The View from Right Field

Tax Reform Versus the 2021 Democratic Congress

In 2017, the Republican Congress passed real tax reform legislation.  Democrats claimed it was just tax cuts for the rich, but they pretty much always say that.  What is funny about that claim (“funny” in the bizarre sense, not funny in the ha-ha sense) is that one of the things the Democrats objected to the most in the reform was the limitation on the deduction of state and local taxes (i.e., the “Salt deduction”) to $10,000 for a couple, even though the legislation also doubled the standard deduction.  For most people, and especially middle class and below, this was a great deal.  It made tax filing simpler, and it saved them some money.  For upper middle class people in states with high local taxes, i.e., Democratic states, it wasn’t.  So, Democrats from states like California, New York, New Jersey, etc., have been pushing hard to reinstate the full SALT deduction ever since, even though it would almost entirely benefit the upper middle class.¹ 

In any case, then-House Speaker Paul Ryan and other Republicans did real tax reform.²  They were trying to make the tax system better: simpler, easier to comply with, less inefficient, raising the most money with the fewest negative impacts on the economy.  In other words, real tax reform.

“Treat Them Mean, Keep Them Lean” Is Terrible Advice for Any Situation – Political, Economic, or Personal

A week ago, Chris Giles wrote in the Financial Times about the belief, fashionable in both politics and economics, “that companies respond best to a ‘treat them mean, keep them lean’ approach.”¹  Mr. Giles concluded his piece:

“While there are some exceptions, making life difficult for business does not improve corporate performance.  ‘Treat them mean, keep them lean’ is terrible advice for healthy relationships.  It is just as bad in economic policy.”

Which I agreed with in a letter than was published in Tuesday’s FT, making a point I have made before (since FT has a very high paywall, here is the letter, as published):

Is This the Way to Set Up New Social Programs?

As Democrats scramble to come up with a bill of social and climate-related programs that can pass, two big questions seem to dominate.

First, while normally you would think that government should decide what it needs to do and then come up with a way to pay for it, that is not what Democrats are doing.  Rather, they are figuring out how much they want to spend first.  Actually, it’s not how much they want to spend.  It’s what number sounds good politically.  $3.5 trillion was too high for some people.  Joe Manchin said $1.5 trillion was okay, but that’s too low for the progressives.  So they will probably come up with some number in between, though apparently closer to $1.5 trillion than $3.5 trillion.  Still, their first question isn’t what to do; it’s how much to spend. 

JB Pritzker, Redistricting, and the Illinois Way

In the 2018 campaign, then-candidate JB Pritzker said he supported an amendment to the Illinois constitution to have state legislative redistricting done by an independent commission.  If an amendment wasn’t adopted, he said the legislature should set up an independent commission, and he pledged he would veto any maps “drafted or created by legislators, political party leaders and/or their staffs or allies.”

Governor Pritzker first broke his pledge earlier this year when he approved redistricting maps passed by Springfield Democrats for state legislative districts.  Now, I am sure, he is set to break his promise again on the Congressional remap drawn up by Democratic “legislators, political party leaders and/or their staffs”.¹

National Health Insurance – The Other Kind

When people think of health insurance, they normally think of the insurance that pays their medical bills.  And when they think of national health insurance, they think of a national system that either provides people health care or pays their bills.  England has a National Health Service that does the former.  The United States has Medicare, which does the latter.¹

But I would suggest there is another kind of national health insurance.  The purpose of this kind of national health insurance isn’t to pay bills or provide services.  It is, rather, to make sure there is enough capacity in the health care system so that you can get care when you need it, separate and apart from who pays for it.

Electric Cars, Ice Storms, and the Grid

I was driving home from Lincoln, Nebraska, last weekend.  (We were there to meet a beautiful new granddaughter.)  As I drove back, I remembered another drive back from Nebraska.  It was in 2006 or 2007.  This time we were in Omaha, visiting our son who was going to Creighton University.  We drove home the day after a massive snow/ice storm hit Iowa.  As we were driving on I-80 across Iowa, we saw the effects of the storm: piles of snow, semis in the ditch, etc.  It was sort of scary, except we were a day after the storm, so the roads were clear, and it didn’t affect our driving.  

The only real problem for us was that electricity was out all along I-80, and we were starting to run low on gas.  (Note to self: In the winter {or spring or fall}, don’t let your gas tank get too low.  You never know when stations might be closed.)  Fortunately, we finally found a gas station that was open: It had a generator, so it had electricity and its gas pumps worked.  To say we were happy – and relieved – is an understatement.

“Don’t Worry About Inflation. It’s Transitory.”

That’s what Jerome Powell, Chair of the Federal Reserve, and most leading economists are telling us.  The idea is that the surge in inflation reflects the fact that last year at this time prices were down due to the pandemic.  The stay-at-home orders, the fact people wanted to avoid contact with other people, etc., cut demand and prices were down.  Now, demand is up, plus there are kinks in supply chains, which is pushing prices up.  Once those things are over, inflation will go back down.  Which may be true.

But what that explanation misses is that, while the rate of inflation may go back down, those increased prices, which the surge in inflation gave us, are going to stay up.  Just because the rate of inflation goes back down at some point in the future, doesn’t mean that the prices on groceries or anything else are doing to go back down to where they were.

If You Want to Win, You Have to Hit the Ball

A quick follow-up on yesterday’s post about the Cubs’ 2021 season.  With two games to go (I am posting this before Saturday night’s game), the Cubs have already set a team record for most strikeouts in a season (by batters, unfortunately, not pitchers), and they are only fourteen strikeouts away from setting a major league record.  Which they should be able to do since they are averaging 9.88 strikeouts a game.

While it may be obvious that you have to hit the ball to win,¹ it is actually more obvious than you think.  Consider the New Look Cubs’ seven-game winning streak from August 31 to September 6.  Two of those wins came on balls that were hit, but should have been outs.  On September 2, a whiffed pop up to the infield resulted in the winning run scoring in the bottom of the eleventh.  A strike out wouldn’t have done it, but when you hit the ball, you never know (see at 7:40):

@Cubs: 2021 Is Over. 2022 Is "Hopes and Ifs"

There were, I think, three high points of the season for the 2021 Cubs.  The first was their 19-8 record in May (the best in the NL).  The second was the Davies-Tepera-Chafin-Kimbrel combined no-hitter against the Dodgers on June 24.  Even with a not-so-stellar June, the Cubs were still tied for first place in the NL Central after that win.  But then, disaster hit, in the form of an 11-game losing streak, ultimately resulting in the July 29-30 trade-o-rama.  Which indirectly led to the third high point of the season: The seven-game winning streak by the “New Look” Cubs from August 31 to September 6: two against the Twins, a four-game sweep of the Pirates, and one against the Reds.  Only the Reds were above .500, but seven straight is seven straight, and it was fun to see the guys who have never had a chance in the majors, get a chance to play – and win – at least for a while.¹

But now that the season is over, it’s time to look to 2022.  President of Baseball Operations Jed Hoyer says the Cubs will be “really active” in the free agent market “in a thoughtful and intelligent way,” whatever that means.  And however much it will help. 

Biden Said No One Advised Him to Keep Troops in Afghanistan. Top Generals Say They Did.

Joe Biden said, back in August, that, as far as he could recall, his military advisers did not recommend to him that we should keep 2,500 troops in Afghanistan.  Yesterday, top generals, including Gen. Kenneth "Frank" McKenzie, the commander of U.S. Central Command, testified before Congress that they recommended that exact thing to President Biden.¹ 

Obviously, I could see Donald Trump doing something like this.  That is one of the reasons he needed to lose last November.  But Joe Biden wasn’t supposed to do this kind of thing.  He was supposed to be better than former President Trump. 

Universal Preschool: “Investing” Versus “Spending”

Among the pieces of the Democrats’ $3.5 trillion package of social programs is a big “investment” in preschool education.  I think preschool education is really important.¹  When our children were little, we sent them to a local Montessori school starting when they were three years old.  We kept our daughter there until first grade, even though there was a public kindergarten, and we kept our son there until third grade.  We were more than happy to use our own money for our kids’ education, whether you call it “investment” or not.

What I am concerned about, however, when it comes to the Democrats’ plan for universal preschool is whether it is going to be “investment” in children or “spending” for more public education bureaucracy and staffing, etc.

Big Changes Coming?

Monday is the Democrats’ self-declared day of decision, the day Democratic leaders in Congress have set as their deadline for passing a huge package of new social programs.  Whether it is going to pass – and/or what’s going to be in it – is unclear, but Monday is supposed to be the day. 

The programs include things that European countries already have, so we should have them, too, we are told.  Of course, Democratic leaders don’t explain that Europeans get these benefits because they, i.e., the middle class, pays more taxes than we pay in the United States.  Joe Biden has said that all these new benefits are “free,” by which he means “free” for the middle (and upper middle) class, because taxes are being raised on corporations and the rich and not the middle (and upper middle) class.

Vaccine Equity

It’s interesting how ideas bounce around the world.  Back in February and March, the stories in the United States were about how hard it was to get the vaccine and whether shots were being distributed “equitably”.  There were complaints that minority communities were not getting their fair share of vaccines and that whites were getting shots that “belonged” to minorities.

Much the same thing happened earlier this month in New Zealand.  David Seymour, the head of ACT New Zealand, a right/libertarian party, got in trouble for publishing a “Priority Access Code for Maori” for Covid vaccinations.  But as Mr. Seymour explained, his publishing of the code had no practical effect.  The code wasn’t private; other people knew it; and the people giving the shots were vaccinating anybody who showed up anyway.  Plus, New Zealand has had fewer than 2,000 cases of Covid and just two deaths since January 1, so it really doesn’t matter the exact order in which people get shots.  The key is getting them vaccinated.

Who’s Worse on Foreign Policy: Biden or Trump?

Donald Trump did a bad job on foreign policy.  I talked about that a lot, though, eventually, I got tired of saying it over and over, so I mostly stopped.¹  Even though I felt that way about former President Trump, I did not vote for Joe Biden because, in Illinois, I did not need to.  President Biden was going to win Illinois.  And I was very concerned about President Biden’s domestic policy – or, rather, the domestic policy of his supporters.  Still, when President Biden won, I was hopeful American foreign policy would be better than it had been under former President Trump.  Unfortunately, it hasn’t been.

On February 19, President Biden told the Munich Security Conference that “America is back.”  That was the hope: President Biden would restore, or at least start to restore, America’s credibility and reliability around the world.  But the way we left Afghanistan was a disaster.  Obviously, President Biden was handed a terrible mess in Afghanistan.  President Trump signed a surrender agreement with the Taliban on February 29, 2020, under which we were to leave on May 1, 2021.² 

Designing Things For the People Who Use Them

Tim Harford wrote recently about the problems he had interpreting the instructions for a mail-order Covid test.¹  It was, he said, a matter of what behavioral economists call “the curse of knowledge,” i.e., “the difficulty a well-informed person has in fully appreciating the depth of someone else’s ignorance.” 

As Mr. Harford notes, “[a]nyone who has assembled a Lego set can attest that, with enough care, it is possible to provide clear instructions even for complex tasks.”  The problem is that too often people don’t take “enough care.”

September 11 – 20th Anniversary

Lots of people will be writing lots of words about the 20th anniversary of September 11.  President Biden will probably talk, inter alia, about how victory over al Qaeda and the death of Osama Bin Laden meant we could get out of Afghanistan.  The Taliban will be talking about how their victory forced us to get out of Afghanistan.  And I am sure former President Trump will have something to say, too.

I will just link to two posts, one that I posted on the tenth anniversary of 9/11, mostly about our visit to Shanksville, Pennsylvania, in 2006.  The other is something I wrote about the movie “United 93” after seeing it, also back in 2006.

The Diversity We Are Missing Today

In of his new book, Three Days at Camp David: How a Secret Meeting in 1971 Transformed the Global Economy, Jeffrey Garton writes about the meetings at Camp David on August 13 to 15, 1971, when Richard Nixon and small group of advisers¹ broke the link between gold and the US dollar (i.e., “closing the gold window”), instituted wage-and-price controls, and more.²  In describing the meeting Mr. Garton emphasizes there was a real diversity among those present.  It was not, course, a diversity of race or sex.  They were all white men.  (It was, after all, 1971.)  But there was a diversity of viewpoints.  Coming into the meeting, some opposed wage-and-price controls (President Nixon had always opposed them because of his experience in the Office of Price Administration in 1942); some were okay with them.  Some thought we needed to close the gold window immediately; others wanted to do the rest of the program and then wait and see.  The investment tax credit, which had recently been repealed, was to be reinstated.  The key was that a number of people with different viewpoints met, talked, and in a weekend came up with a set of policies to change the world economic system.³

When You Go to a Baseball Game, There Is Always a Chance You’ll See Something You Have Never Seen Before

Which may have happened at the Cubs-Pirates game last night.  Let me set the scene: The Pirates took a 3 to 0 lead in the first inning.  The Cubs got five in the seventh to take a two-run lead, but the Bucos tied it in the top of the ninth.  Nobody scored in the tenth or top of the eleventh.¹  In the bottom of the eleventh, the Cubs had runners on first and third with one out.  Ian Happ was batting right-handed, his weaker side.²  Ian hit a really high pop up to the infield – and the second baseman totally missed it!  Sergio Alcantara scored, and the Cubs won.  Here’s the play (see at 7:40):

Covid and Charging More for Not Getting the Vaccine

Some governmental units and companies are requiring their employees to get a Covid vaccine shot: staff at nursing homes and hospitals; teachers; and more.  Delta Airlines is taking a different approach: they’re adding a $200 monthly surcharge on the cost of health insurance plans for employees who won’t get a shot.¹  The reaction seems to be: that’s a great idea.  After all, if you get Covid and have to go to the hospital, which is a lot more likely if you don’t get a shot, it costs a lot of money. 

I understand the reaction.  We need to get people vaccinated.  Requiring them to get a shot.  Adding a surcharge to an employee’s health insurance premium.  Whatever it takes.  This is a pandemic.

November 2, 2016 Seems Like Such a Long Time Ago

When we were in Portland, Oregon, in 2017, to see family, we did what people visiting Portland normally do.  We drove 100 miles south to Eugene to see the Eugene Emeralds, then a Cubs farm team.  While there, I bought this tee shirt: