Author: Steve Prestegard

Presty the DJ for Oct. 23

The number one song today in 1961 told the previous week’s number one, Ray Charles, to hit the road, Jack:

A horrible irony today in 1964: A plane carrying all four members of the group Buddy and the Kings crashed, killing everyone on board. Buddy and the Kings was led by Harold Box, who replaced Buddy Holly with the Crickets after Holly died in a plane crash in 1959:

Today in 1976, Chicago had its first number one single, which some would consider the start of its downward slope to sappy ballads:

Continue reading “Presty the DJ for Oct. 23”

Trumponomics vs. Bidenomics

Dan Mitchell:

The good news is that the election season is almost over. The bad news is that we’ll have a president next year who does not embrace classical liberal principles of free markets and social tolerance.

But that doesn’t mean Trump and Biden are equally bad. Depending on what issues you think are most important, they’re not equally bad in what they say. And, because politicians often make insincere promises, they’re not equally bad in what they’ll actually do.

Regarding Trump, we have a track record. We know he’s pro-market on some issues (taxes and red tape) …

… and we know he’s anti-market on other issues (spending and trade).

Regarding Biden, we have his track record in the United States Senate, where he routinely voted to expand the burden of government.

But we also have his presidential platform. And that’s the topic for today’s column. We’re going to review the major economic analyses that have been conducted on his proposals.

We’ll start with a report from Moody’s Analytics, authored by Mark Zandi and Bernard Yaros, which compares the economic impacts of the Trump and Biden agendas.

The economic outlook is strongest under the scenario in which Biden and the Democrats sweep Congress and fully adopt their economic agenda. In this scenario, the economy is expected to create 18.6 million jobs during Biden’s term as president, and the economy returns to full employment, with unemployment of just over 4%, by the second half of 2022. During Biden’s presidency, the average American household’s real after-tax income increases by approximately $4,800, and the homeownership rate and house prices increase modestly. Stock prices also rise, but the gains are limited. …Near-term economic growth is lifted by Biden’s aggressive government spending plans, which are deficit-financed in significant part. …Greater government spending adds directly to GDP and jobs, while the higher tax burden has an indirect impact through business investment and the spending and saving behavior of high-income households. …The economic outlook is weakest under the scenario in which Trump and the Republicans sweep Congress and fully adopt their economic agenda. …Trump has proposed much less expansive support to the economy from tax and spending policies.

Here’s the most relevant set of graphs from the report.

The Moody’s study is an outlier, however. Most other comprehensive analyses are less favorable to Biden.

For instance, a study for the Hoover Institution by Timothy Fitzgerald, Kevin Hassett, Cody Kallen, and Casey Mulligan, finds that Biden’s plan will weaken overall economic performance.

We estimate possible effects of Joe Biden’s tax and regulatory agenda. We find that transportation and electricity will require more inputs to produce the same outputs due to ambitious plans to further cut the nation’s carbon emissions, resulting in one or two percent less total factor productivity nationally. Second, we find that proposed changes to regulation as well as to the ACA increase labor wedges. Third, Biden’s agenda increases average marginal tax rates on capital income. Assuming that the supply of capital is elastic in the long run to its after-tax return and that the substitution effect of wages on labor supply is nontrivial, we conclude that, in the long run, Biden’s full agenda reduces fulltime equivalent employment per person by about 3 percent, the capital stock per person by about 15 percent, real GDP per capita by more than 8 percent, and real consumption per household by about 7 percent.

Wonkier readers may be interested in these numbers, which show that there’s a modest benefit from unwinding some of Trump’s protectionism, but there’s a lot of damage from the the other changes proposed by the former Vice President.

In a report authored by Garrett Watson, Huaqun Li, and Taylor LaJoie, the Tax Foundation estimated the impact of Biden’s proposed policies. Here are some of the highlights.

According to the Tax Foundation General Equilibrium Model, Biden’s tax plan would reduce the economy’s size by 1.47 percent in the long run. The plan would shrink the capital stock by just over 2.5 percent and reduce the overall wage rate by a little over 1 percent, leading to about 518,000 fewer full-time equivalent jobs. …Biden’s tax plan would raise about $3.05 trillion over the next decade on a conventional basis, and $2.65 trillion after accounting for the reduction in the size of the U.S. economy. While taxpayers in the bottom four quintiles would see an increase in after-tax incomes in 2021 primarily due to the temporary CTC expansion, by 2030 the plan would lead to lower after-tax income for all income levels.

Table 2 from the report is worth sharing because it shows what policies have the biggest economic impact.

The bottom line is that it’s not a good idea to raise the corporate tax burden and it’s not a good idea to worsen the payroll tax burden.

Here are some excerpts by a study authored by Professor Laurence Kotlikoff for the Goodman Institute.

The micro analysis is based on The Fiscal Analyzer (TFA), which uses data from the Federal Reserve’s Survey of Consumer Finance to calculate how much representative American households will pay in taxes net of what they will receive in benefits over the rest of their lives. …The key micro issues…are the degree to which the Vice President’s reforms alter relative remaining lifetime net tax burdens and lifetime spending of the rich and poor within specific age cohorts and the impact of the reforms on incentives to work, i.e., remaining lifetime marginal net tax rates. The macro analysis is based on the Global Gaidar Model (GGM)…a dynamic, 90-period OLG, 17-region general equilibrium model. …The analysis includes three sets of findings. The first is the change in lifetime net taxes defined as the change in lifetime net taxes. The second is the percentage change in lifetime spending, defined as the change in the present value of outlays on all goods and services as well as bequests, averaged across all survivor path. The third is the lifetime marginal net tax rate from earning an extra $1,000. TFA’s lifetime marginal net tax rate measure takes full account of so-called double taxation. …The GGM predicts a close to 6 percent reduction in the U.S. capital stock. The GGM predicts close to a 2 percent permanent reduction in annual U.S. GDP.  The GGM predicts a roughly 2 percentage-point reduction in wages of U.S. workers, with a larger reduction in the wages of high-skilled workers.

In a study for the Committee to Unleash Prosperity, Professor Casey Mulligan estimated the following effects.

This study addresses the impact of these tax rate changes on economic behavior – work, investment, output and growth. This study finds that the Biden tax agenda will reduce production, incomes, and employment per capita by increasing taxation of both labor and business capital. Employment will be about 3 million workers less in the long run (five to ten years). This employment effect is primarily due to the agenda’s expansion of health insurance credits, which raises the average marginal tax rates on labor income by 2.4 percentage points. Biden also plans to increase taxes on businesses and their owners by a combined 6 to 10 percentage points. These taxes will reduce long-run wages, GDP per worker, and business capital per worker in the long run. By decreasing both the number of workers per capita and GDP per worker, respectively, these two key elements of Biden’s agenda reinforce to significantly reduce GDP per capita and average household incomes. I estimate that, as a result of Biden’s tax agenda, real GDP per capita would be 4 to 5 percent less, which is about $8,000 per household per year in the long run. The two parts of the tax agenda combine to reduce real per capita business capital by 7 to 12 percent in the long run.

Here’s a table from the study.

I’ll add two points to the above analyses.

First, the reason that the Moody’s study produces wildly different results is that its model is based on Keynesian principles. As such, a bigger burden of government spending is assumed to stimulate growth.

For what it’s worth, I think borrowing and spending can lead to short-run increases in consumption, but I’m very skeptical that Keynesian policies can generate increases in national income (i.e., what we produce rather than what we consume) over the medium-run or long-run.

All of the other studies rely on models that estimate how government policies impact incentives to engage in productive behavior. They don’t all measure the same things (some of the studies look solely at taxes, some look at overall fiscal policy, and some also include a look at regulatory proposals) but the methodologies are similar.

Second, I’ll re-emphasize the point I made at the beginning about how politicians routinely say things during campaigns that are either insincere or impractical.

For instance, Trump promised to restrain domestic discretionary spending by $750 billion and he actually increased it by $700 billion.

Likewise, I don’t expect Biden (assuming he prevails) to deliver on his campaign promises. In this case, that’s good news since he won’t increase taxes and spending by nearly as much as what he’s embraced during the campaign (in my fantasy world, he turns out be like Bill Clinton and actually delivers a net reduction in the burden of government).

P.S. For those on the losing side of the upcoming election, I’ll remind you that Australia is probably the best option if you want to escape the United States. Though you may want to pick Switzerland if you have a lot of money.

This hot mike/Zoom blog is rated R

Even in the Year of the Pandemic, or maybe because of the Year of the Pandemic, things happen that earn the WTF badge.

Megan Fox writes about the viewer-discretion-advised incident of Monday:

Jeffry Toobin, a CNN contributor and writer at The New Yorker, got caught tickling his pickle on a work Zoom call. This wasn’t a situation where he thought he had hung up but hadn’t. Oh no. Toobin was purposefully masturbating during a work call.

He claims he thought he had “muted the video” but left it on “accidentally.” But that’s not believable, because when turning the camera off on Zoom, there is an avatar where the video used to be. How does he expect us to believe he did not check this before deciding to whip out wee Willie? And worse, why is that a good excuse for flogging the dolphin during a work call? Do we need congressional intervention to tell us that being an Army of One on a Zoom call is the wrong thing to do? Do we need a new criminal code for 2020 specifying that hoisting your own petard while attending a conference call is offensive to others? It’s sad that humans can’t just self-police.

Toobin is rabidly anti-Trump as any famous journalist must be. He’s also already well-known for running afoul of the #MeToo crowd when Patty Hearst blasted him for sensationalizing her rape in his book American Heiress in 2018. Fox canceled plans for a movie based on the book after Hearst got through with Toobin.

And now Toobin wants the world to accept that he made a “mistake” and “accidentally” sexually harassed everyone in a Zoom call. That’s what we’re really talking about here. If MeToo has taught me anything it’s that consent matters and if a man exposes himself to anyone without their consent it’s akin to rape. Remember that Louis C.K. was dragged for engaging in this same activity on phone calls with women. So was Harvey Weinstein, who was reported to have sprinkled his house plant in plain view of witnesses. …

This is no different than Charlie Rose or Matt Lauer groping coworkers or having automatic locks installed on the office door. Why should Toobin get a pass because his crime is embarrassing and rather hilarious? It’s still harassment. Every single one of those people on the Zoom call who witnessed it was sexually harassed, if not assaulted. …

This needs to be a firing offense if the big networks are really concerned about making workplace environments sexual harassment-free. I don’t expect he will be fired, but he should be. …

The other troubling part of this story is the call itself, which reads like some kind of Deep-State media plotting session. Did anyone catch that? While everyone is distracted by Toobin’s lubin’, the description of this Zoom meeting is going largely uncommented on.

Vice reported:

Two people who were on the call told VICE separately that the call was an election simulation featuring many of the New Yorker’s biggest stars: Jane Mayer was playing establishment Republicans; Evan Osnos was Joe Biden, Jelani Cobb was establishment Democrats, Masha Gessen played Donald Trump, Andrew Marantz was the far right, Sue Halpern was left wing democrats, Dexter Filkins was the military, and Jeffrey Toobin playing the courts. There were also a handful of other producers on the call from the New Yorker and WNYC.

An election simulation? What are these people playing at? Coup 2? I’m a reporter and my newsroom doesn’t hold conference calls simulating what we want to happen and gaming different scenarios. We just report what happens. What is the purpose of this “simulation”?

Maybe this is why we lose the media game and we should start doing these simulations and get our narrative together ahead of time, but we’ve literally never even thought of doing this. That’s how honest and naive we are! I think I need to see this Zoom call. In the interest of finding out what the media is doing to undermine our Republic, I think we need the tape (and no one believes this was not being recorded). Let’s see what the media is plotting for November 4. They can edit out the Toobin show. I want to know what Jane Mayer, Masha Gessen, Andrew Marantz, Sue Halpern, Dexter Filkins, and Toobin are cooking up for November.

One day earlier, Fox Sports’ Joe Buck and Troy Aikman exchanged thoughts that they thought were off the air but weren’t:

USA Today reports on the aftermath:

On Monday, we learned that Fox NFL broadcasters Joe Buck and Troy Aikman were not the biggest fans of stadium flyovers. And like many topics in 2020, their remarks were seen as divisive.

Defector Media posted a hot-mic video from Sunday’s Fox NFL broadcast of the Packers and Buccaneers that showed Buck and Aikman mocking a military flyover of four A-10 aircraft at Raymond James Stadium.

Aikman joked that a lot of jet fuel was getting wasted for a flyover of a football game that was being played at a mostly empty stadium. Buck also sarcastically said that it was our tax dollars at work.

The comments, though, were evidently seen by some as anti-military (which they really weren’t). So come Tuesday, Aikman took to Twitter to clarify that his joke was not meant to disrespect the military.

Regardless of their opinion, you would think that after Reds and Fox announcer Thom Brennaman was fired for a hot mike moment that sports announcers would be more careful. Then again, you might think people would be more careful around Zoom.

Noon update: Jimmy Traina of Sports Illustrated:

If you’ve been on the internet over the past 48 hours, you most likely saw the video of Joe Buck and Troy Aikman talking about military flyovers.

The internet, as it always does, ran with the video with no context and spun it to paint Buck and Aikman as super liberal, anti-military people. …

There are many things about this ridiculous story that need to be cleared up. First, it seemed pretty clear if you listened to the audio, that Buck and Aikman were goofing around and being sarcastic.

Two, and most important, they were not caught on a hot mic. This did not take place during a break in the Packers-Bucs game.

This was done before the game, during a rehearsal. That means someone who works at FOX, either in a truck or a broadcast studio, pulled the clip on purpose and then leaked it on purpose to make Buck and Aikman look bad. And the fact that one of their co-workers would leak this clip to make the broadcast duo look bad really sucks.

You can be sure Fox is doing some sort of internal investigation to find the culprit.

There is no question, however, that Buck and Aikman said what they said, whether that should have been exposed by a duplicitous coworker. This will certainly add to the general narrative of Buck and Aikman, who have been criticized for going out of their way to make negative comments about, among other teams, the Packers.

 

COVID and millennials

Tom Woods:

A student at an Ivy League university just wrote to me:
I’m a senior college student at [X] and back in March when we shut down, I was genuinely concerned about COVID.
However, I study hospitality and as I read about layoffs at restaurants and hotels, my heart broke for the staff there. By May, I was fully skeptical. At first, I thought we’d be done with this by now. Back home in NY, my high school friends are terrified and the one time we saw each other, we sat in my backyard 6+ ft apart from each other. As a business student, I hope that I understand how the markets work and how every single week of lockdown affects our society in every shape and form.
Where I live, we are a wealthy town and most parents are businessmen/lawyers and can afford to stay home. However, having worked in the hospitality industry, I understand how so many people are being affected while families in my community are ordering for $100+ delivery and $200+ Instacart orders. They’re so phony — they think that the federal government could snap their fingers for small businesses and its employees and they’ll be saved. Whether it’s Trump or Biden, these people are not being helped.
One interesting anecdote: my friend’s sister has really, really bad eyesight. Both of her parents are doctors and she’s still scared to go get her eyes checked. When I was with her, I had to read her the menu from her phone when we were ordering in. She’s 22 years old. 22!
Trust me, I know I’m privileged but was disgusted by the lack of empathy. I worked in restaurants and hotels and I know that these workers are suffering. Meanwhile, my high school friends think that the federal government will help them. They don’t understand how it works. They keep thinking that we’re going to have a vaccine or treatments by next year. I tried to explain that the US population is over 300 million across the country and that you can’t vaccinate everyone overnight. Somehow all my friends go to Ivy League schools and they don’t understand that logic. And trust me, my major at [X] is known to be the “dumb” major and compared to the engineers, they have no clue.
Now, for some good news. I’m now back at [X] University. Some challenges is having to wear masks everywhere and having twice weekly tests. Aside from that, it’s almost like being back in college. I’ve hosted parties with my best friends hosting pong, getting drunk, and being a college student. The first few days back, my friends and I were a bit scared to hug and all. Since then, we’ve had so many great social events. We even played spin the bottle and had such great experiences. While when I meet another friend that I haven’t seen for a while, we don’t hug or do anything… Soon after, after a drink or two, we’ve all hugged. I talked to my friends about COVID and we’re all under the impression that by March 2021, somehow life has to go on.
Lastly, I do not understand this conversation about waiting until a vaccine or treatment. How long can we go on? Luckily, I’m a senior and will have had most of my college years. But how will education be affected? When I was in high school, I worked with students on the spectrum and with autism; I can’t imagine what they are living.

Now much of this is quite discouraging: the 22-year-old woman who’s terrified to get her eyes checked, even though she quite literally has a greater chance of dying in a car accident on the way to the eye exam than she does of COVID, is beyond ridiculous.
At the same time, I’m glad to hear that when push comes to shove, college students are being college students, regardless of the hysteria, and that they seem to have decided on a date in their minds beyond which the insanity simply cannot go on.

Presty the DJ for Oct. 20

Today in 1960, Roy Orbison had his first number one single:

Today in 1962, the number one single in the U.S. was a song banned by the BBC:

The number one single today in 1973 …

… which bumped off this classic …

… which made an eight-year-old TV viewer’s eyes nearly pop out of his head.

Today in 1977, four members of Lynyrd Skynyrd and two others were killed when their plane crashed near McComb, Miss.:

Continue reading “Presty the DJ for Oct. 20”

The worst? that could happen?

Robert Verbruggen:

We’re weeks from Election Day. There’s still time for the polls to tighten, and the polls might just be wrong anyway.

But boy, do those polls not look good right now. The most likely outcome at this point is for the Republicans to lose the presidency and the Senate, giving the Democrats control of the entire federal-lawmaking apparatus.

At this writing, FiveThirtyEight gives Democrats an 87 percent chance at the presidency, a 73 percent shot at reclaiming the Senate, and a 95 percent chance to keep the House. The “no toss-ups” maps at RealClearPolitics have Biden winning the Electoral College 374–164 and Democrats taking the Senate 51–49. (Bear in mind that the vice president breaks ties in the Senate, so a 50-50 split coupled with a Biden-Harris victory would still give the edge to the Democrats.) For weeks the betting market PredictIt has given the Democrats a better-than-even shot at a “clean sweep.”

If the Democrats do in fact win everything, we could be in for a miserable and acrimonious couple of years.

Toward the top of the agenda will be an intra-party debate over whether to kill the legislative filibuster and pack the Supreme Court. I highly doubt they’ll have the votes for the latter, and with a narrow margin even the former will be out of reach because some moderates are sure to balk. But there’s at least a chance the Democrats could have unified control and no limits on how they use it.

If the filibuster goes, the Democrats can pass just about anything that 50 senators agree to. And even with the filibuster intact, the party can achieve many things through the “budget reconciliation” process. That’s how the Republicans passed their tax bill in 2017, and it’s how they tried to handle health-care reform too. (The big rule for a reconciliation bill is that each provision must affect the budget.)

Democrats’ priorities will obviously depend on their margin of victory. But Biden wants to ban “assault weapons”; further expand the government’s role in health care, including by having a public plan “compete” with private options and lowering the age for Medicare eligibility at great cost; hike taxes, especially, but not exclusively, on higher earners; and much more.

Assuming Court-packing doesn’t happen, some legislative victories will be followed by intense, high-stakes legal challenges. I could definitely see the conservative justices’ striking down an assault-weapons ban and aggressively policing Biden’s use of executive authorities leading to renewed calls to pack the Court. If the ridiculous Obamacare case now before the Court is any guide, I could also imagine frivolous challenges to just about any major victory the Democrats manage to notch — challenges that would have little chance even before a 6–3 conservative Court but might get far enough to make the Left sweat.

All this could add up to an enduring loss for the Right. As 2017 showed us, American conservatives can cut taxes, but rarely do they manage to roll back expansions of government. Republicans made some real changes to Obamacare, both by killing the individual mandate and by enacting some good executive actions, but these efforts fell far short of the total overhaul they had been aiming for — and the executive actions can be undone by the next president without any help from Congress. Two years of unified Democratic control could ratchet the country quite a bit to the left, even if the Supreme Court strikes parts of the agenda down.

An across-the-board defeat next month would also influence the broader conservative movement. One good effect would be to unite us against an onslaught of left-wing initiatives. Honestly, we’ve been at our best lately when fighting a common enemy, as during the Kavanaugh hearings. Most of us are exhausted by the “MAGA”/“Never Trump”/“anti-anti-Trump” divisions that have us perpetually fighting with each other — defending the indefensible, lashing out impotently at the choices our party’s voters have made, and trying to make the best of an embarrassing president without losing our souls.

If Republicans, and especially Trump himself, get demolished next month, it will also begin a new chapter of the “What does Trump’s election mean?” debate. There are some things he proved beyond any doubt in 2016: There’s enough of a constituency for populism in the GOP that a populist can win the primaries, especially if the establishment candidates fracture the rest of the vote; some swing voters will connect with this approach as well; and GOP voters — most of whom are not sticklers for traditional conservative ideology — will consolidate around the party’s nominee more or less no matter what.

But none of that means Trumpism has to be a force for decades to come. Trump didn’t win a majority of the primary- or general-election votes, and it’s not like he was the only Republican who conceivably could have beaten Hillary Clinton. How much to borrow from Trump, both in terms of policy and in terms of demeanor, is a big question that Republican politicians need to be asking themselves. If Trump’s first term culminates in a landslide for the Democrats, the Trump path to victory and method of governing starts to look a lot less attractive.

Maybe everything will change in the coming weeks, and Republicans will at least hold the Senate. But if not . . . well, if you think 2020 has been a hoot, wait till you get a load of 2021 and 2022.

As the phrase goes, expect the worst. Do that, and humans, including voters, will never disappoint you.

 

Presty the DJ for Oct. 19

We begin with one of the stranger episodes of live radio, Arthur Godfrey’s on-air firing of one of his singers today in 1953:

The number 28 song today in 1959 was customized for sales in 28 markets, including BuffaloChicagoClevelandDenverDetroitNew OrleansNew YorkPittsburgh and San Francisco:

That was 27 positions lower than number one:

The number one British album today in 1967 was not the Beatles’ “Sgt. Pepper’s Lonely Hearts Club Band”; it was the soundtrack to “The Sound of Music,” two years after the movie was released, on the soundtracks’ 137th week on the charts:

Continue reading “Presty the DJ for Oct. 19”

Presty the DJ for Oct. 18

The number one song today in 1969:

Britain’s number one single today in 1979 probably would have gotten no American notice had it not been for the beginning of MTV a year later:

The number one album today in 1986 was Huey Lewis and the News’ “Fore”:

The City of Los Angeles declared today in 1990 “Rocky Horror Picture Show Day” in honor of the movie’s 15th anniversary, so …

Continue reading “Presty the DJ for Oct. 18”