Mauvaises Idées

The International Herald Tribune reports that Ségolène Royal, the Socialist Party candidate for the French presidency, wants to impose price controls on banking services. She also wants to distort the allocation of credit by having the government guarantee loans to young people.

These ideas do not make economic sense, but they are a sign of pogress. Thirty years ago, a Socialist in France would be arguing for nationalization of banks. At this rate, maybe the Socialists will be advocating free market ideas within 300 years:

In a French presidential campaign with recurrent anti-capitalist undertones, the Socialist Party candidate, Ségolène Royal, took aim at banks Tuesday, accusing them of penalizing the poor with low interest rates on savings and high overdraft fees.

…Banks should pay customers more interest on current accounts than the 0.5 percent to 3 percent common today, Royal said. They should also credit bank accounts on the day a transfer is made, and give every young person with a “project” a free €10,000 loan that would be guaranteed by the state.

The Tax Code Nightmare Continues

Money, a personal finance magazine, periodically used to conduct a test by sending a hypothetical family’s tax information to dozens of professional tax preparers, an exercise that generated a wide array of results because of the tax code’s complexity. Unfortunately, it seems Money no longer conducts this test. But USA Today has stepped up to the plate, albeit in a more limited way. It asked for a tax return from four preparers and got - gee, what a surprise - four different results:

In 1913, the CCH Standard Federal Tax Reporter, which spells out the U.S. tax code in all its riveting detail, was 400 pages long. In 2007, it contained 67,204 pages. As the tax code turns ever more unwieldy, deciphering it has become more art than science, tax experts say. With the April 17 deadline approaching, USA TODAY decided to test this theory by asking three veteran tax pros — two enrolled agents and one certified public accountant — to prepare a tax return for a hypothetical family, the Baileys. …All the preparers came up with varying results.

To its credit, USA Today draws the obvious conclusion and denounces the current tax code. Unfortunately, other than making some generic comments about the need for reform, the newspaper does not explain why fundamental reform like a flat tax is the only solution:

The fact that they couldn’t agree is testament to how impossibly complex the tax code has become. It also illustrates the utter contempt Congress has for the Baileys and their real-life contemporaries. This year, individuals and companies will spend about $300 billion, according to the non-partisan Tax Foundation, on tax preparation costs. To put that in perspective, that is a 20% levy on top of the $1.5 trillion they will actually pay in taxes. Some 60% of filers — including IRS Commissioner Mark Everson — will pay a professional to do their taxes for them.

It’s Not about Competence, It’s about Ideology

At the start of his disastrous 1988 campaign, diminutive technocrat Mike Dukakis had this rallying cry for the delegates at the Democratic National Convention, “this election isn’t about ideology. It’s about competence.”  At the time, I was a high school student, discovering politics by swiping my dad’s copies of National Review for ammo to use against my lefty history teacher.  I don’t have access to the National Review online archives, but I think I remember NR joining the many other conservatives who made fun of that line.  So it’s interesting to see NR editor Rich Lowry adopt that notion as the basis for his what-went-wrong cover story in the April 2 issue.  The Bush administration’s problem, you see, isn’t with the policies it’s pursued.  The real flaws lie in the execution. 

After a few complaints about ”executive dysfunction” and Bush’s failure “to create a sense of accountability in his government,” Lowry softens the blow somewhat.  The presidency is a hard job, after all, and “Bush has been hurt particularly by two massive events that might have been beyond the managing of even the most talented executive,” Katrina and “the ‘ungrateful volcano’ of Iraq.”  The passive voice is a wonderful touch: it seems that deciding to invade Iraq is just like getting hit by a hurricane.

I can understand why some people view the Bush administration’s failures in terms of competence.  By most accounts, Bush is a terrible manager, “incurious and as a result ill-informed” as former Bush speechwriter and NR hand David Frum has put it.  Bush promotes on the basis of loyalty and appears to view doubt as a character flaw.  “I don’t need people around me who are not steady,” he told Bob Woodward in 2002, “and if there’s kind of a hand-wringing attitude going on when times are tough, I don’t like it.”  And yes, if you’re going to go to war on the theory that the best way to deradicalize the Middle East is to bomb, invade, and occupy a large country at the heart of it, then it is a mistake to staff the occupation authority with the leading lights of the College Republicans.  But might there also be a problem with the theory itself?  Lowry makes a couple of meek gestures in that direction, but falls back on “the incompetence dodge.”

Most damning is the paragraph that comes right after Lowry’s Iraq apologia: “Bush has certainly had successes.  The prescription-drug program is, for better or for worse, one of his most important domestic initiatives…. But [despite its bureaucratic complexity] the program has turned out to be popular, relatively well-run, and less expensive than expected.”  Well, happy days

I don’t take issue with Lowry’s point that the program is popular, and probably a net plus for the Republicans electorally.  But the NR I remember from high school had higher aims than the success of a particular political party.  And the earlier NR, for all its faults, had the quixotic but noble goal of “standing athwart the tide of History, yelling ’stop!‘ “  Too often today, it looks more like: “Surfing the tide of history, screaming ‘Cowabunga!   Go GOP!‘ “   


New Estonian Government Plans to Lower Flat Tax Rate

The International Herald Tribune reports that the new government in Estonia plans to lower the rate on the flat tax from 22 percent to 18 percent. Estonia already ranks as one of the world’s most laissez-faire economies. Reducing the flat tax rate - which was originally imposed at a rate of 26 percent - will further enhance Estonian competitiveness and increase the power of tax competition in Europe:

Estonian lawmakers on Wednesday gave Prime Minister Andrus Ansip the go-ahead to form a new center-right government that is expected to cut the Baltic country’s flat income tax. …Ansip’s center-right Reform Party, the conservative IRL union and the centrist Social Democrats agreed earlier this week on a coalition platform. They plan to continue market-friendly policies in the country of 1.3 million, including reducing the flat tax from 22 percent to 18 percent by 2011. High-tech Estonia has one of the European Union’s fastest-growing economies, and some economists credit the flat tax, which means everyone pays the same tax rate as opposed to the progressive rate that most European countries use.

Who’s Afraid of a Little Flab?

Lest anyone get too carried away with the current wave of anti-obesity hysterics, Harvard economists David Cutler and Edward Glaeser, along with University of Michigan professor of medicine Allison Rosen, have released a working paper titled “Is the US Population Behaving Healthier?” where they find that Americans are getting healthier in spite of a little extra flab.  From the abstract:

Despite substantial increases in obesity in the past three decades, the overall population risk profile is healthier now than it was formerly.  For the population aged 25-74, the 10 year probability of death fell from 9.8 percent in 1971-75 to 8.4 percent in 1999-2002.  Among the population aged 55-74, the 10 year risk of death fell from 25.7 percent to 21.7 percent.  The largest contributors to these changes were the reduction in smoking and better control of blood pressure. Increased obesity increased risk, but not by as large a quantitative amount.  In the future, however, increased obesity may play a larger role than continued reductions in smoking.  We estimate that a continuation of trends over the past three decades to the next three decades might offset about a third of the behavioral improvements witnessed in recent years.

So when you order that second cheeseburger, be sure to ask for a side of ACE inhibitors.

The Right’s Love Affair with the Military

My post the other day about whether American society really ought to look more like the U.S. Army has induced a vein-popping, spittle-flying tirade over at Right-Thinking from the Left Coast. Apparently, the point I was trying to make was lost on some.

To recap, Robert Wright argued in the op-ed pages of The New York Times (subscription required) for an America that looked more like the U.S. Army. In that piece, Wright went on at some length pointing out all the wonderful things he found in that institution. Fine, although I certainly know people who spent time in the U.S. Army who saw things a lot differently.

But never mind. The author left out one not-so-inconsequential aspect of the U.S. Army - in fact, the one thing that actually defines the institution. To wit, it’s an organization in which people are expected to shut up and do as they are told. And if they don’t, they are jailed or even, in some circumstances, shot. And their job is to kill.

Do I think American society ought to look more like that? Uh, no.

Now, how do we get from that – which should have been obvious to most readers – to this shrill “you hate the troops” stuff out of Right-Thinking from the Left Coast? My guess is that there are a lot of people on the Right who worship the Pentagon and everything it stands for because they see it as representing the country as a whole. And, well, they love the heck out of their country.

I understand this, but to me, the military has always been less of a mirror image of the country I love than a mirror image of the Post Office I don’t so love – but a Post Office with heavy ordnance. Sure, we need the military to protect ourselves from bad actors abroad, but let’s not lose our perspective. We need construction workers to protect us from big potholes on the road too, but that doesn’t mean I’ll go into a conniption every time I run across someone with a none-too-rosy view of the U.S. Department of Transportation.

The observation I made in my original post – that it’s unimaginable that any of our founding fathers would ever even dream of making Wright’s argument – was not off-handed rhetorical flourish. It’s a cold hard fact. James Madison, for instance, considered a standing army “necessary” but “dangerous” and, at the very least, an “inconvenience.” Consider the full quote from Federalist 41:

The liberties of Rome proved the final victim to her military triumphs, and that the liberties of Europe, as far as they ever existed, have with few exceptions been the price of her military establishments. A standing force therefore is a dangerous, at the same time that it may be a necessary provision. On the smallest scale it has its inconveniences. On an extensive scale, its consequences may be fatal. On any scale, it is an object of laudable circumspection and precaution.

And that’s on the mild side of the sentiments we find from other founders regarding the institution the modern Right so tightly embraces. In a letter to Samuel Cooper in 1770, for instance, Benjamin Franklin contended that the lot of a common soldier was worse than that of a slave and that the military was “a devouring monster.” George Washington in his farewell address contended that the military establishment is “inauspicious to liberty” and “particularly hostile to republican liberty.” Benjamin Rush proposed in 1792 that the entry to the Department of War should be inscribed with two captions; “An Office for Butchering the Human Species,” and “A Widow and Orphan Making Office.” John Randolph famously argued from the floor of the 6th Congress that:

The military parade which meets the eye in almost every direction excites the fall of our citizens; they feel a just indignation at the sight of loungers, who live upon the public, who consume the fruits of their honest industry, under the pretext of protecting them from a foreign yoke. They put no confidence, sir, in the protection of a handful of ragamuffins.

There may be statements from some founding fathers echoing John Ashcroft about “letting the eagle soar … with heavy weaponry,” but if so, I’ve never come across them. References to the military as a necessary evil are about as positive a statement as your going to find … from them or me.

To paraphrase Benjamin Franklin, you can have liberty, or you can have missile worship. But you’re unlikely to have both in the long run.