Two Questions...

For Warren Buffet.

First: do you think your capital gains taxes should be compared to others' income taxes?

I'd ask this because Warren Buffet continues to claim that he pays lower taxes than his secretary. This, however, is wrong/misleading for two reasons. First, Buffet is comparing capital gains from stock to his secretary's income from wages. But he is not including the income taxes paid on the corporate level in his tax rate. Unless the corporations from which Buffet gets dividends are making less than his secretary, they are paying taxes in a higher bracket. That higher bracket added to the percent tax he pays in capital gains is his tax rate. This rate is undoubtedly higher than what his secretary is paying. What Buffet is doing is buying into the corporate fiction. The corporation isn't earning money for itself, however; it is earning money for it's shareholders. Therefore, any tax the corporation pays is really paid on behalf of its shareholders who have capitalized the corporation.

Furthermore, any dollar invested in a corporation has usually already been taxed once. It is arguable that any future revenue from that dollar has already been paid. That's because the net present value of every dollar is one dollar. Any future tax from income is also reflected in that present value tax that has been paid. Thus, this lower capital gains tax rate Buffet complains about is really the second tax on the same dollar. There is, however, a counter argument that the economy rewards investment with a higher return to compensate for that double tax. Still, it is likely that the tax payer looses some money he would otherwise have because he will pay tax on the same dollar twice.

Buffet should understand all of this if he is really the financial genius that he is supposed to be. If he understands this, as he must, he is intentionally deceiving the weak minded to get his policy preferences.

Second: Why don't you donate the money you save from having lower taxes to the government?

A number of rich people are always telling us that they should be taxed at a higher rate. But why don't they impose a tax upon themselves and give that money to the government? I think it is because they tacitly realize that they are better at spending that money than the government. But while they realize they are better at spending their money, they, for some reason, don't think others will be better. It's an arrogant approach to tax.

Win the Imposible War

Democrats repeatedly tell us that we're not fighting Al Qaeda in Iraq but rather refereeing a civil war. It's strange then that bin Laden would admit he's lost a war he isn't fighting.

60 minutes of fame

Last night, 60 minutes' Katie Couric did a puff piece about the Valarie Plame affair. Needless to say, it was very biased. Without looking at the transcript, here is what stuck out to me:

The good:

• Couric brought up the Vanity Fair picture and story, which shows Plame wasn't too concerned about her "cover" and shows that she was, instead enjoying some celebrity status for her husband's op-ed.
• Couric asked Plame if it ever crossed her mind that someone would wonder, "how did Joe Wilson get this job?" and that that question would eventually lead back to Plame, revealing that she worked at the CIA.
• Wilson made a brief appearance. He was obstinate and angry. Couric noticed. He looked bad, even in this sympathetic portrayal.

The bad:

• Couric repeatedly refers to Plame as an "undercover spy." But it is almost certain Plame was not covert as defined under the intelligence identities protection act. Couric alluded to the fact that some had questioned her status, but never delved into, let alone framed the legal issue. No crime was committed unless Plame was covert as defined by the law.
  
• Couric never explained that Fitzgerald never indicted anyone for breaking the law, only for lying to investigators. Thus it seems the IIPA was never violated.
• Couric never mentioned that Victoria Toensing, one of the authors of the IIPA has said in public that Plame was definitely not a covert as defined by the statute.
  
• Couric never brought up the fact that Wilson was on John Kerry's policy team before he wrote the op-ed, showing that he was a openly partisan before Plame was "outed." It also is important to understand that Wilson was openly partisan because it caused many, including Novak, to wonder why he of all people was chosen for the mission.
  
• Couric specifically said that the 16 word used in the state of the union address-- which said that recent intelligence from Britain indicates that Saddam sought uranium in Africa-- were based upon a forged the memo traced to Italian sources. (She never mentions that the memo was from Italy.) To the contrary, the 16 words were based on British intelligence. She also never mentions that British intelligence did a review of the uranium claim in the Butler report and concluded that the allegation that Saddam tried to buy uranium was well founded. This is a HUGE Mistake oft repeated in the media.
• Couric never pointed out that Wilson actually confirmed the 16 words. After his trip, Wilson reported to a house committee (I believe the intelligence committee) about his findings. In his testimony he said that he spoke with the former Nigerian Official (I believe he was prime minister) who said that an envoy from Iraq had been to Nigeria. the official told Wilson the envoy had subtly tried to establish a relationship to buy uranium.
• Couric never showed that Wilson's op-ed addressed the question, "Did Saddam buy Uranium?" istead of what Bush said: that Saddam"sought" uranium. Thus Wilson's claims in the New York Times didn't even address the 16 words.
  
• Couric failed to press Plame on who suggested her husband for the job if not her? Plame says one of her subordinates suggested her husband, Wilson to Plame, and that, after this suggestion, she wrote the memo proposing the CIA send her husband to Niger. Unfortunately she can't quite seem to remember who it was, nor does it appear that she ever asked around to try and find out. Furthermore, this story about the subordinate suggesting Wilson for the job was never told to the investigator who initially came to the CIA investigating the leak, nor was it told to Congress the first time she testified under oath. The mysterious subordinate story surfaced for the first time that I am aware of, when she testified before John Conyer's congressional committee (the second time).
• Couric never mentioned any of the other material available identifying Plame before the Novak piece, including the "Who's Who" entry, the entry on Wilson's website and, I believe, Wilson's own book.
• Couric never explains that the "leak to get even with Wilson for criticizing the war" storyline is severely undermined because the Novak leaker was Richard Armitage--a war critic himself.
  

Find...

The not-so-hidden bias in this story.

Does it make sense to disable comments on a blog because some comments are abusive? Apparently, some people think so.

Professor Mankiw says rude comments on a blog are like party poopers at a party: They're a small number of people trying to ruin the rest of the party for everyone else. He doesn't want to have to police the comments, so he's decided to disable them.

I see big problems with this analysis. First, does the cost-benefit analysis really add up? Would you rather go to a party where you might bump into a few rude people or would you rather not go to a party at all? Apparently Mankiw thinks that it's better to not have a party at all. I think if I had the option of going to a large party with a few rude people I would still go. What large party doesn't have a few jerks?

Maybe Mankiw thinks the jerks are just too numerous to make the party fun for anyone. But why not let the attendees make that calculation? Mankiw's readers don't have to go to the "party." They can "stay at home" by not reading the comments! I regularly read his blog, and almost never read the comments, so I know this is possible. Why can't Mankiw's readers decide for themselves whether or not they want to "go to the party." Maybe they have a high tolerance for jerks, or are good at avoiding them. It seems pretty authoritarian to make a calculation based on your own taste and enforce it on everyone else, even if it is only a blog.

I think what is really happening here is that Mankiw is offended by some of the comments on his blog and thinks that he has a responsibility to control them because they reflect badly on him. He may believe that if he allows nasty comments that someone will interpret his tolerance of those comments to mean he endorses the them to some degree. But most people realize that anyone can post a comment on a blog and that the blog author may never even read the comments. Therefore, in the spirit of open discussion and free exchange of ideas, Mankiw should continue to allow the comments, and simply ignore the nastiness. No one will think less of him.

CNN v. FOX NEWS

We all know that Fox is conservative and that CNN, along with every other news channel channel, is liberal. That is one reason that I prefer Fox: it more accurately portrays my views. It's frustrating watching a TV program where the anchors and commentators make assertions based on unexamined premises, and no one challenges those premises, because everyone in the news room has made the same assumptions. Although not liberal myself, my guess is that Fox does a much better job representing liberal viewpoints because it always has partisan liberals on to defend those views. CNN, on the other hand, usually has someone like Jeffery Toobin or Bill Schneider, on to analyze a particular legal or political event. That system means you need to trust the expert to give you both sides of the story.

But besides its liberal bias there is another reason I don't like watching CNN: It's just plain boring. Bill Schneider tends to make politics, usually a very interesting subject, quite uninteresting. Toobin manages to make the law boring as well. The anchors could not act more robot like. The whole network is sleep inducing.

Judicial Activism

Just watched 30 seconds of Toobin on C-Span. This short segment, again, confirmed my hunch that Toobin simply does not know or is distorting conservative legal arguments.

He's talking about the Supreme Court, and accuses conservatives on the court of activism. I'm only vaguely familiar with the case, but I'm pretty sure he's talking about Parent Involved in Community Schools v. Seatle School District NO. 1 et. al. The basic issue in the case is whether school districts can use race as a factor when deciding which students will go to which schools. The districts enacted a plan that was designed to help minorities integrate, encourage diversity, etc. In other words, this wasn't discriminatory, unless you also consider potential unintended consequences on minorities and the effect on displaced non-minorities.

Toobin says this decision, right or wrong, is activism because the court strikes down a democratically created system. The upshot is that conservatives, who rail against activism, are just as guilty of activism now that they control the Court. The only problem is that Toobin's definition of activism--striking down democratically created laws-- is not how conservatives define activism, nor should it be.

True activism occurs when courts goes beyond their constitutional powers. The Supreme Court, however, has had the power to strike down laws when they are inconsistent with the constitution since Marbury v. Madison, decided nearly two hundred years ago.

When conservatives argue for judicial restrain, they are simply arguing that, the Court must restrain themselves to plausible interpretations of the text of the constitution and statutes. Unfortunately, its quite easy to find Supreme Court cases where previously unknown "constitutional principles" appears out of thin air. Thus, when the Court says the constitution creates a right to abortion, despite the fact that the constitution says nothing about abortion, they are engaging in activism.

Returning to Seattle School Districts, the conservative judicial activism question is not whether the court is striking down a democratically created law, but whether that law is unconstitutional. If the law is unconstitutional then, contrary to Toobin's assertion, it is activism to allow the unconstitutional law to stand. Not using a power to allow an unconstitutional law to stand is just as much judicial activism as striking down a constitutional law out of a personal policy preference. The conservative touchstone is: What does the constitution require?

In Seattle School Districts, the conservative justices simply applied the 14th amendment. The justices interpret the fourteenth amendment to embody a principle colorblindness. Once race becomes a factor in a government program, the Court must strictly scrutinize that program to ensure that it is forwarding a compelling government interest. Here, the court found no compelling government interest, so the Court stuck down the law as unconstitutional. Agree or disagree, this is all pretty standard constitutional analysis.

But Toobin ignores this definition of activism; he instead takes a term of art and ascribed an entirely different meaning to it. Toobin then applies that meaning to conservative jurisprudence to show that conservative justices are being inconsistent or even hypocritical. The problem is conservatives have never spoused that principle, nor is that principle a good one.

Assuming that Toobin really doesn't know what conservatives mean by "activism" and isn't intentionally deceiving his audience, he has, once again, exposing himself as uniformed. Shouldn't a prominent legal analyst like Toobin know what conservatives mean when they use the word "activism"? It's not like Scalia and Thomas are keeping it secret.