Brexit Again

In looking at Krauthammer, Will, and Kudlow we see a range of opinion over Brexit.  As we predicted, the media is aghast.  To summarize, Krauthammer thinks Northern Ireland and Scotland will leave the United Kingdom.  Will sees the happiness of nationhood and Kudlow thinks that this will lead to second coming of Thatcher.

We see it more with Will.  These are the choices for the British.  We hope the Kingdoms stay together but it is their choice.  We hope it leads to rational economic policies but with Jeremy Corbyn as the leader of Labor there seems to be substantial doubt that the Tories can get it done.  We hope it works out for the best but these are surely their choices.

One thing that Herself, The Donald, and GOP can do to help is repudiate Obama’s threat to move the British to the back of the queue.  It is good for us, good for them, and good for the globe to get free trade started with the United Kingdom.

British Shock The World

We wish we were in Europe yesterday and today.  We were in Europe during another vote, we think it was the Irish rejecting entering the European project but it doesn’t matter.  When the plebs vote the “wrong” way the elites and particularly the press are aghast.  You didn’t have to speak the language that was coming out of the TV to know that something had gone terribly wrong.  We are sure that yesterday would be way up the scale compared to our earlier experience because the polls and even the exit polls suggested that the outcome would be favorable to the elites.

We find joy in anything that brings dismay to the elites but should we rejoice over the British choice?  We support exit but the success of British exit depends upon what happens in the future.  Will the next government continue to support free trade while getting immigration under control?  Labor is led by Jeremy Corbyn.  To call him a loon would be an insult to waterfowl.  Good luck to the next Conservative leader.  It will be an opportunity.

 

Jim Should Have Asked

In the Morning Jolt, Jim Geraghty has a quote on Patrick Murphy, a Democrat candidate for senate in Florida, that he finds damming.  It is not.

Jim DeFade of CBS Miami finds:

Murphy has never held a CPA license in the state of Florida.

Instead, he obtained a license in Colorado. And because the requirements are lower in Colorado, Florida does not accept the license as valid in Florida. As a result, none of the work Murphy did in Florida for Deloitte & Touche was as a CPA.

Murphy is (or was) a CPA.  His license is from Colorado.  Everybody takes the same test under the same conditions.  Some states have more restrictions on taking the exam while some others have more restrictions on obtaining or keeping a license.  Murphy also worked for Deloitte, one of the Big Four accounting firms.  Murphy has a solid accounting background.  Even the comments from his supervisor are less suspicious than Geraghty seems to think.  A partner big firm supervises lots of staff, most of the direct supervision comes from other levels in the firm, and the firm has lots of turnover.  Murphy didn’t make a big impression but he was one of many.

The bottom line is Murphy is a CPA and he worked for a quality firm.  Liberals aren’t the only ones that can show press bias.

If Geraghty had on his conservative hat rather than his partisan one, he might have observed the problem for conservatives.  We want to leave things to the state but we want free trade amongst the states.  When Florida was one of the first to enact restrictions on CPA licensure, it presents a problem for conservatives.  It is likely that Florida acted as it did to keep retirees from practicing in the Sunshine State.  The states have the right to make such restrictions but it presents a challenge for conservatives because we support free trade amongst countries and surely amongst the states.

Mitch and George

George Will has an article at NRO extolling Mitch Daniels.  The headline is the headline, Purdue Has The President America Needs.  Daniels is the president of Purdue and the former governor of Indiana.  We agree that he said nice things to the graduating class of 2016 about work and what not.  He is the anti-Obama.

Well, that is not quite enough.  As you might remember in the recent fight for the GOP nomination, Indiana was the tipping point.  You might also remember that Wisconsin could have been that tipping point but Scott Walker and others stepped up and Cruz won.  The GOP leadership in Indiana sat on their hands.  So yes we liked the recent speech by Mitch Daniels but we were very unimpressed by his actions.

We agree as President of Purdue that there may have been restrictions on his actions.  However, there were costs to Scott Walker too.  Daniels should have found a way to find his voice at that crucial time.

Not A Surprise

Over at WSJ, Professor Steven Horwitz brings to light the behavior we would expect from corporations in disasters.  His concluding paragraph:

As companies engage in peaceful commerce with their friends and neighbors, they begin to inculcate what the economist Deirdre McCloskey calls the “bourgeois virtues,” which go vividly on display when disaster strikes. Many Albertans, as they return to their homes now that the fires have subsided, are glad today that they lived near those supposedly evil oil companies.

It is not a surprise that corporations act like this and the government often doesn’t.  Corporations need to worry about how they are viewed.  It is not true that corporations are perfect at decision making.  It is just true that they have the right incentives while the government has guns.

Social Security

What to do about Social Security.  It seems to have reemerged as the third rail of politics.  As Andrew Biggs at NRO notes, The Bernie is now leading the way for Democrats on Social Security.  That led to Obama recent comments.

Sidebar: It is nice to have company.  Another Andrew, Kleven, thinks Obama is a nincompoop.  We might want to discuss terminology but we basically agree.  We think his comments on Social Security confirm the diagnosis.  End Sidebar.

Obama was quoted by Biggs as follows:

“It’s time we finally made Social Security more generous and increased its benefits so that today’s retirees and future generations get the dignified retirement that they’ve earned,” he said. “And we can start paying for it by asking the wealthiest Americans to contribute a little bit more….”

Biggs header accurately describes this as a fairy tale.  It is a fairy tale because Social Security is broke and it is an awful deal.  One of the problems when Bill and Newt were trying to do a deal on Social Security was the awful returns to all but the low income groups.  Here is a study from that era.

First point: expanding Social Security is forcing high taxes and low returns on individuals, unless of course, you know you will live to 105.  It makes no sense to expand Social Security.  You are doing a disservice to those folks.

Second point: asking the wealthiest Americans to contribute a little bit more does not even close the current gap.  Obviously, it wouldn’t allow for expansion.

Third point: private accounts are a great idea but the transition with the current level of debt is probably unaffordable.  We would need to pay off the current Social Security “clients” without any taxes from the folks in private accounts.  It was a challenge before Obama but it probably can’t be done now.

What we need to do is decide on the purpose of Social Security.  We like the idea assuring some dignity for everyone but not a retirement program for everyone.  We would see a combination of:
Means testing
Some additional taxes
Increased returns for low earners.
To reach this goal.  Under this proposal, you could earn a million dollars every year and spend every red cent and get a bigger Social Security check then a person of modest means that scrimped and saved.

Means testing is a challenge.  The tax concept Gross Income defined as all income from whatever source derived sounds helpful but then we come across except as otherwise provided.  So a person with a billion dollars in tax exempt bonds earning tens of millions has no gross income.  Although Gross Income will work for most folks it won’t work for everyone.  We need an additional test based on Gross Gross Income or assets to work.  We would start phasing in means testing now so the process could be evaluated.

We are in favor of a VAT or carbon tax to fill the void.  We would reduce payroll taxes for low income individuals.  Elsewhere we have given a more detailed tax proposal.  You can find it on the blog.

Free stuff.  We find the idea of helping the low income elderly compelling.  We also find being honest with everyone compelling.  If you say you want all you paid in the fact is it has already been spent.  Even continuing the Ponzi scheme won’t provide a full retirement income for the middle class.  Roughly, in 2016 dollars, we would recommend increasing the payments for folks earning less that $12,000 in retirement, keep them the same for $12,000-$100,000, reduce them for $100,000-$200,000, eliminate them for over $200,000.  This is a rough outline and not a proposal etched in concrete.

We are interested in counter proposals.  What do you want to do and how will you do it?