Perry Flat Tax Is Fool’s Gold for Conservatives: Ramesh Ponnuru
Perry Flat Tax Is Fool’s Gold for Conservatives: Ramesh Ponnuru
Illustration by Devin Rochford
Perry’s mistake wasn’t in choosing the wrong details for his plan. It was in taking on an impossible mission. For all its superficial appeal, the flat tax cannot be made politically viable.
Wall Street Protesters Should Remember Stones Tune: Amity Shlaes
Wall Street Protesters Should Remember Stones Tune: Amity Shlaes
Illustration by Leif Parsons
By Amity Shlaes
What do they want, and what do they need? That’s the question about the protesters who now occupy Wall Street, Washington and just about everywhere else. Theirs is what might be called a Rolling Stones situation: They can’t always get what they want, but if somebody tries, some time, they may get what they need. Protesters want redress of a proximate wrong, or some “efforts to crack down on abusive practices” of Wall Street, as President Barack Obama put it last week. They need something more general: a job or a better job; cash or insurance for health bills; a way to pay off student loans. In other words, a stronger economy.
Fed’s Secrecy During Crisis Limits Effort to Stop Another: View
Opposites in many ways, the Tea Party movement and Occupy Wall Street have this in common: Both have channeled the public’s not always well-informed anger over the behavior of banks and government during the financial crisis. As it turns out, they didn’t know the half of it, and neither did the rest of us, including Congress.
Euro Area Is Coming to an End: Peter Boone and Simon Johnson
Investors sent Europe’s politicians a painful message last week when Germany had a seriously disappointing government bond auction. It was unable to sell more than a third of the benchmark 10-year bonds it had sought to auction off on Nov. 23, and interest rates on 30-year German debt rose from 2.61 percent to 2.83 percent. The message? Germany is no longer a safe haven.
Euro Won't Survive If Italian Government Defaults: The Ticker
Whatever it takes. Ever since the euro crisis started, this is the message that German Chancellor Angela Merkel and French President Nicolas Sarkozy have delivered to defend the common currency. Until last week.
For Better Government, Don’t Kill All the Lawyers: Noah Feldman
Most everyone hates lawyers. So it probably isn’t a surprise that many people hate law professors, too. A recent front-page article in the New York Times, much discussed in legal circles, was the latest salvo in what is now a long line of attacks depicting the legal academy as impractical and unworldly.
I think the dislike, though, is a result of law professors being too much in the world. You see, law professors -- and I should disclose here that I am one -- very nearly run the world, or at least certain parts of the U.S. government. When you include Justice Anthony Kennedy, who taught nights, they make up the majority of the Supreme Court.
I think the dislike, though, is a result of law professors being too much in the world. You see, law professors -- and I should disclose here that I am one -- very nearly run the world, or at least certain parts of the U.S. government. When you include Justice Anthony Kennedy, who taught nights, they make up the majority of the Supreme Court.
U.S. Stocks Rise on Holiday Sales, Europe Progress. By Nikolaj Gammeltoft
U.S. stocks rose, snapping a seven- day decline in the Standard & Poor’s 500 Index, after Thanksgiving retail sales climbed to a record and euro-area leaders were said to boost efforts to end the debt crisis.
Bank of America Corp. and JPMorgan Chase & Co. (JPM) advanced more than 4.6 percent, tracking European banking shares. Energy companies in the S&P 500 soared 4 percent as oil rallied above $100 a barrel. Alcoa Inc. (AA) climbed 5.2 percent as metal prices rose. AT&T Inc. (T) added 2.2 percent after the company was said to prepare an antitrust remedy proposal over its acquisition of Deutsche Telekom AG’s U.S. unit. Amazon.com Inc. (AMZN) jumped 5.5 percent on record Black Friday sales of its Kindle products.
Bank of America Corp. and JPMorgan Chase & Co. (JPM) advanced more than 4.6 percent, tracking European banking shares. Energy companies in the S&P 500 soared 4 percent as oil rallied above $100 a barrel. Alcoa Inc. (AA) climbed 5.2 percent as metal prices rose. AT&T Inc. (T) added 2.2 percent after the company was said to prepare an antitrust remedy proposal over its acquisition of Deutsche Telekom AG’s U.S. unit. Amazon.com Inc. (AMZN) jumped 5.5 percent on record Black Friday sales of its Kindle products.
Sunday, November 27, 2011
America’s Public Sector Union Dilemma
There is much less competition in the public sector than the private sector and that has made all the difference.
Since the Great Recession began in 2008, there has been a growing criticism of public sector unions, reflecting taxpayer concerns about union compensation and unfunded pension liabilities. These concerns have led to proposals to change public sector union policy in very significant ways. Earlier this month, voters in Ohio defeated by a wide margin a law that would have restricted union powers, although polls showed broad support for portions of the law that would have reduced union benefits. In Wisconsin, a state with a long-standing pro-union stance, Governor Scott Walker advanced policy in February that would cut pay and substantially curtail collective bargaining rights of many public sector union workers. In Florida, State Senator John Thrasher introduced legislation that would prevent governments from collecting union dues from union worker state paychecks. And it is not just Ohio, Wisconsin, and Florida that are attempting to change the landscape of public unions. Cash-strapped governments in many states are considering ways to reduce the costs associated with public unions.Mexico Talks Monopoly Reform
Mexico Talks Monopoly Reform
PRI presidential candidate Enrique Peña Nieto proposes a constitutional amendment to allow private investment in Pemex, the national oil monopoly.
Mexico celebrated third-quarter economic growth of 1.34% last week, putting its annual growth pace at 5.5%. But on a visit to The Wall Street Journal earlier this month, Mexican presidential candidate Enrique Peña Nieto stressed that the country's annual average growth rate over the past 10 years has been an anemic 1.7%. It has been, the Institutional Revolutionary Party (PRI) candidate said, the slowest 10-year period of growth in the past 70 years.For steady long-term growth, Mr. Peña Nieto argued, Mexico needs to return his party (out of power since 2000) to the presidential palace of Los Pinos so that he can administer the pro-growth policies the country needs. One of his proposals is startling coming from a PRI candidate: a constitutional reform that would allow private investment in the sacrosanct national oil monopoly, Pemex.
Speaking of private investment in Pemex would have been PRI heresy only a decade ago. But the qualifiers that Mr. Peña Nieto assigns to his "reform" demonstrate that the battle to create true energy competition still lies ahead. It is also worth noting that a PRI-led constitutional amendment will require help from the rival National Action Party (PAN). It is not clear that the PAN will cooperate.
Associated PressIniquity, Irresponsibility, and/or Incentives? Art Carden
Capitalism and the Wall Street Protesters. Dominick T. Armentano
With at least 12 compulsory years in public schools, one would think that most of the twenty-something Wall Street protesters would have some understanding of capitalism, its actual history, and its accomplishments. Well, maybe not. One can only wonder what passes for economic education these days.
So what is capitalism? Free market capitalism is based on the individual right to own and freely trade property. It permits owners of property (land, labor, capital, etc.) to enter (or exit) any contract on mutually agreeable terms. It gives entrepreneurs the freedom to start any business (without government permission) and to borrow money and develop products for consumers. It permits land owners to rent (or sell) their property for any peaceful purpose. It gives adult workers the liberty to lease their services to any business at any agreeable wage and to terminate that agreement at will; employers would have the same right.
So what is capitalism? Free market capitalism is based on the individual right to own and freely trade property. It permits owners of property (land, labor, capital, etc.) to enter (or exit) any contract on mutually agreeable terms. It gives entrepreneurs the freedom to start any business (without government permission) and to borrow money and develop products for consumers. It permits land owners to rent (or sell) their property for any peaceful purpose. It gives adult workers the liberty to lease their services to any business at any agreeable wage and to terminate that agreement at will; employers would have the same right.
The Welfare State Neutralizes Potential Opponents by Making Them Dependent on Government Benefits. By Robert Higgs
From time immemorial—from Etienne de la Boitie to David Hume to Ludwig von Mises—political analysts have noted that because the number of those in the ruling elite amounts to only a small fraction of the number in the ruled masses, every regime lives or dies in accordance with “public opinion.” Unless the mass of the people, no matter how objectively abused and plundered they may appear to be, believe that the existing rulers are legitimate, the masses will not tolerate the regime’s continuation in power. Nor need they tolerate it, because they greatly outnumber the rulers, and hence whenever they become subjectively fed up, they have the power—which is to say, the overwhelming advantage of superior numbers—to oust the regime. Even if the regime possesses a great advantage of coercive power, its employment avails the rulers nothing if they must kill or imprison 90 percent of the population, because such massive violence would reduce them to the status of parasites without hosts.
The Dictator’s Handbook
The Dictator’s Handbook
Review by Samuel Brittan
Review by Samuel Brittan An illuminating and reader-friendly look at dictatorships and imperfect democracies
Niccolo Machiavelli, a 16th-century Florentine statesman who turned to writing during a long period out of office, became notorious for his book, The Prince. Instead of issuing pious platitudes, he analysed the actual behaviour of successful rulers. Inevitably traduced as an immoralist, he was mainly concerned to show what in Tony Blair speak may be described as “what works”, as distinct from what ought to happen. For example, it is more important for a prince to be feared than loved, although he should if possible avoid hatred. His call in another book for the unification of Italy was hardly the work of a hard-boiled cynic.The markets are not the monster
The markets are not the monster
By Gideon Rachman
Last year, Angela Merkel promised to show the markets who is boss. “There is a kind of battle over what power the financial markets have and how much room for policymaking the politicians have,” said the German chancellor. It was vital, she added, to assert the “primacy of politics”.
By Gideon RachmanA better way to occupy Wall Street
A better way to occupy Wall Street
By John Gapper
Michael Bloomberg, New York City’s mayor, made himself unpopular with his decision to raid Zuccotti Park in the early hours of Tuesday and evict 200 campers from the Occupy Wall Street protest, but he was right. So is the City of London Corporation in attempting to shift the tents from outside St Paul’s Cathedral.
It is time for Occupy Wall Street, and its derivatives around the US and the world, to learn a lesson from the name of the left-wing campaign group formed in 1998 in response to the Monica Lewinsky scandal, and Move On. They have better things to do than fight for the inalienable right to a sleepover.
By John GapperIt is time for Occupy Wall Street, and its derivatives around the US and the world, to learn a lesson from the name of the left-wing campaign group formed in 1998 in response to the Monica Lewinsky scandal, and Move On. They have better things to do than fight for the inalienable right to a sleepover.
Why cutting fiscal deficits is an assault on profits
Why cutting fiscal deficits is an assault on profits
By Martin Wolf
By Martin WolfReducing the government’s debt was “proving harder than anyone envisaged”, David Cameron, UK prime minister, said in a speech on Monday. He even admitted that “high levels of public and private debt are proving to be a drag on growth, which in turn makes it more difficult to deal with those debts”. Yet, if Mr Cameron had wanted to do so, he could have met many “anyones” who would have warned him of what he has now learnt, at great cost to the country. If the private sector is seeking to run down its debts, it is hard for the government to do so, too, because everybody cannot spend less than their income. That is the “paradox of thrift”. No, it is not a novel idea.
Occupy protests: Locked into defiance
Occupy protests: Locked into defiance
By John Gapper and Shannon Bond
Many protesters against inequality and the dominance of the financial industry called for the lines of police to let them through so they could repeat a sit-in on the bridge six weeks ago. Instead, they were channelled peacefully along the pedestrian path, and streamed over the long span to Brooklyn holding placards. A couple tried to persuade cars mired in a traffic jam to hoot in support. Few responded.
By John Gapper and Shannon Bond Nascent campaign forced on to the back foot
Another world is possible, read the message projected in giant white letters on to the side of a tower near City Hall in Manhattan on Thursday night, as thousands of Occupy Wall Street demonstrators massed by Brooklyn Bridge. It was the biggest turnout of a week marking a turning point in the two-month-old protest.Many protesters against inequality and the dominance of the financial industry called for the lines of police to let them through so they could repeat a sit-in on the bridge six weeks ago. Instead, they were channelled peacefully along the pedestrian path, and streamed over the long span to Brooklyn holding placards. A couple tried to persuade cars mired in a traffic jam to hoot in support. Few responded.
Secured bonds: banks run for cover
Secured bonds: banks run for cover
When Captain Cook first reached Australia, Prussia had just created the forerunner of today’s covered bonds. This month, Australian banks became the latest to issue the bonds, a safer cousin of the securitisations made infamous in 2007 during the onset of the global financial crisis. US lawmakers may also allow US banks to tap the market.
China can help west build economic growth
Central to international efforts towards promoting strong and balanced growth is the need to generate demand, not only in developing countries but, more importantly, in developed countries. The imperative poses a critical question: where is new demand to come from? The answer lies in boosting investment in infrastructure – and China is keen to get involved.
The narrative of infrastructure development in places such as the US indicates how such investment powers an economy forward. China’s growth story in recent years provides further proof. Now, infrastructure in Europe and the US badly needs more investment.
The narrative of infrastructure development in places such as the US indicates how such investment powers an economy forward. China’s growth story in recent years provides further proof. Now, infrastructure in Europe and the US badly needs more investment.
Too trivial a debate for our times
By Edward Luce
Matt Kenyon illustration
H.L. Mencken, America’s patron saint of sarcastic one-liners, said “democracy is the theory that common people know what they want and deserve to get it good and hard”. In this age of Twitter, Mencken would barely keep his thumb off his BlackBerry.
Matt Kenyon illustration
H.L. Mencken, America’s patron saint of sarcastic one-liners, said “democracy is the theory that common people know what they want and deserve to get it good and hard”. In this age of Twitter, Mencken would barely keep his thumb off his BlackBerry.
The eurozone really has only days to avoid collapse
By Wolfgang MünchauIn virtually all the debates about the eurozone I have been engaged in, someone usually makes the point that it is only when things get bad enough, the politicians finally act – eurobond, debt monetisation, quantitative easing, whatever. I am not so sure. The argument ignores the problem of acute collective action.
Last week, the crisis reached a new qualitative stage. With the spectacular flop of the German bond auction and the alarming rise in short-term rates in Spain and Italy, the government bond market across the eurozone has ceased to function.
Last week, the crisis reached a new qualitative stage. With the spectacular flop of the German bond auction and the alarming rise in short-term rates in Spain and Italy, the government bond market across the eurozone has ceased to function.
Our Spending Problem. Supercommittee, R.I.P.
The failure of the supercommittee marks a good time to highlight just how out of control our federal spending really is. To see the matter in a clearer light, let’s leave aside all disputes over tax revenues for the time being, and focus purely on spending.
The Congressional Budget Office (CBO) says that federal spending has increased from $2.73 trillion in fiscal year 2007 to $3.60 trillion in fiscal year 2011. That’s a whopping 32 percent increase in just five years. (Americans should have been so lucky with their incomes.) That figure has nothing to do with diminishing tax revenues. It is strictly the amount by which federal outlays have increased.
Looking forward, the CBO projects (see table 1-1) that the federal government will spend $5.68 trillion in 2021. That’s an increase of 58 percent over 2011, and 108 percent over 2007. In other words, on our current trajectory, annual federal spending will more than double over the 15-year span from 2007 through 2021.
For President, Newt Gingrich
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This newspaper endorses Newt Gingrich in the New Hampshire Presidential Primary.
America is at a crucial crossroads. It is not going to be enough to merely replace Barack Obama next year. We are in critical need of the innovative, forward-looking strategy and positive leadership that Gingrich has shown he is capable of providing.
He did so with the Contract with America. He did it in bringing in the first Republican House in 40 years and by forging balanced budgets and even a surplus despite the political challenge of dealing with a Democratic President. A lot of candidates say they're going to improve Washington. Newt Gingrich has actually done that, and in this race he offers the best shot of doing it again.
America is at a crucial crossroads. It is not going to be enough to merely replace Barack Obama next year. We are in critical need of the innovative, forward-looking strategy and positive leadership that Gingrich has shown he is capable of providing.
He did so with the Contract with America. He did it in bringing in the first Republican House in 40 years and by forging balanced budgets and even a surplus despite the political challenge of dealing with a Democratic President. A lot of candidates say they're going to improve Washington. Newt Gingrich has actually done that, and in this race he offers the best shot of doing it again.
We need a holiday from stimulus
Illustration: The stimulus box by Alexander Hunter for The Washington Times.
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