Feeds:
Posts
Comments

Posts Tagged ‘Hillary Clinton’

The bad news is that America is about to elect a statist president. But will we get Hillary’s corruption or Donald’s buffoonery?

According to RealClearPolitics, Hillary Clinton will prevail, albeit by a very narrow margin, with 272 electoral votes. They have a very close race because Trump is projected to prevail in the swing states of Florida, North Carolina, and Nevada. If you believe these numbers, Trump simply has to flip semi-competitive New Hampshire (home to thousands of free-state libertarians) and he is the next President. At which point this joke about emigration to Canada becomes reality.

According to Nate Silver, a highly regarded statistics expert, Hillary Clinton wins comfortably because she carries the swing states of Florida, North Carolina, and Nevada. That should give her 323 electoral votes, but Silver’s model is based on probabilities, so she instead is projected to get 302.4 electoral votes. For what it’s worth, Gary Johnson easily breaks the record for the Libertarian Party, but he falls just short of the 5-percent mark.

According the political betting markets, Hillary Clinton will prevail with 323 electoral votes. The people waging cash believe she will come out on top in Nevada, Florida, and North Carolina, matching Nate Silver’s projection (interestingly, Trump is seen as having a better chance in Michigan than in Nevada). All of the third-party candidates, including Gary Johnson, apparently have a 0.1 percent chance of winning.

Last but not least, we have Professor Larry Sabato’s Crystal Ball. He picks Hillary and says she will get 322 electoral votes. Sabato has the same state-by-state breakdown as Silver and the betting markets, but he projects that Trump will win one electoral vote from Maine, which (like Nebraska) allocates two votes to the statewide winner and then one vote to the winner of each congressional district. In the for-what-it’s-worth department, there are twice as many (90) vulnerable electoral votes that Democrats have to worry about compared to Republicans (43).

So what’s my prediction?

If I wanted to torture the American people by prolonging the race, I would take the RealClearPolitics prediction, shift New Hampshire to Trump and shift Maine’s second congressional district to Hillary. The net result would be a 269-269 tie and the result would be total turmoil since the election would then be decided based on skullduggery in the electoral college or a state-by-state vote in the House of Representatives.

But I don’t expect that to happen, even though it would be highly entertaining (it would make Bush-vs.-Gore in 2000 seem like a bipartisan picnic).

I’m tempted to simply recycle the prediction I put forth one month ago. I showed Hillary winning with 328 electoral votes (basically similar to the consensus above, but with Iowa going for Hillary).

But it does indeed look like Trump will prevail in Iowa, so my final prediction will move the Hawkeye State back in the GOP column.

But I don’t want to have the same guess as almost everyone else (we libertarians have a tendency to be obstreperous), so let’s mix things up. The easy adjustment would be to give one or two of the “leaning Democrat” states to Trump. But my gut instinct tells me that growing Hispanic populations in Nevada and Florida make that unlikely. And North Carolina has too many college-educated whites, as well as an increased Hispanic presence, neither of which is good news for Trump.

So I’m going to defy all the experts and give Trump an extra state from the rust belt. Let’s say Michigan, which means my final electoral prediction is a 306-232 victory for Tweedledee. Or is she Tweedledum? Whatever.

Some of my Republican friends will be disappointed by this outcome, so time to make some predictions that will make them happy. The House stays Republican in my humble opinion, with a final total of 239 seats (my one success in the business of political prognostication occurred six years ago when I was exactly right in my House prediction).

The Senate outcome is even more important and GOPers will be very happen if I am correct in predicting that Republicans will hold the Senate 51-49, which would be a remarkable achievement since they are defending more than twice as many seats as Democrats this cycle. Nonetheless, that still means they will lose three seats, and my guess is that Wisconsin, Illinois, and Pennsylvania is where Republicans incumbents will fall short.

By the way, this outcome is not too bad for libertarians and other advocates of limited government. Consider these implications.

  • Hillary will enter office widely disliked and distrusted, and the media will pay much closer attention to her misdeeds once she defeats Trump.
  • She’ll have very little opportunity to expand the burden of government since the House (and maybe the Senate) will be controlled by Republicans.
  • The 2018 mid-term elections are usually bad news for the party that controls the White House and Democrats have to defend a disproportionate number of Senate seats that cycle.
  • The GOP might nominate someone in 2020 who believes in smaller government and that candidate may sweep into office with a Republican House and a Republican Senate.
  • In 2021, genuine entitlement reform and sweeping tax reform could get enacted and Dan Mitchell could then safely retire to the Cayman Islands and introduce softball to that population.

Nice scenario, huh?

Then again, I basically made the same argument four years ago, and that didn’t turn out so well.

So if you’re done laughing at my optimistic take, here’s some meant-to-be-funny material to carry you through the day.

We’ll start with Anthony Weiner learning why it’s not a good idea to get on Hillary’s bad side (by the way, I have run into people who actually think that the Clintons have had people murdered and I always give them this column in hopes of calming them down).

And since Donald Trump is on the bad side of lots of Hispanic voters (presumably enough to give the election to Hillary), this quip by Seth Meyers is particularly (and appropriately) savage. Indeed, if Trump loses by a narrow margin and if he is capable of introspection, one wonders whether he will regret some of his rhetoric.

Last but not least, if you liked the “Mitt Romney Style” video from 2012, we can balance it with a video about Hillary, showing how the White House will operate under when pay-to-play become the modus operandi at 1600 Pennsylvania Avenue.

P.S. Don’t forget that there are several important ballot initiatives today.

Addendum: Can’t resist adding this cleverly doctored photo of Chelsea reading a bedtime story.

Though, to her credit, Chelsea isn’t associated with any bad policy ideas. The same can’t be said for Ivanka Trump.

Read Full Post »

I’ve written before about Hillary Clinton’s unethical and (presumably) illegal actions, both in terms of her email server and the Clinton Foundation.

We’ve probably only seen the tip of the iceberg, but one thing that can be said with confidence is that there is strong scent of corruption, cronyism, and insider dealing that surrounds Mrs. Clinton.

Every day seems to bring new evidence. Writing for the Wall Street Journal, Kimberly Strassel puts it in blunt terms.

A Hillary Clinton presidency will be built, from the ground up, on self-dealing, crony favors, and an utter disregard for the law. This isn’t a guess. …It comes in the form of a memo written in 2011 by longtime Clinton errand boy Doug Band, who for years worked simultaneously at the Clinton Foundation and at the head of his lucrative consulting business, Teneo. It is astonishingly detailed proof that the Clintons do not draw any lines between their “charitable” work, their political activity, their government jobs or (and most important) their personal enrichment. Every other American is expected to keep these pursuits separate, as required by tax law, anticorruption law and campaign-finance law. For the Clintons, it is all one and the same—the rules be damned. …Any nonprofit lawyer in America knows the ironclad rule of keeping private enrichment away from tax-exempt activity, for the simple reason that mixing the two involves ripping off taxpayers. Every election lawyer in the country lives in fear of stepping over the lines governing fundraising and election vehicles. The Clintons recognize no lines. Here’s the lasting takeaway: The Clintons…know the risks. And yet they geared up the foundation and these seedy practices even as Mrs. Clinton was making her first bid for the presidency. They continued them as she sat as secretary of state. They continue them still, as she nears the White House. This is how the Clintons operate. They don’t change. Any one who pulls the lever for Mrs. Clinton takes responsibility for setting up the nation for all the blatant corruption that will follow.

Let’s look at some examples.

And we’ll start with the example of a Swiss bank that was being wrongfully persecuted by the American government for the supposed crime of protecting the privacy of clients (i.e., for following Swiss law inside Switzerland).

In other words, I’m very sympathetic to the bank. But I’m not a big fan of the Clintons using the bank’s legal woes as an opportunity to raise a bunch of money in exchange for a favorable disposition. Yet that’s exactly what happened, as reported by the U.K.-based Guardian.

In February 2009, the IRS sued UBS and demanded that it disclose the names of 52,000 possible American tax evaders with secret Swiss bank accounts. …On 19 August 2009, it was announced that UBS would pay no fine and would provide the IRS with information about 4,450 accounts within a year. Since the deal was struck, disclosures by the foundation and the bank show the donations by UBS to the Clinton Foundation growing “from less than $60,000 through 2008 to a cumulative total of about $600,000 by the end of 2014”… The bank also teamed up with the foundation on the Clinton Economic Opportunity Initiative, creating a pilot entrepreneur program through which UBS offered $32m in loans to businesses, the newspaper reported. Other UBS donations to the Clinton Foundation include a $350,000 donation from June 2011 and a $100,000 donation for a charity golf tournament. Additionally, UBS paid more than $1.5m in speaking fees to Bill Clinton between 2001 and 2014, the newspaper reported.

James Freeman, in a column for the Wall Street Journal, cites two other examples of Clinton-style pay-to-play. The first example deals with Morocco.

We now know from emails published by WikiLeaks that before Mrs. Clinton formally launched her campaign, she arranged for the king of Morocco to donate $12 million to Clinton Foundation programs. What’s significant about the Morocco case is that for years the Clintons peddled the fiction that donors write checks simply to support wondrous acts of Clintonian charity. But that cover story isn’t available here. Mrs. Clinton’s trusted aide Huma Abedin put it in writing: The Moroccans agreed to the deal on the condition that Mrs. Clinton would participate at a conference in their country. Panicked Clinton-campaign aides persuaded Mrs. Clinton to avoid such a trip before launching her candidacy—and the foundation got the king to settle for Bill and Chelsea Clinton. But the record is clear. The king wanted the access, influence and prestige that all strongmen crave from legitimate democracies.

The second example comes from Kazakhstan.

This wasn’t the first time the Clintons satisfied such a desire while collecting megadonations. When it comes to human rights, Kazakhstan’s dictator, Nursultan Nazarbayev, makes Morocco’s king look enlightened. In power since 1991 and never freely elected, Mr. Nazarbayev must have enjoyed the sensation of Mr. Clinton endorsing him to lead an international election-monitoring group in 2005. The Kazakh strongman knows how to return a favor, and he granted valuable mining concessions to Clinton Foundation donors. The donors then built a global uranium powerhouse that was eventually sold to the Russians in a deal that required the 2010 approval of a U.S. government committee that included Mrs. Clinton’s State Department.

There’s a lot more material I could share, but the purpose of today’s column isn’t to demonstrate Hillary’s recent unethical behavior.

Instead, I want to show how she has a decades-long pattern of using government for self-advancement and self-enrichment. And I’ll follow by drawing (what should be) a very obvious lesson about public policy.

To keep today’s column manageable, let’s review just two examples.

First, let’s go back more than 20 years to the early days of Bill Clinton’s presidency. Peggy Noonan explains Hillary’s attempt to replace the career professionals at the White House travel with cronies from Arkansas.

Why don’t people like Hillary Clinton? …Why, when some supposed scandal breaks and someone says she’s hiding something, do people, including many of her supporters, assume it’s true? …the scandals stretch back…all the way to her beginnings as a national figure. …It was early 1993. …It was the first big case in which she showed poor judgment, a cool willingness to mislead, and a level of political aggression that gave even those around her pause. It was after this mess that her critics said she’d revealed the soul of an East German border guard.

Let’s look at what happened.

On May 19, 1993, less than four months into the administration, the seven men who had long worked in the White House travel office were suddenly and brutally fired. The seven nonpartisan government workers, who helped arrange presidential trips, served at the pleasure of the president. But each new president had kept them on because they were good at their jobs. A veteran civil servant named Billy Dale had worked in the office 30 years and headed it the last 10. He and his colleagues were ordered to clear out their desks and were escorted from the White House, which quickly announced they were the subject of a criminal investigation by the FBI. They were in shock. So were members of the press, who knew Mr. Dale and his colleagues as honest and professional. A firestorm ensued. Under criticism the White House changed its story. They said that they were just trying to cut unneeded staff and save money. Then they said they were trying to impose a competitive bidding process. They tried a new explanation—the travel office shake-up was connected to Vice President Al Gore’s National Performance Review. (Almost immediately Mr. Gore said that was not true.) The White House then said it was connected to a campaign pledge to cut the White House staff by 25%. Finally they claimed the workers hadn’t been fired at all but placed on indefinite “administrative leave.”

Noonan continues.

Why so many stories? Because the real one wasn’t pretty. It emerged in contemporaneous notes of a high White House staffer that the travel-office workers were removed because Mrs. Clinton wanted to give their jobs—their “slots,” as she put it, according to the notes of director of administration David Watkins—to political operatives who’d worked for Mr. Clinton’s campaign. And she wanted to give the travel office business itself to loyalists. There was a travel company based in Arkansas with long ties to the Clintons. There was a charter travel company founded by Harry Thomason, a longtime friend and fundraiser, which had provided services in the 1992 campaign.

Unsurprisingly, Mrs. Clinton lied about her efforts to turn the travel office into a goodie for a crony.

All along Mrs. Clinton publicly insisted she had no knowledge of the firings. Then it became barely any knowledge, then barely any involvement. When the story blew up she said under oath that she had “no role in the decision to terminate the employees.” She did not “direct that any action be taken by anyone.” In a deposition she denied having had a role in the firings, and said she was unable to remember conversations with various staffers with any specificity. A General Accounting Office report found she did play a role. But three years later a memo written by David Watkins to the White House chief of staff, recounting the history of the firings, suddenly surfaced. (“Suddenly surfaced” is a phrase one reads a lot in Clinton scandal stories.) It showed Mrs. Clinton herself directed them.

By the way, the most disgusting part of this scandal is the way Hillary sicced the government on Mr. Dale.

The White House pressed the FBI to investigate, FBI agents balked—on what evidence?—but ultimately there was an investigation, and an audit. …Billy Dale was indicted on charges including embezzlement. The trial lasted almost two weeks. …The jury acquitted him in less than two hours.

In other words, expect to see more Lois Lerner-type scandals if Hillary reaches the White House. There should be little doubt that she will use the power of government to attack her political opponents.

Now let’s go back even further in time, to the late 1970s when Hillary Clinton somehow managed to turn a $1,000 “investment” into $100,000 is less than one year. The New York Times reported on this rather implausible story back in 1994.

…in 1978 Hillary Rodham Clinton invested $1,000 in commodities futures and that the investment grew in 10 months of trading in the notoriously volatile market into a gain of nearly $100,000. Seeking to dispel suggestions that the trades were risk-free and improperly arranged by an Arkansas lawyer who represents one of the state’s most powerful companies, the White House issued a statement this afternoon that said the First Lady had put up her own money and that she bore all of the financial risks in a marketplace where three out of four investors lose money. The officials also released a year’s worth of brokerage statements from one of Mrs. Clinton’s two accounts. …Mrs. Clinton based her trades on information in The Wall Street Journal.

In other words, we’re supposed to believe that Mrs. Clinton, a complete novice, with no experience in the private sector or the investment business, suddenly decided to sink money into a very complex type of speculation.

And we’re supposed to believe that she made a series of very clever market-timing decisions and turned small amount of money into a big pile of money.

Needless to say, even the reporter for the New York Times couldn’t help but express skepticism and doubt. Particularly since nobody was willing to back up Mrs. Clinton’s story.

The White House insisted today that Mrs. Clinton received no improper financial assistance on the trades from the lawyer, James B. Blair, a close friend who at the time was the top lawyer for Tyson Foods of Springdale, Ark., the nation’s biggest poultry company. Mr. Blair has said that he had suggested that she get into the commodities market, and that he used his knowledge of trading to guide her along the way. During Mr. Clinton’s tenure as Governor, Tyson benefited from several state decisions, including favorable environmental rulings, $9 million in state loans, and the placement of company executives on important state boards. …brokers in the Springdale office of Refco where Mrs. Clinton executed the trades, including the one she describes as her personal broker, said in interviews in recent weeks that they have no recollection of ever talking with her about the trades. Mrs. Clinton and Mr. Blair have said that they used Robert L. (Red) Bone, the broker who founded the Springdale office of Refco, a Chicago commodities firm, to execute the trades. But Mr. Bone, who worked at Tyson for 13 years until 1973, insisted in several interviews this month that he has no recollection of ever trading for Mrs. Clinton or talking to her about commodities trades.

Here’s the bottom line. Back when this scandal surfaced in the 1990s, I talked to several people in the financial markets, every one of whom was 99.99 percent certain that Hillary was the beneficiary of a gift (if they were favorable to her) or a bribe (if they were unfavorable to her). And they all agreed that somebody on the inside arranged to give her, after the fact, the winning side of trades in order to make it look like she was simply a good investor.

Moreover, every single Democrat that I talked to admitted (but only off the record) that she was the recipient of a gift or a bribe.

And she hasn’t changed in the past 38 years. Government is a vehicle for personal advancement and personal enrichment.

Now let’s conclude by bring public policy into the discussion. Corrupt politicians are able to amass lots of power and money because government is big and powerful.

And I’m not making a partisan argument. Indeed, here are the same bullet points I used when pointing out the empty futility of Trump’s plan to “drain the swamp” and end DC corruption.

All I’m saying is that Hillary Clinton both supports big government and profits from big government. And as the public sector gets larger, don’t be surprised when you find out that Hillary and her cronies have figured out additional ways of feathering their own nests.

P.S. By the way, I do recognize that there’s an infinitesimally small possibility that Hillary’s story about cattle futures is accurate.

I also recognize, for what it’s worth, that there’s a greater-than-zero possibility that aliens will invade the earth tomorrow.

But neither of these hypotheses is remotely plausible (though if I had to pick, I’d go with the alien invasion for the simple reason that it would bring great joy to Paul Krugman).

P.P.S. Plenty of Republicans will get rich as well as Hillary expands government. If you don’t believe me, just consider how many of them collect campaign cash in exchange for votes in favor of ethanol and the Export-Import Bank.

Read Full Post »

Based on what she’s been saying during the campaign, Hillary Clinton is a big fan of class warfare. She has put forth a series of “soak-the-rich” tax hikes designed to finance bigger government.

Her official plan includes provisions such as an increase (“surcharge”) in the top tax rate, the imposition of the so-called Buffett Rule, an increase in the tax burden on capital gains (including carried interest), and a more onerous death tax.

The Tax Foundation explains that this plan won’t be good for the economy or the budget.

Hillary Clinton’s tax plan would reduce the economy’s size by 1 percent in the long run. The plan would lead to 0.8 percent lower wages, a 2.8 percent smaller capital stock, and 311,000 fewer full-time equivalent jobs. …If we account for the economic impact of the plan, it would end up raising $191 billion over the next decade.

Here’s a table showing the static revenue impact for the various provisions, followed by the estimated economic impact, which then allows the Tax Foundation to calculate the real-world, dynamic revenue impact.

So what does all this mean?

Well, the Congressional Budget Office estimates that tax revenue over the next 10 years will be $41,658 billion based on current law. Hillary’s plan will add $191 billion to that total, an increase of 0.46 percent.

Which means that she’s willing to lower our incomes by 0.80 percent to increase the government’s take by 0.46 percent. A good deal for her and her cronies, but bad for America.

But it gets worse. Hillary’s official tax plan doesn’t include her biggest proposed tax hike. As I’ve warned before, and as Andrew Biggs of the American Enterprise explains in a new article, she has explicitly stated her support for huge tax hikes to bail out Social Security.

…she has endorsed both of the main tax increases included in Sanders’ Social Security plan: imposing the Social Security tax on earnings above the current $118,500 cap and applying Social Security taxes to investment income in addition to wages.

Andrew warns that busting the wage-base cap may boost payroll tax receipts, but such a policy will lead to lower revenues from other sources.

Eliminating the payroll tax ceiling would require workers and employers to each pay an additional 6.2% tax on all earnings above the ceiling, currently $118,500. Both the SSA actuaries and the Congressional Budget Office assume that when employers are hit with an additional payroll tax they will over time reduce employees’ wages to cover the increased cost, consistent with economists’ view that employees ultimately “pay” for employer-provided benefits through lower wages. Those lost wages would then no longer be subject to federal income taxes, Medicare payroll taxes or state government income taxes. If the average marginal tax rate on earnings above the current payroll tax ceiling is 48% – say, the top earned income tax rate of 39.6%, plus the 3.8% top Medicare payroll tax rate, plus a roughly 5% state income tax – then federal and state tax revenues would fall by 26 cents for each additional dollar of Social Security taxes collected.

And this estimate is based solely on the reduction in taxable income that occurs as businesses give their employees less take-home buy because of the higher payroll tax.

To be accurate, you also have to consider how workers will react (and rest assured that upper-income taxpayers have plenty of ability to alter the timing, level, and composition of their income). Andrew looks at the potential impact.

…revenue losses occur even if individual earners themselves make no adjustments to their earnings in response to higher tax rates. They’re purely a function of employers adjusting wages to compensate for their payroll tax bills. But if affected earners react to higher tax rates by reducing their earnings, either though less work or by tax avoidance strategies, then net revenue losses would be even higher. A 2010 literature survey by economists Emmanuel Saez, Joel Slemrod, and Seth Giertz found that high earners reduce their earnings by between 0.12% and 0.40% for each 1% increase in their taxes. These estimates imply that total revenues gained by eliminating the Social Security tax max would fall one-third to one-half below the static assumptions that Social Security reforms rely upon. Other credible academic studies find even higher sensitivities of taxable income to tax rates.

For more information, here’s a video I narrated on the issue for the Center for Freedom and Prosperity.

Let’s close on a grim note. If Hillary Clinton goes forward with her plan to bust the wage base cap and change Social Security from an actuarially bankrupt social insurance program into a conventional tax-and-spend redistribution program, she won’t collect very much tax revenue because of the way workers and employers will react.

But from Hillary’s perspective, she won’t care. Under the budget rules governing Washington, she’ll still be able to increase spending (i.e., buy votes) based on how much revenue the Joint Committee on Taxation inaccurately predicts will materialize based on primitive “static scoring” estimates.

In other words, the Laffer Curve will prevail, but – other than the ability to say “I told you so” – proponents of good policy won’t have any reason to be happy.

And when, in the real world, the long-run fiscal and economic outlook weakens because of her misguided policies, Mrs. Clinton will just propose additional tax hikes to deal with the “unexpected” shortfalls. Lather, rinse, repeat, until we become Greece.

Read Full Post »

One interesting feature of this election is that many voters, grappling with the unpalatable choice of Hillary Clinton and Donald Trump, are dealing with the feelings of dismay and despair that libertarians experience almost every election.

All I can say is, “welcome to my world.”

Though I admit our experiences aren’t the same. Ordinary voters presumably are agitated by Hillary’s corruption and Donald’s buffoonery.

As a free-market policy wonk, by contrast, I’m more concerned that both Clinton and Trump are statists. Heck, I’d tolerate some unseemly behavior and sleaze if a politician actually reduced the burden of government (hence, my bizarre ex post facto fondness for Bill Clinton’s presidency).

But since Hillary isn’t Bill and Trump isn’t Reagan, the dark cloud that we’re facing doesn’t have any silver lining.

Unless, of course, you’re a fan of political humor. In which case the 2016 election is Nirvana.

And since I’m a fan (even when libertarians are the intended target), I’m greatly enjoying each and every time that Clinton and Trump are mocked.

And the best of all worlds is when there’s some humor that nails both of them at the same time. So it’s easy to see why I like this bit of satire that combines the controversy over Trump’s undisclosed tax returns and the controversy over Clinton’s illegal (and vulnerable) email server.

Here’s another example of this genre.

Here’s an amusing image showing what might happen if Trump was capable of time travel.

And this anti-Hillary image obviously is satire, though I think it makes a very sensible point about the dangers of interventionism.

Indeed, to be momentarily serious, the moral of the story is that Hillary’s recklessness is likely to create more risk for America, whereas the libertarian approach (illustrated by George Will, Barack Obama (in theory but not practice), and Mark Steyn is based on prudence and a Bastiat-like appreciation for unintended consequences.

Let’s get back to the funny stuff.

Did your parents ever say “America is great because anyone can grow up to be President”? Well, as you can see, that’s not such a good idea.

Last but not least, this cartoon captures the outcome of the election, regardless of which major-party candidate prevails.

Though Libertarians say you can escape this dilemma by choosing with “The Johnson.”

P.S. Since Putin made an appearance in our first item, it reminded me that he featured in a couple of amusing bits of satire (here and here) mocking Obama.

Read Full Post »

Since it’s very likely that Hillary Clinton will be our next President, I’m mentally preparing myself for upcoming fights over her agenda of bigger government and class warfare. But the silver lining to this dark cloud is that I don’t think I’ll be distracted by also having to fight against protectionist policies.

My tiny bit of optimism is based on the fact that hackers at Wikileaks got access to the secret speeches she gave to Wall Street and other corporate bigwigs and we learned that, when she can speak freely with no cameras and outside observers, she believes in “open trade.”

In other words, I was right when I said on TV that she was lying about being in favor of protectionism.

Since I don’t think bureaucrats and politicians should have the power to interfere with our buying decisions, I’m glad Hillary is a secret supporter of free trade.

That’s the good news.

The bad news is that she also is a genuine and sincere supporter of the perpetual motion machine of Keynesian economics (i.e., the theory that more government spending is a form of “stimulus” notwithstanding all the evidence of failure from the spending binges of Obama, Hoover and Roosevelt, and Japan).

Here’s what the Daily Caller is reporting about one of her secret speeches to a corporate audience.

Hillary Clinton argued that expanding food stamps and other safety net programs is essential to fuel economic growth at a speech to General Electric executives, according to an excerpt of the transcript made public by WikiLeaks Friday. “Economic growth will take off when people in the middle feel more secure again and start spending again,” Clinton said in her speech at General Electric’s Global Leadership Meeting in January, 2014. …Giving people income assistance, like the food stamps program, would help the economy because families on food stamps will have more money to spend, Clinton argued.

Wow, this is depressing. If this was an off-the-record speech to the Democratic National Committee, a George Soros group, or some other left-leaning outfit, I’d be tempted to dismiss her remarks as rhetoric.

But GE executives presumably aren’t big fans of income redistribution (other than to themselves, of course). So Hillary’s comments were not a form of pandering. She presumably really believes that Keynesian economics is some sort of elixir, that you actually can boost economic performance by taking money out of the economy’s right pocket and putting it in the economy’s left pocket.

Not only is this wrong, it’s backwards.

  • When the crowd in Washington spends money, much of it is lost to bureaucracy and waste. This may not matter to Keynesians since they just want there to be spending (no joke, Keynes actually did write that  it would be good policy to bury money in the ground so that people would get paid to dig it out). Sensible people, by contrast, understand that it matters for the economy whether money is spent wisely.
  • Moreover, redistribution spending tends to be especially harmful since it subsidizes people for not working or for having low levels of income, which is why research has shown that policies such as Obamacare, jobless benefits, and food stamps are associated with lower levels of employment. In other words, redistribution is bad for economic performance.

The bottom line is that we shouldn’t expect any sort of economic renaissance if Hillary is our next president. Just another four years of the kind of anemic performance we’ve experienced under Obama.

P.S. Click here to learn more about the failure of Keynesian economics.

P.S. If you want both substance and entertainment, here’s the famous video showing the Keynes v. Hayek rap contest, followed by the equally entertaining sequel, which features a boxing match between Keynes and Hayek. And even though it’s not the right time of year, here’s the satirical commercial for Keynesian Christmas carols.

 

Read Full Post »

As part of her collection of class-warfare tax proposals, Hillary Clinton wants a big increase in the death tax.

This is very bad tax policy. In a good system, there shouldn’t be any double taxation of income that is saved and invested, especially since that approach means a smaller capital stock (i.e., less machinery, technology, equipment, tools, etc). And every single economic school of thought – even Marxism and socialism – agrees that this means lower productivity for workers and therefore lower wages.

In a must-read column for the Wall Street Journal, Steven Entin of the Tax Foundation elaborates on why the death tax is pointlessly destructive. He starts by explaining that the tax is unfair.

…estate taxes are always double taxation. Estates are built with savings that have already been taxed as income, or soon will be. …The superrich can afford to give away assets during their lives or hire estate planners to help minimize the tax. …The main victims of the death tax are middle-income savers and small-business owners who die before transferring ownership to their children.

And because the tax reduces investment and wages, the revenue gained from imposing the tax is largely offset by lower income tax and payroll tax receipts.

The estate tax…produces so little revenue, only $19 billion last year. But because the tax has recoil effects, even this revenue is illusory. Because the tax reduces the stock of capital, it lowers the productivity of labor and reduces wages and employment. Much of the burden of the tax is shifted to working people. Research suggests that the estate tax depresses wages and employment enough to actually lower total federal revenue over time.

He then reports on some of the Tax Foundation’s analysis of the good things that happen if the tax is repealed.

…to eliminate the estate tax…would raise GDP by 0.7% over 10 years and create 142,000 full-time equivalent jobs. After-tax incomes for the bottom four-fifths of Americans would rise by 0.6% to 0.7%, mainly due to wage growth. …Revenue losses in the first six years would be almost entirely offset by gains later in the decade, with more gains thereafter. Both the public and the government would be net winners.

But he also warns of the bad things that will happen if Hillary’s class-warfare scheme is enacted.

Mrs. Clinton plans to lower the exempt amount to $3.5 million for estates and $1 million for gifts. She would raise the top rate to 45% for assets over $3.5 million, with further increases up to 65% for individual estates above $500 million. …Mrs. Clinton’s plan would lower GDP by 1% over 10 years and cost 194,000 full-time equivalent jobs. After-tax incomes for the bottom four-fifths of Americans would fall by 0.9% to 1%, due to slower wage growth. …the public and the government would be net losers.

So what’s the bottom line?

The revenue numbers cited here also do not take into account increased efforts to avoid the tax. If these imaginative and highly productive people plan ahead to direct their assets to causes they deem worthy, rather than cede their wealth by default to the government, Washington will not see a dime from an estate-tax increase. …Mrs. Clinton’s plan would not so much redistribute wealth as destroy it. Everyone would lose except estate lawyers and life insurers.

Over the years, I’ve shared other research on the death tax, including a recent column on Hillary’s grave-robber plan, as well as my own modest efforts to impact the overall debate in print and on TV.

But my favorite bit of research on the death tax comes from Australia, where repeal of the tax created a natural experiment and scholars found that death rates were affected as successful people lived longer so they could protect family money from the tax collector.

Now there’s research from another natural experiment.

An economist from the University of Chicago produced a study examining a policy change in Greece to determine what happens when taxes are reduced on the transfer of assets. Here’s a bit about her methodology.

I exploit a 2002 tax reform in Greece that reduced succession tax rates for transfers of limited liability companies to family members from 20% to less than 2.4%. …In the quasi-experimental setting made possible by the tax policy change, I employ two different methodologies to measure the effect of this policy change on investment. …by comparing the two groups before and after the tax reform, the analysis disentangles the effect of the identity of the new owner (family or unrelated) from the effect of the succession tax.

And here are her results. As you can see, there’s a notable negative impact on investment.

…estimates reveal a negative effect of transfer taxes on post-succession investment for firms that are transferred within the family. In the presence of higher succession taxes, investment drops from 17.6% of property, plant, and equipment (PPE) the three years before succession to 9.7% of PPE the two years after. This impact of succession taxes on investment is economically large: the implied fall in the investment ratio (0.079) is approximately 40% of the pre-transition level of investment. For those firms, successions are also associated with a depletion of cash reserves, a decline in profitability, and slow sales growth. Note that to the extent that entrepreneurs can plan ahead for the succession and the related tax liability, the estimates I report in the paper provide an underestimate of the true effect of succession taxes.

Even academics who seem to support the death tax for ideological reasons admit that it undermines economic performance, as seen in this study published by the National Bureau of Economic Research.

…aggregate capital and income go up as the estate tax is lowered. When the labor income tax is used to balance the government budget constraints, for given prices, reducing estate taxation does not reduce the rate of return to savings for anyone in the population and still increases the return to leaving a bequest… As a result, aggregate capital goes up a bit more…and so does aggregate output.

By the way, the economists who produced this study constrained their analysis by assuming other taxes would have to be increased to compensate for any reduction in the death tax. To my knowledge, there’s not a single lawmaker who wants to raise other taxes while reducing or eliminating the tax. As such, the results in the above study almost certainly understate the economic benefits of reform.

If you don’t like reading academic studies and dealing with equations and jargon, here’s what you really need to know.

  • Rich people aren’t idiots, or at least the tax advisors they have aren’t idiots.
  • Those upper-income taxpayers have tremendous ability to manage their finance.
  • Rich people (and their smart advisors) figure out how to protect themselves from tax.
  • The death tax is a voluntary tax it can be avoided by people with substantial assets.
  • But the various means of avoidance all tend to result in a less dynamic economy.

In other words, when politicians shoot at rich taxpayers, the rich taxpayers manage to dodge much of the incoming fire, but ordinary people like you and me suffer collateral damage.

Let’s close by shifting from economics to morality.

The death tax is odious in part because it is a pure (in a bad sense) form of double taxation, but it also is bad because the government shouldn’t be imposing double taxation simply because someone dies.

Actually, let’s add one more wrinkle to the discussion. If it’s immoral to impose tax simply because of a death, then it’s doubly immoral to impose such taxes while simultaneously (and hypocritically) taking steps to dodge the tax.

Which is a good description of Hillary’s behavior, as reported by the Washington Examiner.

Bill and Hillary, like most millionaires whose wealth is mostly in housing and liquid assets, have engaged in sophisticated estate planning to avoid the death tax. …the Clintons placed their Chappaqua home — the one that housed the secret servers Hillary used to evade transparency laws — into two separate trusts. For complex reasons, this protects Chelsea from having to pay the estate tax when she inherits the house. …The Clintons also hold five life insurance policies, worth somewhere around $2 million. This is “designed to transfer assets outside of the estate,” one estate planner told Time. Life insurance payouts are generally exempt from death taxes.

Oh, and you probably won’t be surprised to learn that Hillary has close ties to the special interest cronyists who profit from the death tax.

The death tax brings in a paltry sum for Uncle Sam, but it provides a windfall for a couple of tiny segments of the economy: estate planners, and well-funded investors who buy out the family businesses threatened by the death tax. Jeff Ricchetti is a longtime Clinton confidant, a revolving-door corporate lobbyist on K Street, and a donor to all of Hillary Clinton’s campaigns. …Jeff has spent two decades lobbying to preserve and expand the death tax. In 1999, When Jeff cashed out of the Clinton administration, he joined the Podesta Group, co-founded by Clinton’s current campaign manager John Podesta. One client there: the American Council of Life Insurers, where Ricchetti lobbied in favor of taxing inheritances. …Life insurers, such as the members of ACLI and AALU, sell estate-planning products that could become worthless — or at least worth less — if parents were simply able to hand the fruits of their life’s work to their children. That’s why in April, TheTrustAdvisor.com ran a piece headlined “Estate Tax Repeal: Has Hillary Become the Estate Planner’s Best Friend?”

I’m shocked, shocked.

By the way, one of the main practitioners of cronyism is Hillary’s political ally, Warren Buffett.

Buffett advocates the death tax because it has been so very good to him over the years. To fully understand the depth of Buffett’s cynicism and self-interest, let’s take a look at how one might avoid paying the death tax. If you’re a wealthy person and want to steer clear of this tax, you have three options: Set up complicated trust arrangements, which mostly serve to enrich lawyers and merely delay and shift a tax that must eventually be paid; arrange for your estate to make tax-deductible contributions to charitable organizations; or plow your wealth into life insurance before you die. By law, when your heirs are paid the life-insurance disbursement, it’s tax-free. It doesn’t take a genius to see how certain industries could make a tidy profit off these death-tax escape hatches. In fact, some of the most ardent opponents of permanent death-tax repeal are (surprise, surprise) estate lawyers (who set up the trusts), charities (who fear their spigots of money turning off), and the life-insurance lobby (which does all it can to preserve its tax loopholes). Buffett has major investments in companies that sell life insurance. The death tax has helped make him rich while it has made other families poor. What’s sad and ironic is that it takes families with the resources of the Buffetts (and the Hiltons and the Kardashians) to set up the trusts and life-insurance schemes that are necessary to avoid paying the death tax.

Once again, I’m shocked, shocked.

P.S. Our death tax is even more punitive that the ones imposed by left-wing hell-holes such as Greece and Venezuela.

Read Full Post »

I’m a policy wonk rather than a political partisan or political prognosticator, so I generally don’t comment on elections. But since I’ve received several emails asking my opinion of the Trump debacle and this is the topic dominating the headlines, I will offer my two cents on the mess.

My first observation is that there are nearly 325 million people in the United States, so it’s rather amazing that neither Republicans nor Democrats could find candidates more appealing than Donald Trump and Hillary Clinton. It’s almost as if Democrats had a secret meeting and decided, “Hey, let’s deliberately lose this election by nominating a corrupt, statist hack.” Which led Republicans to convene their own secret meeting, where they decided, “Two can play at this game. Let’s nominate an empty-suit populist who is famous for being a reality TV huckster.”

And if that is what happened, both the polls and the betting markets indicate that the GOP is more competent at losing (since they are adept at throwing away simple-to-win policy fights, it stands to reason that they’d also be good at fumbling away sure-thing political victories).

But have they thrown away victory in the presidential race? Let’s look at the analysis of Scott Adams, the Dilbert creator who has now become famous as a quasi-pundit because he predicted Trump would get the GOP nomination when the rest of us thought it would never happen.

Here are his 14-points, each followed by my assessment.

1. If this were anyone else, the election would be over. But keep in mind that Trump doesn’t need to outrun the bear. He only needs to outrun his camping buddy. There is still plenty of time for him to dismantle Clinton. If you think things are interesting now, just wait. There is lots more entertainment coming.

Yes, it’s probably true that Hillary could still lose. And, yes, things will probably get more interesting. But my guess, for what it’s worth, is that the additional “entertainment” that we’ll experience will not be favorable to Trump. Don’t be surprised if women come forward to say that Trump coerced them into sex, into abortions, into whatever.

2. This was not a Trump leak. No one would invite this sort of problem into a marriage.

I wasn’t aware that anybody was even speculating that Trump or his people would leak a tape with him bragging about grabbing women’s privates.

3. I assume that publication of this recording was okayed by the Clinton campaign. And if not, the public will assume so anyway. That opens the door for Trump to attack in a proportionate way. No more mister-nice-guy. Gloves are off. Nothing is out of bounds. It is fair to assume that Bill and Hillary are about to experience the worst weeks of their lives.

Trump was being a nice guy up to this point?!? More important, what can he dump on Hillary at this stage that will change minds? People already recognize that she’s corrupt and dishonest. But her sleaze is boring and conventional, and voters probably prefer that to an unconventional and erratic Trump.

4. If nothing new happens between now and election day, Clinton wins. The odds of nothing new happening in that timeframe is exactly zero.

I’m tempted to repeat my response to point #1, but let’s hypothesize about what can happen that might derail Hillary. We now have the alleged transcripts of her speeches to Wall Street and the only revelation of any note is that she’s for free trade (as many of us suspected). But since voters already know she lies, I don’t think this matters. Some folks speculate that the Russians or some other foreign power (or a random hacker) will release top secret emails that she illegally transmitted on her insecure private server. But I suspect most voters already know and accept that she put America’s national security at risk. Or what if we learn that she altered government policy in response to bribe money going to the Clinton Foundation? Again, most voters probably already accept this as a given. Maybe I don’t have a sufficiently vivid imagination, but I just can’t think of a (pro-Trump, anti-Hillary) game changer between now and election day.

5. I assume that 75% of male heads of state, including our own past presidents, are total dogs in their private lives. Like it or not, Trump is normal in that world.

I suspect there’s some truth to this. But those various heads of state didn’t brag about their conquests and advertise their infidelities. To be sure, Trump fans do have a point that he is being held to a tougher standard than Bill Clinton or Ted Kennedy, both of whom allegedly engaged in sexual assaults on women. But Trump isn’t running against Bill Clinton or Ted Kennedy.

6. As fictional mob boss Tony Soprano once said in an argument with his wife, “You knew what you were getting when you married me!” Likewise, Trump’s third wife, Melania, knew what she was getting. It would be naive to assume Trump violated their understanding.

No argument with this. But I also don’t think this point has any political relevance.

7. Another rich, famous, tall, handsome married guy once told me that he can literally make-out and get handsy with any woman he wants, whether she is married or not, and she will be happy about it. I doubted his ridiculous claims until I witnessed it three separate times. So don’t assume the women were unwilling. (Has anyone come forward to complain about Trump?)

Let’s accept, for the sake of argument, that some women are turned on by money and power and that they are amenable to advances by someone like Trump. My response is “so what?” What will matter, for purposes of handicapping the election, is whether any women come forward to say that they didn’t welcome the advances. And it won’t even matter if they’re telling the truth.

8. If the LGBTQ community wants to be a bit more inclusive, I don’t see why “polyamorous alpha male serial kisser” can’t be on the list. If you want to label Trump’s sexual behavior “abnormal” you’re on shaky ground.

This seems very weak. The issue isn’t whether Trump is “abnormal.” I don’t think anyone will be shocked if we learn he’s cheated on all of his wives, including the current one. But if it come out that he actually has grabbed an unwilling woman by the you-know-what, that’s something that could impact voting behavior.

9. Most men don’t talk like Trump. Most women don’t either. But based on my experience, I’m guessing a solid 20% of both genders say and do shockingly offensive things in private. Keep in mind that Billy Bush wasn’t shocked by it.

I know plenty of guys (and even a few gals) who talk like Trump. And since I have a juvenile sense of humor (I used to enjoy hearing Trump as a guest on the Howard Stern show), I confess that I’m amused by what’s now being called “locker-room banter.” But I’ll repeat what I just said. People probably won’t change their votes based on Trump’s rhetoric, but some of them will change their votes if they learn his actions matched his bluster.

10. Most male Hollywood actors support Clinton. Those acting skills will come in handy because starting today they have to play the roles of people who do not talk and act exactly like Trump in private.

Probably true, but does any of that matter for the election? No.

11. I’m adding context to the discussion, not condoning it. Trump is on his own to explain his behavior.

Fair enough.

12. Clinton supporters hated Trump before this latest outrage. Trump supporters already assumed he was like this. Independents probably assumed it too. Before you make assumptions about how this changes the election, see if anyone you know changes their vote because of it. All I have seen so far is people laughing about it.

Perhaps true, but Republican strategists are probably terrified that there will be revelations that Trump crossed the line from mere rhetoric to actual misbehavior.

12. I hereby change my endorsement from Trump to Gary Johnson, just to get out of the blast zone. Others will be “parking” their vote with Johnson the same way. The “shy Trump supporter” demographic just tripled.

Republicans (at least the ones who want Trump to win) are praying and hoping that the “Bradley Effect” is real and that there are lots and lots of voters who will secretly vote for Trump even though they’re telling pollsters otherwise. I’m guessing that there are lots of these people. But probably not “lots and lots,” which is probably what Trump would need to prevail.

13. My prediction of a 98% chance of Trump winning stays the same. Clinton just took the fight to Trump’s home field. None of this was a case of clever strategy or persuasion on Trump’s part. But if the new battleground is spousal fidelity, you have to like Trump’s chances.

Even if the new battleground was spousal fidelity, that doesn’t help Trump since he’s running against Hillary rather than Bill. But I think Adams is wrong. The new battleground is potential abuse of power.

To be sure, Hillary has plenty of vulnerabilities in this regard, most notably with the pay-to-play antics at the Clinton Foundation. But the media doesn’t want to cover that example of corruption and I doubt Trump has the discipline to make her sleaze an issue.

By the way, since Trump is at 20 percent in the betting markets, Mr, Adams has a chance to become very rich. I wonder if he’s putting his money where his mouth is.

However, before dismissing his prediction, it’s worth remembering that he was right about Trump getting the GOP nomination when everyone else (including me) didn’t think is would ever happen.

14. Trump wasn’t running for Pope. He never claimed moral authority. His proposition has been that he’s an asshole (essentially), but we need an asshole to fight ISIS, ignore lobbyists, and beat up Congress. Does it change anything to have confirmation that he is exactly what you thought he was?

A very good point. I bet a big part of Trump’s appeal is that people think he would kick butt in Washington (for what it’s worth, he might disrupt Washington, but I very much doubt that he would shrink Washington).

But let’s stick with the political side of things. I repeat what I’ve already written about the difference between saying coarse things and engaging in actual coarse (and unwelcome) behavior. That is Trump’s bigger vulnerability.

Adams concludes by arguing that “reason is not part of decision-making when it comes to politics” and that none of what’s discussed above will impact voters.

I’m dubious about this claim. Besides, what matters for elections is whether some voters are affected, not whether all of them care about a particular issue. And on that basis, I suspect Trump is heading for defeat. And since we’re a month from the election, here’s my prediction of a comfortable victory for Hillary.

The good news is that Trump’s presumed loss is not a defeat for limited government. In part because he doesn’t believe in small government, but also because Democrats may rue the day Hillary prevailed because of what that implies for the 2018 midterm election and whether that sets the stage for total GOP control in 2020.

Though keep in mind that I’ve made the same argument in the past. Here’s what I wrote back in 2012.

…keeping Obama for an additional four years would be the best way of laying the groundwork for a Reagan-style victory in 2016 with a presumably small-government advocate like Rand Paul, Marco Rubio, or Paul Ryan at the top of the ticket. …my first political decision was to favor Carter over Ford in 1976 in hopes of paving the way for Reagan in 1980.

So maybe the real issue is whether Republicans would be crazy enough to nominate another Trump in 2020 or whether they might actually find another Reagan-style limited-government conservative.

And if this hypothetical poll is any indication, that would be the route to electoral success.

Read Full Post »

Older Posts »

%d bloggers like this: