Fair Tax

I sent the following as a letter to the editor of the Wall Street Journal regarding an editorial on the Fair Tax. We'll see if it gets published.

While I sympathize with their desire to simplify the tax code, I am mystified by the desire of the proponents of the "fair tax" to continue to promote their program with misleading arguments. It appears that they constantly try to have it both ways. For example, Leo Linkbeck, in his editorial FairTax Facts, points out early on that the cost of the income tax is "embedded" in the price of everything that you buy. By the end of the same essay though, he argues that a benefit of his tax proposal is that it would collect from the underground economy, illegal aliens, and foreign tourists. It already is though, as he pointed out, it is embedded in the price of everything you buy.

My God This Woman is Dense

We have been following the idiotic comments of Naomi Wolf, the woman who made Al Gore a man, on Screw Loose Change, so I ended up watching this video of her speaking at my alma mater. I wasn't expecting much, and I was certainly not disappointed, it was even stupider than I was expecting.

This woman certainly has a flair for the dramatic, in the introduction she congratulates the students for being brave enough attend her speech. Yeah, like going to a lecture at Kane Hall is the moral equivilant of storming Omaha Beach under fire. The biggest risk you face there is getting mugged while waiting for your bus on the Ave.

As a Russian and East European studies major at the University of Washington, having taken many a class at Kane Hall, I was particularly annoyed at this speech being full of bad Soviet comparisons. Half the speech was, "Well Stalin did something bad, which has a superficial resemblence to something Bush might do if we let him". Yeah, Stalin murdered 20 million people, Bush had water dumped on Khalid Sheikh Mohammed's head, big difference genius.

This idiotic part pretty much summed it up for me.

When the Berlin Wall fell, the third of the US economy that is defense manufacturing was facing a declining market share because we lost our global enemy. And what do you have to do if you are losing a global enemy and you are the defense industry? Make a new enemy, exactly. They were facing a real economic catastrophe unless they could hype a new enemy. Enter the Global War on Terrorism.

A third of of the economy? In 1989 military spending was only 5.6% of GDP. Given that much of that was salaries for the soldiers themselves, defense manufacturing was only about 2-3% of the economy. Is she just making this crap up?

Barack Obama on the Mortgage Crisis

I don't know if I would vote for him, but Barack Obama seems like a reasonably smart guy. Just one day after Jesse Jackson's editorial in the Journal, he weighs in on the same topic. I don't agree with his conclusions, but he has some decent ideas.

To prevent the current problems in the housing market from spreading, shaking confidence in other sectors of the economy, we need to put money in the pockets of middle-class Americans. In September, I proposed a middle-class tax cut that would offset the payroll tax that working Americans are already paying. It would give very working family a tax cut worth up to $1,000. It would also make retirement more secure by eliminating income taxes for any senior making less than $50,000 per year. And over the long term, I've called for an automatic workplace pension enrollment policy, which would include a federal government match for part of the savings of middle-class families so they can count on more savings when they retire.

Tax cuts, coming from a Democrat? I am kind of waiting for the other shoe to drop though.

One Bad Idea

I am not sure if there is any greater argument against something than the fact that Jesse Jackson is for it. In this case he argues for the mortgage freeze, although he says that it is not large or early enough. He is wrong on both counts. Here is the stupidest part:

But for the two million homeowners who face foreclosure over the next year because of the subprime mortgage crisis, their New Year's hopes rest not with themselves, but with policy makers in Washington and the investment community on Wall Street.

Hello, they are not facing foreclosure because of the crisis, they are the cause of the crisis. My sympathy goes out to anyone who loses their home, but this was the result of poor decisions, they are not the passive recipients of over people's actions.

Jackson continues:

Many of the victims of aggressive mortgage brokers were single women, seniors on fixed income, young couples, Latinos and African Americans. They live in every neighborhood in every one of our major cities, and elsewhere. In one block alone on West Madison Street in Chicago, every one of the homeowners is in default on their current mortgage terms. In neighborhood after neighborhood in Chicago, foreclosures have soared to more than 50 per square mile.

Of course since there are 640 acres to a square mile, we are conservatively talking about thousands of homes, from which those 50 are from. These houses are not going to go empty after their current owners lose them, others, specifically the poor that he is worried about will have to opportunity to pick them up at bargain prices, that they can hopefully actually afford.

Amen Brother!

My Milton Friedman side has been rather insulted by the talk of bailing out people for being idiots. This is capitalism, Darwinism applies, I don't want my tax money going to people on the basis that they are stupid. In any case the WSJ has a great editorial on this subject today. I couldn't agree with it more.

A taxpayer bailout of distressed homeowners would be expensive, unfair to the vast majority of homeowners and renters who have made prudent financial decisions, and set a troubling precedent that would invite reckless behavior in the future. What's more, a bailout will not stop the inevitable correction in home prices, and is unlikely to prevent the associated economic repercussions.

The primary argument for a taxpayer bailout is based on a myth -- that subprime borrowers are falling behind on their mortgages because interest rates on their adjustable rate mortgages have spiked, making their monthly payments unaffordable. In fact, the vast majority of delinquent subprime borrowers are still paying introductory teaser rates (about 8% on average, a below-market rate for borrowers with checkered credit histories). In other words, for most of these borrowers, their monthly payments have not yet gone up.

Why Didn't They Just Hold On To Him the Last Time?

Ahh, the nuttiness that is Christopher Story:

U.S. JUDGE ISSUES A WARRANT FOR PAULSON’S ARREST PAULSON SERVED, SAYS HE WILL PAY, THEN FAILS TO DO SO
Sunday 2 December 2007 01:12