• Black Friday Miscellany

    The I405 Bristol Street offramp to South Coast Plaza, 2:01 PM on Friday, November 24, 2017. When these folks finally get off the freeway, they still have half a mile to go before they'll get to the mall.

    I’ve got a bunch of stuff clogging up my browser tabs and RSS reader, and I don’t think I’ll get around to doing full-blown posts about any of them. So here’s a quick dump of interesting stuff that caught my eye over the past couple of days:


    The New York Times reports that Mike Flynn’s lawyers are no longer cooperating with Donald Trump’s lawyers. The Times suggests that this means Flynn has been flipped and may be providing dirt on Trump. As one person “close to the administration” told the Washington Post, it’s a “classic Gambino-style roll-up”—not a phrase one normally associates with a president of the United States. Stay tuned.


    A few days ago David Dayen wrote a piece explaining that Donald Trump can’t unilaterally name a successor when Richard Cordray steps down as director of the CFPB. It turns out that the deputy director automatically takes over. This was interesting, but a bit moot, since Cordray has never appointed a deputy. But today, a few hours before his resignation took effect, he finally did:

    Cordray on Friday appointed the agency’s chief of staff, Leandra English, as the CFPB’s deputy director, establishing her as his successor when he steps down at the end of the day. The move appears designed to thwart any move by President Donald Trump to name another temporary official to head the controversial agency. Trump has been reported to be considering White House Budget Director Mick Mulvaney for the role.

    Dayen thinks this signals an “epic fight” over the position. What happens if Trump appoints someone new, claiming that the Federal Vacancies Reform Act gives him the authority to do so, but English stays on, insisting that she’s the only legitimate director because language in the Dodd-Frank bill overrides FVRA? Pass the popcorn!

    I suspect this is a fight Trump won’t pick, but I guess you never know. The easy alternative, of course, would be for Trump to nominate a replacement who’s moderate enough to get confirmed by the Senate with 60 votes. But I guess that’s such an outlandish idea these days that it’s hardly even worth a hollow laugh.

    UPDATE: That was quick. It looks like Trump decided to pick this fight after all. As of midnight Friday, there are two dueling directors of the CFPB. I imagine this will go to court quickly, possibly directly to the DC Circuit Court as the court of original jurisdiction.


    Via Alex Ward, here’s the most likely reason that there’s suddenly been a lull in North Korean missile tests, and it has nothing to do with Donald Trump’s blathering:

    Until 2012, North Korea never tested missiles during autumn and winter. That changed when Kim Jong-un took over, but not by a lot. They still conduct very few tests in the fourth quarter. The reason comes down to simple bad weather:

    Missile launches require good weather. Even NASA delays rocket launches sometimes because of storms. That poses a problem for North Korea, which suffers from brutally cold and blustery winter weather…..At the same time, North Korea’s harvest season takes place during the last three months of the year….Come winter time, Pyongyang prioritizes food transportation over missile launches.

    The bad news is that missile tests are likely to pick up next year, and very likely to pick up in February, when South Korea is hosting the Winter Olympics.


    Just to remind everyone, there are three separate rules that the Republican tax bill has to conform to:

    1. The Republican budget resolution, which limits the bill to additional deficits of $1.5 trillion over its first ten years (2018-2027).
    2. The Byrd Rule, which mandate additional deficits of zero after ten years (2028 and beyond).
    3. PAYGO, or pay-as-you go, which, when combined with the Budget Control Act, mandates that any new deficits need to be offset with equal spending cuts.

    #1 appears to be pretty well in hand. #2 is still a problem as far as I know, though we haven’t yet seen the latest JCT estimates. And #3 is basically an ICBM headed straight for the Capitol dome: we can all see it coming, but for some reason hardly anyone is talking about it. I don’t quite understand this.

    By the way, all of this could have been avoided if Republicans were willing to work with Democrats. The fact that this sounds so ridiculous is a sign of the times, but the fact is that there’s plenty of corporate tax reform that Democrats would go along with—but only if it’s deficit-neutral, which is the one thing Republicans are dead set against. Their goal is, and always has been, budget-busting tax cuts, not economy-growing tax reform.


    From the deputy Washington editor of the New York Times:

    Oh come on. If Republicans were really that confident, they’d have the entire bill expire in 2027. That would sure make passage a whole lot easier. But they aren’t all that confident, so they had to make a decision: which part would they prefer to jettison if worst comes to worst? And the answer was the middle-class tax cuts.


    It appears that thousandsor maybe millions—of comments submitted to the FCC in favor of repealing net neutrality were fake. New York State Attorney General Eric Schneiderman has been trying to investigate, but apparently the FCC has refused to cooperate. This is very strange. It’s unlikely that these comments had any actual impact on the Republican FCC commissioners, who were all dedicated to repealing net neutrality from the get-go, so why would they be so uninterested in finding out how this happened and who was behind it?


    John Eligon went to Vallejo, California, recently to take a look at one of the most diverse cities in America. “About 30 miles north of Oakland,” he writes, “it is the rare place in the United States where black, white, Asian and Hispanic people not only coexist in nearly equal numbers, but actually connect.”

    In a follow-up piece that promises “behind-the-scenes insights,” he repeats this:

    I found that most people in Vallejo interacted quite comfortably across racial lines and were accepting of one another, more so than in much of the rest of the United States. Several black people told me, for instance, that they did not feel profiled anywhere they went in town, something I certainly do not hear in most other parts of the country to which I travel.

    For some reason, though, this entire “behind the scenes” piece is devoted to Fred Hatfield, an explicitly racist white guy Eligon met in a diner. Hatfield was “very much an exception in Vallejo,” Eligon says, but he was apparently worth a thousand-word spotlight anyway. Why?

    Eligon explains that his piece is really about himself: “Mr. Hatfield’s disparaging remarks about minorities and his quickness to stereotype me underscored a truth about covering race in America as a black man: The story is never far from home.” I’d buy that if his article really was about his experience covering race in America—which would probably be pretty interesting. But it’s not. It’s basically a thousand words about Hatfield.

    I struggle a bit to understand why Hatfield was worth this attention. After all, it’s hardly news that if you look around you’ll find some people willing to be overtly racist to your face. Nor, as Eligon acknowledges, is Hatfield even remotely typical of Vallejo. In the end, then, this piece is just the latest in the tired genre of liberal anthropology: stories about “regular places” that inevitably feature “regular people” saying terrible things. This is understandable if (a) these people are representative and (b) there’s a good reason to profile the place itself, but often it seems to be little more than an excuse to highlight non-college graduates outside of big cities being appalling.

    Maybe I’m missing the point, but surely this genre is old in the tooth? Reporters should describe the world as it is, warts and all, and that means showing us raw racism and stupidity when that’s how the world is. But it doesn’t mean going out of our way to highlight this stuff just because it confirms our liberal pieties.


    Christophe Haubursin reports on experiments in several European cities to improve safety by completely removing road signs:

    That’s thanks to a design concept called “shared space,” where urban planners drastically lessen the presence of traffic lights, signs, and barriers, encouraging all forms of transportation to share the road….The heightened risk forces commuters to remain on high alert as they pass through an intersection, in theory leading to safer travel….After installing shared spaces, Ipswich’s accident rates with injuries fell from 23 over three years to just one per year. Pedestrian injuries at London’s Kensington High Street fell by nearly 60 percent.

    I just spent three weeks living near Kensington High Street, and I didn’t notice any lack of signs or crosswalks. What did I miss? Not much, apparently: it appears that some modest changes were made there starting in 2000, but not so much that it’s surprising I didn’t notice them. Still, it was apparently enough to produce impressive results: for the past decade reporters have been dutifully passing along the news that collisions involving pedestrians, bicycles, and motorcycles dropped by 48 percent in the three years after the project was completed in 2003.

    But there’s a gotcha. First, it turns out that these same collisions dropped by 37 percent everywhere in the borough. Second, it mostly happened before the KHS simplification was carried out:

    Color me confused. The entire borough got safer, obviously for reasons unrelated to road simplication. And it mostly happened between 2000 and 2002, before the traffic simplification was even finished. If Kensington High Street followed the same trend, it mostly benefited from the global changes and has probably seen only modest improvement from the simplification. Unfortunately, there don’t seem to be any studies of KHS more recently than 2005, so who knows?

    In any case, the borough itself says that “although the scheme is often cited as an example of ‘simplification’ (since some barriers and other street furniture were removed) it should properly be considered as a holistic re-design of the area that produced (on average) a simplified space although many features were added as part of the scheme.” And it doesn’t appear to have had a big effect. So it might be best to stop using this as one of the half dozen examples that shows up in every article about traffic simplification.


    The latest hotness in conservative circles is a proposal to create a whole bunch of new judgeships. Back in 2013, when Democrats merely wanted to fill three empty seats on the DC Court of Appeals, conservatives argued that, properly measured, caseloads were down and we really ought to just eliminate the empty seats entirely rather than let President Obama fill them. But now that a Republican is president, guess what? The court system is groaning under the weight of increased caseloads. We need new judges, and we need them now—with “now” defined as prior to November 2018 when Republicans might lose their Senate majority.

    However, the primary author of this proposal, Stephen Calabresi, is pretty frank that although increased caseloads should be the public rationale, it’s really about getting more conservative judges appointed. And don’t call it court packing!

    In fact, it is a court-unpacking plan. It counteracts Democratic court-packing under President Carter and a Democratic Congress in 1978…and it counteracts the partisan effects on the judiciary of Senator Chuck Schumer’s shameful filibustering of lower-court federal judges under the younger President Bush and his abolition of the filibuster of lower-court federal judges under President Obama.

    ….Republicans will have controlled the presidency for 32 of the 52 years between 1969 and 2021. By all rights, Republicans ought to have a three-fifths majority on all the federal courts of appeals. Instead, there is a Democratic majority on almost all of those courts….This is a national scandal of epic proportions, which Congress should and could address by increasing the size of the federal courts of appeals and district courts by 33 percent.

    Really? It’s a “national scandal” that Republicans don’t have the same percentage of judges as they’ve had of presidential years between 1969 and 2021? How about if we rerun this from, say, 1993 to 2016? Let’s see. That gives Democrats 67 percent of the years but, shockingly, only 56 percent of the seats on federal courts of appeals. My goodness.

    This is a dumb game. If you pick the years right, you can get any percentage of Republican or Democratic years you want. (Though, at the very least, you should probably stop at the present instead of using a range that, comically, goes out to 2021.) And the composition of the courts is always weighted more heavily toward the most recent president’s party.

    But why stop there? Democrats won 49 percent of all votes for the Senate in 2016 but won only 35 percent of the open seats. They won 49 percent of the two-party House vote but occupy only 44 percent of the seats. And Hillary Clinton won 51 percent of the two-party presidential vote but Donald Trump is currently occupying the White House. Is this an epic national scandal too?

    And by the way, Calabresi also wants to summarily dump all 250 administrative law judges currently on the books and turn them into trial judges with lifetime tenure too. Pronto.

    I’d call this a sad joke if it weren’t for the fact that sillier things than this have turned into real-life movements thanks to Fox News and talk radio. Luckily, Calabresi seems not to know anything about reconciliation rules, so he suggests that this should all happen as part of the Republican tax bill. I believe the Senate parliamentarian would have something to say about that. Still, as dumb as this is, it’s worth keeping an eye on. After all, I thought Randy Barnett’s invented-from-whole-cloth argument against the individual mandate was silly too, and that came within a hair’s breadth of overturning all of Obamacare.


    What kind of roundup would this be if I didn’t end it with Donald Trump’s latest bit of self-parodic narcissism?

    I feel for him. Cat Fancy called a few weeks ago to say that Hilbert and Hopper were probably going to be named Cats of the Year, but they’d have to be groomed and videoed and photographed and—long story short, I took a pass.¹ It would have interrupted nap time, after all, and they might have lost out to Serwer’s brood anyway. Who needs the grief?

    ¹This joke stolen from Atrios. Used without permission.

  • Friday Cat Blogging – 24 November 2017

    Hilbert had his beauty shot in the leaves a couple of weeks ago, so Hopper gets her chance today. It’s not quite as good as Hilbert’s, but blame the photographer for that, not the cat.

    REVISE AND EXTEND: Actually, the picture of Hilbert is more dramatic than this one, but it’s not better. Hopper has a lovely, feline expression in this shot, doesn’t she?

  • Some Thanksgiving Trump/Defense Fact Checking

    Donald Trump celebrated Thanksgiving by handing out turkey sandwiches and potato chips to the Coast Guard while regaling them with stories of the F-35:

    Donald Trump returned to a favourite subject on Thursday, telling a US coast guard audience the air force was ordering a new plane that was “almost like an invisible fighter”….Trump first startled reporters with talk of an invisible plane in October, when he discussed the F-35 at a military briefing in hurricane-hit Puerto Rico….“That’s an expensive plane you can’t see. As you heard, we cut the price very substantially. Something that other administrations would never have done — that I can tell you.

    ….Trump also told coast guard members of his pride in having increased military spending. “We’re ordering tremendous amounts of new equipment — we’re at $700bn for the military. And, you know, they were cutting back for years. They just kept cutting, cutting, cutting the military. And you got lean, to put it nicely. It was depleted, was the word. And now it’s changing.”

    In case you’re interested, here’s the order history of the F-35 so far:

    As you can see, Trump had no impact on either the price of the F-35 or the order book. The unit price declined steadily for years under both Bush and Obama, and the order quantities have been going up.

    As for defense spending, it’s naturally decreased since the drawdowns in Iraq and Afghanistan. What we’re more interested in is base defense spending excluding war costs. Here it is:

    I dunno. Unless you consider the 2008-10 spike to be the new normal forever, base defense spending is about the same as it was midway through the Bush administration and about 50 percent higher than it was before 9/11. I’m not sure I’d call that “depleted,” but I guess your mileage may vary.

  • My Quasi-Annual Black Friday Post

    According to the retail industry, “Black Friday” is the day when retail profits for the year go from red to black. Are you skeptical that this is really the origin of the term? You should be. After all, the term Black ___day, in other contexts, has always signified something terrible, like a stock market crash or the start of the Blitz. Is it reasonable to think that retailers deliberately chose this phrase to memorialize their biggest day of the year?

    Not really. But to get the real story, we’ll have to trace its origins back in time. Here’s a 1985 article from the Philadelphia Inquirer:

    [Irwin] Greenberg, a 30-year veteran of the retail trade, says it is a Philadelphia expression. “It surely can’t be a merchant’s expression,” he said. A spot check of retailers from across the country suggests that Greenberg might be on to something.

    “I’ve never heard it before,” laughed Carol Sanger, a spokeswoman for Federated Department Stores in Cincinnati…”I have no idea what it means,” said Bill Dombrowski, director of media relations for Carter Hawley Hale Stores Inc. in Los Angeles…From the National Retail Merchants Association, the industry’s trade association in New York, came this terse statement: “Black Friday is not an accepted term in the retail industry…”

    Hmm. So as recently as 1985 it wasn’t in common use nationwide. It was only in common use in Philadelphia. But why? If we go back to 1975, the New York Times informs us that it has something to do with the Army-Navy game. The gist of the story is that crowds used to pour into Philadelphia on the Friday after Thanksgiving to shop, they’d stay over to watch the game on Saturday, and then go home. It was the huge crowds that gave the day its bleak name.

    But how old is the expression? When did it start? If we go back yet another decade we can find a Philly reference as early as 1966. An advertisement that year in the American Philatelist from a stamp shop in Philadelphia starts out: “‘Black Friday’ is the name which the Philadelphia Police Department has given to the Friday following Thanksgiving Day. It is not a term of endearment to them. ‘Black Friday’ officially opens the Christmas shopping season in center city, and it usually brings massive traffic jams and over-crowded sidewalks as the downtown stores are mobbed from opening to closing.”

    But it goes back further than that. A couple of years ago I got an email from a Philadelphia reader who recalled the warnings she got from the older women at Wanamaker’s department store when she worked there in 1971:

    They warned me to be prepared for the hoards of obnoxious brats and their demanding parents that would alight from the banks of elevators onto the eighth floor toy department, all racing to see the latest toys on their way to visit Santa. The feeling of impending doom sticks with me to this day. The experienced old ladies that had worked there for years called it “Black Friday.”

    “For years.” But how many years? Ben Zimmer collects some evidence that the term was already in common use by 1961 (common enough that Philly merchants were trying to change the term to “Big Friday”), and passes along an interview with Joseph Barrett, who recounted his role in popularizing the expression when he worked as a reporter in Philadelphia:

    In 1959, the old Evening Bulletin assigned me to police administration, working out of City Hall. Nathan Kleger was the police reporter who covered Center City for the Bulletin. In the early 1960s, Kleger and I put together a front-page story for Thanksgiving and we appropriated the police term “Black Friday” to describe the terrible traffic conditions. Center City merchants complained loudly to Police Commissioner Albert N. Brown that drawing attention to traffic deterred customers from coming downtown. I was worried that maybe Kleger and I had made a mistake in using such a term, so I went to Chief Inspector Albert Trimmer to get him to verify it.

    So all the evidence points in one direction. The term originated in Philadelphia, probably sometime in the 50s, and wasn’t in common use in the rest of the country until decades later. And it did indeed refer to something unpleasant: the gigantic Army-Navy-post-Thanksgiving day crowds and traffic jams, which both retail workers and police officers dreaded. The retail industry originally loathed the term, and the whole “red to black” fairy tale was tacked on sometime in the 80s by an overcaffeinated flack trying to put lipstick on a pig that had gotten a little too embarrassing for America’s shopkeepers. The first reference that I’ve found to this usage was in 1982, and by the early 90s it had become the official story.

    And today everyone believes it, which is a pretty good demonstration of the power of corporate PR. But now you know the real story behind Black Friday.

  • Happy Thanksgiving!

    As always, Hilbert and Hopper wish you a happy and stress-free Thanksgiving day.

  • Congress Is Hearing From the Teamsters About Driverless Trucks

    Alexis Georgeson/Tesla Motors via ZUMA

    This is sort of fascinating:

    In its race to embrace driverless vehicles, Washington has cleared away regulatory hurdles for auto companies and brushed aside consumer warnings about the risk of crashes and hacking….New Trump administration regulations don’t require industry to submit certain safety assessments, leaving it voluntary. And legislation — already approved in the House and expected to pass in the Senate — strips authority from states to set many of their own safety guidelines.

    ….Lobbying from the Teamsters succeeded in stripping commercial vehicles from the rapidly advancing congressional action. Automated commercial trucks would not get the exemptions to state and many federal rules as robot cars would in the legislation. The concession — heralded as a big victory by the Teamsters — was met with a shrug by many in the automation world. They don’t expect it to slow the arrival of fleets of self-driving trucks on the road.

    I’m inclined to agree that this strategy won’t have much near-term success. The technology will either work or it won’t, and if it does then people are going to use it. Trying to artificially slow it down is a dead end.

    At the same time, what the Teamsters see happening in a few years is something that everyone will see happening in a decade or two. So the fact that they’re bringing it to the attention of Congress now is a very positive development. More people in the political world need to understand how this is likely to play out, and what it means for their constituents. You can read more about it from me here. Or, if you want to hear me talk about it—something you do at your own risk—you can listen to my recent podcast with Carl Etnier here. (Search for the November 23 edition of “Relocalizing Vermont.”)

  • How to Handle Thanksgiving With Your Crazy Relatives

    I’m lucky enough to have a family that’s all in sync politically, which means that Thanksgiving is a fun time for everyone. But lots of families aren’t so lucky: they have that one crazy relative who makes the whole holiday awkward with their constant TV-inspired rants about retrograde politics. So what do you do if you don’t want Thanksgiving dinner to turn into a war zone?

    The main thing to keep in mind is that your crazy SJW niece probably doesn’t share your value system. Research shows that liberals think differently than we do—they care almost exclusively about “fairness” and are unmoved by appeals to loyalty, order, and traditional morals—so arguing on your terms will often just make things worse. She’s a product of both her times and the liberal media, and you need to appeal to her on her terms.

    It’s equally important that you keep your proposals modest. Don’t meet anger with anger. Liberals, especially young ones, are full of fury over politics, and a little sympathy can go a long way. Agree with her that the economy should be doing better and there ought to be more good-paying jobs for new college grads. (Maybe you can even sneak in a pitch for tax cuts!) Don’t get angry over jargon. You had yours when you were a kid too: remember “supply-side economics” and “evil empire”? Keep things mild, and invite her to explain her views in ever more detail. Act interested, and keep asking for more. It’s possible she’s never had to do this in her entire life, and all by itself it might be enough to make her start doubting things she’s believed for years.

    Finally, remember that this is a long-term project. Rome wasn’t built in a day. You may not settle down your crazy niece in a single year, but you might make next year a little better.

    Here are some examples of how you might deal with a few common subjects.

    Race. Liberals are obsessed with race. Unlike you, they weren’t raised to be color blind, and they’re likely to bring up race as the underlying cause of practically everything. Try to make your crazy niece see what a rabbit hole this sends them down. Does she really want to harm Asian-Americans with affirmative action policies? Should well-to-do blacks get more assistance than poor whites? Is she familiar with research showing that illegal immigrants take jobs away from the very poorest Americans? Eventually a light bulb might come on, and she’ll realize that even using her own values, all she’s doing is pitting one “oppressed” group against another.

    Climate change. Because this is a scientific subject, your first instinct will probably be to engage in a torrent of facts and figures. Don’t bother. For most liberals, this is an emotional issue, not a fact-based one. You can tell them all about measurement error in the troposphere, variability in solar forcing, and corruption in the research community, but you won’t make any headway. Your niece is in an epistemic bubble, surrounded by friends and media who have convinced her that “97 percent of scientists agree” that climate change is real. She’s probably never even heard that there is any evidence against climate change, so take this slowly.

    Point out that reducing fossil fuel use hurts the poor more than the rich. Make the case that developing countries shouldn’t be stuck forever in impoverishment just to make privileged liberals in first world countries feel better about themselves. Explain that most of the “scientific” models don’t have good track records, and that even tiny errors can make a huge difference a century down the road. This may or may not make a dent, but you might at least spark a realization that climate change is a complicated subject that’s not as cut and dried as she’s been led to believe.

    Obamacare. Unlike climate change, this is an area where facts and figures might help. Your niece probably has plenty of them at hand, which gives you an opening to throw in a few she might never have heard before if she’s been getting all her news from Rachel Maddow and HuffPo.

    Does she realize that premiums have skyrocketed since Obamacare went into effect? Last year Arizona premiums were up 116 percent and they’re up again this year! Does she know that insurers are fleeing the market, and lots of areas are now down to a single provider? Try to explain what a “death spiral” is, which she might actually be interested in. Liberals love to think of themselves as wonks. Does she know that the Obamacare pool started out older and sicker than anyone projected, and has been getting worse every year? She may be skeptical that “the market” does a better job of running health care than the government, so try to get her to realize that every time the government interferes, it just creates yet another problem to be solved. Even with its faults, maybe the free market is best in the long run after all?

    Guns. This can be an emotional subject. Most liberals have never even handled a gun, let alone fired one, and this often produces unreasoning fear. That’s just human nature: we’re afraid of what we don’t know. The best way to handle this is by showing rather than telling. Don’t push too hard, but offer to introduce her to some of your shooting buddies. Show her one of your hunting rifles and explain how it works. Appeal to her sense of “tolerance” by offering to take her down to the range to fire a few rounds. If she’s going to oppose guns, isn’t it fair that she should know a little more about them?

    Take this a step at a time: introduce her first to few easygoing shooters, not the Second Amendment know-it-alls. (You know the ones I’m talking about!) Start her out with an easy-handling sidearm that won’t scare her off. Point out casually that the ACLU supports gun rights, just like they support freedom of speech and religion.

    Patriotism. This can turn into a shouting match pretty easily. The idea of a callow twenty-something confidently claiming that her country is responsible for the world’s ills is hard to take. But rein it in. Remember that the only war she’s ever known is the Iraq War, and let’s be honest with ourselves: that wasn’t America at its best. But it’s hardly her fault that she didn’t live through any of the struggles that produced the country she lives in.

    Try to introduce her to some history. Talk about the real-life horrors of communism: gulags, famines, and show trials. She probably never learned any of that at her liberal arts college. The wealth of the modern world may seem obvious to her—like water to a fish—so point out that 50 years ago it was far from obvious. It only exists because America persistently defended capitalism and free trade even when it wasn’t always popular. And while every country has its problems to deal with—she’s certain to chime in with something about slavery, and you should just nod your head without getting into it—America really has been a beacon of democracy and anti-fascism ever since World War II.

    And remember: your niece is young! She was brought up in different times. You’re not going to change her mind overnight, but remember what the Bible tells us: A soft answer turneth away wrath, but grievous words stir up anger. So take it easy. Don’t get into shouting matches. A better Thanksgiving dinner for everyone will be your reward.

  • Please Cut the Crap About Red States Subsidizing Blue States

    The New York Times reports that many state governments are concerned that the Republican tax plan will hurt them:

    Of primary concern is the Senate’s plan to repeal the state and local tax deduction….The tax break is claimed by people across the nation, but is more heavily utilized in higher-tax states like Oregon, California, New Jersey and New York. Eliminating the deduction has long been a goal of many Republican lawmakers, who view the tax break as a subsidy that poorer red states provide to richer blue ones that spend heavily on government services.

    This is tiresome as hell. I don’t begrudge the fact that poorer red states tend to receive more in government benefits than they pay in taxes. Nor do I begrudge the fact that it’s mostly richer blue states who fund this state-level social welfare. That’s how things should work. But I do begrudge Republicans weaponizing the tax code against liberals with sanctimonious lies about how red states are subsidizing blue states. Via the Tax Foundation, here’s the truth:

    The biggest takers in the nation are almost all red states. The biggest net givers are unanimously blue states.

    Now, this chart is from a study done in 2005. Although I doubt things have changed a lot since then, it’s unfortunate that the Tax Foundation doesn’t have more recent data. Their website says they are “currently seeking funding to update this study,” but apparently none of their conservative donors are much interested in that. Odd, isn’t it? Maybe George Soros should step up to the plate.

    However, the Tax Foundation does have a recent study that looks at how much state budgets rely on federal aid. Here it is:

    Once again, the top takers are almost all red states, while the most self-reliant states are almost all blue. Any way you slice it, blue states heavily subsidize red states when it comes to federal spending. Can’t we at least be honest about this much?

    NOTE: State colors are taken from here to ensure that I’m not fudging the data.

  • Inflation is Weak, Weak, Weak

    The Wall Street Journal reports today on the most recent meeting of the Federal Reserve. They’re still planning to raise interest rates in December, but “many participants” are worried about weakness in inflation:

    Minutes of the Oct. 31-Nov. 1 meeting, released Wednesday with the usual three-week lag, indicated that officials thought persistently weak inflation could stay below their 2% annual arget for longer than many expected, raising questions about the pace of rate increases next year.

    ….After touching the Fed’s 2% annual target earlier this year, inflation has been weak for seven consecutive months, according to the Fed’s preferred gauge, the Commerce Department’s personal-consumption expenditures price index.

    ….For much of this year, Ms. Yellen and other Fed officials said the shortfall in inflation could be caused by transitory factors, like a drop in pricing for wireless phone plans and subdued growth in health-care prices. But in the weeks since their last meeting, some have questioned how transitory the price weakness may be.

    ….There is also “some hint” that after many years of low inflation, inflation expectations may be drifting down, and “that would be a very undesirable state of affairs,” she said.

    I don’t have anything new to say about this. I’m just reproducing it to revel in the sheer novelty of the writing. Until just a couple of years ago, can you even imagine a front-page Journal article describing 1-2 percent inflation as “weak” six times in less than a thousand words? It would have been low or steady or well-controlled, all of which sound like good things. But never weak, which sounds like a very bad thing.

    And yet, it is bad. Low inflation makes it hard to maintain low interest rates when you need them. If the inflation rate is 1.6 percent, then a zero percent interest rate is effectively -1.6 percent in inflation-adjusted terms. That’s it. That’s as low as you can go. The Fed may think this isn’t a problem right now, but when the next recession hits it will be.

    In theory, a central bank can engineer any inflation rate it wants. In reality, politics makes this asymmetrical. We’re willing to tolerate a recession of almost any size if we need to reduce inflation, but we’re not willing to tolerate money creation of any size if we need to raise inflation. This is perverse, but there you have it.

  • Ron Johnson Is Making an Epic Run For “Greediest Senator” Award

    Bill Clark/Congressional Quarterly/Newscom via ZUMA

    Over at National Review, Jibran Khan reports that several Republican senators are still skeptical about the tax bill:

    Most of the skeptics are concerned about debt. Susan Collins (Maine) questions the inclusion of individual-mandate repeal and the removal of SALT deductions. And Ron Johnson (Wis.) opposes the different treatment of different kinds of business taxes.

    ….Senator Johnson has emphasized the Senate tax bill’s treatment of pass-through businesses as the reason for his opposition to the bill as currently written. Pass-throughs are over 90 percent of American businesses and “generate over half of U.S. business income,” per a 2015 NBER paper. While they would face a lower tax rate under the reforms than they do now, pass-throughs would still face higher taxation than corporations. Johnson, whose family runs such a business, thinks this is unfair.

    I’m an idiot. I wasn’t paying attention to this and vaguely thought that Johnson was taking a principled stand against the reduction in rates on pass-through income. After all, the whole point of pass-through income is that it passes through the business untouched to the owners and becomes personal income that’s taxed at personal rates. It’s absurd that under the Republican tax bill, the CEO of a big corporation has to pay 43.4 percent on her income (the top tax rate of 39.6 percent plus the 3.8 percent Obamacare tax) while the CEO of a pass-through business only has to pay 25-35 percent.

    But no! Johnson is all in favor of this. He’s only griping about the bill because the pass-through tax rate isn’t being lowered even more. He wants it to be set at 20 percent, just like the corporate rate.

    Think about this. Under the Republican bill, a corporate CEO who’s paid $100 will have $56.60 left after taxes. But pass-through business income is taxed at a lower rate that ranges between 25 and 35 percent. Out of that same $100 paycheck, $65-75 is left over. This is the greatest, least defensible gift to the rich in the entire bill, but Johnson thinks it’s still not enough. After all, the guy owns a pass-through business himself and he’s tired of having to pay so much.

    Holy greedballs, Batman. It just never ends, does it?

    UPDATE: I did the math wrong in the initial version of this post. It’s fixed now.