Feeds:
Posts
Comments

Archive for the ‘Politics’ Category

I would like to think that the election results from Super Tuesday signify a rejection of the evil and destructive ideology of socialism. After all, despite promising the most handouts, Bernie Sanders was defeated in most states and quickly went from being the front-runner to a long-shot candidate.

This chart shows how political betting markets have dramatically changed in the past couple of days. Crazy Bernie (in green) has collapsed with Biden (in blue) has skyrocketed.

Moreover, the other explicitly hard-left major candidate, Elizabeth Warren, saw her support collapse even earlier.

Daniel Henninger of the Wall Street Journal opined today on the implications of this week’s political earthquake.

Before the voting began Tuesday it was conventional wisdom…that something called progressivism was on the march in the U.S., sweeping aside decades if not centuries of belief, history and tradition with a new agenda of wokeness, identity politics and socialism. …Guess what? The voters still get the last word. …Progressives, however much they dominate the culture, keep losing big, competitive elections. …Joe Biden, hardly a commanding presence, is a proxy for Democratic voters’ pragmatism and their doubts about Mr. Sanders, socialism and the American left.

By the way, it’s not just that Crazy Bernie got trounced.

As reported by the New York Times, many hard-left congressional candidates also are being rejected.

Ms. Ocasio-Cortez previously suggested that Democrats who were not sufficiently loyal to an emergent brand of progressive politics should have others like her run against them in a primary. She is now suggesting that, exit polling be damned, Mr. Biden’s latest string of successes is because of the strong-arming of corporate lobbyists, something Mr. Sanders has underscored by repeatedly calling Mr. Biden the establishment candidate. But the results speak for themselves. Ms. Ocasio-Cortez threw her weight behind Cristina Tzintzún Ramirez in her Senate primary campaign in Texas to defeat the Democratic Senatorial Campaign Committee’s chosen candidate, M.J. Hegar. Ms. Hegar ended up easily outpacing a crowded Democratic field.

All of this is very encouraging, but I’m still worried.

There are three reasons why I’m not brimming with optimism.

First, as explained by Annie Lowrey for the Atlantic, a non-trivial number of young people are enamored with the evil ideology of socialism.

A striking generational divide has emerged. Older people still see socialism and communism as dangerous, authoritarian political systems, whereas younger people are more likely to see them as economic systems, and to care far less one way or another. For millions of potential voters, the Red Scare is no longer so scary. …The simple passage of time explains a lot. Millions of Millennials and Gen Zers were never exposed to the threats of the Soviet Union; they did not live through the fall of the Berlin Wall… A recent poll conducted by the Victims of Communism Memorial Foundation showed that 36 percent of Millennials have a favorable opinion of communism, as do a quarter of Gen Zers. Roughly half of the members of those two generations have a favorable view of socialism and thinks the government should act as an employer of last resort. One in five Millennials thinks the Communist Manifesto better “guarantees freedom and equality” than the Declaration of Independence and thinks society would be better off if the government abolished private property.

I’ve shared plenty of additional data to confirm this worrisome trend.

Second, older Democrats may not embrace the socialist label, but they have shifted in that direction.

I previously wrote about how even prominent folks on the left agree that Joe Biden is far to the left of both Barack Obama and Hillary Clinton.

This graphic from the New York Times illustrates how the rest of the Democratic establishment (as measured by party platforms) has also veered toward statism.

For what it’s worth, the “Median party” line shows the average position of the world’s other political parties, so the takeaway is that America’s Democrats (and the U.K.’s Labour Party) are now further to the left than some of the world’s socialist parties.

Third, while the Republican Party hasn’t moved to the left based on its platforms, I fear that the GOP isn’t motivated today by a Reagan-style belief in limited government and individual liberty.

It’s not just that Trump is a big spender (and a protectionist). Every major Republican in the post-Reagan era has expanded the burden of government and rejected the principles of classical liberalism.

Read Full Post »

In an amazing display of incompetence, we still don’t know whether Bernie Sanders or Pete Buttigieg won the Iowa caucus.

This has created some opportunities for satire, with people asking how a political party that can’t properly count 200,000 votes somehow can effectively run a healthcare system for 340 million people.

That’s a very good point, but today let’s focus on a contest that does have a clear winner.

As explained in this video, John Stossel and his team crunched the numbers and they have concluded that “Crazy Bernie” wins the free-stuff primary.

Senator Sanders doubtlessly will be very happy with this victory, especially since he trailed Kamala Harris when Stossel did the same calculations last summer.

America’s taxpayers, however, might not be pleased with this outcome. Especially if Bernie Sanders somehow gets to the White House.

Last week, I shared new numbers from the Congressional Budget Office, which showed that the federal budget is now consuming $4.6 trillion.

Bernie Sanders is proposing a staggering $4.9 trillion of new spending – more than doubling the burden of government spending!

And the 10-year cost of his promises could be as high as $97 trillion.

To make matters worse, all this new spending is in addition to already-legislated spending increases for everything from boondoggle discretionary programs to behemoth entitlement programs.

Hello Greece.

Heck, it may be hello Venezuela if Bernie gets unleashed.

P.S. Trump’s record on spending is bad, though his mistakes are measured in billions rather than trillions.

Read Full Post »

One of the most significant developments in 2020 politics is how Democratic presidential candidates have embraced hard-left economic policies.

Prominent analysts on the left have noted that even Joe Biden, ostensibly the most moderate of the candidates, has a very statist economic platform when compared to Barack Obama.

And “Crazy Bernie” and “Looney Liz” have made radicalism a central tenet of their campaigns.

So where does Michael Bloomberg, the former mayor of New York City, fit on the spectrum?

The New York Times has a report on Bloomberg’s tax plan. Here are some of the key provisions, all of which target investors, entrepreneurs, small business owners, and other high-income taxpayers.

Former Mayor Michael R. Bloomberg of New York unveiled a plan on Saturday that would raise an estimated $5 trillion in new tax revenue… The proposal includes a repeal of President Trump’s 2017 tax cuts for high earners, along with a new 5 percent “surcharge” on incomes above $5 million per year. It would raise capital gains taxes for Americans earning more than $1 million a year and…it would partially repeal Mr. Trump’s income tax cuts for corporations, raising their rate to 28 percent from 21 percent. …Mr. Bloomberg’s advisers estimate his increases would add up to $5 trillion of new taxes spread over the course of a decade, in order to finance new spending on health care, housing, infrastructure and other initiatives. That amount is nearly 50 percent larger than the tax increases proposed by the most fiscally moderate front-runner in the race, former Vice President Joseph R. Biden Jr. …Mr. Bloomberg’s advisers said it was possible that he would propose additional measures to raise even more revenue, depending on how his other domestic spending plans develop.

These are all terrible proposals. And you can see even more grim details at Bloomberg’s campaign website.

Every provision will penalize productive behavior.

But there is a bit of good news.

Though it would be more accurate to say that there’s a partial absence of additional bad news.

Bloomberg hasn’t embraced some of the additional bad ideas being pushed by other Democratic candidates.

It would…maintain a limit on federal deductions of state and local tax payments set under the 2017 law, which some Democrats have pushed to eliminate. …the plan notably does not endorse the so-called wealth tax favored by several of the more liberal candidates in the race, like Senators Elizabeth Warren and Bernie Sanders.

I’m definitely happy he hasn’t embraced a wealth tax, and it’s also good news that he doesn’t want to restore the state and local tax deduction, which encouraged profligacy in states such as California, New Jersey, and Illinois.

It also appears he doesn’t want to tax unrealized capital gains, which is another awful idea embraced by many of the other candidates.

But an absence of some bad policies isn’t the same as a good policy.

And if you peruse his website, you’ll notice there isn’t a single tax cut or pro-growth proposal. It’s a taxapalooza, what you expect from a France-based bureaucracy, not from an American businessman.

To add insult to injury, Bloomberg wants all these taxes to finance an expansion in the burden of government spending.

For what it’s worth, this is my estimate of what will happen to America’s tax burden (based on the latest government data) if Bloomberg is elected and he successfully imposes all his proposed tax increases. We’ll have a more punitive tax system that extracts a much greater share of people’s money.

P.S Take these numbers with a grain of salt because they assume that Bloomberg’s tax increases will actually collect $5 trillion of revenue (which won’t happen because of the Laffer Curve) and that GDP won’t be adversely affected (which isn’t true because there will be much higher penalties on productive behavior).

Read Full Post »

I started fretting about the socialist tendencies of young people early last decade.

And when Sanders attracted a lot of youth support in 2016, I gave the issue even more attention, and I’ve since continued to investigate why so many young people are sympathetic to such a poisonous ideology with a lengthy track record of failure and deprivation.

Some of the recent polling data is very discouraging.

And if you want to be even more depressed, here are some tweets with the most-recent data about the the views of young people.

It’s not just that they have warm and fuzzy thoughts about so-called democratic socialism.

I’m completely horrified to learn that more than one-third of young people even have a positive perception of communism.

In other words, wearing Che t-shirts isn’t just a vapid fashion statement.

These kids are either overtly evil or utterly oblivious.

Yes, I realize I sound like a curmudgeon (“you kids get off my lawn!”), but how else should I react when I see these numbers from Axios.

For what it’s worth, the same problem exists in the United Kingdom.

And it may be even more lopsided.

(Though I’m very relieved the misguided views of young people didn’t prevent a victory for Boris Johnson last month.)

For today’s column, let’s keep our focus on the United States.

What’s the underlying cause of bad polling numbers in America?

In a column for the Washington Times, Robert Knight explains that many young people have been spoon-fed a leftist version of American history.

Why do so many young people hate America and think we’d be better off as a socialist country? …reading and believing Howard Zinn’s best-selling ‘A People’s History of the United States’… First published in 1980, “A People’s History” has sold more than 2.5 million copies and is in virtually every school district, university and local library. …Everything Zinn wrote was couched in the language of Marxist class warfare. Key events were omitted. The mass slaughter that followed the Communist takeover of Cambodia? Good luck finding it in “A People’s History.” …Zinn was a member of numerous Soviet front groups, and he helped found the socialist New Party… Before the fall of the Berlin Wall, Zinn warned that concern over communism was due to “hysteria,”… In a chapter titled “The Coming Revolt of the Guards,” …Zinn states flatly that “capitalism has always been a failure for the lower classes. It is now beginning to fail for the middle class.” …Zinn envisions a utopian future in which “certain basic things” would be “…available — free — to everyone: food, housing, health care, education, transportation.” …The reason this insane, economically illiterate, un-American scheme appeals to so many is that they’ve been miseducated via Howard Zinn into thinking that they live in a bad country that must be rebuilt as a socialist paradise.

Jarrett Stepman opined on the adverse consequences of historical illiteracy in a piece for the Daily Signal.

As young Americans are losing an understanding of civics and American history, they increasingly embrace socialism. …younger generations have a far sunnier view of socialism and communism than their elders. …Perhaps worse than nostalgia for the Soviet Union, “57% of millennials (compared to 94% of the Silent Generation) believe the Declaration of Independence better guarantees freedom and equality over the Communist Manifesto.” That’s appalling. …there’s not only been a worrisome decline in inculcating informed patriotism in young Americans, but a willful attempt to re-educate them to turn them against the foundations of America itself. …So far, we have escaped the curse of socialism… But a troubling collapse in a basic understanding of our history, along with the malignant attempt to reframe our country’s origins to make us more susceptible to doctrines outside our tradition, means that the specter of socialism now hangs over us.

Amen. The government’s education monopoly too often gives kids a diet of statist pabulum. This is another reason why we need school choice.

But it’s not just bad history in government schools.

It’s also bad policy in government.

In a column for the Wall Street Journal, Mene Ukueberuwa shares some insights from Edward Glaeser, a professor at Harvard who warns that statist policies are leading young people to support bigger government.

Bernie Sanders…has become an unlikely voice of the young generation. …this axis of today’s struggle could change politics for generations to come, as millennials reject the country’s capitalist consensus and embrace socialism in record numbers. …Critics often blame today’s socialist surge on millennials’ laziness. …One free-market economist has a different explanation. Edward Glaeser, a Harvard professor…, argues that young people have radicalized politically because “there are a number of ways in which the modern American economy isn’t working all that well for them.” Many public policies make it harder to get a job, save money or find an affordable home, leaving young idealists thinking, “Why not try socialism?” But that cure would merely worsen the disease. Mr. Glaeser decries policies that constrain the job market and increase the cost of living compared with what the economy would produce if left alone. …Consider the housing market. “In the 1960s and earlier,” Mr. Glaeser says, “America basically had a property-rights regime that meant that anyone who had a plot of land could pretty much put up anything reasonable on that plot of land.” …The shift of income toward those Mr. Glaeser calls the “entrenched” is most explicit in entitlement programs. …They’re funded by payroll taxes, which snag a disproportionate share of low-earners’ paychecks. Taxpayers also pony up ever more to fund the retirements of government employees.

Glaeser is right.

Government intervention is increasing the price of housing for the young. Entitlement programs are pillaging the young. And bureaucrat pensions are a scam that victimizes the young.

For all intents and purposes, Prof. Glaeser is describing Mitchell’s Law.

Bad policy causes bad results, which leads some people (in this case, young people) to want more bad policy.

So the obvious solution, he argues, is to get rid of the bad policies that are causing problems in the first place.

And maybe young people will realize that they should support free markets and limited government!

“They say, ‘Well, there are a whole bunch of projects—a whole bunch of government spending that helps old people. I want mine. If we’re going to spend a huge amount on Medicare, why aren’t we spending a whole lot on education for me?’” …To give newcomers a chance, Mr. Glaeser would curtail the influence of entrenched groups and restore incentives for “a capitalism that is inclusive, and that provides a place of opportunity for more people.” …Mr. Glaeser insists that this message would be likelier to catch on if it were backed by policy reforms that make work more fruitful. A program of plentiful job opportunities, cheaper housing, and tax cuts financed by curtailed entitlements could be a significant step toward replacing socialism in the hearts of Mr. Sanders’s young supporters.

For what it’s worth, bad history and bad policy are both good explanations, but they don’t fully explain why young people are misguided.

I suspect many young people also think support for socialism is a way of signalling that you’re a nice person. That you care about others.

I’m not sure how we solve this problem, but this clever video from Kristian Niemietz suggests that part of the answer may be satire.

Though I may be biased since I have an entire collection of humor that targets socialism and communism.

P.S. When it hits close to home, college students actually reject socialism, though maybe they should have learned that lesson in kindergarten.

Read Full Post »

When I was in London last week for Boris Johnson’s landslide victory, many people asked me whether Trump would win again in 2020.

Since I was wrong about 2016, I told them I wasn’t the right person to ask.

That being said, Trump has some positive economic tailwinds.

For those of you who care about political outcomes, there’s a new CNN poll of battleground states.

It’s good news for Republicans, particularly if one assumes that there are some people who don’t want to admit that they will vote for Trump (which seems to have been true in 2016).

Political betting markets also are pointing to a Trump victory.

Here’s a screenshot showing the 2019 odds of success for the various candidates. As you can see Trump’s numbers are trending upwards – including a positive bump after the House voted for impeachment!

Both polls and betting markets were wrong in 2016, so take all this data with a grain of salt.

For those who care about economic policy, I’ll simply regurgitate my usual comment that Trump is good on some issues (taxes and regulation) and bad on other issues (trade and spending).

I expect this pattern to continue if he’s reelected.

The big wild card is monetary policy.

As I said in the interview, I worry there’s a bubble caused by an easy-money approach. And bad things happen when bubbles pop.

P.S. I should have mentioned that the employment-population data is not as positive as the unemployment-rate data.

P.P.S. I mentioned macroeconomic political forecasts in the interview. I wrote about those predictions back in October.

Read Full Post »

There’s an entire field of economics called “public choice” that analyzes the (largely perverse) incentive structures of politicians and bureaucrats.

But is economic analysis also helpful to understand voting and elections?

In the past, I’ve suggested that political betting markets are a useful place to start since “you are seeing estimates based on people defending their views with cold, hard cash.”

In his Bloomberg column, Professor Tyler Cowen takes a more rigorous look at the potential insights of political betting markets.

Prediction markets…are a quick way to get an overview of the state of the campaign. President Donald Trump is currently at about 0.40 to be re-elected… Under normal assumptions about the uncertainty of future economic growth, the markets rate Trump’s chances of winning at 40%. …it is a useful corrective to the argument that Trump is toast — or, alternatively, that he is a shoo-in.  The market incorporates the relevant uncertainties in both directions. (Interestingly, Trump’s re-election odds have stayed pretty steady over the last week or so of negative news.) In many cases, prediction markets…“see through” the day-to-day volatility that may buffet the polls but not affect the final outcome. …Prediction markets…also made me think that a possible Hillary Clinton candidacy…is perhaps an undercovered story. …It is not a valid criticism of prediction markets to say that they didn’t predict Trump, say, or Brexit. The purpose of prediction markets is not to foresee particular upsets. They can, however, tell you in advance what would be an upset — much like probability theory can tell you that getting three heads in a row is unlikely but is of no help in predicting exactly when it will happen.

There are also people who build models that predict elections based largely on economic factors.

The Washington Post just published a very interesting review of how three of these models show Trump comfortably winning.

President Trump is on a fast track to an easy reelection. That’s the conclusion reached by economic forecasters… Moody’s Analytics projects the president will win handily next year if the economy doesn’t badly stumble — and in fact, rack up a greater margin in the electoral college than the 304-to-227 victory he secured against Hillary Clinton in 2016. …The finding jibes with those of other forecasting models that rely on measures of the economy’s strength to predict which major party’s candidate will win the White House next. Oxford Economics sees Trump winning 55 percent of the popular vote next year barring a “significant downturn” in the economy. …by the reckoning of the firm’s model, three key economic indicators — unemployment, inflation and real disposable income growth — all favor Trump’s reelection. They outweigh a “negative exhaustion factor” with Trump that dents his support in the projection. …Another model, assembled by Trend Macrolytics, accurately predicts every presidential victor back to 1952 by focusing on the effects of the economy and incumbency on the electoral college, according to Donald Luskin, the firm’s chief investment officer. It projects Trump will win reelection next year with 354 electoral votes — a margin that seems staggering on its face.

Here’s the Moody’s electoral map, which doubtlessly will cause sleepless nights for the anti-Trump crowd.

Wow, not only do they show Trump winning every state he won in 2016, but they show him picking up New Hampshire, Virginia, and Minnesota.

So which approach is more accurate, betting markets of election models?

Given my inaccurate 2016 predictions, I’m probably not the right person to ask.

I’ll simply observe that both approaches have erred in the past.

And if you believe in guilt by association, some of the people who put together political prediction models also put together deeply flawed Keynesian economic models.

Read Full Post »

When I talked to CNBC on Wednesday, I was very critical of Trump and other Republicans for promoting protectionism, Keynesian monetary policy, and wasteful spending.

Yes, I give Trump and the GOP credit for improvements in regulatory policy and tax policy. And I used to think that the pro-growth effect of those reforms was enough to balance out the anti-growth effects of the bad policies.

But I now think the net effect of the Trump presidency is to expand the overall burden of government.

In early July, my report card on Trump’s economic policy (based on the five key indices in Economic Freedom of the World) had him slightly above a C average.

Now, as you can see, he’s slightly below. And since Republicans in Congress are largely going along with Trump’s policies, they also deserve blame.

I realize that people also care about other matters, such as social issues, the judiciary, and foreign policy, so it’s not my goal to influence how anyone votes.

But I do want people to understand that economic policy matters. And for readers who like Trump (or at least think he’s a less-worse alternative than Sanders, Harris, Warren, etc), be forewarned that Trump’s big-government policies are increasing the probability of having Democrats win in 2020.

The lesson Republicans should have learned from Ronald Reagan is that good policy is good politics (my Fourth Theorem of Government).

George H.W. Bush didn’t learn that lesson. George W. Bush didn’t learn that lesson. And now Trump is demonstrating that he didn’t learn that lesson.

P.S. Some of us knew ahead of time to expect bad policy from Trump.

P.P.S. Since my 2016 election prediction was wrong, feel free to ignore my political prognosticating.

Read Full Post »

Older Posts »

%d bloggers like this: