Category Current Affairs

A common sense idea about “tax holidays”

We appear to be on the verge of a deal to raise the debt ceiling, and there seems to be a chance that it’ll contain some things that will horrify many working people and most Democrats.  One of these is a “tax repatriation holiday,” in which corporations who have profits “stashed” overseas, can bring those profits back into the U.S. tax free.

In the last few days, I’ve had conversations with conservatives, and I think there’s a compromise position that appeals to both sides, appeals to patriotism, but “gets something in exchange” for the tax holiday.  Which would be a good thing, because despite the rhetoric, we all know that American companies are not going to automatically turn around and use the profits to hire Americans.

The reason we know this is that they have plenty of profits onshore, and they haven’t used those profits to hire many people, either.  For a simple reason — the economy lacks sufficient demand to require new hiring.  This has been exhaustively covered elsewhere, so I won’t bore you by repeating the evidence.

So, if we want jobs in exchange for a tax repatriation holiday, here’s how we do it.

Under a program which automatically sunsets (say, 5 years, but that’s negotiable), American companies are allowed to repatriate profits tax-free, for each new job created in the United States.  In order to create incentives for full-time jobs, capable of supporting a wage earner and their family:

  1. For each new job created, a company would be allowed to repatriate a multiple (M) of the fully burdened cost of the employee.  “Fully burdened” means wages and benefits — the total cost of having someone on staff.
  2. Each job would be eligible for the repatriation credit in each year the program existed, perhaps at a declining modifier.  This creates incentives to keep the jobs created, and not lay them off on Day 366.
  3. Attaching the credit to the fully burdened cost, rather than the salary alone, creates incentives for companies to create full-time jobs that carry benefits, which are essential to ensuring that jobs can support families.  Indeed, the better the benefits a company provides, the more profits it can repatriate.
  4. Also, using the fully burdened cost allows the plan to work easily in those industries with union contracts, since it does not specify anything about the structure of compensation.

There are obviously details that need to be worked out.  What is the multiplier?  How long does the program or credit last?  Should we simply keep a program like this in perpetuity as a means of allowing global trade to be “open” but still incentivize domestic job creation?  Should the repatriation by completely tax-free in year one, and at a steep discount off normal tax rates in future years?

The main outlines sound fair, and even patriotic.  And it’s a mix of liberal and conservative ideas.  From my initial discussions with folks, the idea seems to appeal to both sides, and sounds “fair” both to companies and to the country.

Kick it around a bit, share it with friends, and tell your Congressperson about it.

Open Letter to Democrats Who Threaten a Boycott Vote in November

Fellow Democrats:

I’m increasingly disturbed by reports (or perhaps merely polls) that some Democrats will “boycott” the general election, or even vote for John McCain, if their preferred candidate doesn’t win the Democratic nomination.

After nearly 8 long years of the Bush White House, scandals and wars and torture, after the twisting of the meaning of “executive power” and constitutional rights, after the trashing of America’s image to its allies and the world….after all of that, are you seriously ready to vote for “a third Bush term with a different face” simply because your favored candidate ends up not getting the nomination?

If you can really look at the last 8 years, and still decide to throw your vote away or vote for McCain in order to protest not getting your favorite nominee, then shame on you.

As I’ve said previously, both here and to many friends, I’m supporting Barack Obama. Perhaps not surprising, given my demographics. But as I’ve also said, I will happily vote for either Hillary or Barack in the general election. We’re in the middle of a particularly protracted and hard-fought primary battle. And the reason why it’s hard-fought and protracted is that — surprisingly — the Democrats actually fielded two viable candidates this time!

We need to recall that the number of viable candidates for President we typically field is somewhere between ZERO and one. If we’re damned lucky it’s been one per election. In my whole lifetime, it’s often it’s been closer to zero.

So two strong candidates is an embarrassment of riches, and we ought to stop the incendiary language and threats of boycotts. First of all, there’s another six long months for all of us Democrats, regardless of who we support now, to really get to know John McCain and our chosen nominee, whomever it turns out to be. And are you really going to say, right now, that you’re willing to irretrievably throw your vote to McCain, before you know what we’re all going to find out once the general election campaign begins in earnest?

Frankly I don’t buy it. I think you’ll reconsider once the difficulty of this primary season fades into the “swift-boating” and right-wing media blitz to come. I think you’ll come home to the party and support our chosen candidate, whomever it turns out to be. And yes, I know it’s difficult to read my references to “whomever” it turns out to be and not think that I’m simply gloating over Obama’s perceived chances of victory. But I really mean it — whomever our nominee is, has my support, and my vote.

And if some of you choose to make good on your threat and abandon our nominee — then I ask of you one simple thing. Look back at the last 8 years, in detail. Look at the run-up to Iraq, at Abu Ghraib, at Guantanamo Bay, at the torture memos, the attitude to constitutional rights, the Supreme Court nominees, at Valerie Plame and the politicization of intelligence, at the secret energy committee we still don’t know much about….look at the last 8 years as a whole, and know for certain that if you make good on your threat then you’re voting for more of the same, and that when it gets even worse because of all the precedents set by the Bush Administration, that you have only yourself to blame.

But I don’t think you’ll throw your vote away. I think that no matter what happens in the primaries, Democrats on both sides of the nomination fight cannot, and will not, look at the last 8 years and decide to — in effect — vote for more of the same.

That’s why I think it’s going to work out, why the party will remain unified, and why we’ll all rally around whichever candidate soon emerges as the nominee. I hope I’m right.

Why I’m Caucusing for Obama

I’ve been mostly silent here on the subject of politics for awhile. There are any number of reasons for this, mostly practical — time, and other priorities. But at least part of my reticence comes from a feeling, in retrospect, like I’ve been holding my breath in anticipation. Not necessarily over the Democrats’ chances this year; I think they’re good (but definitely not a lock, now that McCain is the defacto nominee).

I’ve been holding my breath, I think, hoping that the “practicalities of winning” don’t overwhelm this election far too early. Ever since a mostly-unknown Barack Obama stood up in Boston at the 2004 Democratic National Convention and delivered the most stunning political speech of my lifetime (I’m too young for JFK), there’s been the possibility of idealism this time around.

Politics, at least in my adulthood, has been a grim, pragmatic affair, split by dry-as-dust tinkering in the boiler room of the Great Society welfare state for Democrats, and rigid adherence to a set of litmus tests among Republicans aimed at enforcing ideological purity on tax cuts, guns, and abortion. Politics has been thoroughly computerized, mapped, analyzed like baseball box scores and run by experts on polling, advertising, demographics, and mass fundraising. In other words, it’s a gigantic commercial ecosystem, and both sides increasingly treat it that way.

Obama has seemed, since his declaration became all but inevitable last year, like our generation’s best hope for short-circuiting the wiring of the increasingly robotic Body Politic, and perhaps — even if in small ways — re-envisioning the rules of the game. Perhaps even re-imagining them in ways which cross-cut, and thus defuse, the power of our current definitions of “red” and “blue.”

Naturally, Obama’s relative youth has laid him open, on both sides of the aisle, to those who wonder about his toughness, his experience, his ability to win. Once the primary campaigning got seriously underway, moreover, it has seemed like Obama hasn’t lived up to his 2004 performance. Early debates showed him quiet, almost deferential, and he left us underwhelmed. Polls showed Clinton with an early and massive lead, and one had to wonder, as recently as the holidays, whether it truly was the case that Obama needed more time and experience before running. A series of fairly lackluster press events and appearances have done little to change that impression.

I have to admit that despite never wanting anyone else as nominee, I have fallen prey to all of these species of doubt and skepticism, and probably a few others.

No longer. I don’t know whether Obama will make it and become our nominee, but I think it’s very possible. Nothing magical has happened, except for one thing: he’s made it thus far, all the way through Super Tuesday, and his momentum does seem to be building.

But the uphill climb is seeming more and more like a social movement, and less like a political campaign. Obama’s message of change is largely in the eye of the beholder, but it resonates precisely because much of the voter base today has only experienced the type of politics I described above. We want something more. We’re all slightly cynical about the ability of politics and government to change anything for the better; some of us are much more than slightly cynical. In part, our generation’s growing flirtation with libertarian economics and even politics stems from this disillusionment with government.

Some of that disillusionment is quite proper; we are the inheritors of a New Deal and Great Society that turned out to have noble goals but often methods that were flawed, either in the short or long terms. We are also the inheritors of the social world created when the Supreme Court short-circuited a slowly developing social consensus, as they did with Roe v. Wade, and handed a minority of the nation a rallying cry that would drive judicial nomination and set much of the political landscape for a generation.

That landscape now seems frozen and unalterable. Acquiescence in, and intimate knowledge of, this landscape, is now the mark of a “serious” politician or staffer. An entire industry of political staffers, pollsters, lobbyists, advisors, and of course politicians have a vested interest in that landscape, since knowledge of it is crucial to their employability or electability.

Obama may or may not be serious about changing that landscape, and even if he is successful in beating the odds and securing the nomination, as well as winning the general election, he may only succeed in making small alterations. But the chance — just the chance — that we may see something other than the politics of “culture war,” or the politics of “triangulation” — both manifestations of a politics of cynicism — during our lifetime, makes it well worth supporting his campaign.

We deserve something more from our collective efforts at self-government, and although we might not get it during the next President’s term, a social movement starts somewhere, somehow. Social changes always start out as small, seemingly fragile things, laughed at by the “grownups” who know “how the world works” and label anything but the status quo as “impractical” or simply sheer nonsense. In retrospect, of course, social changes always seem inevitable, when observed through the lens of history, growing seemingly logically out of preceding conditions given our knowledge of the outcome.

In the hazy middle, when those who laughed or ignored it in its early stages are caught short, and forced by the size of the crowds or vote counts to wonder whether a movement or change should be taken seriously, is the crucial moment. The moment when growth could feed on itself, or fizzle out. A moment when a little extra support and encouragement could make all the difference to whether a social movement succeeds in changing the way we think, and act.

That’s why I’m supporting Barack Obama, with a vote on my primary ballot, at the caucuses tomorrow, with donations, and hopefully on November’s ballot. And it’s why I hope you will as well.

Carl Sagan and the “High-Water Mark”

San Francisco in the middle sixties was a very special time and place to be a part of. Maybe it meant something. Maybe not, in the long run, but no explanation, no mix of words or music or memories can touch that sense of knowing that you were there and alive in that corner of time and the world….There was a fantastic universal sense that whatever we were doing was right, that we were winning. And that, I think, was the handle – that sense of inevitable victory over the forces of Old and Evil. Not in any mean or military sense; we didn’t need that. Our energy would simply prevail. There was no point in fighting – on our side or theirs. We had all the momentum; we were riding the crest of a high and beautiful wave. So now, less than five years later, you can go up on a steep hill in Las Vegas and look West, and with the right kind of eyes you can almost see the high-water mark – the place where the wave finally broke and rolled back.

Hunter S. Thompson, “Fear and Loathing in Las Vegas

Today is the eleventh anniversary of Carl Sagan’s passing, and like last year many people are writing today to commemorate Sagan and contribute to the second annual Carl Sagan Blog-a-Thon. This is the first of several from me, and one that I’ve been thinking about for awhile.

Not too long ago a friend asked why I still was enamored of the old Cosmos episodes, and periodically went back to watch them. I had to think about it a great deal, because ultimately my friend was right: they’re outdated, and even in their depiction of history are occasionally inaccurate. I keep coming back to an answer, however, which makes me think about Hunter S. Thompson and the quote above.

At least for me, Carl Sagan and his work with Cosmos and planetary exploration represent the “high-water mark” for American scientific culture. Cosmos is redolent with the sense of knowing that we lived in a time when science and democracy and rationalism were winning out over superstition and fear. As Thompson says, not in any military sense, but simply that a particular sensibility would ultimately prevail.

It has not. Not long after Sagan completed the Cosmos series, the Moral Majority (and its descendants, the modern Religious Right) became a major force in American politics, and so-called “postmodernism” became a major force in American scholarship. Today, less than 30 years later, the prestige of science and rationalism are at their lowest in my lifetime. Watching Cosmos, and reading Sagan’s writings are the equivalent, in my view, of seeing the “high water mark” — the place where the wave of mid-20th century secular rationalism finally broke and rolled back.

This isn’t entirely a bad thing. A bit of skepticism is always a good thing. Feyerabend and Arthur Fine bring to the philosophy of science a needed skepticism about the uniqueness of “scientific method” and most of us now view science as a socially conditioned process. But still one whose essential feature is self-correction across the efforts of many. We may have no solid ground to claim that anything we learn is really true, in any ultimate sense, but Popperian falsification still seems to work: we can know when we’re wrong.

But the skepticism of the postmodern critique of “scientism” has crept into policy-making and politics. The shameless manipulation of science and expert testimony under recent (and especially the current) Administration is shocking, and it’s not clear how to reverse this trend. A whole generation of Americans is growing up without much significant training in math and science, which are increasingly viewed as specialities which it’s OK for most people to skip because they’re “not interested in that sort of thing.”

The elevation of personal choice as the sole arbiter of value is a difficult topic in a capitalist democracy (see Michael Sandel on this topic, among other political philosophers), but one thing is clear: we face choices as a country that virtually require us to understand the issues. And it is far from clear that the electorate does understand the evidence on global warming, or peak oil, or biodiversity, or genetic research, to name just a few topics.

So to some extent, I continue to remember Sagan and watch Cosmos as a reminder of what we need to regain, of what we’ve lost in the past 30 years.

Multiple Patriotisms: Is it Possible For Americans To Unify Behind One Leader?

As we get into the fall season, in addition to the normal rhythms of autumn — back to school, back from vacation, buckling down for the winter — we pass another anniversary of the attacks on 9/11, and get to witness the spectacle of Congress "getting back to work" and the 2008 Presidential race kicking into high gear. 

Frankly, Americans on both sides of the aisle have reasons to dread the latter two events.  With respect to the politically motivated among Americans (however large that population truly is), neither side will actually get anything they want, and much noise and ink will be deployed in trying to convince us otherwise.  One side will not see the US signal a willing end to the Iraq War and an admission that the policy was a mistake, whether deliberate or not — because as is apparent, this is what the "anti-war left" wants.  And the other side will not see a country that "sees the light" and finally agrees unanimously that everything in the last six years is more than justified by the gravity of the threat we face — again, as everybody in the country knows, this is what the "conservative" and traditionalists in this country want.  I leave aside the less salient but still significant aspects of political opposition in this country because, honestly, these are the big issues of the day.  As with Vietnam, the nation today is split over different models of what "patriotism" requires of citizens in our current situation.

Sen. Clinton’s “Baby Bonds” and a Stakeholder Society

While not yet a firm policy proposal, Sen. Hillary Clinton endorsed the notion of giving every child born in America a $5000 “baby bond” account which would accrue until they went to college, thus helping pay for the education necessary to raise a competitive, educated citizenry.

The bashing has already begun by the RNC, who called it an irresponsible idea, requiring “devastating tax hikes on hard-working families” and would “grow the size of government at a massive rate.”

Leaving aside comments about precisely which party has been “growing the size of government” and creating skyrocketing unfunded fiscal liabilities for our country (hint: read the GAO’s GAAP accounting estimates for the federal deficit, rather than the White House’s, if you want to know what the country’s finances under the Bush administration really look like), let’s talk about the merits of the proposal.

The idea is a variant on Anne Alstott and Bruce Ackerman’s proposal in The Stakeholder Society, which argued that our efforts at remedying the effects of income inequality should come on the front end, with children, rather than on the back end, with adults and assistance programs. There are many good reasons for “front-ending” such assistance, including arguments that conservatives and libertarians should be attracted to.

Arguably, adults should be responsible for their actions and life choices, and except for dire circumstances, government and tax dollars should not be spent to remedy poor personal choices. Even Hayek and Friedman argue for assistance in extremity, so I would expect conservatives and libertarians to follow this line of reasoning fairly closely.

Equally, we can all agree that children, prior to achieving independence and some age of majority, are not responsible for their own socio-economic status nor the life choices made by their parents and remoter ancestors. Hence, if we are to ensure that all citizens have equal opportunity (not equal outcomes!), equalizing the starting line status and success probabilities of children is the appropriate way to do it.

This is precisely what Alstott and Ackerman argue in the Stakeholder Society, and point out that $80,000 per child born in the United States would accomplish precisely this — allowing all children the ability to go to any school, commensurate with their intelligence, ambition, and abilities, or to pursue the opening of a small business or training in a trade or specialty.

The $80,000 figure has a fair amount of analysis behind it, and clearly it’s much higher than the $5000 described by Senator Clinton. Perhaps one is more than we can afford, but the smaller figure is also less help than we need to give: $5000 compounded for 18 years at today’s money market rates ain’t a college education by any standard, even in-state tuition at a state university.

But it’s an idea that’s on the right track. Both those who believe both in fighting the effects of income inequality on life chances, and those that believe we need to hold adults responsible for their choices but help children; in other words both principled liberals and principled libertarian conservatives, ought to come together and discuss Clinton’s proposal, and the Alstott-Ackerman research that underlies it, in good faith, and without the duplicitous rhetoric that the RNC pays its spokespeople to shovel out.