70 billion in Iraq war funding with no strings attached, President Bush is threatening to veto the omnibus budget bill because it contains $11 billion in domestic spending he doesn't want. Heavens, Bush proposed $623 billion in defense spending alone; he wants to spend almost $3 billion in Iraq and Afghanistan every week, and he can't compromise on $11 billion in domestic spending he doesn't like? We've got $141 billion to spend in Iraq and Afghanistan but not $11 billion to spend at home?

Look, I don't know the details. Maybe there's something specially bad about this $11 billion. But for Bush and the Republicans to claim that they've suddenly discovered fiscal responsibility is absurd. They've been pouring our money down bottomless foreign pits for five years now. They boosted domestic spending to record highs when they controlled the whole show. Now the Dems have Congress and they're going to have to compromise a little.

Saturday, December 8, 2007

Owning Up

President Bush never admits a mistake, but we bloggers have a higher standard: I admit it, I was wrong. In these early posts, I suggested that increasing our troop strength in Iraq by a mere 18% or so (the famous "surge") couldn't make that big a difference to conditions there. I was cautious enough to note that an untrained, armchair general such as myself might easily be missing something. Well, it seems that I was.

Security conditions in Iraq have improved. U.S. troop deaths, the indicator I follow most closely, are way down. We're still losing about 1 per day, which of course is not good, but it's way better than the 3-4 per day we were losing earlier in the year and at times last year. Iraqi deaths are at about 20-30 per day; again, not a happy statistic, but way down from the peak of over 100 per day. We can't be sure these improvements are due to the surge, but they at least coincided in time.

I'm not saying that I've changed my opinion on the war as a whole. Improvement in security conditions in Iraq does not appear to have been matched by much progress in political reconciliation. We're still pouring billions of dollars into the war every week. It's still true that the whole war was based on faulty intelligence, was appallingly mismanaged for years, has harmed our international standing, and hasn't acheived benefits worth its enormous costs.

But I was wrong to say that a modest change in our troop strength couldn't make a difference. Something has made a difference, and it's hard not to give at least some credit to the surge.

Sunday, December 2, 2007

More on "Fair Tax"

One of the comments on yesterday's entry made a good point (actually, several good points but I'm just going to highlight one of them).

The comment by Kipesquire points out that the claim by Fair Tax proponents that the Fair Tax would impose a federal sales tax of 23% is somewhat misleading. To their credit, the Fair Tax people at least acknowledge this point on their website (they don't acknowledge the regressivity point anywhere that I can see). Under the Fair Tax, if you spent $1 at a store, 23 cents of that dollar would be paid by the store to the federal government as tax. This is the basis for the Fair Tax people's statement that the Fair Tax rate would be 23%.

But as even they acknowledge, sales taxes are usually quoted on a "tax exclusive" basis; that is, they are quoted as a percentage of the cost of the underlying goods, not as a percentage of a price that includes the tax itself. What's really happening in this example is that you are spending 77 cents on some item and paying 23 cents in tax on that item. If you went to a store today and bought a 77-cent item and paid 23 cents in tax, we would normally say that the tax rate is 23/77 = 30%, not 23/100 = 23%. So it would be more straightforward (although less politically appealing) to present the "Fair Tax" as a 30% sales tax.

So when I said yesterday that my hypothetical couple Alice and Bob earned $100,000, saved $10,000, spent $90,000, and paid 23% of $90,000, or $20,700 in taxes, it's important to realize that the $20,700 is part of the $90,000 they spent. They got $69,300 worth of goods and paid $20,700 in taxes on those goods. On the more normal "tax exclusive" basis, one would say they paid a tax of $20,700/$69,300 = 29.87%. After their $6,297 rebate, their tax would be 20.78% of their spending. The richer C&D paid 29.70% of their spending (after rebate), and the even richer E&F paid 29.83% (after rebate).

Thus, under the Fair Tax, one's tax, quoted on a "tax exclusive" basis, would asymptotically approach 30% of one's spending, the more one spent.

But yesterday's main point was that it's extremely misleading to call a tax "progressive" when the rich would in all likelihood pay less of it as a percentage of their incomes. As noted yesterday, rich people can save a much higher percentage of their incomes than middle-class people. (Indeed, my hypothetical Alice and Bob's ability to save 10% of their $100,000 income while raising two kids is prodigious, given that real Americans often save less than nothing.) Because the "Fair Tax" would tax only spending, not savings (and it also taxes only consumer spending, not spending that represents business investment), rich people, as shown yesterday, could easily pay a lower percentage of their incomes in tax than middle-class people, thus piling up savings on which they could earn even more income on which to pay an even lower tax rate. I just can't trust people who fail to acknowledge this basic point.

Saturday, December 1, 2007

The "Fair" Tax

Republican Presidential candidate Mike Huckabee recently endorsed the "Fair Tax." The "Fair Tax," which you can read in detail about here, is a proposal to repeal federal income tax, payroll tax, estate tax, and a bunch of other taxes, and replace them all with a 23% federal sales tax. The IRS could be abolished, and people would pay taxes only on what they spend, not on what they save.

Everyone would also get a "prebate" of the tax equal to the amount of tax that a poverty-level household would pay. The prebate is determined solely by household size, not by income -- for example, every married couple with two children would get an annual prebate of $6,297. The alleged advantage of the prebate is that it would, supposedly, make the Fair Tax progressive -- poor people would pay hardly anything, and middle-class people would pay a lower percentage of their spending in tax than rich people.

I'm not really expert enough to evaluate the Fair Tax in all its detail, but I can tell you one thing: the whole concept is based on a big, fat lie. The Fair Tax website prominently states and many times repeats that the Fair Tax is "progressive." Nonsense.

The website makes this claim because, under the Fair Tax, the wealthier you are, the more tax you would pay, when the tax is considered as a percentage of your spending. But they hide the fact that they wealthier would be likely to pay less when the tax is considered as a percentage of income.

The wealthy generally spend less of their income than the poor or middle class, and the Fair Tax taxes only spending, not saving. Therefore, under the Fair Tax, the wealthy would likely pay less tax as a percentage of income. Maybe a lot less.

Let's do an example. Alice and Bob are a two-earner couple with two children. Between them, they make $100,000 per year. Because raising kids is expensive, they have to spend most of their income. Let's imagine they manage to save $10,000 and spend $90,000. They pay 23% x $90,000 = $20,700 in tax. After their rebate of $6,297, their net tax is $14,403. That's 16.00% of their spending, and it's 14.40% of their income.

Now, Carol and David are also married with two kids, but Carol is a partner at an investment bank and makes $10,000,000 per year. David doesn't work. Living rich is expensive, but they've got so much money they manage to save $5,000,000 of their income and they spend $5,000,000 (I could live pretty well spending $5,000,000 per year, couldn't you?). They pay a tax of 23% x $5,000,000 = $1,150,000. The get the same $6,297 rebate (a trivial sum for them), after which their net tax is $1,143,703.

Now, the Fair Tax people want you to focus on how much tax Carol and David pay as a percentage of their spending. And yes, as a percentage of spending, Carol and David pay 22.87% -- notably higher than Alice and Bob. But look at their tax as a percentage of income. Because they can save half their income, Carol and David's tax is just 11.44% of their income! That's substantially lower than Alice and Bob's tax as a percentage of income.

And if Ellen and Frank, another married couple with two kids, are super-rich, make $100,000,000, and spend $25,000,000 (saving $75,000,000), they'd pay 23% x $25,000,000 = $5,750,000 in tax, or $5,743,703 after their rebate. That's 22.97% of their spending but just 5.74% of their income!

So it seems to me that the "Fair Tax" is likely to be highly regressive. The Fair Tax website touts the tax as progressive many times based on tax paid as a percent of spending. But I don't see a word about tax paid as a percent of income.

In my opinion, that's fundamentally dishonest. It causes me to distrust the whole website. When people are promoting a highly regressive tax as progressive, I would say, stop right there. The whole thing is immediately suspect.