Not Pro or Anti Business

Holman Jenkins has a piece in the WSJ that is confusing because of missed terminology.  The title is The GOP’s Anti-Business Temptation.  There is a real enough problem but his poor terminology makes it seem like he has missed the point.  An important paragraph goes like this:

Those ads, in turn, recall the Republican corporate vilification campaign of 1996, when downsizing became the central issue in a raucous GOP primary. Any who lived through a strange episode of GOP anti-business fever won’t soon forget it. Pat Buchanan, hurling rhetorical grenades at the Nafta free-trade deal and corporate CEOs, stormed to an unexpected victory in the New Hampshire primary and finished a close second in Iowa.

Most of these issues are about government regulations with Nafta being the most obvious example.  Nafta is not pro-business or anti-business.  We suppose it nets out as being more pro than anti business but the fact of the matter is that reducing (or increasing) taxes and regulations produces business winners and losers.  Reducing those taxes and regulations might be a dominant solution for consumers but it is a mixed blessing for business.

There is a critical temptation for for the GOP.  The left is pro or anti individual businesses depending on circumstances.  The temptation of the GOP is to do the same thing with perhaps a different weighting of circumstances.  Why does the left hate Walmart?  The temptation is for a GOP candidate to be the pro-Walmart candidate.  The road to salvation for the GOP is to be pro-markets rather than pro-Walmart or anybody else.  Walmart will disappoint us eventually.  Markets don’t.  Reduce taxes and regulations and let the markets make allocations.  Markets are smarter than central planners.  And that includes you.

Means Testing Social Security

We support means testing social security because if provides a method to save social security without onerous taxes.  Another way to think of it is that means testing is a fairer deal for those who test out.  That is, “the return on investment” of social security for successful people is very low and often negative.  Testing out mean that you miss the taxes and perhaps the returns.  If you get the choice of higher taxes or testing out, pick test out.

At NRO and Bloomberg Ramesh Ponnuru says

The kind of means-testing Christie is proposing [based on current income] would discourage people from saving for retirement, or working in retirement, when we should be encouraging both. But we can avoid this problem by basing means-testing on lifetime income, which Social Security already uses to calculate benefits.

Ponnuru has a point that using current income is a problem but the problems he suggests don’t seem significant.  Do we think that wealthy individuals will forgo savings to create a $16,667 a month annuity to get a $2,500 a month annuity?  It looks to us like Christie’s proposal to phase out social security from $80,000 to $200,000 range gets the incentives close to right.  Why do we want individuals to work in retirement?  Perhaps Ponnuru is thinking about the marginal cliff for people that work.  The real issue is that we want people to be able to plan the financial issues related to retirement.

Lifetime income has some attractions but it has more shortfalls.  To take an extreme example, what about Mike Tyson?  He has made millions but but gone bankrupt.  Even folks that invest may invest poorly.  Secondly, social security taxes are only levied on certain types of income.  Do you remember John Edwards?

Means testing social security is a great idea.  A phase out process as Christie has proposed is a critical part of means testing.  How to test means is extraordinarily difficult.  A single test might not be sufficient.  The best system would not require repayments of social security.

Bogus Statistics Day Two

William Galston does the 77%ers one better in today’s WSJ.  He says that Obama had three challenges

The first, and most immediate, was to prevent the financial crisis from morphing into a global meltdown…  [The] second task was to halt, and then reverse, a tidal wave of job losses….  [The] third challenge—to reshape economic growth so that all working Americans and their families can share in its fruits.

You’d think the answers would be (1) he stayed the course, (2) he has been a failure, (3) did he intend to make economic growth slower?  If so it has been a success.

On number two we see the bogus statistic of the unemployment rate.  As everyone knows and Galston admits, labor participation has dropped.  Even by the unemployment rate, progress has been extraordinarily slow.  In addition, the successes have been from fracking and Texas.  A more honest evaluation would be that the administration has been unable to restrain the the areas that have led to job growth.

We fear that the administration’s failure in economic growth will be translated into Galston’s third challenge in the upcoming election.  Growth is the issue.  The allocation of it to certain segments is beyond the crude instruments the federal government has.  There is also a need for less bogus statistics here.  We will be retiring shortly.  Our taxable income will go down but our disposable income will go up.  How?  No longer will 15-20% go to FICA and retirement.  As the population ages and transfer payments increase it is a challenge to find comparable numbers.  Taxable income is not useful unless modified in some way and may never lead to a useful number.  Caveat emptor.

Bogus Statistics Day

Mark Perry has a nice suggestion for replacing “Equal Pay Day” with Bogus Statistic Day.  If you don’t know why read his other post that goes into more details.  It meshes nicely with Bret Stephens and the Liberal Way of Lying.  Stephens gives the Clintons credit for pioneering the brazen lie to allegedly serve some higher purpose.  It is hard to think of a lie more brazen than “Equal Pay Day” and there is some allegedly higher purpose of helping women.  A slightly less dishonest higher purpose might be to provide women with victimhood.  It would be a step closer to the truth to say that the higher purpose is to generate political support for anti-market solutions.

We might quibble that Stalin and others really pioneered the brazen lie but we understand that Stalin’s control over the press was different the left’s control of the press in the present day.  On the other hand, Stalin didn’t control Walter Duranty so perhaps Stalin should get some credit.  And, of course, Stalin was a liberal.

Not Watching

If we would ever watch a college basketball game it would be tonight.  It is the national championship.  We are an alum of one of the schools.  One of the players is a local kid.  One of the coaches has a D-III background that we hold near and dear and that we have seen in action.

All the partials are positive but we still can’t do it.  We are already upset with the refs.  We don’t need more.

On the plus side, Arsenal won on Saturday and the baseball season opens today.  Go BoSox.