http://online.wsj.com/article/SB123655553728965955.html#mod=todays_us_opinion
This piece by Obama (and former Clinton ) economic advisor Tyson is flawed on so many levels, I hardly know where to start, but I will try with two points.
First, this is just an amazingly shallow "puff piece" by another Obama cheerleader. She tells us over and over how lucky we are to have "the one" leading us right now. You can almost see her getting weak-kneed (Chris Matthews-like) at the thought of Obama.
Second, her main argument is that Obama's proposed tax rates are similar to those in the Reagan or early Bush years, so what's the big deal? Ignoring the accuracy of this (given bracket creep and nominal income levels), she is referring to absolute rates and completely ignores the direction of the change. Common sense tells us (and research has shown) that direction matters - an increase in the marginal rate to 36% from a lower rate will reduce incentives to work, invest and take risks, while a decrease to 36% from a higher rate will increase the incentives. As a highly educated and accomplished economist, Tyson knows this, but she instead tries to confuse us with lots of numbers that miss the point.
For some government (SBA)-sponsored research on the effects of tax rate changes on entreneurship, see http://www.smallbusinessnotes.com/aboutsb/rs252.html
Saturday, March 14, 2009
WSJ Letter - March 3, 2009
Congressional outrage over the Northern Trust Open is a great example of the pernicious effects of coercive government intervention in the private sector.
Northern Trust, one of the healthiest of the major banks, did not need or request government funds, but agreed to take a relatively small sum ($1.6 billion) along with all major banks as part of Treasury's arm twisting. Its thanks for playing ball is to be lambasted by John Kerry, Barney Frank and others for continuing with multi-year contractual commitments to the event and related charities, and with longstanding client plans.
The lesson here is that government "help" always comes with strings attached. My guess is that Northern Trust regrets its decision to play ball and would love to pay the funds back right now. Unfortunately, unlike most of the home mortgages that Fannie Mae, Freddie Mac and their enablers in Congress encouraged, this loan comes with a hefty prepayment penalty, so it would be expensive to do so. No wonder a number of governors are thinking twice about accepting "help" from Washington.
Paul S. Detlefs
Glenview, Ill.
Northern Trust, one of the healthiest of the major banks, did not need or request government funds, but agreed to take a relatively small sum ($1.6 billion) along with all major banks as part of Treasury's arm twisting. Its thanks for playing ball is to be lambasted by John Kerry, Barney Frank and others for continuing with multi-year contractual commitments to the event and related charities, and with longstanding client plans.
The lesson here is that government "help" always comes with strings attached. My guess is that Northern Trust regrets its decision to play ball and would love to pay the funds back right now. Unfortunately, unlike most of the home mortgages that Fannie Mae, Freddie Mac and their enablers in Congress encouraged, this loan comes with a hefty prepayment penalty, so it would be expensive to do so. No wonder a number of governors are thinking twice about accepting "help" from Washington.
Paul S. Detlefs
Glenview, Ill.
My New Blog
One of my favorite things to do is to read the OpEd pages of the Wall Street Journal. After getting a Letter to the Editor published on March 3, 2009(http://online.wsj.com/article/SB123604724174015715.html#mod=todays_us_opinion), I decided I would create this blog to comment on WSJ OpEd pieces. I hope you will read it and join the discussion.
Paul Detlefs
Paul Detlefs
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