Do these taxes feel high to you?

Though the theory underlying the Obama administration’s response to the current economic crisis is usually described as “Keynesian,” it’s interesting to note that John Maynard Keynes himself would demur.  Michael Barone puts it well when he writes,

“Animal spirits,” said John Maynard Keynes, are the essential spring of capitalism. We depend on the animal spirits of investors, high earners and entrepreneurs for a growing economy.Keynes, a subtler analyst of market economies than the single-minded booster of high government spending that so-called Keynesian economists depict, knew whereof he spoke. People don’t just respond in linear quantum jumps to the incentives and disincentives they perceive around them. They perk up when their animal spirits are aroused, and they slump down into inertia when they are not.

A good illustration of this comes from, of all people, Whoopi Goldberg.  Read the link, then check out this video (they’re from different parts of the conversation):

My wife watched the clip and read the transcript, then looked at me and said, “I didn’t think Whoopi was a Republican.”  She isn’t, but she sure sounds like one here; and if someone like Whoopi feels this way, you can be sure a lot of other rich folk do too.  I think Barone’s argument goes a long way to explaining why.

The Clintonites managed to hit a sweet spot with the 39.6 percent rate. It was a number that started with a three. To high earners, not bothering to calculate exact returns to the last decimal point but just concentrating on the big picture, it seemed that the government was taking just about one third—hey, maybe a bit more—of their incomes. They would get to keep the other two thirds, pretty much. So they proceeded to try to make intelligent investments and to earn large amounts of money without being preoccupied with how much the government would snatch from their hands.Quite a contrast with the 1970s, when the high income tax rate was 50 percent, and 70 percent on “unearned” (i.e., investment) income. In that environment, the animal spirits of the productive class were directed away from making productive investments and toward sheltering their income from seizure by the government. . . .I think there is a serious risk that the Obama tax proposals are going to bring back those days. Yes, they call for returning the high income tax rate only to the sweet spot of 39.6 percent. But they also want to reduce the amount of the mortgage interest and charitable deductions for high earners, which would channel less money to charities and more to the government (and thus to public employee unions and, through them, to the Democratic Party) and would raise the effective rate on high earners to above 40 percent—a number with a four in front of it.Add on to that the state income tax rates of 10 percent or so in place or in contemplation in New York, New Jersey, Connecticut and California—states with more than a quarter of the nation’s high earners—and you are looking at income tax rates above 50 percent.When you get a number with a five in front of it, you are in grave danger, I submit, of directing the animal spirits of our most productive citizens away from productive investments and toward tax shelters: “Those bastards want to take half my money, and I’m not going to let them get it.” You are at risk of directing our economy back into the unproductive slog of the 1970s and away from the robust growth of the 1980s, 1990s and most of this decade.

His argument is, in essence, that most economic actions aren’t purely rational responses to a detailed command of the facts, but rather are in response to more general perceptions, and that these perceptions don’t shift gradually, little by little, but rather tend to do so all at once when a particular threshold is crossed.  As he notes,

When gas prices earlier last year were at $2, $2.50, $3 and $3.50, most Americans opposed oil drilling offshore and in Alaska’s Arctic National Wildlife Refuge. When they hit $4, opinion shifted. The Santa Barbara County Board of Supervisors and the governor of Florida suddenly favored offshore oil drilling. As for Alaska, nuke the caribou!

This suggests that taxes can in fact be higher than most conservatives would prefer without causing much of an adverse effect, as long as they don’t feel higher to the folks whose investments drive the economy; it also suggests, though, that if you overshoot your target even a little, the adverse effect of your miscalculation is likely to be a lot worse than you would consider to be rational.  If Whoopi’s reaction is any guide, I suspect the Obama administration isn’t going to know what hit it.

The Peter Principle in the White House

As was the case more than once during the campaign, SNL’s doing a better job of dealing with the news (in its own inimitable way) than the people whose job it is to cover it; this sketch captures the deer-in-the-headlights cluelessness of the Treasury Secretary so well, it’s almost painful to watch.  For all his résumé, it’s clear that Timothy Geithner is out of his depth in doing the job he’s been given; he has risen to the level of his incompetence.Unfortunately, it isn’t just Secretary Geithner.  We were repeatedly told during the campaign that Barack Obama was going to improve America’s reputation around the world—but that doesn’t appear to include our allies, since we’re not even two months in to his administration and he’s already managed to infuriate the Brits.  Though delivered in the “stiff upper lip” tone that Americans associate with our closest ally, the outrage in the British media at the way President Obama responded to their prime minister’s visit is clear.  I’m sure they particularly appreciated this curt dismissal of their concerns from an official in the State Department: “There’s nothing special about Britain. You’re just the same as the other 190 countries in the world. You shouldn’t expect special treatment.”True enough, I suppose, except of course for the fact that unlike those other 190 countries, the UK has been a staunch and consistent ally of our government . . . Now, as the whole David Brooks episode clearly demonstrated, this White House is remarkably thin-skinned when it comes to criticism and complaint, and so when the firestorm erupted, they defended the President—if you want to call this a defense (emphasis mine):

Sources close to the White House say Mr Obama and his staff have been “overwhelmed” by the economic meltdown and have voiced concerns that the new president is not getting enough rest.British officials, meanwhile, admit that the White House and US State Department staff were utterly bemused by complaints that the Prime Minister should have been granted full-blown press conference and a formal dinner, as has been customary. They concede that Obama aides seemed unfamiliar with the expectations that surround a major visit by a British prime minister.But Washington figures with access to Mr Obama’s inner circle explained the slight by saying that those high up in the administration have had little time to deal with international matters, let alone the diplomatic niceties of the special relationship.Allies of Mr Obama say his weary appearance in the Oval Office with Mr Brown illustrates the strain he is now under, and the president’s surprise at the sheer volume of business that crosses his desk. . . .The American source said: “Obama is overwhelmed. There is a zero-sum tension between his ability to attend to the economic issues and his ability to be a proactive sculptor of the national security agenda.”

In other words, as Power Line’s John Hinderaker summed it up, “Don’t blame us, we’re incompetent!”  Except that there’s one other factor referenced in the Telegraph article:

A well-connected Washington figure, who is close to members of Mr Obama’s inner circle, expressed concern that Mr Obama had failed so far to “even fake an interest in foreign policy”.

It seems clear that indifference—to foreign policy in general and Great Britain in particular—also played a part in this:  Barack Obama and his administration simply didn’t care enough about Gordon Brown’s visit or our alliance with his country to try to be competent about it, or even to try to hide their lackadaisical attitude about it.That said, the portrait painted here of an overwhelmed president who’s unable to keep up with the demands of his job in any sort of effective fashion is deeply worrying, and particularly when combined with his own expressed opinion that he’s “very good” at the job.  This is a member of the Self-Esteem Generation, all right.  It’s no wonder he inflated his résumé (follow the links from that post), took credit as a Senator for work he didn’t do, and gilded the lily in his autobiography to make his first job look much better, and his decision to leave it much more meaningful and meritorious, than it really was; he’s the product of an educational system that’s been more concerned in recent decades with making sure students feel good about themselves than about giving them the education they need to live lives that merit a healthy self-respect.  It’s all of a piece with him taking a job at a law firm, slacking on billable hours, and spending much of his time working on his autobiography (which he didn’t even manage to finish, at least while he was there).Up until last November, none of this has been much of a problem for Barack Obama; he’s had the brains, the grace, and the charm to keep wangling his way along and retelling his story to suit himself without anybody minding enough to cause him any problems.  After all, nothing was really riding on him.  The law firm wasn’t depending on him; the Illinois State Senate got its bills passed whether he did any work or just voted “present” (though the man who ran the shop was happy enough to boost him by putting his name on bills anyway); the US Senate kept running along whether the junior Senator from the state of Illinois was in his seat or not.  Being President of the United States, however, is different; and now, this is a problem.  This is the first actual job he’s had since his days as a community organizer (which were, by his own admission, unsuccessful) in which his job performance actually matters—and it’s one of the biggest jobs in the world, and his performance is all-important.  Now, it matters immensely whether he gets things done, and whether they’re the right things; and unfortunately (for us), he has never cultivated the habit of digging deep and digging in to get things done, he has never cultivated the endurance necessary to true accomplishment—in Nietzche’s words, he’s never practiced “a long obedience in the same direction”—and so he doesn’t have the habits and skills and life patterns necessary to do that job effectively.This shouldn’t be a surprise to anyone, since it was all there in his résumé, for anyone who cared to look; but too many people didn’t.  The McCain campaign tried to make the point, but they couldn’t get beyond talking about “experience,” as if it was simply a matter of time served, when it was really a matter of character.  This allowed the Obama campaign to counter it emotionally, by making “experience” mean “old, tired, and four more years of Bush”; it allowed them to counter it mathematically by adding Sen. Biden to the ticket, when in fact Sen. Biden’s career in the Senate basically consisted of nothing much more than Sen. Obama’s time in the Senate, spread out over many more years; and perhaps most fatally, it allowed them to portray Sarah Palin, when she was named as John McCain’s running mate, as equally “inexperienced.”  Thus what should have been a powerful comparison for the McCain campaign—that Gov. Palin had accomplished far more of substance at a similar age than Sen. Obama—ended up being used against them.  People looked at the numbers and missed the real point:

Two things would leap out from Sarah Palin’s résumé—a pattern of overachievement and a pattern of actually getting things done. Two things would also leap out from Barack Obama’s résumé—an undeniable wealth of talent and an equally undeniable dearth of accomplishments. . . .In truth, Sarah Palin is the kind of employee virtually every enterprise seeks—the kind who gets things done. And Barack Obama is the kind of employee a company hires only when it’s in the mood for taking a risk and willing to wager that the candidate’s past performance isn’t predictive of his future efforts.

So far, that risk isn’t looking too good.

Another addition to the blogroll

As someone who started posting on Sarah Palin a couple months before her nomination helped the MSM see that the deepest desire of their collective heart was to slander libel her to within an inch of their lives, I’ve been pleased to see the rise of various grassroots networks dedicated to her support.  I tend to be a late adopter on such things (it took a long time for friends to talk me into joining Facebook), but I’ve jumped in and joined one of them, the Read My Lipstick Network, and their blogroll is now in the sidebar.  (I must confess it seems a little strange to me, not being the type to wear lipstick, but American politics is in something of an odd phase these days anyway.)  For those who are into politics (which isn’t everyone who drops in here, I know), there are some good blogs in there, and I encourage you to check them out.

Sarah Palin, sexism, and shoddy research

I haven’t wanted to waste time and space giving attention to the dubious study that purports to show that Sarah Palin’s looks hurt her as a politician; but when Bill O’Reilly interviewed one of the academics behind the study, with Tammy Bruce also in the conversation, I had to post this.  I do think there’s some legitimate material here about the way in which women are perceived in our society, but it’s clear watching this smirking Ph.D. that she wants people to draw negative conclusions about Gov. Palin which, as O’Reilly and Bruce point out, her study simply doesn’t justify.  (The real question here is whether the Democratic Party deliberately used and encouraged societal impulses and tendencies which they would normally have denounced as “sexist” in an effort to undermine Gov. Palin specifically and the McCain/Palin ticket more generally; for my part, I think they did, and believe a study on that could be quite enlightening.)

HT:  C4P

Barack Obama is no John Kruk

If you’re not a baseball fan, you’ve probably never heard the story, and even if you are, you might not remember it.  Today, John Kruk is a scruffy, rotund talking head, but back in the day, he was a scruffy, rotund hitter for the Padres and Phillies.  He was a good one, too; for all that he walked up to the plate looking like an unmade bed a lot of the time, he could pretty much roll out of bed and collect a hit, so it worked for him.  He was a lifetime .300 hitter with an on-base percentage just south of .4oo, and he had enough power to keep pitchers honest; he made the All-Star Game three times in a ten-year career and could fairly have gone once or twice more.Anyway, I no longer remember the precise situation, but on one occasion, Kruk was confronted by a female fan with a disparaging comment—I think to the effect that he looked too fat to be an athlete (as noted, he was far from svelte).  Slow of foot but quick of wit, Kruk immediately responded, “Lady, I’m not an athlete, I’m a ballplayer.”It was the absolute truth, and dead on point.  Bo Jackson was an athlete.  John Kruk was a ballplayer.  Bo looked a lot better in uniform, but Kruk did more to help his teams win.  Why?  Because being an athlete is about having talent; being a ballplayer is about having skill.  Talent is innate; skill is learned, developed, honed.  Talent limits what you can do with skill, but skill is ultimately what wins ballgames.I got to thinking about this when I read Michael Gerson’s Washington Post column “GOP at the Abyss.”  Ultimately, I agree with Jennifer Rubin’s assertion that Gerson gets the matter backwards; but I also think he gets there in the wrong way.  Gerson writes (emphasis mine),

[American conservatism] has been voted to the edge of political irrelevance, assaulted by a European-style budget and overshadowed by a new president of colossal skills and unexpected ambition.

The vote I’ll grant, but that’s happened before.  The budget I’ll grant, but the mere fact of the budget doesn’t spell curtains for conservatism; if the budget fails, the results are likely to be quite the contrary.  That President Obama’s leftist ambition was “unexpected” I most emphatically do not grant; many people saw that one coming, including Sarah Palin, Stanley Kurtz, and (for whatever it’s worth) me.Most significantly, though, I cannot agree with Gerson’s statement that Barack Obama is a president of “colossal skills.”  He’s a president of colossal talent, of rare political gifts, and few actual skills.  The recent commentary on his dependence on the teleprompter, while unimportant in itself, illustrates this.  He has great ability, but very few political and governance skills because he’s done little to hone them; he’s spent more of his career campaigning for jobs than actually doing them, and it shows—when he needs to accomplish something, he reverts to campaign mode because that’s the only way he knows how to get anything done.  That’s the only area in which he’s done any significant work to develop skills to utilize his talents.  When it comes to actually governing, he’s the Bo Jackson of politicians—he can hit the ball a country mile when he makes contact, but he has absolutely no clue what the pitcher’s going to throw him next.Of course, this is by no means a permanent situation; skills can always be developed, and the president now has a powerful incentive to develop them.  He’s bound to get better, and as he does, the task of opposition will grow more difficult for the GOP.  But that doesn’t mean the GOP ought to buy in to Gerson’s gloomy analysis, because the fact is, Barack Obama isn’t the colossus at the plate that Gerson takes him for.  He might be pretty good with the roundball in his hand, but in this game, he’s no ballplayer at all; he’s just an athlete.  He’ll hit the meatball and the hanging curve, but a good pitch at the right time will get him out.  The GOP just needs to have confidence in their stuff, focus on their control, and go after him.

Obama threw down the gauntlet; Rush picks it up

Obviously, an old-fashioned duel is out of the question, so Limbaugh has challenged the president to its modern-day political equivalent:  a debate.

If these guys are so impressed with themselves, and if they are so sure of their correctness, why doesn’t President Obama come on my show? We will do a one-on-one debate of ideas and policies. Now, his people in this Politico story, it’s on the record. They’re claiming they wanted me all along. They wanted me to be the focus of attention. So let’s have the debate! I am offering President Obama to come on this program—without staffers, without a teleprompter, without note cards—to debate me on the issues. Let’s talk about free markets versus government control. Let’s talk about nationalizing health care and raising taxes on small business.Let’s talk about the New Deal versus Reaganomics. Let’s talk about closing Guantanamo Bay, and let’s talk about sending $900 million to Hamas. Let’s talk about illegal immigration and the lawlessness on the borders. Let’s talk about massive deficits and the destroying of opportunities of future generations. Let’s talk about ACORN, community agitators, and the unions that represent the government employees which pour millions of dollars into your campaign, President Obama. Let’s talk about your elimination of school choice for minority students in the District of Columbia. Let’s talk about your efforts to further reduce domestic drilling and refining of oil. Let’s talk about your stock market.

I’m quite sure Barack Obama is neither gutsy enough nor foolhardy enough to take that challenge, and in some ways, I wouldn’t be happy to see him reduce the dignity of the office enough to do so . . . but that would be a fun three hours.Update:  Of course, if he doesn’t, Jeffrey Lord is right:  his own team’s language is going to make him look pretty bad.  After all, David Plouffe called the GOP “paralyzed with fear of crossing their leader” because they haven’t taken on Limbaugh; given Limbaugh’s challenge to the president,

the Obama crowd has now set up a breathtakingly stupid proposition: either Obama debates Rush one-on-one or he is, in the words of his own staff, paralyzed with fear.

Not good.  None of Obama’s guys are chess players, I can tell—so far, there doesn’t seem to be one member of this administration who thinks beyond the next move.

Will Darth Biden have to use the Force?

Because there’s a rebellion afoot in the Senate, and the rebel base isn’t on Yavin or Hoth, it might just be right here in Indiana.  I always thought Evan Bayh was a Democrat I could respect, and now I think he’s gone and proved it:

This week, the United States Senate will vote on a spending package to fund the federal government for the remainder of this fiscal year. The Omnibus Appropriations Act of 2009 is a sprawling, $410 billion compilation of nine spending measures that lacks the slightest hint of austerity from the federal government or the recipients of its largess.The Senate should reject this bill. If we do not, President Barack Obama should veto it. . . .Our nation’s current fiscal imbalance is unprecedented, unsustainable and, if unaddressed, a major threat to our currency and our economic vitality. The national debt now exceeds $10 trillion. This is almost double what it was just eight years ago, and the debt is growing at a rate of about $1 million a minute.Washington borrows from foreign creditors to fund its profligacy. The amount of U.S. debt held by countries such as China and Japan is at a historic high, with foreign investors holding half of America’s publicly held debt. This dependence raises the specter that other nations will be able to influence our policies in ways antithetical to American interests. The more of our debt that foreign governments control, the more leverage they have on issues like trade, currency and national security. Massive debts owed to foreign creditors weaken our global influence, and threaten high inflation and steep tax increases for our children and grandchildren.The solution going forward is to stop wasteful spending before it starts. Families and businesses are tightening their belts to make ends meet—and Washington should too. . . .Voters rightly demanded change in November’s election, but this approach to spending represents business as usual in Washington, not the voters’ mandate.Now is the time to win back the confidence and trust of the American people. Congress should vote “no” on this omnibus and show working families across the country that we are as committed to living within our means as they are.

For Sen. Bayh to write this in the Wall Street Journal is definitely a shot across the bow of the Obama/Pelosi/Reid triumvirate—but he’s not the only hand at the linstocks.  According to Politico,

Moderate and conservative Democrats in the Senate are starting to choke over the massive spending and tax increases in President Barack Obama’s budget plans and have begun plotting to increase their influence over the agenda of a president who is turning out to be much more liberal than they are.A group of 14 Senate Democrats and one independent huddled behind closed doors on Tuesday, discussing how centrists in that chamber can assert more leverage on the major policy debates that will dominate this Congress.Afterward, some in attendance made plain that they are getting jitters over the cost and expansive reach of Obama’s $3.6 trillion budget proposal.Asked when he’d reach his breaking point, Nebraska Sen. Ben Nelson, one of the most conservative Democrats in the Senate, said: “Right now. I’m concerned about the amount that’s being offered in [Obama’s] budget.” . . .Sen. Evan Bayh, the Indiana Democrat who assembled Tuesday’s skull session, added that he was “very concerned” about Washington’s level of spending, especially in a $410 billion “omnibus” spending bill to fund the government until the start of a new fiscal year in October.As for the tax increases on high-income earners called for in Obama’s plan, Bayh said, “I do think that before we raise revenue, we first should look to see if there are ways we can cut back on spending.” . . .If the moderate Democrats in the Senate are willing to work with moderate Republicans—as Bayh said they are eager to do—they will negate the White House’s ability to portray opposition to Obama’s spending as partisan obstructionism.

I think we now know why Barack Obama didn’t pick Sen. Bayh as his running mate, eh?  Biden had best go grab the helmet . . .HT:  Jennifer Rubin

Some people don’t need PR

Conservatives4Palin found an astonishing post on the Governor by a blogger who goes by the handle The Aged P, an infrequent poster but clearly someone well worth listening to when he does post.  I’m going to do something I rarely do and quote the post in full, because it would be a shame to chop up the analysis:

The one thing that Gov Palin has not been short of since the election has been advice from Republicans and the media—stand for governor again in 2010, go for the Senate, go for POTUS 2012, wait until 2016, write a book, go into the media, give up politics and concentrate on her family—the options are endless.As an outside observer, however, it strikes me that she is intelligent enough and shrewd enough to make up her own mind. I think that maybe she has already decided on a course – I believe she is going de Gaulle.General de Gaulle entered France alongside the Allies at the head of his Free French army after years of exile in London. Initially greeted as a returning hero by the French he served as the President of the Provisional Government but within two years he had resigned, disillusioned by the re-emergence of the old inter-party squabbles that had characterised the pre-war regime.For the next few years he led his own political party but, tiring of the political rat race in 1953 he withdrew from public life and retired in self-imposed internal exile to his home in the village of Colombey-les-Deux-Eglises to write his war memoirs, and many pundits wrote him off as a man whose time had passed.His followers, however, retained their cohesion because they saw de Gaulle as a man of destiny who one day would be called forth from his exile by the people of France to rescue them at a time of great danger—which is exactly what happened in 1958 when France was torn apart by the Algerian crisis. The General returned to office but this time on his own terms and remained in power for the next decade.Since the Alfalfa Dinner Gov Palin appears to have chosen Alaska as her own Colombey-les-Deux-Eglises, far enough away from the mainstream of US politics, concerning herself with her responsibilities as Governor and keeping a distance between herself and the spotlight, just as de Gaulle did in the 1950s. She has stayed away from CPAC, she did not attend the NGA, causing some irritation amongst some elements who would prefer her to act as some Joan of Arc type figure scorching across the lower 48 thrusting and slashing at the President and Congress. Staying out of the spotlight is not an option for some of these folk who often see politics as showbiz where your PR people will tell you that you have to be forever working on your next film or album to remain in the public eye.But the Governor does not need any of that—like de Gaulle she is so deeply impressed upon the public’s imagination that she needs no PR, she is simply there.De Gaulle was relatively unknown to the French people in 1940 but millions of them heard his broadcast from London at the moment of their deepest despair and in those few minutes he became the inspiration and hope for so many. Governor Palin walked onto the stage at the Republican Convention, electrified millions and stole their hearts forever with her grace, her honesty and her love of life sealing there and then a contract and covenant of support through fire and flood whatever may happen. Camille Paglia called her an immensely talented politician whose time had not yet come. But perhaps, one day, just as in 1958 with de Gaulle, a message will go across Canada to the north saying her time has come—and then the banners must unfurl . . .

Other than noting that Gov. Palin isn’t exactly in internal exile, but is in fact continuing to do her job as an effective and popular governor, I don’t think there’s anything here I’d argue with.  Click the link, give this man some traffic and leave a comment, because he’s produced a remarkable piece of political commentary here.And I agree with Ramrocks—that last sentence really gets me.

The anti-bipartisan chicanery continues

Barack Obama’s budget director, Peter Orszag, suggested yesterday that the administration would consider using the budget reconciliation to pass its healthcare agenda and energy agenda (particularly their proposed cap-and-trade bill) by inserting that legislation into the final version of the budget.  It’s not that those bills are actually a proper part of the budget process—rather, it’s that the budget reconciliation (the final version of the budget agreed upon between the House and Senate after each passes its separate version) can’t be filibustered.  Orszag’s suggested tactic would allow the White House to pass major legislation without debate—and without a single Republican vote.At least, it would in theory.  In actual fact, as About.com’s Kathy Gill points out,

If Democratic leadership pursues this ill-advised plan, moderates do have an out. The out is a constraint on reconciliation that is called the “Byrd rule.” Named after Senator Robert Byrd (D-WV), the constraint means that if a Senator believes that a provision of the reconciliation bill is “extraneous” it may be subject to a point of order. After the Byrd Rule is invoked, at least 60 Senators must vote to waive the Byrd rule.

There are two things to be said about this.  The first is that the Byrd Rule is there to prevent exactly the sort of shenanigans that the Obama administration is contemplating, and that’s a very good thing; misusing the budget process in that way would just be wrong.

The budget process should be used to manage federal expenditures for programs that have been enacted by Congress. It’s bad enough that enabling legislation runs hundreds of pages and that there is no requirement of nexus (relevance). The budget is not the place to shoehorn policy changes that should be the subject of their own enabling legislation.

The second is that Gill’s point shouldn’t be news to Barack Obama.  Don Surber comments,

Perhaps if Barack Obama had spent a few days in the Senate instead of campaigning, he would know this.

You would think that a former member of the Senate would have more awareness of and respect for the proper procedures of the Senate than President Obama has so far shown.(Cross-posted to RedState)