I’d be surprised if Mike Kinsley makes much less than 250K a year. In fact, I suspect he’s straight-up lying here (via), though maybe his total earnings per year are down from the days when he was riding higher:
Sure let’s raise taxes on the rich. But that’s not going to solve the problem. The problem is the great, deluded middle class—subsidized by government and coddled by politicians. In other words, they are you and me. If you make less than $250,000 a year, Obama has assured us, you are officially entitled to feel put-upon and resentful. And to be immune from further imposition.
And the wretched spinach/dessert cliché:
Austerians don’t get off on other people’s suffering. They, for the most part, honestly believe that theirs is the quickest way through the suffering. They may be right or they may be wrong. When Krugman says he’s only worried about “premature” fiscal discipline, it becomes largely a question of emphasis anyway. But the austerians deserve credit: They at least are talking about the spinach, while the Krugmanites are only talking about dessert.
How does he know that austerians don’t get off on other people’s suffering? When austerians write articles declaring “make everybody hurt”, isn’t it hard to argue that they don’t get off, at least a little, on other people’s suffering, isn’t it?
It’s also worth noting that Kinsley does not cite a single figure in his column, other than the 250K a year he claims to make less than. He gives himself a way with the spinach/dessert, too; that has more the ring of a moral argument than a serious economic one.
I’ve always hated Michael Kinsley. He invented nerdy-yet-smug overly boyish shtick that Bobo’s made a career out of copying, his oh-so-contrarian shtick gave rise to Mickey Kaus and countless others, and he made glib substance-free Harvard dining hall bullshit strangely respectable. He’s never been any kind of a liberal, despite his protestations.
And that’s my ultimate problem with Kinsley. He’s free to believe what he wants, but he should stop pretending he’s on the left.
Hill Dweller
As is usually the case with people that come at him, Kinsley completely misrepresents Krugman’s views. Krugman’s believes(rightly) that austerity right now is actually counterproductive and extends the period of suffering. In good economic times, he is all for reigning in government spending.
dedc79
Whether they “get off on suffering” strikes me as a straw man. I think the issue is whether they have any empathy for the less fortunate, and that’s where I tend to think the failure lies.
Bulworth
“Austerians don’t get off on other people’s suffering.”
Assuming facts not in evidence.
jamick6000
I enjoy this paragraph from his wikipedia page.
a dry wit with nerdy demeanour and analytical skills. what is wrong with these people
Cacti
Austerity has been tried in the Eurozone and has been a massive failure.
It was tried by Herbert Hoover and was a massive failure.
It was even tried by Roosevelt in 1937 and sent the economy back into recession the following year.
There is no historical or current example of austerity cutting an economy into prosperity.
forked tongue
I remember back in the 80s when Kinsley was the latest bright young liberal pundit on the scene, writing in TNR about how much he loved Margaret Thatcher. The guy writing the Press Clips column in the Village Voice (which was at that time virtually the only place in all media where you could find snarky ripostes to right-wingers) said something like “Persons interested in joining Liberals for Thatcher should write to: Editor, The New Republic, [etc.]”
some guy
A New Republican pretending to be a liberal? Did the wayback machine return us to the 80’s ?
the Conster
Krugman throws the rocks, then just has to stand back to see who yelps. Must be fun to watch all the assholes out themselves.
Schlemizel
fuck this entire argument. As long as you ignore the payrolls taxes you can pretend that the middle class is coddled and low income are all lucky duckies
Fuck that and fuck the people who ignore payroll taxes. I am so god damned sick and tired of this shit
gene108
If by “dessert” you mean lower short term unemployment, higher median incomes, better chances of climbing the socio-economic ladder, and lower medium-to-long-term budget deficits, I’d like seconds.
Austerians enjoy the whole notion of making people suffering.
They are a strange cult, where one only learns to better oneself through suffering, despite the fact one doesn’t actually have things improve despite the suffering because there are no jobs, education access is limited and in the U.S. access to healthcare is limited.
I think the villain in Hellraiser pretty much had the same view of making people suffer as the average austerian.
some guy
DeLong’s takedown, linked to by Atrios, is superb.
Walker
Austerians are talking about fluorescent-colored demons from their acid trips. Their believe system has no bearing on reality. So no one cares what they say.
Cacti
@Hill Dweller:
Keynesian economics also supports running a surplus in the boom times, as hedge against the next bust, when increased government spending will be needed.
Bill Clinton accomplished this before leaving office. As soon as the dumbass Bush team walked through the door, it was “Surplus? We need to get rid of that!”
Bulworth
@Cacti: Yeah, but then thankfully, after the Germans bombed Pearl Harbor, FDR returned to a period of less government spending so we could win the war. /
Suffern ACE
Funny thing though, is that I don’t think the middle classes voted for Obama. Although I do think they might be entitled nonetheless. So in essence, he’s complaining about Republican voters not accepting austerity. That’s not Krugman’s or Obama’s fault. Those voters aren’t inclined to listen to them.
brettvk
It makes me a little crazy – in a good-thing-I-don’t-own-a-gun kinda way – when the east coast media elite casually list all the bad things that a shit economy does to other people. I’m so tired of them looking at me as a specimen on a slide. Their speculations are always framed from 25,000 feet above the muck that the rest of us are slogging through, because they know nothing bad will ever happen to them.
If I had the guts, the means and a terminal diagnosis, I’d seriously consider a improvised act against one of these fuckers.
Roger Moore
Which is total bullshit. Krugman is saying that we’re starving, so we shouldn’t be too worried about what we’re eating. He thinks a the normal balanced diet can wait until we’re back to a healthy weight, and some fattening desserts are likely to get us there faster than eating spinach. The austerians hate dessert as a matter of principle and think it should be permanently off limits. They’ve heard we have a weight problem and have prescribed spinach, even though our weight problem is that we’re underweight, not overweight.
Jockey Full of Malbec
Shorter austerians: “This hurts us more than it hurts you. Really.”
Cacti
@Bulworth:
I always shake my head when Republicans say it was WWII that brought us out of the Depression, as if it’s some sort of point against Keynesian economics.
The WWII economy was the largest Keynesian stimulus in the history of the Republic.
kwAwk
I actually kind of agree with Kinsley on this one. If we believe that Social Security should be saved and Medicare should be saved then we should all be willing to sacrifice to make that happen. If you’re not willing to accept a small tax increase for yourself to make that happen, then you shouldn’t be so sure about enacting a big tax increase for someone else to make that happen.
We can’t become a society where we expect everything for free, otherwise we’re playing right into the hands of the wingnuts who claim all socialism is about getting free stuff.
I believe in having a mixed socialist/capitalist society with the recognition that socialism isn’t cheap.
srv
Besides you Doug, CS and maclaren, John on Dronze, and K-Thug, who’s on the left anymore?
And I wouldn’t have even included you a few years back.
Just Some Fuckhead
.. even the liberal Michael Kinsley..
MattF
It’s the smile that gives it away. “This hurts me more than it hurts you. (Grin)”. Bah.
Bob
This tune from the Sex Pistols has some relevance,
http://www.youtube.com/watch?v=aAyrhlomON0
Cacti
@Bulworth:
I always shake my head when Republicans say “WWII ended the Depression,” as if it was some sort of point against Keynesian economics.
The WWII economy was the greatest Keynesian stimulus in the history of the Republic.
Omnes Omnibus
The problem with being a career contrarian is is that much of the time the conventional view is correct. Seat belts save lives, etc. Occasionally, the contrarian view is correct, but, if one just bets on it every time, one isn’t prescient or insightful.
Not exactly the same thing but, when Nassim Taleb wrote his book about “black swans,” he emphasized their rarity. Indeed, when he talked about a “black swan” investment strategy, he suggested putting 90+% of one’s funds in safe things like government securities and then taking risky or contrary positions with the remainder. He also noted that most of the risks would be losers, but, is and when one paid off, it could be huge.
Career contrarians are just hoping that people will notice only the few occasions where they get it right, not the majority where they are wrong.
Bill Arnold
@Schlemizel:
And sales taxes.
Mr Stagger Lee
I wonder if Kinsley still lives on Bainbridge Island, the upscale artsy suburb of Seattle?(Not rich like Mercer Island or Medina, but still snooty) He ought to go down to Bremerton or maybe White Center to see what life is really like. But he never thinks of the lumpen.
becca
Now where did I put my hair shirt…
Hoodie
You can see the field of strawmen Kinsley burns from outer space. Krugman and others of the “left” are not simplistically saying tax the rich to pay for middle class benefits. Rather, the political-legal structure, including the tax code, is oriented to facilitate short term wealth maximization for rent-seekers, who are keeping their foot on the neck of the economy because they refuse to take a hit for shenanigans of the late 90’s and early 2000’s that put them in that position. Unsurprisingly, they love austerity for everyone but them. Austerity holds the bond holder harmless while fucking everyone else, notably the working class families from which business creators often come. Krugman talks about that frequently. Austerians turn it into a morality play because they’re looking for validation of their privilege. Kinsley is a worthless courtier who started as Bill Buckley’s pet liberal on “Firing Line” and has never been anything else.
Higgs Boson's Mate
Austerianism is Calvinism masquerading as economics.
Villago Delenda Est
@Cacti:
This.
They utterly ignore that government spending ending the Depression.
I don’t want to shake my head, I want to strangle them for being so willfully stupid.
Belafon (formerly anonevent)
Everybody must sacrifice in the name of austerity. And by everyone sacrificing I mean that everyone must choose to make a few hundred less out of their paychecks. See, everyone will sacrifice equally. No, money earned on the stock market doesn’t count, since it’s not a paycheck.
No, I don’t think anyone should be allowed to sleep under the bridge.
NickT
Kinsley is liberal in the way that Marty Peretz is pro-Palestinian.
El Caganer
I don’t give a fuck whether austerians want to hurt people or not. Their ideas are bullshit and, in a sane world, would be either ignored or mocked.
cvstoner
If you make less than $250,000 a year, Obama has assured us, you are officially entitled to feel put-upon and resentful. And to be immune from further imposition.
Well, that, and the fact that if you make less than $250,000 a year, your real wage has only increased by like $50 over the last 30 years, while the 1%’ers have seen vastly larger pay increases. Just sayin’.
patroclus
Austerians like Kinsley are talking about cutting the meat and bones. Krugman is talking about growth, stabilization (safety and soundness), an efficient allocation of resources and an equitable distribution of wealth and income.
liberal
@Hoodie:
The key word here is “rent”. Most of the wealth of the truly wealthy was accrued via parasitic rent collection, aka legalized theft. There’s no harm to economic efficiency if most of it is taxed away, and also no harm to justice.
Cacti
@kwAwk:
Unless your annual income is above $113,700 annually, you already pay payroll taxes on 100 percent of your income. In it’s current form, it’s the most regressive national tax we have on the books and one of the reasons why Warren Buffet talks about paying a lower tax rate than his secretary.
The household making $50,000 per year isn’t the one that’s not pulling its weight.
El Cid
No, this is mathematically wrong: taxing the rich really does fix it.
It’s because there don’t have to be a lot of them for them to have a lot of money.
Having a billion dollars is a whole lot more than having a million dollars.
Getting a few more percent from someone with a billion dollars really does outweigh a few more percent taken from lots of people with far less money.
I hate these fucks.
ericblair
@Cacti:
I remember Greenspan wringing his hands late in the Clinton administration about how monetary policy was going to be a real problem since it looked like we were going to pay off a lot of Treasury debt. Guess we fixed that little problem.
The Austrian solution to economic problems is an elitist moral panic. Essentially, all the little people were getting uppity by borrowing more money than befits their station, and need to suffer and re-impoverish themselves to restore moral order. Rent-seeking idle rich must be protected by ensuring the money supply never increases, because increasing the money supply would benefit people who actually build and do shit over inbred trustafarians. And evidence? We don’t need no stinkin evidence.
MikeJ
@Omnes Omnibus:
A 15-1 payout on 10-1 odds means you’ll come out ahead even after losing most of the time.
Marc
Brad DeLong has the definitive takedown of this column.
Just Some Fuckhead
Who do I blow to get a front page gig around here? I want to write about programmable calculators, my crazy cat and teen porn, three subjects that are severely neglected here. Additionally, I can occasionally be the token wild-eyed liberal when I’m in a bad mood.
pamelabrown53
@NickT:
I would also add Howard Fineman and Joe Klein (more and more) to the list of old “liberals” like Kinsley, who have long past their “sell by” date.
MomSense
@Bulworth:
Austerians may not “get off” on other people’s suffering but they certainly are indifferent to it. And that is the big problem with these policies. Evidence that refutes austerity and the demonstrable economic and human consequences are just dismissed.
Roger Moore
@Omnes Omnibus:
And they’re probably right. The problem is that nobody is reliably keeping score, so the part where the pundits lose something for being wrong has been eliminated from the equation. They’re making bets with no downside but with a huge upside. It’s no wonder they don’t care about being wrong most of the time.
Just Some Fuckhead
@Belafon (formerly anonevent):
Fuck you, bridge nazi.
kwAwk
@Hoodie:
I disagree that Kinsley is creating a strawman here. I have not heard one proposal to raise taxes on the middle and lower classes to pay for saving Social Security and Medicare.
I agree with you that the tax code is biased towards capital gains over earned income, but we can’t simply say that the Bush Tax Cuts should be repealed for how the rich get their income without saying that perhaps the Bush Tax Cuts should be repealed for everybody.
It would make it a lot easier of a sell all around if the burden was spread around even a little bit. Or it would make it an impossible sell, in which case that would be the judgement of the American people that they don’t really want Social Security and Medicare saved.
patroclus
@Higgs Boson’s Mate: Uh, no. Calvinism stands for the democratic election of church leaders, the priesthood of all believers, the separation of church and state, the end of the concept of “ex-communication” and the termination of the corrupt sale of indulgences. Or, at least, that’s what John Calvin stood for – your definition of Calvinism needs some work.
jrg
Oh, fuck you. How much of the Social Security that gets pulled from my paycheck will go to support another imbecilic war? That’s my money, you clown. I may not see it when it’s time for me to retire. Maybe I’ll be really coddled and have cat food when I can’t work anymore. Whee!
Tractarian
@dedc79:
Exactly. They don’t “get off” on other people’s suffering. The problem is, they don’t notice it at all.
@Cacti:
To be fair, Al Gore would have gotten rid of the surplus too, by putting it all in a Social Security “lockbox.” Imagine that, setting money aside to shore up long-term entitlement obligations instead of frittering it all away on tax cuts. Anyway, the point is Democrats Did It Too So Shutup
SatanicPanic
@Roger Moore: I get what you’re saying, but it’s a losing battle fighting on their metaphorical turf. Pretty soon you’re stuck arguing over patterns for the tablecloth on the kitchen table that the government sits around
kwAwk
@Cacti:
But the first problem is that the contributions of 100% of income at $50k being taxable isn’t paying for the program and the benefits received. People with higher incomes aren’t paying FICA taxes on 100% of their income, but by the same token, their benefits are capped in line with their contributions just like everybody else.
Roger Moore
@Bill Arnold:
And all kinds of hidden taxes that businesses “pay” but then charge back to their customers, like property taxes for renters or the way cable companies directly charge their franchise tax to their customers.
MomSense
@Bill Arnold:
and property taxes.
Tractarian
@kwAwk:
Sure we can. The 1% have seen their income inflate like a balloon in the last decade. The income of the other 99% is stagnant. Why shouldn’t we tax the ultra-rich to pay for everyone else’s retirement?
Omnes Omnibus
@kwAwk: Quick question: who is more undertaxed at the moment – ordinary citizens or the mega-rich?
MikeJ
@MomSense:
It’s actually ok for someone studying the economy writ large to be indifferent to individual suffering.
If economists were coming up with ideas that worked, it would be up to politicians to decide if the outcome was worth the cost in human suffering, or if there was some way to alleviate it.
But since their ideas don’t work, everything else about the austerity brigade is pointless. They could be the nicest people in the world, devoted to feeding the poor, etc, and it still wouldn’t matter.
Cacti
@Tractarian:
At least not until the peasants storm the palace gates, and they expect the 60-year-old, $8 an hour rent a cop to lay down his life for them.
Tractarian
@kwAwk:
“Austerians get off on other people’s suffering” is indisputably a strawman argument.
NickT
@pamelabrown53:
That wouldn’t be a list. It would be an infinite loop. Appropriately, when you consider how those talentless, discredited frauds bob to the top of Villager publications year in year out.
Roger Moore
@Just Some Fuckhead:
Why don’t you try blowing yourself and see if that does the trick.
Butch
@kwAwk: ‘Scuse me, but the payroll tax for Social Security reverted to a previous higher level on January 1, which certainly made my middle class taxes go up. Between that and the increase my company imposed for health insurance, I’m taking home $250 a month less than I did on December 31.
NickT
@Roger Moore:
He’s probably enough of a contortionist to make a serious attempt.
Patrick
The rich and the upper middle class have vast and vast amounts of access to media outlets that the average person don’t have. When was the last time you saw a poor person on MTP or on CNBC? Instead you have multi-millionaires such as Tom Brokaw or Rich Santelli crying about how bad the deficit is and that we need austerity. And this is why our government has such a flawed policy when it comes to government spending. It is the dumbest idea to cut government spending when the economy is doing badly.
Frankensteinbeck
@Tractarian:
No, the Republican troll is right. Just as soon as the rich are paying the same percentage of their income as the middle class and poor, then if we’re still short on money we’ll have to look at raising everyone’s taxes. Not at the same rate, of course, because of marginal utility issues, but after we fix the giant unfairness of our current tax scheme we should maintain the new tax scheme in a fair way.
kwAwk
@Tractarian:
Point taken. Sure we can do it. In theory. But so far we’re not being successful at it.
My contention would be that we on the left need to decide what is more important to us? Saving Social Security and Medicare or protecting the middle class from incremental tax increases.
Which is more important?
Tractarian
@Butch:
Yeah, but admit it, if you didn’t pay that extra $250 you’d start to think that Social Security is like a Free Lunch and you never have to pay for it and Socializm etc. etc. etc.
Never mind that you’d still be paying a substantial part of your income to the government.
NickT
@kwAwk:
Why assume that this is the only possible set of choices?
Svensker
Which deluded subsidized middle class is that? I guess The ones whose wages haven’t gone up since the 1970s? The ones who pay enormous amounts for health care and their kids’ college? The ones in debt up to their necks and worried about their jobs, if they have jobs? The ones whose kids graduate from college with huge debts and can’t get a decent job? That deluded middle class?
Who the hell is he talking about? I guess I don’t hang out the right crowd.
Chyron HR
@Just Some Fuckhead:
So what are the other two topics you want to write about?
Omnes Omnibus
@NickT:
Because it is essential to his/her argument.
Odie Hugh Manatee
Yeah, we really need to stop coddling the middle class and let the reality of the free market set in. Fuck them, their whiny, entitled asses and the government that coddles them. We would be a better country with full employment if people were limited to earning a minimum wage.
The middle class costs companies and shareholders too much.
NickT
@Omnes Omnibus:
Well, d’oh!
NickT
@Odie Hugh Manatee:
Indeed. A happy, morally upright middle class is a poor middle class. As Brooks and Kinsley would no doubt agree.
Tractarian
That’s like saying, we need to decide which is more important, providing education to our children or protecting them from violent crime.
They are both important. And, given the income explosion experienced by the ultra-rich in the last few years, there is a very simple way of doing both. So there is really no need to throw out one of those goals in the name of securing the other one.
srv
@jrg:
Purina. It’s What’s For Dinner:
If Americans were just more like Viktor Belenko, we’d have a little less trouble
rikyrah
tell it.
TELL IT
aimai
@kwAwk:
That’s backwards. The middle class already accepted a “small tax” on itself–that’s exactly what Tip O’Neill and Reagan famously enacted in order to (supposedly) shore up Social Security and Medicare. The question people are raising in re raising taxes is whether we should continue to carve out an exemption for people who make a shitload more than 250,000 and “bust the caps” on SS payroll taxes. I’d turn this whole thing around on you and ask you “why do people rob banks” (i.e. tax the rich?) because that’s where the god damned money is.
Mr Stagger Lee
@kwAwk: Why are these two the only choices? We got corporations not paying taxes, the Rich basically getting away scot-free, a military industrial complex that is a giant white elephant. I mean really? Fuck the lower classes so the banks can get more? Madam Defarge call your office!
NickT
@srv:
You know, I had a tin of Victor Belenko-flavored catfood recently….
Just Some Fuckhead
@Roger Moore:
That would certainly be a trick!
Chris
@dedc79:
This.
It’s exactly like all these people saying “I’m not a bigot. I don’t HATE black/gay/Muslim/etc people. And it’s really horrible of you to say that. I just think…” and they go on to tell you the various Very Serious Reasons why these people are being unreasonable by asking for fair treatment.
Conservatives believe that all that matters is how they feel in their hearts. Doesn’t matter that your actions actually have consequences. It’s terribly unfair of you to note that all they want to do is fuck over the poor; they assure you that they don’t WANT to fuck over the poor, and that should be enough for you, and also all that matters.
NickT
@Just Some Fuckhead:
Just think, you could rise to the dizzying heights of two-trick ponyhood.
SatanicPanic
@NickT: I suspect JSF wouldn’t be here so often if this were his other trick
Bighorn Ordovian Dolomite
I don’t have anything meaningful to add. I just want to go on record as saying that I would enjoy physically assaulting Michael Kinsley.
Patrick
@kwAwk:
Why?
Why not instead look at other obvious choices? For example, shifting defense spending towards SS/Medicare? There is no reason whatsoever why our defense spending is as much as the rest of the world combined.
How about universal health care a la Europe? They are spending much less as a % of GDP than we are.
There is no reason for a tax increase when there are these other obvious choices. The problem is that the rich/special interests dominate the airwaves/Congress and instead the middle class get hurt as a consequence.
ericblair
@Tractarian:
I don’t think they’re jerking off to videos of underemployed maids eating ketchup sandwiches. However, it sure as hell looks like they think any enjoyment or relief that the huddled masses receive is an affront to the natural order of things and therefore pointless, and the poor must suffer again for things to improve. They sure as hell haven’t gone out of their way to test the theories they’re inflicting on the great unwashed.
Steeplejack
@Roger Moore:
Excellently stated!
Older_Wiser2
Maybe Kinsley needs to get another part time job, the way people around here are doing to make up for the 27-29 hrs per wk they’ve been reduced to because of companies not wanting to offer health ins.
All corporate retailers and service providers are doing this, for the most part. Then they’re advertising for more “hires” to make up the hours needed to run their businesses.
This is the future of PT work now. Job cobbling.
Suffern ACE
Perhaps if the austerians wanted a more receptive middle class, they shouldn’t have spent the first 30 years of the Raygun Revolution claiming that such middle class programs like food stamps and WIC are the biggest problem.
LongHairedWeirdo
Biggest bullshit is that the “Krugmanites” are talking about “dessert”. They’re more talking about sports. Yes, they’re fun, but they’re also exercise, and therefore good for you. And by the way, look for some fresh spinach, not that the ready-for-composting crap that the austerians are pushing.
MomSense
Before the Nov ’12 election there was a lot of discussion about the idea of raising taxes at 250K and I kept hearing that 250K is unfair because what about the people who have to live in New York City for work. 250K is not enough for those folks and certainly isn’t the same as earning 250K somewhere else. And then I would say well the median income in New York City is about 35K (37 for men and 32 for women) and then all of a sudden living in New York City is a choice.
What is the psychology that makes it so tough for people to have compassion for others? I wonder if some of the problem is that life has become more precarious. With flat wages, recession, rising health care costs, etc many people are living on the edge. One bad thing and you can find yourself losing everything. It seems like the response to this has been to pretend that people who are suffering in this economy must have done something wrong or been lazy rather than face that this economy works for fewer and fewer people.
Mr Stagger Lee
@Bighorn Ordovian Dolomite: Take a number, get in line.
Higgs Boson's Mate
@patroclus:
Maybe. I was thinking specifically of the Calvinist belief that people are so depraved or so ethically deficient that only the Lord can give them salvation. Substitute “austerity” for “the Lord.”
aimai
@Hoodie: Oh. This.
I'mNotSureWhoIWantToBeYet
@kwAwk:
In addition to what others have said, if you accept the framing of the question in that way, it’s hard to see what is wrong with the “obvious” solution. Language matters. You’re using loaded terms. What if we “all” don’t agree? Does nothing happen?
The tax and benefit system in the US (and elsewhere) is a human construct. It’s not perfect. It can always be tweaked to make it better (or worse). At any given time, some people pay less than they “should” and some pay more than they get back in benefits. The evidence is that the wealthy are the ones not paying enough.
The lower and middle classes in the US have had stagnant or falling incomes for decades (back to 1980 by some measures). The wealthy have had dramatically increasing incomes over that time, and part of their increasing share of the national income is due to the tax system being increasingly tilted in their favor.
The wealthy are not paying enough to support the society in which they live. They need to pay more. The lower and middle classes are paying enough (and actually probably should be paying less).
My $0.02.
Cheers,
Scott.
NickT
@MomSense:
Plus, you can get around the New York issue by having something like an extra cost of living allowance from companies specific to New York. It’s not a problem for which there are no solutions – unless people don’t want there to be solutions.
schrodinger's cat
From the article
Moral or immoral, austerity does not work to get an economy out of recession. In fact it is the people who are advocating for austerity cast it as a morality play accusing the other side of spending our children’s money or living beyond our means or similar claptrap.
Also too, haven’t these msm punditubbies realized that arguing with Krugman about economics is futile. Its like giving Obama pointers on public speaking or winning elections. Idiots.
Violet
@Hill Dweller:
And the so-called Austerians will be clamoring for increased government spending during good times because “it’s the people’s money” and “the government has a surplus” etc. It’s bizarre and criminal how entirely backwards they have the economic stuff. And then there’s this:
They believe it. They don’t need data and proof and experience and history. The just believe it. Magic.
MomSense
@Roger Moore:
If people could actually blow themselves they wouldn’t spend any time on blogs–they wouldn’t leave their houses.
NickT
@Bighorn Ordovian Dolomite:
Would you consider beating him to death using JSF? We might as well find some use for the critter.
NR
Kinsley is on the left, though–the so-called “New Left” that’s right on the same page with Obama in embracing Social Security cuts and austerity policies, and thinks that forcing everyone in America to give money to private corporations is a good thing.
In short, Kinsley would fit right in here.
patroclus
@Higgs Boson’s Mate: Maybe, but the actual Calvinist belief is that people ought to “love thy neighbor as thyself;” to “judge not lest ye be judged” and to do good works like feeding the needy, sheltering the homeless and providing aid to the poor and impoverished. That’s what John Calvin tried to do in his churches after being ex-communicated by the Roman Catholics and that’s what mainline Reformed churches (that try to continue his traditions)try to do today. Calvin may have been a dogmatic God-believer but he was no austerian, and your attempt to classify him as such is inaccurate.
Cacti
@Patrick:
Imagine how much money we could free up if we found it wasn’t absolutely necessary to have military personnel stationed in more than 140 countries.
Nah, the guy making $30,000 a year needs to dig a little deeper to stave off old age poverty.
mainmati
Kinsley’s argument is that of a not-very-bright 5 year old. Corporations and the wealthy do not pay the nominal rate of tax. Virtually none of them. Many multimillionaires pay nop Federal income tax at all. The effective tax rate for anyone above $250 K is much, much lower than the nominal rate. End the tax subsidies, tax shelters, the multinational profit transfers overseas and the thousands of other bennies the rich and powerful get and you won’t have to touch rates at all. Also, wasteful programs like much of the DOD budget.
MomSense
@NickT:
I think it is just justifications for supporting economic policies that are unfair and absolving themselves for not caring about the people who are struggling.
belieber
What’s this. A BJ article without once mentioning “Benghazi”. Wholly fuck…call Dkos and get BrooklynBadBoy on it. Something is wrong here.
ericblair
@I’mNotSureWhoIWantToBeYet:
Along with this, the concentration of wealth into a tiny elite has fucked up our financial system badly. There’s more and more idle money sitting in fewer and fewer hands, and since we’ve been busy hollowing out the economy, less productive and attractive places to put this money. The biggest shitpile “investments” of the 2008 financial crisis were synthetic CDOs, which were packaged side bets on real mortgage bonds because there was too much greedy money chasing too few bonds and the ibanks had to make more out of thin air. You had so much money chasing internet stocks a few years before that any turdpile.com got a shitload of investors who had no idea what they were buying. All of this crap predictably blew up and took a pile of bystanders in the process.
Most rich people are morons with money; it’s just that the can fuck up a lot more than the rest of us before it starts to actually hurt.
kwAwk
@Omnes Omnibus:
I would say the rich are more under-taxed. However, that doesn’t mean that we all aren’t under-taxed considering the financial position our government is in.
schrodinger's cat
Since Kinsley’s fee fees are hurt, Krugman must be doing something right.
NickT
@kwAwk:
Is there an English translation of your remarks?
Yatsuno
@kwAwk: What exact financial position is the government in, and what are the underlying causes? Answer carefully…
Hoodie
@kwAwk: Your arguments make no sense in a country with the expanding wealth disparity we’re seeing in the US, it’s like asking the cattle to slaughter themselves to spare the expense of killing them. Some things aren’t worth saving if you have to beggar the beneficiaries to do it. The problem with Medicare is not Medicare itself; Medicare is very efficient. The problem is medical costs in a system that allows too much rent-seeking. Medicare costs too much because medical care is too expensive. Similarly, Social Security is fine. The problem is a retirement system that has been gutted over the last three decades for the benefit of Wall St. and corporate management, which puts an enormous amount of pressure on Social Security. We can afford a system that enables people to become wealthy, but not one that is designed to create so many millionaires and billionaires, especially when that results in the pauperization of the rest of the population. Going after middle class entitlements will only create more paupers. Many of the folks in that allegedly privileged middle class are the ones that do actual work, not just live off capital. The goal of the Austerians is to maintain and even increase the wealth of the already-rich so that they can keep up with their peers in oil states or oligarchic slave-labor economies. It’s extremely short-sighted and unAmerican. The wealth of the rich is not some kind of god-given election; they got rich because they live and do business here, and many of them have forgotten that or were born into it and never understood it in the first place. They would be fucking dead in Somalia.
Chris
@Violet:
Much as I hated Matoko Chan’s guts, one of her better incessantly-repeated points was about RWA mentality, and how people who had it were the people who, once you presented them with evidence that their prior “beliefs” were not accurate, came out of the experience with their faith in their mistaken beliefs reinforced rather than shaken.
It describes the austerians to a tee, as well as a big chunk of our political system. We’ve been in an ideological vicious cycle for thirty three years at least, where the system implements conservative ideas, finds out that they don’t work, and reacts to the ensuing disaster by implementing the same ideas again, but this time even more harshly.
kwAwk
@I’mNotSureWhoIWantToBeYet:
Democrats used to make the arguement that we shouldn’t enact means testing or eliminate the caps on contributions to Social Security because it would then turn Social Security into a welfare program which would be easier to attack, and even possibly turn Social Security into a program carrying shame like WIC or Food Stamps.
I’m still of that school. I don’t disagree that the wealthy and corporations should be paying more in taxes and contributing to the society that they live in, but as long as it is turned into and us vs them proposition, I fear that we will continue to see this perpetual vicious fight.
When the argument comes that we all must contribute more then it takes some of the conflict out of it. It’s then a policy debate about what is the proper amount that needs to be contributed as opposed to a moral fight over who is and isn’t doing their part.
Cacti
@mainmati:
Like the 80 billion dollar F-22, in service since 2005/never used in combat?
Or the F-35, already 7-years behind schedule, 200 billion over budget, and whose performance has earned it the nickname “The Flying Piano”?
RSA
@aimai:
If we all have to share the pain, I’ll suggest a temporary wealth tax, across the board. Austerians don’t seem to mind a few extra percentage points on income tax for everyone–it’s skin in the game. Shift the target just a bit, though, and I can only imagine the screaming…
Chris
@ericblair:
This.
The trouble with concentration of wealth, whether in a feudal aristocracy, a communist inner party or our own one percenters, is that a fuckton of money gets to sit around collecting dust instead of being put to use in the economy. “Idle money” is exactly the word for it.
Even conservatives acknowledge this to some extent, but claim that the reason it’s idle is because we haven’t given them enough of it, and we haven’t told them we love them enough times, and if only we were even MORE deferential, they’d suddenly put the money to good use… yeah.
Chyron HR
@NR:
As demonstrated by the fact that 99% of people here are disagreeing with his remarks, obviously. Why, it’s practically central to your point.
kwAwk
@Yatsuno:
The financial position our government is in is that we’re running deficits approaching $1 trillion a year and we have social programs like Medicare and Social Security that are projected to continue to grow at rates that aren’t sustainable.
The deficit presently is related to social spending and defense spending.
Todd
There is a great scene from the new Trek where Cumberbatch deals very sternly with someone in an…um….up front and seriously gruesome way.
I’d like to see Kinsley receive similar treatment.
NickT
@kwAwk:
This is utter bullshit. The deficit is projected below 700 billion and health care costs are being reined in.
Hoodie
@kwAwk: The non-rich have already contributed. Look at flat wage levels for the last couple of decades.
liberal
@kwAwk:
Actually, SS is sustainable. It will need either some increased inflow or decreased outflow, but the numbers actually aren’t all that bad, big-picturewise.
Medicare is another matter entirely, but the cost explosion has to do with our idiotic healthcare/health insurance system in general, not just the government-sponsored part.
matt
Kinsley is just working the same grift the bush people worked – have a bunch of cuts massively skewed to rich people, then in the ensuing budget crisis insist on ‘spreading the pain’.
A guillotine is called for.
liberal
@kwAwk:
Actually, when it comes to health care (not just health insurance, but actual health care), socialism is definitely more efficient, which isn’t surprising given that health care is plagued by so much market failure.
schrodinger's cat
My take on our current economic woes.
Violet
@Chris: So defining characteristics of teabaggers or Republicans or conservatives or austerians or however they refer to themselves at that time include: lack of empathy, refusal to revise beliefs based on new evidence, and reliance on beliefs rather than facts. Anything else?
Tonal (visible) Crow
I’m shocked, shocked that a Republican would pose as a liberal while spewing Republican propaganda. Next, you’ll tell us that Republicans are denying science!
liberal
@RSA:
I completely agree. Income this, income that. “Rich” should be defined by wealth, not income.
quannlace
“deluded middle class—subsidized by government and coddled by politicians. I”
********
Aah, I see he’s joined the ‘moochers’ bandwagon.
Violet
@liberal: Agreed. A lot of the super rich don’t even have normal incomes. They don’t pay “income tax”. They have investment returns.
liberal
@kwAwk:
That’s just moronic. It is an us-vs-them proposition. No, not capitalists vs workers, or even the rich vs middle class and poor—it’s rent-collecting parasitic scum vs the rest of us. But not very many people anywhere on the political spectrum understand that.
Just Some Fuckhead
Remember when Kinsley was on Crossfire with Pat Buchanan? He seemed so liberal sitting next to a guy bedecked in full Nazi regalia.
liberal
@Violet:
Well, if I had $10M, and I invested it in ultrasafe stuff, I might “only” have an income of $100K (these days anyway). But that doesn’t mean I’m not rich.
Tonal (visible) Crow
@Roger Moore:
Fixed.
Svensker
@ericblair:
You sure about that?
Just Some Fuckhead
@liberal: I believe the phrase du jour is “working millionaire”.
liberal
@kwAwk:
More idiotic spew. Someone who’s truly destitute isn’t undertaxed, because there’s nothing to be taxed.
ericblair
@Chris:
Absolutely, and the real problem is that they don’t want to put it to any use; it’s just a status marker to them. They want to accumulate more of it than the other rich guy across the street in the Hamptons, and that’s it. I’ve heard pathetic stories of billionaires crying and bitching about their ranking in the Forbes list.
If it were anything else but money, monomaniacally acquiring more and more of a resource than you could possibly use in a hundred lifetimes would put you on a freakshow A&E series and anti-anxiety med1cation, not on a magazine cover for the adoration of the masses.
liberal
@mainmati:
First tax shelter to get rid of is the disparate treatment of capital gains.
Patrick
@Cacti:
Yup. Why are we still defending Germany from the old Soviet Union? It boogles the mind why our tax money is wasted like that.
But apparently not to people like Kinsley. They think it still necessary, which is why they want the little guy flipping burgers at McDonalds paying more in taxes.
Tonal (visible) Crow
@Higgs Boson’s Mate:
I hope your driveway is triple-wide, because the truck delivering your internets will be there in 15 minutes.
Tractarian
Matty Y just had a good take on this.
In a nutshell: Even if you agree that Americans have committed some grave sin in the past, which they now need to be punished for, there’s no need for everyone to start paying higher taxes.
Instead, you could just have very loose monetary and fiscal policy, which would depreciate the currency but boost employment. Unfortunately, it would also mean that the bank accounts of the ultra-rich aren’t so impressive anymore.
So, it’s really just a question of who bears the burden of the punishment.
liberal
@I’mNotSureWhoIWantToBeYet:
No, I thought the year everyone cites is 1973.
catclub
@MomSense: “What is the psychology that makes it so tough for people to have compassion for others?”
If love thy neighbor came naturally, it would not have to be part of the instructions. Also, determination that someone different from you actually IS your neighbor is an unpopular concept.
Tractarian
@liberal:
He must have meant under-income-taxed, because he couldn’t have just forgotten the fact that poor people pay sales tax, payroll tax, property tax, etc….. right?
Chris
@Cacti:
I remember reading as a kid (fighter plane geek here) that the F-22 and F-35 would be the last fighter jet generation. After them, it would be all drones from there on in.
My magazines were wrong. We’ve gone straight from the previous generation to the drones. Except, for some reason, we’re still building the fifth generation fighters anyway, just not using it.
Violet
@ericblair: Is there maybe a reality show in there somewhere? Something about following the rich, showing how completely insulated they are, looking over their balance sheets, etc. Maybe include a comparison to rich people in times gone by–during the robber baron era, during the Great Expansion of The Middle Class (1950’s or so) era, and so forth? Something that would make rich people afraid of being singled out?
Something like that might help things change. As it is, we seem to revere rich people. Why is that? How can that be changed? They didn’t revere them in the French Revolution.
Tractarian
@NR:
Fixed.
liberal
@MomSense:
Nope. Not the part on the land, anyway. It’s been known since Ricardo that you can’t pass tax on land onto a tenant.
tomolitics
People on the right & “left” keep coming after Krugman. And he keeps drinking their milkshakes.
Mnemosyne
@Older_Wiser2:
They seem slightly confused about Obamacare, then, because all they’re doing is ensuring that they will have to get health insurance for twice as many employees starting in 2014. The law is actually designed to prevent companies from doing exactly this. Any company that’s cutting hours and hiring more part-timers to make up for it is getting very bad advice from somewhere.
liberal
@Tractarian:
Well, they actually don’t pay the part of the property tax that falls on land (for urban poor, the site value), since the owner can’t pass that on to the tenants. And most of the $hitholes truly poor people live in are such that the improvements are worth very little.
ericblair
@Violet:
If you haven’t seen it, The Queen of Versailles is interesting in the freakshow WTF-is-wrong-with-these-people way. Otherwise, I can see a really good Ken Burns miniseries out of the history of the rich in the US. The politics of getting a show like that made, considering who has to sign off on it and what tends to actually sell on TV, is kinda problematic I think.
Tonal (visible) Crow
@liberal:
Huh? A lease cannot require a tenant to pay enough rent to cover property taxes? In what jurisdiction is this?
MomSense
@liberal:
Or you can live in a house for 40 years and find that in your golden years, the tax burden is increasingly shifted from federal and state income taxes to higher sales and property taxes and all of a sudden you can’t afford the taxes on your house.
It is happening all the time. Happening in my town.
Roger Moore
@kwAwk:
You mean the government with a deficit that’s currently manageable and is shrinking? We have some long term problems, but they’re almost all related to ballooning healthcare costs and are better by cost containment than increasing spending. There are even some early indications that we’re starting to bend the curve on medical costs, which would largely solve our long-term problems.
Violet
@ericblair: It would probably work better as a web-based show. Something hilarious that younger folks would get into. Show how rich, old people fuck over the younger generation..that kind of thing. There has to be a show in there, even if it had to be web-based. Plenty of other web-based shows do well or get recognition outside the web or even move to TV.
danimal
Kinsley, comparing our mild, meek austerians to the Greek economy nightmare, “No one here is proposing anything like a 40 percent cut in overall health care spending.”
Perhaps Mr. Kinsley needs to be introduced to Rep. Ryan the next time he’s in Davos.
I don’t reflexively hate Kinsley, but when he pulls this excrement out of his ass and thinks he’s giving us gold bars, he needs to be called on it. The massive nature of the GOP budget cuts, especially to Medicaid, are really, really bad, even if Mr. Kinsley doesn’t think they will happen.
ETA: I miss the blockquote button.
Zapruder F. Mashtots, D.D.S. (Mumphrey, et al.)
I’d like to see these assclowns try to live for one week working three jobs for minimum wage, riding the bus to and from work, seeing their children for a few hours a day, and then come and tell us how lazy these bums are, and that they need to stop whining, wipe away their tears and do some honest work for a change; and that the rest of us who are getting by need to suck it up, say goodbye to the money we paid into our Social Security accounts, and bend over so the Captains of Industry can fuck us up the ass some more. Because, what, I don’t know… The Invisible Hand! Markets know best! It’s good for you! It builds character! Edmund Burke! Eat your spinach!
liberal
@Tonal (visible) Crow:
It’s a matter of economics, not legality. Since land is in fixed supply, the landowner cannot “charge extra” to pay the tax. He can charge the going market annual rent for the land, but if the government takes some of that from him via an annual ad valorem tax on the (unimproved) value of land, he can’t add that onto the market rent, in terms of price equilibrium.
danielx
They are not talking about spinach, when they’re talking about cutting the budget for food stamps they’re talking about taking food off people’s tables. When they talk about the virtues of cutting entitlements, they’re talking about how people deserve to be punished for being poor.
The austerian motto: always kick a man when he’s down, it gives him incentive to get up.
In common with all the other Very Serious People, Kinsley has never in his life had to worry about having enough to eat or (in his case) about top quality medical care for the Parkinson’s disease he’s had since 2002.
What an asshole.
liberal
@MomSense:
Not true, in the long run; property taxes have been declining. The wealthy like it that way since the easiest, best way to get rich is to buy well-sited urban parcels and do nothing while other people who are productive (as well as productive activities of the government) drive the value up.
Amir Khalid
@Chris:
Being you’re a fighter plane geek, maybe there’s something you can explain to me. I’ve been mystified at how the US Department of Defense, the planet’s most experienced buyer and operator of fighter planes, could make such a pig’s breakfast out of the F-22 and F-35 projects: round after round of technical problems, out of control development costs, delays in deployment. It’s like DoD just threw its project management experience out the window.
liberal
@Roger Moore:
I think Dean Baker had a post today about that, and how little attention it’s drawing.
Me, I’m interested in a toy model that claims that it might lead to corporate profits declining.
Tonal (visible) Crow
@Zapruder F. Mashtots, D.D.S. (Mumphrey, et al.): Every congressmember should have to work 1 month/year in the ghetto while receiving no support other than the money (if any) they directly earn at their ghetto job (if any) and the welfare that they should get no special help in acquiring. Also too, they should have to spend another month each year as inmates in a randomly-selected prison, at which they will be randomly assigned to general population, solitary, protective custody, and rape room.
That ought to grow Republicans some empathy.
replicnt6
@liberal:
I don’t understand why not. Presumably all landowners would be subject to that tax. Why wouldn’t they all pass some or all of that on to their tenants?
Bill E Pilgrim
Anyone still going on about runaway deficits at this point has lost all right to be taken seriously.
Not that they’ll stop being taken seriously of course, but we’re talking rights here, not sad reality.
gogol's wife
OT, but now that I have Reader’s Digest-size font, I have to say I’m really reveling in the readibility of the site, with the central placement of text and the letters in black, not gray. Too bad I need to be working right now!
Tonal (visible) Crow
@liberal:
Huh? The market rent is a function of the costs of providing rental property. If the costs go up for whatever reason, landlords will demand higher rent to cover them.
Cris (without an H)
Why not? As a greedy landlord, I’m not aware of a law saying I can only charge my tenants enough rent to cover P&I, but have to cover the taxes myself.
Edit: sorry, I see others have already asked this question
replicnt6
@gogol’s wife:
I wholeheartedly agree. I also note that our whining has been rewarded with upping the font size. Reward the behavior you want, they always say. So more whining!
liberal
@replicnt6:
Here’s what I mean:
Suppose the annual market rent is $100 for a particular parcel. The landowner charges his tenant for that. Property tax is zero; landowner pockets $100.
Now suppose the government sets the tax on land such that the landowner has to pay $25 in annual land tax to the government. He still gets the $100 from the tenant, and now gives the government $25, leaving him with $75.
You could argue that “OK, he’ll just raise the price to $125,” but he can’t do that, because the supply curve for land is vertical. (Sure, an individual landowner can try to do that, but in terms of price equilibria (supply and demand curves), it can’t be done.)
This is a more general principle of economics: who actually bears the burden of a tax depends on the “elasticity” of supply and demand.
It’s not the same with improvements to land, e.g. structures, because the supply isn’t fixed.
The same kind of reasoning can be used to show that the employer side of a payroll tax mainly falls on the employee, given some empirical claims about the relevant elasticities in supply and demand for labor.
Cris (without an H)
How about the “quote” button?
Roger Moore
@Chris:
The key is to understand our current military procurement system, especially for big-ticket items like aircraft, as a make-work program for the Military Industrial Complex rather than a serious attempt to buy equipment. We don’t need new airplanes, since the ones we have are entirely capable and have a very long service life, but if we don’t start working on them now, all the engineers and production workers will be retired or dead when we need to design and build replacements. The result is that we drag out the procurement process for as long as possible, keep making unnecessary changes, etc. We aren’t really paying for airplanes, we’re paying to preserve our industrial capacity.
catclub
@liberal: of course, all the other landowners are in the same situation, so the market price DOES include the cost of the tax. (neglecting the cases where churches or other non-taxed entities are also landlords)
liberal
@Tonal (visible) Crow:
Nope. There is no cost to providing land. That’s the whole point. The land was already there. That’s why landownership per se is “parasitic rent collection”. The landowner contributes nothing to production.
Now, of course, the fact that the land is valuable is due to factors that weren’t “already there”. But the landowner isn’t providing those factors.
Structures and other improvements are a different matter; they’re capital, not land, and they’re not in fixed supply.
As I said, this has been known to economics since Ricardo. Even Adam Smith seems to have known about it, writing before Ricardo formulated his “law of rent”.
Keith G
Kinsley has become a rather obscure voice. Why get so rattled by him? Still he is only raising a point that has been touched on by President Obama, ie raising taxes will not be enough.
And, the middle economic strata does enjoy lifestyles made significantly easier due to government subsidies.
liberal
@catclub:
Nope.
I understand what you’re saying, but you’re wrong. (The concept of rent is actually not at all intuitive.)
Tonal (visible) Crow
@liberal:
This makes no sense. If all the landlords in an area are subject to the tax, they’ll all attempt to pass it on at the next lease renewal. And they generally will successfully do so because most tenants will be unwilling or unable to move to another area where rents are lower.
NickT
@Amir Khalid:
DoD has been infamous for miserably bad project management for at least the last 30 years. Basically it has a long tradition of very little oversight in critical areas, backed by the eternal reluctance of politicians to cancel any boondoggle, no matter how chronically behind schedule/unworkable/grotesquely expensive it might be. After all, that laser toaster with matching bafflegab attachment functionality in pink chrome might one day save us from being slaughtered in our beds by Zombie Bin Laden/French cultural critics/the Easter Bunny/Insert Latest Phantom Menace Here.
Chris
@Amir Khalid:
Not a clue; I am (or was) a geek about the planes, but not do much how they were developed. I do know that the F-35 is at least three programs fused together to replace four different aircraft with radically different missions and I’ve never been sure exactly how that’s supposed to work.
If I had to guess, I’d imagine that the end of the Soviet threat and the rise of asymmetric threats made the need for conventional fighter craft less urgent, even as their cosy was skyrocketing and alternative weapons systems (cruise missiles, now drones) meant there were other places to turn… but that the Air Force, which sees its fighter pilots as its elites that the entire force should look up to and be based around, insisted on building the planes anyway, and that the ensuing tug of war is what dragged it out into such a mess. Again, that’s just me guessing; would love to have that confirmed or denied by someone who really knows the DOD/MIC bureaucracy.
Unsympathetic
No, Kinsley. They are simply wrong.
Cris (without an H)
liberal is very knowledgeable, but this sort of theoretical pronouncement on what the market can and can’t do reinforces my belief that economics is not actually a science.
Chris
@Roger Moore:
Ah thank you; that makes a LOT of sense. Especially since, in the last thirty years, the MIC has become the only politically acceptable jobs program in the nation.
liberal
@Tonal (visible) Crow:
No, again, the tax on land cannot be passed on.
It’s a standard exercise in economics to compute the incidence of a tax. The way you do it is draw supply and demand curves.
This kind of exercise shows you, for example, that a sales tax on a good isn’t entirely born by the consumer, unless the relevant elasticities are of a particular nature.
The same kind of analysis can be used to show that landowners cannot pass on a land value tax. They can charge the market rent, but the market rent does not depend on the tax.
The reason this is true is that land is in fixed supply and the landowner activities don’t contribute to its value. This is different from structures, where the owner has to build and maintain them.
mere mortal
@DougJ
I believe that you are misreading Kinsley here. He makes no claim as to his income, his only claim is to what Obama has assured us is all is the case in regards to those making less than $250k.
So: Obama has assured *us* that *you* are entitled. The income claim would have been implicit if he had said that *we* are entitled.
He’s still a hack, and the column is still a miserable, steaming pile, which DeLong did a fine job of pointing out. But I don’t think what you quoted can support a claim that Kinsley is a liar.
liberal
@Cris (without an H):
Actually, you’re completely wrong. Economics can do a lot as a science. The problem is that a lot of the scientific conclusions are contrary to what the rich and powerful want.
In the case of land value taxation, the people who are really opposed are people who own valuable urban and suburban land, especially commercial parcels. They don’t like the idea of increasing taxes on land, so you’ll almost never hear an economist advocating this, though occasionally one will.
The situation is so bad, however, that even a very liberal and bright economist like Dean Baker doesn’t understand land economics. I read his blog all the time, and re the housing bubble, he once made the off-hand comment about better production making homes cheaper and cheaper, just like shoes have been made cheaper and cheaper. And while that might apply to construction of improvements, it doesn’t apply to land—the best land is the land in good locations (“location, location, location”), and that can’t be increased by better production methods.
Once you understand these points, you understand a lot about our current economic situation. E.g. the changing nature of being poor—it used to be that food wasn’t all that cheap, and being poor meant not having anywhere to sleep or eat. Now food (if not good food) is very cheap, so the poor (at least in a place like the US) get enough to eat (at least compared to, say, a century ago), but they still have trouble finding a place to sleep.
Tonal (visible) Crow
@liberal: You’re just reasserting the same argument.
Of course the market price of a rental property depends upon the cost of making it available. If there is no property tax, and the landlord’s other costs are, say, $10,000/year, the minimum price she can charge (over the long term) is $10,000/year. If something (such as a tax on land) raises her costs to $20,000/year, the minimum she can charge (over the long term) is $20,000/year. If she charges less, she will lose money until she can no longer pay the property tax, at which point the government will seize and sell her rental property. The new landlord will be subject to the same tax, and will have to charge enough rent to cover it.
Amir Khalid
@Roger Moore:
So, if I’m reading you correctly, the procurement process now serves the industry ahead of the military? This is exactly what President Eisenhower’s warning was about, isn’t it?
wuzzat
I think it’s good of Mike Kinsley to refute these ethnic stereotypes that have insinuated themselves into our pop-culture lexicon.
Oh, wait. Austerians.
Never mind.
replicnt6
@liberal:
OK, I did a bit of research, and somewhat understand your point now. It is critical, though, to be absolutely clear that what you are talking about is land value, and not “property” value, which includes (and is usually dominated by) the structures on the land. You did mention this, but it is really central. And it makes the claim somewhat removed from modern life, where, in general, people rent the structures, not the land, and it is property value that is taxed, not land value.
Consider a spherical cow…
schrodinger's cat
Austerity explained
NR
@Tractarian: Your post is a perfect illustration of what “New Liberals” are all about. Whatever Obama proposes, you find an excuse to support it, no matter who it screws over. As if taxes going up slightly on the rich means seniors will somehow get fucked over less by Social Security cuts.
But hey, Obama Gets Shit Done. Doesn’t matter what that shit is. At least, not to you guys.
liberal
@Tonal (visible) Crow:
Nope. A “cost” for a factor of production is the expense involved in keeping it in production. I’m using the word “cost” in an economic sense, not an accounting sense.
For example: for capital, say a machine, you have to buy the machine and maintain it. For a worker, you have to pay her a wage. For land, you don’t have to do anything.
If government increases the tax on land, to first order the rent will be unchanged. (I say to first order, because all told if government did smart things like that, the economy would be better off, and perhaps rent would increase.) So the landowner can’t charge more.
What definitely will happen, though, is that land values will declined. Land value is the discounted value of future land rents after tax.
In an idealized model, if the tax were set at 100% (not practical of course), the land would be worth nothing in terms of capitalized value. The market rent would be charged and entirely passed on to the government.
I know you don’t believe me, but this stuff is actually textbook economics.
cckids
@patroclus: A bigger issue with Calvinism is the belief in predestination – that God has chosen the “elect” who will succeed in this life & go on to heaven & everyone else is screwed, here & hereafter.
gene108
@Mnemosyne:
My understanding of Obamacare is the penalty for not providing benefits is based on full-time equivalent hours, i.e. two 20 hour per week workers = one 40 hour per week worker for determining the penalty. You don’t reduce the penalty by only hiring part-time workers, versus not providing insurance for full-time workers.
Insurance companies usually have definitions of full-time employees, who are eligible for benefits having to work a minimum of 30 hours. This may vary depending on state laws, where the plan is written.
So by cutting people to temporary hours, those people would not be eligible to have employer provided insurance per the existing insurance regulations for what defines a full-time employee eligible for benefits.
Employers would then have to pay the penalty for not providing insurance, which in some cases maybe cheaper for them or not apply, depending on how many waivers* are built into Obamacare for different sized businesses.
*Depending on the size of the business you get ‘x’ number of waivers automatically exempting you from providing insurance for ‘x’ number of employees, plus exemptions for employees showing they have spousal coverage. For example, a 50 employee business would get 30 waivers (from what I’ve been told), so they would only be penalized for not providing benefits for 20 employees.
Kip the Wonder Rat
@NickT: Because he is a dishonest broker of broken ideas. The guy has a history. And the real tell is the “we on the left” schtick.
liberal
@replicnt6:
First, I did mention it.
Second,
That’s false. If you rent a house or even an apartment, you’re renting the structure and the land. It might not be as apparent with an apartment or rented condo, but it’s absolutely true; why do you think an apartment in Manhatten is so much more expensive to rent than an apartment of the same “indoor quality” in Peoria? Because of the land it’s situated on.
In my own situation, I live in a house in suburban Maryland, just outside the beltway. While the structure has value, the tax assessment claims that 2/3 of the value is in the land, which is entirely believable. My in-laws have a house of the same genre, but much bigger, in western Nebraska, and it’s worth far, far less.
You’re right, of course, that both the land and the property are taxed currently in most jurisdictions. But I’ve been pretty careful about referring to “land tax”.
Roger Moore
@liberal:
But the idea that the supply curve for land is vertical is either nonsense or applies to only a tiny fraction of the taxed value of the land. The market price of land varies enormously depending on issues like zoning and access to transportation and utilities. This is why the land development business is so corrupt; you can massively increase the market value of land by manipulating the political process. Because you can convert really cheap land into expensive land, the part of the value that is in absolutely limited supply is very small.
Maude
@NickT:
Robert Gates tried to get rid of a boondoggle plane program and Congress wouldn’t stop funding it.
If a part is being made for one these huge projects is in a congress member’s district, he/she won’t vote to cut the funding.
.
I see that when you write a comment it’s 10 point and when it’s published, it’s 12 point.
Kip the Wonder Rat
@Roger Moore: In that one sector, agreed. It’s also one reason why some politicians said we needed to keep the lights on in Detroit: preserve industrial capacity. I’m not saying that we should protect the buggy whip sector, but such a stance on manufacturing has kept German uber alles in Europe for some time now. France is a distant second in that regard.
I'mNotSureWhoIWantToBeYet
@kwAwk: FDR didn’t want Social Security to be welfare. That’s a big reason why it is structured the way it is. That doesn’t mean that it can’t or shouldn’t be adjusted over time. It has been and will continue to be.
Raising the FICA income limit, or increasing the rate on higher-income people, won’t suddenly make Social Security into welfare.
You’re just trolling, aren’t you? You’re for raising taxes on those who can afford it but it will hurt some people’s feelings or cause them to argue so we can’t do it?
Have you never lived under a Democratic president before?
Republican arguments in the national media are nearly always framed as “us versus them” whenever any change in taxes for anyone who can claim itemized deductions. They pick fights even when there is nothing to fight about. (E.g. 90+% of people wanting stronger gun regulations.)
If you are expecting people to hold hands and agree on everything, then you’ll be waiting a long time for anything to change. And in that case, you are (by your arguments) not for increasing taxes on the wealthy and corporations. You’re pretending. Or, you’re trolling.
Cheers,
Scott.
jl
No time to read all the comments, so apologies if this is a repeat of another commenter.
Economists View blog has some links, including one to Brad DeLong, that explain in detail how awful the incorrect the Kinsley piece is, and Mark Thoma throws in a few of his own comments
Kinsley’s Howlers
http://economistsview.typepad.com/economistsview/2013/05/kinsleys-howlers.html
Tonal (visible) Crow
@liberal:
There is no “economic sense” aside from “accounting sense”. If you cannot account for all the costs and revenues, your model is broken. As stated, your model requires that landlords whose property taxes rise so that their costs exceed their revenues either (a) magically receive some reimbursement from an unstated source or (b) magically sustain the loss indefinitely. Both alternatives fail accounting, so they fail economics too.
For land, you still have to buy it — and you still have to pay the taxes on it that are secured by it, or you’ll lose it, in the same way you have to pay the mortgage. There is no accounting difference between the mortgage, the insurance, the maintenance, the property tax, or any other cost of keeping the property in the landlord’s ownership and available for her to rent out.
Where “first order” is defined as “in the period before the landlord has her first opportunity to ask for a rent increase”, as in the expiration of a fixed-price lease.
Roger Moore
@Amir Khalid:
Yes, and yes. This is why the military is one of the very few parts of the budget where Congress routinely appropriates more than requested. The military asks to de-fund stuff that they don’t need and don’t want to pay to maintain, and Congress puts it in the budget anyway. It’s exactly what Eisenhower was warning about, except that he might not have realized just how bad it could get.
jl
I do have one comment on the welfare versus insurance arguments.
The proper perspective for social insurance is that of young people entering the job market, because that is when they start paying premiums. From that perspective, no one knows for sure whether they will be wealthy or poor when they retire in the future.
So, you have the problem of how to structure intertemporal insurance contracts over time. This is a problem with all insurance schemes where contracts have to be made over long periods of time, and at any point, those who turn out to be lucky, or different persons’ abilities (or merit, however you want to put it) to earn income or accumulate wealth are revealed, the ones who discover they will not need the insurance can pull out of the contract.
The exact same problems arose in early life insurance markets and that is why that industry has been so highly regulated since the mid 19th century. It is in large part the lack of any similar regulation in the market for comprehensive health insurance that has lead to the problems in health care finance we see in the U.S. today.
For retirement, it is wealth, not income, that should determine who ‘really needs’ their social security check. It it is very difficult, and would be extremely intrusive to administer a wealth test for social security.
So, if you look at social security from the perspective of a young person entering the labor market, there is nothing wrong with a small increase in the income cap, and would solve all the long term social security financial problems. To some extent, the problem of increase in inequality of income that is related to the growing gap between growth rate inmean per capita GDP and median per capita wage income that is causing the problem of long term SS finance.
Dean Baker has a good discussion of the problem of a wealth test for social security payments. Anyway, means testing violates that basic idea of what insurance is, it is not appropriate for fire or property insurance, or retirement insurance, or old age pension insurance.
How Much Money Do You Need to Get an Op-ed in the Washington Post?
http://www.cepr.net/index.php/blogs/beat-the-press/how-much-money-do-you-need-to-get-an-oped-in-the-washington-post
I'mNotSureWhoIWantToBeYet
@jl: Thanks very much.
Cheers,
Scott.
Mnemosyne
@liberal:
I see you’ve never lived in an apartment. The only time your landlord can’t raise your rent on a whim is if you either live in a city with rent control (and even then they’re usually only limited to a permitted percentage increase, not no increase) or you have a signed lease.
Otherwise, the sky’s the limit, particularly when there’s demand for rentals.
ETA: You also seem to have a weird concept where people rent out plots of land with nothing on them like, say, apartments, houses or office buildings. I don’t think I’ve ever seen that.
Mnemosyne
@liberal:
Please give us an example that you personally are aware of (ie not a hypothetical) of a situation where a person is renting a piece of undeveloped land from another person.
Emma
@liberal: Really? Where do you live? Because here in the Holy State of the Real Estate ClusterF**k, property taxes went down for a couple of years due to the fact that the property value crashed. Now that they’re beginning to recover, property taxes are moving up fast.
MomSense
@gene108:
I think the way it works with employers who do not provide health benefits and have the equivalent of 50 full time employees is that they have to pay a fee if that employee accesses insurance through the exchange.
So let’s say I work 24 hours for Walmart (please bieber never let this be the case) and I have a spouse who provides my health benefits, Walmart would not have to pay the fee. If I do not have a source of insurance and I am not eligible for Medicaid and I go to the exchange to get insurance–then Walmart would have to pay.
But I do think it is poor advice if companies are lowering people’s hours to part time and hiring more employees thinking this will get them off the hook. It doesn’t.
MomSense
@replicnt6:
Somewhat removed is an understatement especially since he first made this argument in response to my statement about adding property taxes to the taxes that affect the middle class and people with lower incomes. And people with lower incomes are not always renters. Many people are homeowners who have lower incomes because of the recession or they might be seniors on fixed incomes.
Property taxes in my little town have gone up tremendously in the last two years and are likely going to go up again–because federal and state budget cuts have shifted the burden of paying for services and education to the municipalities which means property tax increases. Incidentally, rents in town are definitely going up. And to make matters worse, there are often loopholes for people who have vacation homes or second homes.
The point is that when politicians talk about the 47% who do not pay federal taxes, they are conveniently ignoring payroll taxes, state income and sales taxes, and property taxes. Sales taxes especially are regressive.
jl
@MomSense:
Can’t help jumping into the land and property thing. My perspective is that one of the benefits of having a big chunk (if not all) of social security financed as ‘pay as you go’ out of current incomes is that it is equivalent to an extremely broad and very stable investment portfolio: the national income, or at least the part that goes to the national labor force. The only thing that would mess up that approach would be something that interfered with the parallel growth in national income going to workers with growth in total national product. But that is exactly what happened since the mid 1980s in the U.S.
But nothing is ever perfect, and even there, rather modest changes in the payroll tax structure can solve social security’s funding problems for as far as we can see into the future.
I guess 200 years ago (before George) when Paine and Jefferson thought up social security and income redistribution schemes financed by property taxes, or Jefferson thought just giving people land would be enough, there was a strong enough connection between land or property values and national product for their ideas to work. I wonder whether that is still true. Maybe in the ‘long run’ these programs can be funded by taxes on land or real property values, but in a modern economy, that long run might be longer than the 45 or 55 years between entering the work force and retirement.
Putting social security money in the stock market has the same problem. 45 to 55 years is just not long enough to get a reliable enough return on investment for a single generation to depend on for old age pension insurance.
Keith G
@Mnemosyne:
Renting farmland to raise crops, renting grazing lands, renting a deer lease, renting land as an open storage area, renting land as an access point. etc.
I am personally aware of some/have participated in the rest.
Roger Moore
@Mnemosyne:
My family owns some undeveloped land that we rent out to a farmer who grazes animals on it. I suspect this is the situation Ricardo was thinking of when he developed his theory: small farmers or shepherds renting land from large-scale landholders.
OTOH, my experience shows how meaningless the theory is for somebody who’s actually in the position of renting a developed property. The property we’re renting for grazing land is the largest part of a piece of land my grandfather bought back in the 1970s with the hopes of developing part of it. After much time and effort working to get the permits, we were eventually able to sell a small piece of the land to developers. It’s not exact, but comparing the price we got for the developable land to the rent we get from the undeveloped land implies that the value of the property went up about 100x when we got permission utility hookups and the legal right to build there. IOW, most of the value of the land comes from the legal rights and practical ability to develop there, not to the intrinsic value of the land, and Ricardo’s theory applies only to that small intrinsic value, not to the monetary value of the legal rights associated with the land.
Mnemosyne
@Keith G:
@Roger Moore:
Okay, that makes sense, but I’m still not getting why liberal thinks that a property owner in that situation could not raise the rent on that property if his/her property taxes go up (barring some kind of existing contract like a lease, of course).
Mnemosyne
@Roger Moore:
Also, too, can I make a stab at guessing that Ricardo came up with his theory soon after they started passing enclosure laws in England that closed off previously public land and privatized it all? Because the more I hear about the theory, the more applicable it seems to that specific situation and not to the modern system of renting housing or commercial space.
I'mNotSureWhoIWantToBeYet
@Mnemosyne: I think it goes back to Adam Smith:
IOW, the rent the owner can charge is set by perfect supply and demand. He can’t charge more because the value of the property goes down by the same amount, so if his taxes go up – tough. Similarly for other landowners.
But as everyone who says liberal is wrong points out, the landowner isn’t the perfect monopolist and supply and demand aren’t perfect. All land isn’t equally fungible, and most renters these days aren’t renting the use of the land, they’re renting the house/apartment on the land.
That’s my take anyway. Corrections welcome.
Cheers,
Scott.
Tonal (visible) Crow
@I’mNotSureWhoIWantToBeYet: Ah, I see where this is coming from. It is a thought experiment that assumes conditions (e.g., zero frictional cost of moving a farming operation from one plot to another) that never apply in the real world.
Mnemosyne
@I’mNotSureWhoIWantToBeYet:
It seems to depend on a weird situation where one person owns the land and a different person owns the capital property (house or whatever) that sits on that land. I’m still not sure that that’s a common situation — it seems as though the land that most homes or office buildings sit on is sold along with those buildings. I guess sometimes you run into a situation where the building is built on land with a 99-year lease but, again, that’s a contract situation and doesn’t seem to apply to the Ricardo or Smith formulations.
The only situation I can think of where that happens is in something like a trailer park, but as Fred Clark at Slacktivist can tell you, Smith and Ricardo are still wrong about the landowner being unable to raise the rent in those cases. If the trailer park owner raises your rent and you can’t afford it, you’re pretty much SOL.
Mnemosyne
@Tonal (visible) Crow:
Or they applied to the real world of the 18th century when people mostly lived in rural areas, but they don’t apply as much to an urbanized population.
I'mNotSureWhoIWantToBeYet
@Mnemosyne: Great article. Thanks for the pointer.
Cheers,
Scott.
Robert Waldmann
Kaus is infinitely worse the Kinsley. Also I never heard any bullshit anywhere near as glib as Kinsley’s in any Harvard dining hall and lord knows we tried.
jake the snake
@Higgs Boson’s Mate:
This. This. This.
I am so stealing that.
jake the snake
@patroclus:
Calvinism has typically conflated with Puritanism. Though it may be technically incorrect,
if someone refers to Calvinism, they are referring to the tenets of Puritanism.
Which include, work as a moral good in itself, pleasure is the work of the devil along with
all the weaknesses of the flesh.
jake the snake
@Just Some Fuckhead:
It can done if you are flexible, or so I’ve heard.
jake the snake
@liberal:
Maybe it works that way in your Econ 101 book, but not in the real world.