Chart of the Day - 4.14.2009

With Tax Day coming up, and astroturf tea parties being organized around the country, a lot of people have been linking to polls showing that most Americans aren't, in fact, actually unhappy with the amount of income tax they have to pay.  Gallup, for example, reports that 61% of Americans think the amount they're paying this year is fair.  Or there's this one, also from Gallup, that asks directly whether the amount you're paying is too high or not:

Not bad!  49% think their income taxes are just fine or even a bit low.  Except for one thing: this chart shows exactly the opposite of what it seems.  Consider this: about 40-50% of Americans pay no federal income tax at all1.  That's zero dollars.  I think we can safely assume that these are the people who think their taxes are about right.  What this means, then, is that virtually every American who pays any income tax at all thinks they're paying too much.  There are various reasons why this might be so (a sense of unfairness regardless of amount paid, a fuzzy sense of how much they're paying in the first place, simple bloody-mindedness, etc.) but overall it's not exactly a testament to our collective willingness to fund the machinery of state.

1Of course, all of them pay other taxes.  There's more to life than just the income tax.  But this question was strictly about federal income tax, and it demonstrates that nearly everyone with a nonzero 1040 payment thinks they're paying too much.

Your Daily Economic Cynicism

Berkeley prof and former Labor Secretary Robert Reich echoes Jim Ridgeway. Both are deeply skeptical about claims that the economy will soon be back on its feet. Here's Reich:

But we're not at the beginning of the end. I'm not even sure we're at the end of the beginning. All of these pieces of upbeat news are connected by one fact: the flood of money the Fed has been releasing into the economy. Of course mortgage rates are declining, mortgage orginations are surging, and people and companies are borrowing more. So much money is sloshing around the economy that its price is bound to drop. And cheap money is bound to induce some borrowing. The real question is whether this means an economic turnaround. The answer is it doesn't...

Some of the big banks will claim to be profitable, but don't bank on it. Neither they nor anyone else knows what their assets are really worth. Besides, the big banks are sitting on over $500 billion over taxpayer equity and loans. Who knows how they're calculating profits? Most importantly, there's still a yawning gap between the economy's productive capacity and what it's now producing, and absolutely nothing will turn the economy around until that gap begins to close.

I don't have the economic expertise to know if all of this is right, but if my choice is between Reich and Larry Kudlow, who boosted the market right until it fell off a cliff and is starting to boost it again (by saying we've already hit bottom, recovery is around the corner, etc.), I know who I'm going to trust.

Waste Not, Want Not

Paul Krugman sez:

President Obama hails the fact that stimulus projects are coming in “ahead of schedule and under budget.” Yay — but boo.

Ahead of schedule is good. Under budget — well, ordinarily that’s a good thing. But the point of the stimulus is to increase spending! So if we don’t spend as much as expected, that’s less stimulus.

Technically, maybe this is right.  But it ignores the political side of things, which in this case is probably more important than a few billion dollars here and there.  Back in the 30s, the WPA struggled endlessly with attacks on "wastefulness," and those attacks were instrumental in keeping spending below the level it otherwise could have been.  Filling up bottles with money and paying people to dig them up may have been a nice metaphor for Keynes, but that's all it was: a metaphor.  In the real world, if we want to maintain public support for stimulus spending, it has to be seen as fair, efficient, and well managed.  Obama is playing this exactly right.

 

Unions and Inequality

The Employee Free Choice Act would make it easier for workers to organize new unions.  This would probably increase unionization in the United States, and unsurprisingly, corporate America is fighting EFCA like a pack of crazed weasels.  But today Lane Kenworthy points out something that's also been in the back of my mind during this whole debate: just how big a deal is EFCA, anyway?  Why the full court press against it?  Right now, private sector union density in the United States is around 8%, and if I had to guess I'd say that EFCA might — might! — increase that to 10% or so.  Maybe even 11%.  Is that really worth going nuclear over?

Kenworthy's own skepticism is mainly based on the chart on the right.  Sure, America has uniquely unfriendly labor laws these days, but outside of Scandinavia, where union membership is required to remain eligible for unemployment benefits, unionization has been dropping like a stone practically everywhere.  So just how much impact do different regulatory regimes have, anyway?

Not too much, probably, and Kenworthy suggests that the bigger issue isn't unionization per se, but laws that extend union wage agreements throughout an entire industry, even to firms that aren't unionized.  This practice is widespread in Europe but practically unknown here.  Kenworthy:

I would like to see EFCA become law. The ability of workers to bargain with management collectively rather than individually is, in my view, an important element of a just society, and these days the playing field is too heavily tilted in management’s favor. But I doubt EFCA will get us very far in reducing income inequality. Extension of union-management wage settlements would likely have a bigger impact, but at the moment that isn’t even part of the discussion.

And not likely to be, either.  We have a long way to go.

The Los Angeles Times

We were chatting about the LA Times during dinner on Sunday, and it turns out that pretty much everyone in my family wonders how much longer we're going to read it.  The conversation got started when I mentioned that I used to link to LAT stories fairly frequently on the blog, but that I find myself doing this very rarely anymore.  I deal almost exclusively with national and international news here, and in the past the Times frequently covered different stories, or had different takes on the same story, that provided a perspective the other national outlets didn't.  Today, not so much.  It's mostly just routine coverage of the standard set of major events.  You can read the whole paper in a few minutes.  And the op-ed page is so consistently dull that I barely even skim it these days.

What's more, our subscription costs $42 per month.  Marian pays the bills around here, so I hadn't seen a LAT bill for ages, and I was surprised the cost had gotten so high.  I've been reading the Times since I was five, but now I'm beginning to wonder how much longer I'm going to bother paying $500 per year for a paper that's such a shadow of its former self.

There's nothing new here, of course.  It's just part of the decline of American newspapers generally.  But suddenly it feels an awful lot more real around here.

Somali Pirates=Environmental Avengers?

Tuesday's Washington Post features a narrative of how Navy SEAL snipers dispatched three Somali pirates to free Richard Philips, their hostage and captain of the Maersk Alabama. In the hours following the operation, pundits hailed it as a master stroke, a surefire way (pun intended) to convince pirates that American vessels are not to be trifled with. Are they right? Certainly not. Yes, hostage-taking is a no-no and must be dealt with aggressively, but in a desperate and anarchic place like Somalia, it's unlikely that the deaths of three low-level criminals are going to do anything at all to alter the big picture--except, of course, to make it bloodier for everyone involved.

Until now, the motivation of Somali pirates has been clear: they want money. But shooting pirates who hitherto had shown little desire to kill their captives so much as ransom them off will likely change their calculations. Already one pirate leader has said that the next time he takes a US-flagged ship, the crew is as good as dead. That doesn't sound like a man cowering in the face of American power.

Quote of the Day - 4.14.09

From conservative Bernard Goldberg, talking to Sean Hannity about the right's obsessive effort to find fault with Barack Obama's handling of the Somali pirate affair:

"I'm sorry, Sean....but we have to stop going out of our way to find fault with every single thing he does.... If something bad happened here, and thank God it didn't, but if something bad happened here, I guarantee you, I'll tell you who would have been leading the crusade against him: you."

Jeez, even Bernard Goldberg sees this?  Wingers take notice.

Senator Franken, Almost

Yesterday, 161 days after the 2008 elections, Al Franken was declared the winner of the Minnesota Senate race. Former senator Norm Coleman pressed every angle he could in front of a bipartisan three-member election court, and the end result was that Franken's lead grew about 100 votes, leading the court to rule that Franken is indeed the winner and ought to be seated. "Enough is enough," said DNC chair Tim Kaine, who urged Coleman to concede so that Minnesota could have two votes in the Senate. (The GOP has been silent on the ruling.)

Coleman, of course, has no intention of heeding Kaine's advice. He plans on appealing to the Minnesota state supreme court, and to SCOTUS if necessary. As many have pointed out, the longer Coleman ties Franken up in legal challenges, the longer the Senate Democrats have to scrap and hustle to find an extra vote on all of their major priorities.

It's kind of astounding how long Franken has been at this. I sat down with him in spring 2007 in order to write a magazine profile of him and his Senate chances, and at that time he had already spent 18 months attending every political event he could find in small- and medium-sized Minnesota towns (wellll out of the spotlight) in order to slowly built support for his run. No one can accuse him of not doing the legwork on this one. Now he's closer than ever to realizing his dream; while he waits for the final word, maybe he can work on his vocals.

Photo courtesy of flickr user ohad*.

Ethanol or Water: Which One?

Growing and producing ethanol costs a lot more water than anyone realized. Nevertheless we make some 9 billion gallons worth every year in the US. That's 13 to 17 percent of US corn production—with more coming down the pipeline.

But we could be a lot smarter about the process. Based on water use alone, some places grow reasonably cost-effective bioethanol while others produce an absurdly environmentally expensive brew.

Previous studies estimated that a gallon of corn-based bioethanol uses from 263 to 784 gallons of water from the farm to the fuel pump. But a new study assessed irrigation data from 41 states and found it's as high as 861 billion gallons of water. And some places cost 2,100 gallons of water to produce one gallon of ethanol.

Bottom line: Colorado, Wyoming, Kansas, Oklahoma, California and New Mexico should not be growing ethanol. In the authors' words: Continued expansion of corn production in these regions is likely to further aggravate expected water shortages there.

Better growing states: Michigan, Wisconsin, Ohio, Indiana, Kentucky. The authors conclude: The time left for improving water consumption is limited… and immediate action needs to be taken in order to prevent a problem shift from energy supply to water sustainability.
 

Coleman's Appeal

From USA Today:

A Minnesota court court has confirmed that Democrat Al Franken won the most votes in his 2008 Senate race against Republican Norm Coleman, The Associated Press reports.

But, as the saying goes, it ain't over til it's over. Coleman already had said he would appeal such a decision to the state Supreme Court. He has 10 days to file.

So here's something to watch for: how long will it take Coleman to file his appeal?  He's known this decision was coming for a long time.  His legal team almost certainly knew the grounds on which he was going to lose.  They've had plenty of time to prepare their argument.  They could probably file it tomorrow if they wanted to.

But do they want to?  If they're genuinely trying to win a Senate seat, they'll file quickly.  After all, the faster they file, the faster Coleman can win the case and return in triumph to Washington.  But if they don't think they can win — if they're merely trying to stretch out a losing argument as long as possible in order to deny Franken his seat — then they'll wait the ten full days.  Which do you think it will be?