The Morning Grumpy – 10/15/12

15 Oct

All the news, views, and filtered excellence fit to consume during your morning grumpy.


1. The Self-Destruction of the 1%

The story of Venice’s rise and fall is told by the scholars Daron Acemoglu and James A. Robinson, in their book “Why Nations Fail: The Origins of Power, Prosperity, and Poverty,” as an illustration of their thesis that what separates successful states from failed ones is whether their governing institutions are inclusive or extractive. Extractive states are controlled by ruling elites whose objective is to extract as much wealth as they can from the rest of society. Inclusive states give everyone access to economic opportunity; often, greater inclusiveness creates more prosperity, which creates an incentive for ever greater inclusiveness.

Even as the winner-take-all economy has enriched those at the very top, their tax burden has lightened. Tolerance for high executive compensation has increased, even as the legal powers of unions have been weakened and an intellectual case against them has been relentlessly advanced by plutocrat-financed think tanks. In the 1950s, the marginal income tax rate for those at the top of the distribution soared above 90 percent, a figure that today makes even Democrats flinch. Meanwhile, of the 400 richest taxpayers in 2009, 6 paid no federal income tax at all, and 27 paid 10 percent or less. None paid more than 35 percent.

The choice in this election is indeed about what kind of country we want to be. Are we still a nation which believes in “E Pluribus Unum”? Or will we choose to follow Governor Romney’s path towards an extractive American state?

2. The “reverse brain drain” and how it is destroying the competitiveness of American business and engineering.

United States policymakers are failing to address the departure from this country of tens of thousands of talented immigrants — including engineers, doctors, lawyers and teachers. These highly-skilled workers are leaving the U.S. because they can’t obtain permanent residency here. Outdated immigration laws and regulations, bureaucratic delays and partisan bickering have created a Kafka-esque situation where the U.S. is inexplicably telling the smartest immigrants to go home.

“For several years, anecdotal evidence has suggested that an unwelcoming immigration system and environment in the U.S. has created a ‘reverse brain drain.’ This report confirms it with data,” said Dane Stangler, director of Research and Policy at the Kauffman Foundation. “To maintain a dynamic economy, the U.S. needs to embrace immigrant entrepreneurs.” According to the study, immigrant founders are most likely to start companies in the “innovation/manufacturing-related services (45%) and software (22%) industries,” and employed some 560,000 workers nationwide. These companies generated an estimated $63 billion in sales from 2006 to 2012, the study found.
Our colleges and universities are filled with talented and intelligent foreign-born students who would love to stay in America and build the next wave of American industry. Instead, we send them back to their home countries with a top-notch education to design and create that industry in their home countries. We’re a nation of immigrants and this is a problem we need to solve. Can Congress still do big things?

3. The final word on Mitt Romney’s tax plan.

Mitt Romney‘s campaign says I’m full of it. I said Romney’s tax plan is mathematically impossible: he can’t simultaneously keep his pledges to cut tax rates 20 percent and repeal the estate tax and alternative minimum tax; broaden the tax base enough to avoid growing the deficit; and not raise taxes on the middle class. They say they have six independent studies — six! — that “have confirmed the soundness of the Governor’s tax plan,” and so I should stop whining.  Let’s take a tour of those studies and see how they measure up.

As you might imagine, this doesn’t turn out so well for the Romney campaign.

4. The next crisis, sponging baby boomers.

These boomers have lived a charmed life, easily topping previous generations in income earned at every age. The sheer heft of the generation created a demographic dividend: a rise in labour supply, reinforced by a surge in the number of working women. Social change favoured it too. Households became smaller, populated with more earners and fewer children. And boomers enjoyed the distinction of being among the best-educated of American generations at a time when the return on education was soaring.

More worrying is that this generation seems to be able to leverage its size into favourable policy. Governments slashed tax rates in the 1980s to revitalise lagging economies, just as boomers approached their prime earning years. The average federal tax rate for a median American household, including income and payroll taxes, dropped from more than 18% in 1981 to just over 11% in 2011. Yet sensible tax reforms left less revenue for the generous benefits boomers have continued to vote themselves, such as a prescription-drug benefit paired with inadequate premiums. Deficits exploded. Erick Eschker, an economist at Humboldt State University, reckons that each American born in 1945 can expect nearly $2.2m in lifetime net transfers from the state—more than any previous cohort.

Unsurprisingly, boomers are the voters who most demonstrably populate tea party groups.

5. Every once in a while, I like to watch the “All About Mormons” episode of South Park to remind myself how incredibly insane it is that we’re thinking of electing a guy who believes this shit. Most religions can be dismissed as bizarre, but this one is special.

Here’s a clip from the show, but you can click here to watch the whole thing. It’s actually quite accurate as well as being funny.

Fact Of The Day: The Doctor who claimed a link between vaccines and autism created fraudulent data for his paper and lost his medical license as a result. Of course, hundreds of thousands of people still believe in his disproven research and now threaten herd immunity against dozens of deadly diseases.

Quote Of The Day: “I put up my thumb and shut one eye, and my thumb blotted out the planet Earth. I didn’t feel like a giant. I felt very, very small.” – Neil Armstrong

Video Of The Day: Crash Course In World History: World War I – This guys makes awesome, educational videos

Song Of The Day (Monday Morning Wakeup Edition): “Last Caress” – The Misfits

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9 Responses to “The Morning Grumpy – 10/15/12”

  1. Jim_Holstun October 15, 2012 at 7:45 am #

    Hey, here’s some more crazy things about the candidates: BOTH candidates for the other side believe in virgin birth, the resurrection of the dead, and a punishing and rewarding afterlife. UNBELIEVABLE! And Al Gore’s former running mate believes that God loves one ethnic group best, and gives them the right to ethnically cleanse the groups God doesn’t like so much and take over their land–not only back then, but TODAY! And ALL of these monotheistic God-botherers believe it’s absolutely jake to kill and imprison and deny civil rights to another group of monotheistic God-botherers. INCREDIBLE!

    Really, the Democratic partisanship here is enough to make an aging atheist shake his head and beg the Jesus he doesn’t believe in to give him strength.

    • Jesse Griffis October 15, 2012 at 8:43 am #

      Right on.

    • Christopher Smith October 15, 2012 at 9:32 am #

       “Most religions can be dismissed as bizarre, but this one is special.”

      I’m an atheist and I’ve read The Book of Mormon, cover to cover, and it is fantastically bizarre. To me, Mormonism and Scientology are the two religions which read more like science fiction rather than legendary puffery. I’m especially a big fan of the Curse of Cain and that The Garden of Eden was in Missouri. The origin story of Joseph Smith is also worthy of specific ridicule. It’s just fun, guys.

      • Jim_Holstun October 15, 2012 at 10:31 am #

         Yeah, Christians and Jews believe that the Garden of Eden was in Iraq–didn’t stop the US from bombing it to hell though, did it? And really, is Eden in Missouri any screwier than God speaking from a burning bush or virgin birth? Where’s your patriotism? What do you have against Missouri? (I know, the summers, I’ve lived there and can appreciate your pain–but they’re not worse than those in Mesopotamia).

        Joseph Smith was killed by a lynch mob, and never killed any children. That’s not a claim that Barack Obama can make, though I’m guessing you’re going to give him a pass on that.

  2. Jesse Griffis October 15, 2012 at 8:47 am #

    On #1, can you provide any proof (the last 3.5 years should hold numerous examples but I can’t think of any) whereby Obama is moving the country to a more inclusive state? Was it the auto bailouts that favored some creditors more than others? Was it the “health care for all” nonsense that allows favored groups to opt out of the whole thing? Or was it the incessant quantitative easing set forth by our “independent” central bank that means the dollar you made in 2009 is now worth maybe 90 cents?

    Believe me, there’s no defending Romney from this corner. But to ignore the damage Obama’s doing to this country is just rank partisanship from guys who ought to know better.

    • Christopher Smith October 15, 2012 at 9:46 am #

      Yes, progress towards universal health care, support for progressive taxation, investments in public education, support for community college and adult vocational training, the DREAM Act, Lilly Ledbetter Act, public infrastructure improvements, support for marriage equality, repeal of DADT, etc.

  3. MaxPlanck October 15, 2012 at 9:56 am #

    Romney’s candidacy is following a classic LDS script where he’s narrating behind a curtain just like Smith was purported to do.

  4. BlackRockLifer October 15, 2012 at 10:45 am #

    On #1, the concentration of wealth has been enabled by government not just in tax policy but in government subsidy to workers. We have relieved private enterprise of their responsibility to pay a fair and reasonable wage. Government programs provide health insurance, food stamps, housing subsidies, etc. to low wage workers. This allows business to continue exploiting workers while returning profits to the executives and shareholders.
    We need to value all work, however menial and compensate all productive members of society at a decent wage. Only then can we reduce (business) dependancy on government and increase the tax base.

  5. Gabe C Strongarm October 15, 2012 at 10:57 pm #

    1. All of the Ambrahamic religions (along with each and every sub-division and sub-sect) are double-complete mountains of unadulterated nonsense–perfect diabolical mind-control programs for their sleepwalking masses to lap up like hungry little lap-poodles. Why single out Mormonism?

    2. Both major parties are completely pwned by the 1% plutocratic elite. Obama was just a happy, go-lucky optimistic spin face the elites threw on top of their crumbling rubbish pile of an economic system to….wait for it….distract the masses like they always seem to perfectly do.  Thinking the blandola left side of the coin is going to pull us out of this mess is pure foolishness.

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