Should I stay? Or (where) should I go go – 31 January 2018 part I

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Caucus night is fast approaching, and the thoughtful are thinking … should I stay home or should I go? And if I go … should I go play the DFL’s voices-for-all (except me), or should I go play the GOP’s freedom for all (except you)?

Recently we were made very aware of how differently the two tribes think about the world. We were attending a regional conference on climate, and we were put through an interesting exercise. We were asked to physically line up by various criteria. First we lined up by gender.

And that was easy, except for one transgender friend, she paused briefly.

Meanwhile, on the male side of the room a medical-scientist type pontificated that gender in clinical trials is a function of several variables, especially:

      • chromosomes – multiple choice – XY, XX, XXY, other
      • hormone production and processing – continuous, with testosterone, estrogen, and reactions to those
      • affect – continuous over several variables) – how the patient views themselves and how they attempt to project signals (voice, hands, posture) consistent with that image
      • others – continuous – how do other people see the person?

Sigh. It all seemed so simple until the research nerd showed up.

Next we lined up by birth/youth city size, nothing of note there.

Finally, we lined up by politics – liberal or conservative?

No surprise there either, as three of us stood up against the conservative wall, the other 50 or so milled around in the liberal echo chamber. But even there, puzzled voices could be heard, “well, I’m a social liberal but a fiscal conservative“.

Well, duh, so are a lot of us.

So, we are going to look at the foundations of political belief and how we might really start to think about our political alliances.

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What do we know? 31 January 2018, 7PM

At last week’s Politics and a Pint we talked briefly about the way our politics have changed since marketing took over. We identified several milestones:

 

Reflections on what we know … 24th January 2018

Just in time for the 2018 Follies, we are coming back to The Contented Cow. We will start Season 4 with Episode 0 on the 24th of January, 2018.  We will introduce out new format, and talk about the epistemology of political debate.

We will trace the evolution of the truth-tellers as they moved from the subjective through objective truth and back to subjective truth.

Follow us! We’ll have beer and fun!

Continue reading “Reflections on what we know … 24th January 2018”

Flat Tax Fever

Well, it’s the silly season again, and Republican candidates are scrambling all over each other to get their tax simplification plans in place. Governor Rick Perry, for example, proposes a simple 20% flat rate (NYTimes, 5 Nov 2011), which is most assuredly a part of a secret jobs creation program for editorial cartoonists.  Cain’s 9-9-9 plan fared no better.

These plans, and plans like them, are popular not because they are fairer than the existing plan, but rather because they are simpler. The byzantine US tax codes are legendary, and the immediate appeal of these plans is their simplicity, a simplicity that promises to remove all those special interest advantages that so distort the free market that we believe in.

The guiding idea behind the flat income tax is the idea that all taxpayers should be treated equally, but any introductory economics class will certainly introduce the student to the concept of the law of diminishing utility, which leads, from a fairness argument, to the concept of a progressive tax structure.

For example, a person who earns $90,000 per month attaches less importance to $10. But a man who gets $1000 per month, the value of $10 to him is very high. A finance minister knowing this fact that the utility of money to a rich man is high and to poor man low bases the system of taxation in such a way that the rich persons are taxed at a progressive rate. The system of modern taxation is therefore, based on the law of diminishing marginal utility.
Ref: http://economicsconcepts.com/law_diminishing_marginal_utility.htm

So, while the candidates try to use a flat tax to appeal to the voters, in a gesture with no hope of ever becoming law, what they might find more success with, in a manner consistent with basic principles of human behavior, is a “fair flat tax”.

The figure below illustrates graphically the three forms:

  • In red we see the current tax code, idealized with a smooth curve, it starts with a low rate and steps up to a maximum rate of 35%. We also observe some of the special interests … these exceptions to the tax rules are sometimes very small divots in the collections (how many llama farmers are there, anyway?). Sometimes they are larger (oil companies come to mind) and sometimes they are simply politically powerful special interests (renewable energy companies). Some even experience negative tax rates due to grants and the like.
  • In blue we see the simple flat tax as proposed by Perry. At 20% (which seems to reflect Hauser’s Law), it is simple in theory, but is not really fair. The person earning $20K per years will miss much more from the tax of $4K than the person making $100K will miss the $20K. The former may miss some meals, the latter may miss some trips to restaurants.
  • In black we see a progressive flat tax. This correctly recognizes the decreasing marginal utility of money as a function of income (itself a surrogate for wealth, against which real marginal utility must be measured).

Both the blue and the black lines promise the most important feature of the flat taxes,  which is that there are no special breaks, making both “flat” when compared to the current tax codes. If Republican candidates were able to make their proposals look like the black “fair flat tax”, then the editorials would have to take them seriously and the cartoonists would have to find honest ways to make a living. As long as we don’t add the word “progressive” we will never make it past the late night comedy show monologues and the editorial cartoonists, and lacking any meaningful dialog, we (the taxpayers who fund all this silliness) shall surely lose.

(Never let it be said that we do not see the irony in this cartoon.)

The Details:

  • What: Politics and a Pint
  • Where: Contented Cow, Northfield MN
  • When: Sunday, 13 November 2011, 6-7:30PM

Footnote: The Center of the American Experiment is hosting a roundtable on political  compromise that could use this information, methinks.

The political economy of Elinor Ostrom (2009 Nobel Laureate in Economics)

The tragedy of the commons refers to the tragedy that befalls resources that are held in commons. Like the overgrazed commons of a British sheep town, since no one feels ownership, no one feels compelled to preserve the commonly held resource. Some of the current examples include water and air quality, which are often viewed as resources that cannot be owned by individuals. The tragedy of the commons is then invoked to justify attempts to control those resources by governments rather than by markets.

At our last session, we were briefly presented with the ideas of Elinor Ostrom, winner of the Nobel Prize in Economics in 2009 (the only female recipient of this award) and considered one of the founder of the “Bloomington School” of economics.  Much of her work deals with efficiencies in local governments, natural resources and turning the “tragedy of the commons” into the “opportunity of the commons“.

References:

What:  Politics and a Pint
Where: The Contented Cow
When: Sunday 23 OCT 11 starting at 6:00pm

“All economics are local” and so is Politics and a Pint – 11 Sep 2011

All politics is local” is a mantra we hear a lot. As I was reading The Myth of the Rational Voter (Caplan), it occurred to me that there is a similar paraphrase that might be equally important:

All economics are local          (1)

Caplan puts forth the arguments that our regular, Stephen Kallestad, makes … that free markets (not the same as capitalism, by the way) are the economic engine that produces the greatest wealth. I completely agree, and have used the old

free markets work for the same reason that evolution does — competition drives out the weak and poorly producing          (2)

to explain to unbelievers why they should believe. But see statement (1). To the voter, it does not matter if the planet is wealthier if they (locally) are poorer. No wonder we get the sorts of economist-layperson discrepancies that Caplan identifies in his book, including anti-free trade attitudes amongst the laypeople.  (By the way, the statistical methods used in the referenced study are quite interesting and quite sound, if done correctly).

Details:

WHAT: Politics and a Pint
WHERE: Contented Cow
WHEN: 6-7:30PM Sunday, 11 Sept 2011

 

Plans to change Northfield, do they have a prayer? (4 Sep 2011)

Well, there is a kerfuffle or two in Northfield, while nothing interesting is happening out east, so we will focus on some local stuff this week.

  • First on the agenda, the LoGroNfld alarm over a public prayer event with an agenda. Not since the prayer incident in the City Hall have we seen the forces of darkness so riled up. The principalities have gathered and the conversation has begun.  See the forces of good and evil duke it out right here in River City.
  • Then we’ll talk about bullying by … public officials. There are some tough characters out there and we’ll grumble about their rough treatment of local innocents. Bring your stories of power and corruption run amok in the small towns around us. This is all in good fun, so leave your lawyers at home.

Details:

Where: Contented Cow
When: 6-7:30 PM, 4 Sep 2011