Category Archives: Econ & Money

Just sent this to the NPR ombudsman:

This morning on the news, an NPR reporter referred to the debate in DC as (I'm paraphrasing, but it's close) between a “tax cut for those who make under $250,000” and a competing proposal that also would also offer tax cuts to the higher-income group. That's pretty much how most media report it. And it is not factually accurate.

If you look at the actual tax cut bill that is supposedly for those under $250,000, you would see that the benefits in that bill also flow to people making more. There is no income limit for benefiting from the middle-class tax cut. All that is limited is how much you get — in the Democratic proposal, people making $5million get the same sized tax cut as those making $250,000, in the Republican the more you make, the greater your benefit (at the expense of the deficit, of course).

So in fact the debate is not whether wealthier tax payers should get a tax cut — both plans, every plan, on the table give them a tax cut. Rather the debate is over whether people making over $250K should get additional, higher tax cuts in some ratio to their earnings, in addition to the base tax cut they would get anyway under the first plan.

NPR should explain this correctly, not go with the lazy explanation even if (almost) everyone else does.

Of course this particular error is everywhere, so much so that when I first encountered the truth it seemed unlikely. This represents such a catastrophic failure of White House and Democratic leadership messaging as to make one believe that they never seriously contemplated not having the extra-large tax cuts for millionaires, even though my children will be paying for it for years. Yes, that's the tax cut financed by the same deficit spending that is too horrible to contemplate for extending unemployment benefits to people who have been out of work for over a year due in large part to the actions of some of those self-same millionaires.

Hypothesis: It's all kabuki. We are going to tax the future poor to benefit the present rich again, just like we did when so much of the bailout money — our future taxes — ended up in Wall Street bonuses. And that was the plan in the White House and much of the Senate and even Congressional leadership from day one.

Fred Clark has a really neat idea about how to Fix the deficit. Implementation is a bit tricky, but it has all sorts of good properties if one could pull it off.

For background, consider Kevin Drum's pithy observation that — unless we go down the road of giving rich people more tax cuts at the expense of poor people's kids — everything you really need to know about the deficit is captured in one chart on p.4 of this testimony by the Congressional Budget Office.

Paul Krugman, I Am A Psychotic Ferret.

The underlying debate is pretty good too (in that I think my side wins), but takes some economics to follow.

The Agonist, The Checking Account Scam – How Wells Fargo Gouged Its Customers.

Among the many interesting things in the article is this nugget:

It is also interesting that Judge Alsup is willing to fault the bank process of sending customers reams of tiny-print legal documents that nobody reads or can understand. No doubt the bank lawyers thought this document was a foolproof way to protect the bank in any lawsuit – “see, it says right here….!”. Judge Alsup was not fooled, particularly as the Wells Fargo executives involved testified that the bank did not expect customers to read or understand this document.

I have not read the decision, but it seems from the article to rely on the obligations of good faith and fair dealing in the California Business and Professions Code, and thus may not easily be generalizable nationally.

This is a great graph, via Ezra Klein – The Bush tax plan vs. the Obama tax plan in one chart:

Advice from Quintin E. Primo III, co-founder and chief executive of Capri Capital Partners, a real estate investment and development firm based in Chicago:

Q. What's your best career advice to young graduates?

A. Three words: leave the country. Get out of here. That's what I tell everybody — just go. I don't care where you go, just go.

Q. Because?

A. Because the world is changing. It is no longer acceptable to speak only English if you are 25 and younger. It's unacceptable. You have little chance of being successful if you speak only one language.

If you don't understand Islam, you're in trouble because Islam comprises somewhere between 1.6 billion and 1.8 billion people, and there are markets that are untapped that need to be tapped.

So you've got to get out of your front door, get out of the comfort and quiet of your home, and your safety zone, and step into a pool of risk where you have no idea what the outcome is going to be. Out of it all, you will have a much broader understanding of the world's cultures, and you will have a much clearer idea of how the world perceives our culture, and all the value, and the benefits, and the beauty of our culture.

There is nothing more important. I don't care where you went to business school. I don't care whether your grades were good or bad. You have to leave the country.

I think this advice applies to lawyers too. Yes, there remain areas of practice largely untouched by globalization, but not many.