January 07, 2003
The Conservative Weekly Standard Calls Bush Plan "A Catastrophe in the Making"

Chris Caldwell, from the conservative Weekly Standard, calls the Bush unstimulus package a "catastrophe in the making":


FT.com / World / US economic stimulus: ...the middle-class benefits in this plan are wholly illusory. The middle class does not simply get a smaller gain than the upper class; it loses ground. Take the most progressive corner of the president's plan, the $400 increase in the per-child tax credit. For a family of four, the change amounts to $800 a year. That seems like a useful, if modest, gain. But it is not. It is a dead loss. This is because, particularly in a modern economy, relative wealth matters. The middle class, in certain circumstances, must compete against the rich as if in a luxury market - not just for luxury goods but for the staples of life. What do middle-class parents want for their children? A house in a neighbourhood with a good public school system, orthodontia, a college education, maybe even (heaven forbid) a kidney transplant. The prices of all these commodities will be bid up (and by considerably more than $800) when top earners start getting their annual five-figure windfalls.

There is something unconservative about this. The traditional optimistic account of why the US has seen little of the class envy that has so wracked Europe is that, instead of seeking to overthrow the rich, America's poor seek to join them. True. And hallelujah. But that solidarity is possible only when the working class is capable of imagining it can join the rich.... [I]n terms of economic equity it is a catastrophe in the making. Taxpayers are about to receive $600bn worth of "stimulus". Over the long run, they may pay dearly for it...

Posted by DeLong at January 07, 2003 06:35 PM | Trackback

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Caldwell actually understates it. The child-tax credit is not refundable. That is, you don't get the full credit unless you currently pay >= $800 in income tax, even if you pay more than $800 dollars in the payroll tax. That means lower-middle income families, even if they have a zillion kids the right age, get less, in some cases much less, than they think they have been promised.

Posted by: roublen vesseau on January 8, 2003 12:05 AM

I am glad that conservatives like Caldwell seem to have realized that without conservative criticism, the Bush Administration is going to act as if his conservative base were generally satisfied with his economic policies.

Posted by: Jean-Philippe Stijns on January 8, 2003 08:34 AM

P.S. I am of course assuming that most conservatives care about the fate of the American economy above and beyond the outcome of the 2004 elections...

Posted by: Jean-Philippe Stijns on January 8, 2003 08:37 AM

The middle class, in certain circumstances, must compete against the rich as if in a luxury market - not just for luxury goods but for the staples of life. What do middle-class parents want for their children? A house in a neighbourhood with a good public school system, orthodontia, a college education, maybe even (heaven forbid) a kidney transplant. The prices of all these commodities will be bid up (and by considerably more than $800) when top earners start getting their annual five-figure windfalls.

Let's carry this through to its logical conclusion: Tax cuts or outright grants for the bottom income quartile.

Using Caldwell's logic, doesn't that mean the prices of mobile homes, pickup trucks, and tickets to tractor pulls will be bid out of reach of the the bottom decile? And, in the cities, Colt 45 malt liquor quarts, Fubu clothing, rap CDs and ghetto flats will get bid up?

/satire

Posted by: Bucky Dent on January 8, 2003 09:05 AM

BTW, the headline for this thread is misleading. The exerpted article is by a Weekly Standard "senior editor" but is published in the Financial Times of London. It may not be the Stardard's official position.

Posted by: Bucky Dent on January 8, 2003 09:08 AM

"This is because, particularly in a modern economy, relative wealth matters. The middle class, in certain circumstances, must compete against the rich as if in a luxury market - not just for luxury goods but for the staples of life. What do middle-class parents want for their children? A house in a neighbourhood with a good public school system, orthodontia, a college education, maybe even (heaven forbid) a kidney transplant. The prices of all these commodities will be bid up (and by considerably more than $800) when top earners start getting their annual five-figure windfalls. "

If increased demand for houses, good schools, braces, college educations, and kidney transplants does not lead to an increase in the supply of same, then we've got serious problems that go beyond the existence of rich people. Taking money away from rich people is not the way to solve these problems - the way to solve these problems is to look for the things that prevent the supply of these good things from increasing to meet demand, and get rid of those things post haste. Then the rich can be allowed to keep their money, and the middle class can get on with their lives without any concern over those who have more money than they do.

For that matter, if we're forced to take it as given that the supply of those good things will not increase to meet demand, then the same "bid up" phenomenon will occur if people increase their incomes without any change in tax policy. In other words, rising middle class incomes will fail to improve their ability to get these things. We can all agree that that is undesirable.

Posted by: Kenneth Uildriks on January 8, 2003 10:36 AM

To push Kenneth Uildriks argument a little further...
Maybe the government ought not to worry about tax policy alone...but worry about how the governement can improve the quality of life of all its citizens by addressing shortages in good schools, orthodontia and the rest (which by the way are desirable commodities to everybody...not just the rich and the middle class)
Oops...sounds like big government...I take that back...let us go back to fiddling (with the tax code, I mean)

Posted by: Sam Jackson on January 8, 2003 12:25 PM

Brad (and any other economist who cares),
Do economists worry about the bidding-up problem in any quantitative way? Where can I read up on this? I'm particularly interested in inelastic cases--if you bid up the prices of real estate on Manhattan Island, the market won't respond by increasing the available space on Manhattan Island, as I understand.

And Bucky, those stereotypes don't get any less offensive when you type "/satire". What is it that you're satirizing, exactly?

Posted by: Matt Weiner on January 8, 2003 12:48 PM

-if you bid up the prices of real estate on Manhattan Island, the market won't respond by increasing the available space on Manhattan Island, as I understand.

You understand wrong.

Even with the "soft" property market, under-utilized office space in Flatiron/Gramercy is being converted into million dollar condos. And New apartment towers are rising on the West Side train yards. Bloomberg is making progress unfreezing property on the lower West Side along the abandoned elevated freight rail yard. And there are lots of new units going up in Harlem, now that folks aren't afraid to live/invest there.

There are formidable roadblocks to property development here, but it is a myth that space available is fixed.

What is it that you're satirizing, exactly?

The notion that class warfare enjoys a one way free rhetorical ride in demonizing people.

Posted by: Bucky Dent on January 8, 2003 01:01 PM

Republicans are mistresses of class warfare.... Never leave a trace as they slog over the poor and middle class.

Mureen Dowd - NYTimes

"Mr. Rove and his president have a new style of class warfare the affluent afflicting the afflicted; the ruling class enacting policies to help itself, weaving a pashmina safety net so the well-off can buy more expensive stuff they don't need."

Posted by: on January 8, 2003 01:45 PM

"Me: What is it that you're satirizing, exactly?

Bucky: The notion that class warfare enjoys a one way free rhetorical ride in demonizing people."

But who are you satirizing, Bucky? The quote from Caldwell didn't contain a single negative stereotype of the rich, nor did any of the posts above you in the thread. Caldwell postulated that middle-class people want good homes, good schools, maybe a kidney transplant. The idea that poor people and black people want tractor pull tickets and malt liquor is down to you, and to you alone.

If someone had said a whole lot of negative things about rich people, maybe you could satirize that by saying negative things about poor and black people. (Though rich-bashing and black-bashing aren't morally equivalent.) But in the context of this discussion, you just came from nowhere with a bunch of stereotypes.

As Atrios says, satire isn't spitting in someone's face, and then saying "just kidding."

I'm not going to post further on this phenomenon, to avoid going off-topic; you can have the last word.

Anyway, if anyone knows about research on bidding-up, I'm still interested; particularly if economists have anything to say besides "The market will take care of everything, unless there are obstructive factors." Elastic or inelastic markets, I don't care.

Posted by: Matt Weiner on January 8, 2003 03:30 PM

Bucky reminds me of some thoughts I've had on why democratic socialism (a la Sweden) would never work in the US. It's not because it's inefficient; it's because we're too racist. [No, although I think Bucky is clearly insensitive, I'm not calling him a racist.]

We are conditioned in this country to be afraid that someone else (especially someone black or brown) will get something from us for free. We do not trust one another enough to support that kind of system.

Bring on class warfare, it's a debate we should get started. As we enter into postmodernism, what kind of country to we want? Clearly, some of us want more wealth disparity and some of us don't.

Posted by: provoc on January 8, 2003 03:45 PM

>>> ..if you bid up the prices of real estate on Manhattan Island, the market won't respond by increasing the available space on Manhattan Island, as I understand.<<<

> You understand wrong. Even with the "soft" property market, under-utilized office space in Flatiron/Gramercy is being converted into million dollar condos... <

Perhaps even more to the point, quite a large part of Manhattan from midtown south was constructed on the filled in Hudson river, increasing the size of Manhattan itself.

So the market will respond to do it. Of course, the government has created so many regulatory obstacles in recent years that it's a whole lot harder to do than it used to be -- in fact, the government itself is usually stymied when it wants to nowadays -- but the market tries.

Posted by: Jim Glass on January 8, 2003 03:49 PM

Caldwell postulated that middle-class people want good homes, good schools, maybe a kidney transplant.

And implied those'd be still harder to attain after those rich people higher up in the food chain got a tax break.

The idea that poor people and black people want tractor pull tickets and malt liquor is down to you, and to you alone.

What are the demographics of the buyers of those items? How many Lexus vehicles are parked outside the tractor pulls? And do they sell Colt 45 at your nearby upscale gourmet greengrocer?

There's nothing perjorative in noting that different groups purchase different things.

Posted by: Bucky Dent on January 8, 2003 04:00 PM

quite a large part of Manhattan from midtown south was constructed on the filled in Hudson river

Thanks for mentioning this. Battery Park City was landfill from the building of the original WTC for instance.

I'd love to see more of the same along the West Side, but I think the enviros would burst an artery at the mere thought.

Posted by: Bucky Dent on January 8, 2003 04:04 PM

rich-bashing and black-bashing aren't morally equivalent

Thank you for stating my point -- the overt double-standard concerning demonization -- perfectly.

Posted by: Bucky Dent on January 8, 2003 04:38 PM

I think Bucky is clearly insensitive

Right.

Caldwell implies a tax cut will make kidney transplants harder to get for some people, and *I* am the one who is "clearly insensitive".


Question: With a tax structure deeply skewed toward income redistribution, is any reduction in existing tax burdens possible without demagoguery?

Posted by: Bucky Dent on January 8, 2003 04:59 PM

Using Caldwell's logic, doesn't that mean the prices of mobile homes, pickup trucks, and tickets to tractor pulls will be bid out of reach of the the bottom decile? And, in the cities, Colt 45 malt liquor quarts, Fubu clothing, rap CDs and ghetto flats will get bid up?

Those are neither luxury goods, nor does the market for them function like that for luxury goods.

Posted by: Jason McCullough on January 8, 2003 05:03 PM

Ask a homeless hitchiker if mobile homes and pickup trucks aren't luxuries.

My transparent point was that all changes in wealth can be used to demagogue.

Posted by: Bucky Dent on January 8, 2003 05:25 PM

all changes in wealth can be used to demagogue

Exactly, that's why we need to bring on the class warfare debate. Why do the promoters of this package keep saying, don't talk about it, that's class warfare? Why not talk about it? What are the ultimate societal goals?

To me, it seems rather useless to keep futzing with income distribution until we're clear on what we want the outcome to look like. Or is it more efficient to give all of the money to the rich (1920s), then let gov't take it back (1930-1960), and keep oscillating until equilibrium is reached?

If the tax structure is deeply skewed toward income redistribution, why is income disparity greater now than 20 years ago?

In retrospect, I don't think Bucky's insensitive, it's just his version of the southern strategy.

Posted by: provoc on January 8, 2003 06:40 PM

"Maybe the government ought not to worry about tax policy alone...but worry about how the governement can improve the quality of life of all its citizens by addressing shortages in good schools, orthodontia and the rest (which by the way are desirable commodities to everybody...not just the rich and the middle class)"

Given that the government is busy causing these shortages, I don't see much hope of that approach bearing fruit.

The point is that anytime the price of something gets "bid up", greedy bastards will get to work increasing the supply of it... unless someone or something stops them. The way to solve the "bid up" problem is not to take more money away from select bidders, but to get rid of whatever is stopping the greedy bastards from increasing the supply.

Typically, that turns out to be a dumb law or regulation or a government monopoly.

"I'm particularly interested in inelastic cases--if you bid up the prices of real estate on Manhattan Island, the market won't respond by increasing the available space on Manhattan Island, as I understand."

Sure it will. How do you think those tall buildings got there in the first place? They were built for the very purpose of increasing the available space on Manhattan island to meet demand.

Posted by: Kenneth Uildriks on January 8, 2003 08:09 PM

It's not class warfare I want, it's class justice! This is not just a matter of vocabulary. To classify the desire for economic justice as an illegitimate thing (a war) rather than a morally legitimate quest is another case of the (current) winners controlling the vocabulary of the debate. No one complains about voters voting their pocketbooks, until majorities develop around issues of economic justice - then it's suddenly class warfare.

The idea that "the poor in America don't hate the rich, because they hope to be rich themselves" - this is just another self-serving stereotype. Done any polling on this, or just repeating the mantra? Sure, we all want to be rich, but it doesn't follow that the rich are not hated for using their money as "political speech" to overpower those whose lack of money equates with having no voice. The desire to be rich is not just to buy things, but to get my way, and not be stepped all over. The rich must be reckoned with, and vice versa, the poor can be ignored - and who wants that kind of justice? (Hint - not the poor!)

Posted by: tjallen on January 8, 2003 08:19 PM

"Those (mobile homes, pickup trucks, tractor pulls, Colt 45, etc) are neither luxury goods, nor does the market for them function like that for luxury goods."

Why not? What is the difference between those and houses, braces, and colleges? Why does the supply of the former increase to meet demand, while the supply of the latter does not?

"Bring on class warfare, it's a debate we should get started. As we enter into postmodernism, what
kind of country to we want? "

A free country. I see no pressing need for the United States of America to be a European-style social democracy - there's already plenty of those in Europe. Our nation was created for the very purpose of giving people the opportunity to break away from the European way of doing things.

"Clearly, some of us want more wealth disparity and some of us don't."

And some of us don't give a rat's ass about wealth disparity one way or the other, so long as everyone has a chance to get ahead, the opportunity to get rich supplying whatever unmet needs their fellow citizens might have, and the right to trade goods and services on mutually agreeable terms without asking anyone's permission.

Posted by: on January 8, 2003 08:23 PM

"If the tax structure is deeply skewed toward income redistribution, why is income disparity greater now than 20 years ago?"

I don't know. Maybe income disparity was too low 20 years ago.

Don't laugh. There is such a thing as too little income disparity. Zero, for instance - zero income disparity is invariably a bad sign.

I don't have any idea what the "right" amount of income disparity is - and neither, I suspect, do you. I'm not about to take your word for it that today's income disparity is "too high" or that the income disparity of 20 years ago was "just right".

"To classify the desire for economic justice as an illegitimate thing (a war) rather than a morally legitimate quest is another case of the (current) winners controlling the vocabulary of the debate."

But what is economically just, and by what standard? By what moral principle is it unjust for someone to have and keep a ton of money? And how can turning a markedly progressive tax code into a slightly less progressive tax code be unjust, and by what logic does anyone claim that making such a change, in and of itself, amounts to taking from the poor and giving to the rich?

Posted by: Kenneth Uildriks on January 8, 2003 08:36 PM

Kenneth you asked: But what is economically just, and by what standard?

The poster before you suggested: "so long as everyone has a chance to get ahead, the opportunity to get rich supplying whatever unmet needs their fellow citizens might have, and the right to trade goods and services on mutually agreeable terms without asking anyone's permission."

That might be a good start. Better would be "everyone had an EQUAL chance to get ahead, an EQUAL opportunity to get rich." Or even, a roughly equal chance. Or even, a legitimate, visible chance. But less than 1 in 10? 1 in 100? Many of the poor see ZERO chance to get ahead (except by the lottery).

Is this economic justice in America - Those with some money can invest it to make more (and risk losing it all to people who are even more powerfully rich), and the rest can try the lottery?

I've been told to expect to spend $5000 minimum to patent any invention.

Just to cut your hair or paint your nails, I have to ask the state's permission (get schooling and a license, both of which cost time and money, over $1000 recently.)

Various "barriers to entry" into the marketplace obviously stop lots of people from having an equal chance to get rich - even if my goal is not to open an airline. What do you call a "significant barrier to entry" ? Some people find even the potato market too expensive to enter (the supposed example of free market I was taught used this as the example of low barrier to entry).

Do you admit there is any truth behind the old saw - gotta have money to make money? If you agree that there is some substance to it, then the have-nots are out of luck.

Some say the resentment of the rich by the poor is "merely envy" but that doesn't make it wrong, and doesn't make it go away. To say of the rich who want to hold onto their money that they are "merely greedy" doesn't make that wrong either. We are emotionally driven creatures!

Kenneth said: "Then the rich can be allowed to keep their money, and the middle class can get on with their lives without any concern over those who have more money than they do."

Why shouldn't the middle class (not to mention the poor) have these similar concerns, when in interactions with the rich, they cannot be equal participants in any exchange? The rich have better lawyers, better doctors, better educations, borrow money cheaper, have more access to political power, buy the laws they need, can bribe whoever they want, etc.

Even ignoring the plights of the poor, with their barriers to entry into the economic system (other than by contributing labor), even the middle class cannot compete on equal footing with the richer richer richer rich. The richer the rich get, the more unequal the economic interactions. It may not be an intrinsic feature of economic interactions (that the rich are in the power position), but given the better lawyers, political access, etc, it sure works out that way!

Posted by: tjallen on January 8, 2003 09:49 PM

the plights of the poor, with their barriers to entry into the economic system (other than by contributing labor)

The rentier class is the US is tiny. For all intents and purposes, EVERYONE here "contributes labor".

Posted by: Bucky Dent on January 9, 2003 06:17 AM

"Just to cut your hair or paint your nails, I have to ask the state's permission (get schooling and a license, both of which cost time and money, over $1000 recently.)"

I see that your notion of economic justice has something in common with mine, at least.

Before we even think about giving people money or other goods and services, we should first see what barriers are placed in front of the non-rich in their efforts to get ahead. Economic justice demands that these barriers be removed first and foremost. Economic justice does not demand that we take away anyone's money, or that we give anyone money; economic justice demands that we allow people to employ any peaceful means they see fit to convince their fellow citizens to trade with them and thereby enrich themselves. When we demand that citizens ask permission to trade, that is a perfect example of economic injustice.

Posted by: Kenneth Uildriks on January 9, 2003 06:35 AM


I thought this posted on MWO seemed appropriate:

MWO,

Welcome back.

Do you think that when Jesus said, "It is easier for a camel to go through a needle's eye, than for a rich man to enter into the kingdom of God," (Luke 18:25) that the Lord God Almighty, Bush's favorite philosopher, was engaging in class warfare?

Jeff Crook

Posted by: Cookie Monster on January 9, 2003 11:51 AM

I asked about research on bidding-up. Does the fact that no one has answered the question mean that there is no such research, or that it's agreed that there's no such phenomenon (though I'd expect some research designed to show that)? Or that economists don't consider this question important?

You can build skyscrapers and fill in land, true. But I suspect that anyone who tried to rent an apartment in the Bay Area or Greater Boston during the dot-com boom would confirm that giving a lot of money to a select group of people can drive up prices. My evidence is at best anecdotal; that's why I want to know about research.

Posted by: Matt Weiner on January 9, 2003 01:20 PM

giving a lot of money to a select group of people can drive up prices

Isn't this just standard supply/demand curve stuff? A sudden burst in demand caused by a financial boom (dot-coms, IPOs, oil) hitting a market that can't respond with supply quickly, real estate, results in a price spike. This is far from rocket science requiring new empirical research.

Posted by: Bucky Dent on January 9, 2003 01:37 PM

A very good comments section, thanks for the push, Brad.

First, Chris Caldwell didn't mention perhaps the most important case where relative wealth is important: political influence. If you become twice as wealthy tomorrow, you will still lose in political influence (access to politicians, ability to broadcast your message) should everyone else's wealth quadruple. A population with a large skew in the distribution of wealth is one where a small section of the population has too much political influence - even if you don't think that that is bad, I would hope you agree that it will lead to inefficiencies. The political machinary will badly distribute resources - those having more influence (meaning the rich) will get more of the rewards of the political system and so get richer. The Administration's stimulus plan is a good case in point.

Relative wealth has some importance for a college education, because it is sometimes not the absolute level of one's education that matters, but the ranking i.e. one's relative position. Supplying "more" education doesn't change the ranking system (even if Harvard were to double its students, recruiters would then start looking at some choice subsection of the Harvard student population).

Kenneth wrote: By what moral principle is it unjust for someone to have and keep a ton of money? Ok, so let's not discuss morality. Would you agree at least that it's not particularly efficient? Would you agree that a large part of the population in America has difficulty getting adequate health care? Or is not properly educated? Do you think this matters? And I mean, not in terms of justice (because I said I will leave that aside), but in terms of the strength of the American nation. Imagine a boat, where half the people don't row so well; it's not going to go so fast, is it? Why does this matter? Because there are other countries out there, with different values or systems - China comes to mind - and the U.S. had better make sure it doesn't lose its lead compared to them. Maybe our other efficiencies and advantages will pull us through; but I don't think you can count on it.

An anonymous poster wrote: And some of us don't give a rat's ass about wealth disparity one way or the other. And some people (I imagine you are one) don't give a rat's ass about other people, the future, or even themselves. So what's your point? The relevant question is, does and will American wealth disparity matter, e.g. for America and America's future?

Posted by: Andrew Boucher on January 9, 2003 01:49 PM

>>Why not? What is the difference between those and houses, braces, and colleges? Why does the supply of the former increase to meet demand, while the supply of the latter does not?<<

Houses and orthodontia are less of a problem. It takes about a year to build a house, and about four years to qualify an orthdontist. So while you could get short-term imbalances and bidding-up here, in equilibrium one would expect supply to meet demand.

Colleges are *much* more problematic. I'm an Oxford man myself. Lots of people wanted to go to Oxford at the same time as me, and a lot of them were probably prepared to pay at least as much as me. Lots of them were probably within a statistical measuring error of being as clever as me. So why doesn't the University of Oxford double its capacity to take in all those extra students?

To ask this question is to answer it. There are some things which are only valuable *because* not everyone can have them. My old business school alumni association does a big deal about this every time it asks me for money; they point out that if they don't get good alumni donations they'll have to take in more students, and that will devalue my qualification.

So there are some goods (exclusive education being a good example) which can be subject to exactly the sort of bidding-up effect that Caldwell describes, and his point that this increased economic stratification will lead to social stratification that the middle class will notice is a good one.

For example, could someone answer me the question whether the Bush tax plan will make it more or less likely that a managing director of Morgan Stanley will continue to go to the same country club as his dentist?

Posted by: dsquared on January 9, 2003 01:56 PM

they point out that if they don't get good alumni donations they'll have to take in more students, and that will devalue my qualification.

Simply untrue.

Your graduating class is fixed in size and time. A decay in the quality of subsequent classes won't harm the reputation of your class, assuming its existing status is good.

A CUNY degree in the 1940s was worth a lot. Someone with that pedigree wasn't devalued by the subsequent open admissions horror.

whether the Bush tax plan will make it more or less likely that a managing director of Morgan Stanley will continue to go to the same country club as his dentist?

If the MS MD is in the muni department, he'll have to resign from the club for lack of dues paying ability. :)

Posted by: Bucky Dent on January 9, 2003 02:14 PM

Because there are other countries out there, with different values or systems - China comes to mind - and the U.S. had better make sure it doesn't lose its lead compared to them. Maybe our other efficiencies and advantages will pull us through; but I don't think you can count on it.

Ack! Global competitiveness rhetoric! Back, back I say!

I agree with the rest, though.

Posted by: Jason McCullough on January 9, 2003 03:11 PM

Andrew--
Perhaps different definitions of efficiency are at issue.

I think (roughly) that it's inefficient for X to belong to person A rather than person B, if X would do B more good than it does A. Of course, I don't want to coerce people into choosing what's best for them, but we can approximate this by imagining that A and B are given an equal amount of chits to buy goods, and seeing who would pay more chits for X. [There's no way to attain complete efficiency by this standard; inequality will lead to inefficiencies, and some inequality is necessary in any functioning economic system.]

Most economists and all libertarians, as far as I can tell, think that it's inefficient for X to belong to A rather than B if B would pay more for X than A would, in actual dollars. The difference between dollars and chits is that A may have more dollars than B, and so may wind up willing to pay more money for something that would be better for B to have.

[WARNING: what follows is a rank oversimplification of the health care market. Think about other markets if that helps.]

So, to me it's inefficient for some people to go without health care while others can have all sorts of optional procedures done*, because we would be better off on the whole if the resources devoted to those optional procedures for the rich were directed toward health care for the poor. Not because of any animus to the rich, or out of any distributional concerns**, but because the health care the poor aren't getting would do them more good than the procedures that the rich are getting does them.
[This isn't a relative wealth thing, either. It's not that the poor are getting worse health care than the rich, they absolutely aren't getting health care at all. In real estate markets, when some people get rich and drive up rents, the rest wind up with absolutely smaller apartments (or the equivalent). etc.]

On the second concept of efficiency, though, it's not an inefficiency that the poor are lacking in health care. The poor won't pay as much for their health care as the rich will pay for their procedures (because the poor don't have the money), so diverting resources toward health care for the poor is an inefficiency.

Of course, my notion of efficiency springs from moral concerns; I see no moral justification for a system that allocates resources to people who are better off and don't get as much good out of them.*** So perhaps I should just have accepted your invitation not to discuss morality. (And please don't take my grumpy tone, combined with the use of your name at the beginning, to indicate that I'm attacking you.)

*I would name plastic surgery, liposuction, and Viagra, but I fear this would be construed as rich-bashing.
**I'm working from a straight-up Utilitarian perspective, for those who care.
***Some people will take the moral foundation to be the sanctity of property rights; but then efficiency doesn't matter, does it? Property rights are sacred whether or not respecting them is efficient, by whatever standard of efficiency.

Posted by: Matt Weiner on January 9, 2003 06:52 PM

I see no moral justification for a system that allocates resources to people who are better off and don't get as much good out of them

So you agree that an educational system that creates and supports graduate students in the humanities -- a notoriously glutted middle class field with scant impact on the lives of America's least well-off -- while at the same time offering abysmal educational opportunities to inner-city children, lacks "moral justification"?

Posted by: Bucky Dent on January 10, 2003 05:37 AM

Bucky--
I think that's the least of our problems. If we want to improve educational opportunities for the inner city, the money going to humanities grad students isn't the richest source of funding.

The point I'm trying to make is more about general principles than specific decisions: we should care about inequality.

Posted by: Matt Weiner on January 10, 2003 06:39 AM

we would be better off on the whole if the resources devoted to those optional [medical] procedures for the rich were directed toward health care for the poor

So, should our society fund Phds in Frent Lit, or smaller class sizes for inner city schools?

Given the oft-discussed "crisis" in urban education, the "moral justification" [your term] to divert the funding from "optional" pedagogy toward "the poor" is compelling. As you note, "we should care about inequality".

Posted by: Bucky Dent on January 10, 2003 06:56 AM

Bucky--
Why do you assume that the money for inner city schools is going to French Lit PhDs? Why don't you assume that it's going to tax cuts for the rich, which seem to be eating up more money these days? If the government stopped all funding of the humanities, do you think they would redirect all the savings to inner-city education?

Of course, the sensible question would be to consider the whole budget at once. If you do that, there's no need to fixate on French Literature vs. inner-city education; I'm not sure why you're making a big deal of this.

Again, feel free to take the last word.

Posted by: Matt Weiner on January 10, 2003 09:24 AM

Why do you assume that the money for inner city schools is going to French Lit PhDs?

Why do you assume optional health procedures for some people diverts resources from health care for the poor?

I am simply repurposing your argument from health care to education.

Posted by: Bucky Dent on January 10, 2003 09:37 AM

Ah, I see. I'm going to break my promise to let you have the last word, because I misunderstood your point.

I was using health care as an example of where you can find an inefficiency. If the amount of resources devoted to health care were fixed, it really would be a choice between care for the poor and optional procedures for the rich. Since the amount of resources isn't fixed, we could in theory have both if we diverted resources from somewhere else.

When we look at the economy as a whole, we don't have the option of diverting resources from outside, so we do wind up with inefficiencies of the sort I object to even if we have markets that are efficient in the libertarian sense. Rich people can (and should) spend more money for things that do them less good, because they have more money to spend.

One could argue that libertarian-efficiency increases overall productivity enough to offset the inefficiency (in my sense) that inequality creates. To do that, we'd have to measure inefficiency in my sense, to see how much increase in productivity is required to offset it. That would require some serious thought about the economics of inequality. Again--this is where I started--if anyone knows of any such research, I'd love to hear about it.

Posted by: Matt Weiner on January 10, 2003 11:33 AM

thought about the economics of inequality

I believe empirical work has been done relating income dispersion to overall living standards in developed countries. IIRC, a weak positive relationship exists between the two.

Posted by: Bucky Dent on January 10, 2003 11:47 AM

When we look at the economy as a whole, we don't have the option of diverting resources from outside...

Actually we're running a trade imbalance of about $1 billion/day, "diverting resources from the outside".

Posted by: Bucky Dent on January 10, 2003 12:20 PM

I believe empirical work has been done relating income dispersion to overall living standards in developed countries.

Median or average?

Posted by: Jason McCullough on January 10, 2003 01:22 PM

Median or average?

If I'd remembered, I'd have been more precise. :)

Posted by: Bucky Dent on January 10, 2003 02:16 PM

By Dent's reasoning, it NEVER matters how inequitable the tax structure is, because the expansion in production caused by a greater tilting of taxes away from the rich will ALWAYS lower the cost of a good enough that the poor will have no more trouble obtaining it than they did. Uh huh. By that reasoning, let's set the income tax rate at 90% on those making under $20,000 a year, and 0% on those making over $200,000 a year. Obviously those making under $20,000 won't suffer at all from this little change, since the price of anything they might want to buy will immediately dive by 90% in consequence. Please... To quote Caldwell's key passage: "The prices of all these commodities will be bid up (and by considerably more than $800) when top earners start getting their annual five-figure windfalls." If you intend to prove confidently that Bush's latest economic plan will make the prices of such commodities rise by LESS than $800, you have your work cut out for you.


As for Kenneth Uildreks' statement that "Economic justice does not require that we give anyone money": does that apply to the disabled who would be unable to support themselves? And does it apply to those who make a hell of a lot less money than (to take an extreme example) Bill Gates, for a comparable amount of work effort?

Posted by: Bruce Moomaw on January 10, 2003 02:27 PM

Dent again: "I believe empirical work has been done relating income dispersion to overall living standards in developed countries. IIRC, a weak positive relationship exists between the two."

The key word here, of course, is "weak". No one outside an insane asylum doubts that an economy with total after-tax income equality would be a disaster, because it would provide no reward whatsoever for those forms of individual cleverness that are useful to society as a whole. But -- to put it mildly -- Dent's statement is not adequate justification for Bush's scheme.

Posted by: Bruce Moomaw on January 10, 2003 02:31 PM

Mr. Moomaw, I suggest you make your own arguments rather than spend time attributing stawmen to others.

Posted by: Bucky Dent on January 10, 2003 02:53 PM

"And does it apply to those who make a hell of a lot less money than (to take an extreme example) Bill Gates, for a comparable amount of work effort? "

No. Bill Gates did not steal your money, so the existence of his fortune is not an injustice to you.

In fact, Bill Gates got every penny of his fortune by convincing lots of people to give him money, which all those people would not do if they did not value his product more than they valued the money they paid for it. In short, every transaction that put money into Bill Gates' pocket also made one of his fellow citizens better off than he had been before. Bill Gates' wealth is a perfect example of economic justice, not economic injustice.

Now, of course there exist rich people that got that way not by enriching their fellow citizens, but by getting unearned money from the treasury or by pressuring the government to lock out competitors or put the squeeze on customers (let's not forget that the non-rich have been known to engage in similar shenanegans). But I don't see how "justice" demands that we take large amounts of money from people who have very little in common with such ruffians other than the amount of wealth they hold.

"By that reasoning, let's set the income tax rate at 90% on those making under $20,000 a year, and 0% on those making over $200,000 a year. "

That doesn't make any sense. Of course if you increase taxes on the non-rich, they'll have more trouble buying stuff! No one is claiming any different, and no one is proposing that we actually raise anyone's taxes. The reasoning that says that lowering rich people's taxes isn't going to impoverish the non-rich doesn't have anything to do with what will happen if you also raise taxes on the non-rich. Obviously, bad things will happen to them in that case.

"If you intend to prove confidently that Bush's latest economic plan will make the prices of such commodities rise by LESS than $800, you have your work cut out for you. "

I don't see how Bush's latest economic plan will cause any sustained price increases. Other factors may be in place that inhibit increases in supply of certain critical things, but that is not Bush's fault and those things need to be fixed no matter what Bush does.

Posted by: Kenneth Uildriks on January 10, 2003 02:56 PM

To Dent: Exactly what in my statement is a "strawman"? You said the connection between income inequality and productivity in societies is, on the whole, "weak" -- which could, of course, be perfectly true if there was no connection between them at all beyond a certain fairly low level of income inequality. Your statement certainly provides no reason at all to believe that Bush's scheme would produce enough increase in total productivity to do more overall good than harm for the populace.

To Uildreks: by your reasoning, Gates should pay exactly the same total amount in taxes as someone who earns $20,000 a year (or $5000 a year) -- after all, he's morally entitled to every single penny he earns through sheer cleverness as opposed to actual effort. Arguing that people are just as much "morally entitled" to money they earn strictly through cleverness (or any other kind of personal luck) as that which they earn through actual effort is morally deranged to the point of being completely insane. Taxes should be limited on the rich only for purely pragmatic reasons, at the point when taxing them further would reduce their productivity enough to do more harm than good to the total populace. Most economists seem to think that Bush's proposed tax cuts for the wealthy go far beyond that point.

"Of course if you increase taxes on the non-rich, they'll have more trouble buying stuff! No one is claiming any different, and no one is proposing that we actually raise anyone's taxes. The reasoning that says that lowering rich people's taxes isn't going to impoverish the non-rich doesn't have anything to do with what will happen if you also raise taxes on the non-rich. Obviously, bad things will happen to them in that case."

Brilliant! In that case, let us, once again, charge the richest American and the poorest American exactly the same total amount in taxes, since they'll actually consume the same amount of every government-provided good in your libertarian paradise. This strikes just about everyone on the planet as totally insane, for the obvious reason I've stated above. And rejecting all income redistribution whatsoever as "immoral" is equally insane, for exactly the same reason.

(On a separate point: the Wall Street Journal, of course, IS now proposing raising taxes on the non-rich -- or, as they call them, "lucky duckies" -- at the same time that taxes are lowered on the rich. According to the Washington Post, the Bush Administration is seriously considering the same plan.)

Posted by: Bruce Moomaw on January 10, 2003 06:13 PM

Exactly what in my statement is a "strawman"?

Well, this, for starters:

By Dent's reasoning, it NEVER matters how inequitable the tax structure is, because the expansion in production caused by a greater tilting of taxes away from the rich will ALWAYS lower the cost of a good enough that the poor will have no more trouble obtaining it than they did.

I made no such case anywhere.

If you want to infer all that based on your analysis of the topic under discussion, feel free to do so. But don't waste time and bandwidth putting words in other people's mouths.

Posted by: Bucky Dent on January 10, 2003 06:28 PM

"after all, he's morally entitled to every single penny he earns through sheer cleverness as opposed to actual effort."

He's entitled to the money not strictly on account of his cleverness or his effort - he's entitled to it because he got it from people who freely gave it to him because they benefitted from his product more than they gave up by paying him for it. That seems to me like the very essence of economic justice - you enrich your fellow citizens, and you get rich in turn.

"Effort" in and of itself does not enrich your fellow citizens - it may take a lot of effort to crawl home after a night of drinking, for example, but it doesn't really do anyone any good.

"Arguing that people are just as much "morally entitled" to money they earn strictly through cleverness (or any other kind of personal luck) as that which they earn through actual effort is morally deranged to the point of being completely insane."

It doesn't seem the least bit morally deranged for people to be rewarded for results and actual benefits provided to their fellow citizens.

"Taxes should be limited on the rich only for purely pragmatic reasons, at the point when taxing them further would reduce their productivity enough to do more harm than good to the total populace."

No, taxes should be limited to the amount actually required for the government to operate and provide vitally needed public services. That is the whole purpose of taxation, to make a functioning government possible. Depriving people at any income level of their money is a necessary evil in order to allow the government to function - considering it to be a positive good which happens to fund a government as a side effect is, as far as I can tell, morally deranged.

"Brilliant! In that case, let us, once again, charge the richest American and the poorest American exactly the same total amount in taxes, since they'll actually consume the same amount of every government-provided good in your libertarian paradise."

I suspect that we could get away with having a government small enough to be funded in that manner. (Well, maybe not the poorest American, since he wouldn't be paying his own way even without taxes, but you get the point.) There'd be a cutoff - if you could prove you were below the cutoff, the government would give you a break, otherwise you write the Feds a check and they don't even have to know or care how much you make or what you spend it on. I'd go for that, and I'm not even filthy rich.

In the meantime, I don't see how turning a markedly progressive tax code into a slightly less progressive tax code, without raising anyone's taxes, is an outrage.

"On a separate point: the Wall Street Journal, of course, IS now proposing raising taxes on the non-rich -- or, as they call them, "lucky duckies" -- at the same time that taxes are lowered on the rich. According to the Washington Post, the Bush Administration is seriously considering the same plan"

Got a link?

Posted by: Kenneth Uildriks on January 10, 2003 08:01 PM

To begin with, an apology on another subject -- I now (very belatedly) understand the hole in Caldwell's reasoning. The wealthy can already afford all they need of the sort of "staple goods" he's
talking about (elementary orthodontic work, relatively snall domiciles, a lower-level college eduction); they're not going to buy more of those -- and thus bid up their price for the rest of us -- simply because they have more money. Instead, they'll use their additional income to buy more luxury goods of a sort the rest of us can't buy at all.

But this does NOT mean that Bush's scheme is a good idea. Unless it causes the economy to grow fairly dramatically, it means that the non-rich will have a smaller share of total income (from employment and government aid) to buy those staples. And there is no reason to think that it will cause the economy to grow dramatically enough to compensate for this -- Clinton's 1994 tax hike did not cause the economy's growth rate to perceptibly shrink, contrary to the dire predictions of virtually all the Reaganites who are now supporting this move by Bush. (Paul Craig Roberts did a cover story for National Review, "How to Grow the Deficit"; Forbes magazine predicted an economic collapse and urged ivnestors to move their money out of the US and into the safety of -- you guessed it -- Japan.)

As for Dent, he still hasn't tried to respond to the point I raised before -- if the connection between income inequality and national productivity is "weak", then when income inequality rises above a relatively limited level it does more harm than good.

And as for Uildreks: by his moral reasoning the physically disabled should be allowed to starve to death -- after all, they produce nothing of value to anyone else, and so morally no one else owes them anything in income. As for his objection that people don't deserve income for "work effort" if their work effort is useless: no one is proposing anything remotely like that. What they are proposing is providing people who cannot earn more than a certain income, through no fault of their own, some additional assistance; but not enough to remove their desire to make more money on their own by doing useful work. Obviously, if income redistribution finally rises above a certain level, it will indeed discourage productive activity enough to do more total harm than good to the populace. But even at that level, the rich will still be making far more money than the rest of us for the same amount of work effort, which means that it is absolutely ridiculous to say that their higher taxation will be "unjust" persecution of the poor dears. And there is no reason to believe that we have yet reached the level beyond which income redistribution is wrong for pragmatic reasons (NOT for reasons of "justice").

My God, all of this should be obvious to an 8-year-old. It's interesting that DeLong's blogsite seems to attract not regular economic conservatives (virtually all of whom, including Reagan and Milton Friedman, back some government income redistribution), but kook-libertarian extremists, the way a bright lantern attracts clothes moths.


Finally, as for the Wall Street Journal's proposed scheme to increase taxes on the non-rich (and the White House's possible agreement with it,) it's been all over the media. See, for starters:

http://slate.msn.com/id/2074593/

http://slate.msn.com/id/2074630/

http://slate.msn.com/id/2074666/

http://www.nytimes.com/2002/12/03/opinion/03KRUG.html

http://www.washingtonpost.com/ac2/wp-dyn/A39211-2002Nov25?language=printer

http://slate.msn.com/id/2075483/

http://www.washingtonpost.com/ac2/wp-dyn/A59577-2002Dec15?language=printer

http://slate.msn.com/id/2076282/

Posted by: Bruce Moomaw on January 11, 2003 07:22 AM

Bruce:
When you wrote this:
"By Dent's reasoning, it NEVER matters how inequitable the tax structure is, because the expansion in production caused by a greater tilting of taxes away from the rich will ALWAYS lower the cost of a good enough that the poor will have no more trouble obtaining it than they did."
were you referring to this:
"If increased demand for houses, good schools, braces, college educations, and kidney transplants does not lead to an increase in the supply of same, then we've got serious problems that go beyond the existence of rich people"?
That was Uildriks, not Dent.

Kenneth: For the Wall Street Journal, check out this editorial, and this discussion on this site, which featured an extensive discussion of whether the WSJ had actually proposed raising anyone's taxes.

That discussion was pretty much mooted by

First sentence: "As the Bush administration draws up plans to simplify [ha ha] the tax system, it is also refining argumentsfor why it may be necessary to shift more of the tax load onto lower-income workers."

("New Tax Plan May Bring Shift in Burden," Washington Post, Dec. 15, 2002.)

The issue, of course, is whether progressivity is a good thing. Fortunately, more people's moral intuitions are with Bruce than with Kenneth.

Posted by:
Matt Weiner on January 11, 2003 07:31 AM

Yuck. That should read "...was pretty much mooted by this Washington Post article, which showed that the Bush Administration was interested in raising taxes on the poor, even if the WSJ wasn't."

Posted by: Matt Weiner on January 11, 2003 08:40 AM

if the connection between income inequality and national productivity is "weak", then when income inequality rises above a relatively limited level it does more harm than good.

Is there a scintilla of empirical proof for this?

Posted by: Bucky Dent on January 11, 2003 05:40 PM

My God, all of this should be obvious to an 8-year-old. It's interesting that DeLong's blogsite seems to attract not regular economic conservatives (virtually all of whom, including Reagan and Milton Friedman, back some government income redistribution), but kook-libertarian extremists, the way a bright lantern attracts clothes moths.

Thank you for clarifying this. I didn't know what level of edudcatoin you'd obtained, nor did I know that Milton Friedman was a social democrat. Of course, we all know anyone who supports diminishing the role of the State is a "kook".

Posted by: Bucky Dent on January 11, 2003 05:46 PM

To Dent:

(1) YOU said the correlation between income inequality and national economic productivity is "weak". Well, as ALL economists point out, when income inequality rises without total economic output rising, the result is more harm done to the populace as a whole, since the rich buy still more luxury goods from which they derive relatively little utility, while the nonrich have less ability to buy goods for which they have a more urgent need. Which means, of course, that if an increase in income inequality has only a "weak" positive effect on total economic production, when income inequality rises above a certain relatively low point, it does more total harm than good for the populace as a whole.

(2) No, Friedman isn't a "social democrat". He IS a supporter of the "negative income tax", which is classic economic redistribution, as is the Earned Income Tax Credit which Reagan backed -- neither of which is backed by Uildreks or (apparently) you. As I say, there's a huge difference between standard economic conservatives and flat-out libertarian/Social Darwinist fanatics.

Posted by: Bruce Moomaw on January 11, 2003 07:26 PM

Third point: No, a person who favors reducing the (current) redistributive role of the state is not a "kook", although he may be appallingly wrong. A person who favors totally abolishing such redistribution, however, most definitely deserves that tag.

Posted by: Bruce Moomaw on January 11, 2003 07:28 PM

Well, as ALL economists point out, when income inequality rises without total economic output rising, the result is more harm done to the populace as a whole

Uh, dude, no economists assume the economy is a zero sum game, as you do.

Posted by: Bucky Dent on January 12, 2003 08:48 AM

No. Bill Gates did not steal your money, so the existence of his fortune is not an injustice to you.

In fact, Bill Gates got every penny of his fortune by convincing lots of people to give him money, which all those people would not do if they did not value his product more than they valued the money they paid for it. In short, every transaction that put money into Bill Gates' pocket also made one of his fellow citizens better off than he had been before. Bill Gates' wealth is a perfect example of economic justice, not economic injustice.

Pointing to a monopoly rents in a network-effect market isn't a very convincing argument.

Posted by: Jason McCullough on January 12, 2003 03:38 PM

Re the origin of Gates' wealth, much more could be said (by observers including current or former high-level subordinates), but let it suffice to note that Mr. Gates' personal pragmatic views favor a more progressive tax system, and his personal moral sentiments are emphatically more consistent with those of Mr. Weiner than those of Mr. Uildriks.

Posted by: RonK, Seattle on January 12, 2003 05:36 PM

Mr. Gates' personal pragmatic views favor a more progressive tax system, and his personal moral sentiments

Gates is a perpetual supplicant to social democrats for legal boons. He has nothing to lose by advocating 99% tax rates for everyone else.

Posted by: Bucky Dent on January 13, 2003 04:49 AM

"Legal boons", eh? We can't claim his wealth is fairly earned if it depends on "legal boons", now can we? Which is it going to be?

BTW I saw Mr. Gates Senior live on C-SPAN this morning (with Sen. Conrad and Mr. Soros) speaking for the "Responsible Wealth" movement. He appeared to be supplicating for an eleven-figure legal bash (retention of the Estate Tax).

Gates the Elder and Gates the Younger are also pushing for a Washington state progressive income tax, which would also bash them very directly.

What's your fallback explication of this seemingly inexplicable behavior? Are they:
(a) Stupid?
(b) Crazy?
(c) Evil (BWA-HA-HA-HA-HA)?

Posted by: Duckie Bent on January 13, 2003 09:44 AM

"Legal boons", eh?

How many laws/regs/codes must Microsoft meet around the world? What kind of govt/pol is most likely to add to that burden, or bring a lawsuit?

Mature reasoning is worth a try. You might find it useful.

Posted by: Bucky Dent on January 13, 2003 12:37 PM

What kind of govt/pol is most likely to add to that burden, or bring a lawsuit?

Who persuaded the Gates family to pay ransom in the tens of billions of dollars, for unspecified service or services? Let me guess ...

The same ones that implanted a microchip in Greenspan's brain so they could control global interest rates?

The founders of an identity movement representing the true progenitors of the Modern Age, namely, short, homely, nearsighted people?

The Illuminati? No. Too easy. Jews? No. Alien pod-thingies? Time travelers from the Future, bent on rectifying "all these problems we've been having for all these years"? C. Montgomery Burns? Statist Thugs? Stateless Terrorists? Faceless bureaucrats? Pointy-headed intellectuals? The French?????

Let me know when I've stumbled on the key to "mature reasoning". The suspense is killing me!

Posted by: Duckie Bent on January 13, 2003 06:47 PM

You're not warm. But you have succeeded in driving me off this thread. Bravo.

Posted by: Bucky Dent on January 14, 2003 05:14 AM

"But this does NOT mean that Bush's scheme is a good idea. Unless it causes the economy to grow fairly dramatically, it means that the non-rich will have a smaller share of total income (from employment and government aid) to buy those staples. "

After you've just stipulated that the rich won't bid up the cost of the staples, why should we care about the non-rich's share of total income?

"As for Dent, he still hasn't tried to respond to the point I raised before -- if the connection between income inequality and national productivity is "weak", then when income inequality rises above a relatively limited level it does more harm than good. "

Assuming it does any harm at all.

"by his moral reasoning the physically disabled should be allowed to starve to death -- after all, they produce nothing of value to anyone else, and so morally no one else owes them anything in income. "

Whether or not public charity should exist is a completely different question. I think that, given the amount of wealth that exists today, private charity would be up to the job. Be that as it may, the idea that rich people should be taxed only as pressing public needs require, not as a means to deprive them of their wealth that is supposedly (a) unearned and (b) a threat to the rest of us does not depend on the idea that people who can't support themselves, and were never able to make provision for such an eventuality, should be left to starve.

"As for his objection that people don't deserve income for "work effort" if their work effort is useless: no one is proposing anything remotely like that. "

But you were suggesting that the amount of "work effort" (good luck measuring that, by the way) was somehow related to the amount of wealth that a person deserves.

""Legal boons", eh? We can't claim his wealth is fairly earned if it depends on "legal boons", now can we? Which is it going to be?"

We're talking of the sort of "boons" that protection rackets generally offer.

"Obviously, if income redistribution finally rises above a certain level, it will indeed discourage productive activity enough to do more total harm than good to the populace. But even at that level, the rich will still be making far more money than the rest of us for the same amount of work effort, which means that it is absolutely ridiculous to say that their higher taxation will be "unjust" persecution of the poor dears. And there is no reason to believe that we have yet reached the level beyond which income redistribution is wrong for pragmatic reasons (NOT for reasons of "justice")."

We shouldn't be basing our income redistribution levels, or our government budget in general, on how much we can possibly get away with taking. Just because the government can get away with taking more money doesn't mean that it should - the fact that the money is there doesn't mean that there is a pressing public need for it to be used by the government.

Posted by: Kenneth Uildriks on January 15, 2003 09:57 AM

We're talking of the sort of "boons" that protection rackets generally offer.

Interesting. And how do you explain the existence of other multi-billionaires -- who take positions opposite Gates on matters of taxation and/or personal philanthropy? Have the "protection rackets" not yet found out where these billionaires live? Have other billionaires availed themselves of anti-extortion methods several orders of magnitude less expensive, and kept their methods secret from Gates?

On a different but related topic, Uildriks: Suppose a billionaire voluntarily transfers a dollar to a penniless man half a world away (without coercion, without insisting that others do likewise, and with no expectation of any favor in return). Would you consider this action:
(a) irrational but harmless?
(b) not possible (he must have been coerced, or must expect reward)?
(c) evil (as destructive to the proper distribution of endowments)?
(d) other?

Posted by: RonK, Seattle on January 15, 2003 11:43 AM

"Third point: No, a person who favors reducing the (current) redistributive role of the state is not a "kook", although he may be appallingly wrong. A person who favors totally abolishing such redistribution, however, most definitely deserves that tag."

Then the U.S. Founding Fathers, and the first 120+ years of U.S. governments, were kooks.

Posted by: Mark Bahner on February 6, 2003 04:36 PM
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