Someday you might like this song by Jason Molina, Farewell Transmission, but don’t go down his dark path no no

Posted in Music

Why did the South support the Federal income tax and the 16th amendment? because they understood the Progressive movement all too well

Robin Einhorn on tax redistribution to the South in the United States, “Look Away Dixieland: The South And The Federal Income Tax” in Northwestern University Law Review, 2014.

Some facts (and Einhorn has great maps in the paper):

Armed with the power to collect this lucrative tax by the ratification of the Sixteenth Amendment in 1913, the federal government has raised its revenues disproportionately in the North and distributed its spending disproportionately in the South. Strikingly, the tax side of this history has gone all but unremarked in the literature. The outline of the spending story is much more familiar: the huge role that federal spending played in promoting the transformation of the South “from cotton belt to sunbelt,” starting slowly in the 1930s (with, for example, rural electrification), accelerating rapidly during World War II (military bases, weapons contracts), and then ratcheting upward again after 1970. The Social Security and Medicare benefits of migrating retirees have enhanced the pattern more recently, along with disproportionate spending on poverty programs in the South.

How much was the redistribution worth?

In 1916, the first year of published income tax statistics, New York State paid a stunning 45% of the proceeds of the personal income tax. Pennsylvania came in second, paying 10%, and Illinois third at 6%. This result was the point of the Sixteenth Amendment: by exempting income taxation from the apportionment rule that the Constitution specifies for “direct taxes,” the Amendment allowed Congress to levy its taxes in proportion to the distribution of income rather than the distribution of population. More specifically, in regard to New York, the amendment allowed Congress to pull 45% of the income tax from a state with only 11% of the population.

And also expected income tax to replace the “punitive” tariffs that favored the North.

Some snark?

Today, it can seem a paradox, at best, that the federal government redistributes from the states where majorities are tolerant of federal taxation toward the states where they are unremittingly hostile. A century ago, however, the rhetoric was more straightforward. Southern politicians demanded the adoption of the federal income tax because they knew that it would benefit their constituents.

Why did the South, so opposed to Federal “intervention” rush to support the income tax? Because they correctly surmised that “intervention” was over.

But they [southern politicians] did know one thing: that they were living in the Progressive Era. Hayne had not wanted Webster’s railroad in 1830 because it would allow Massachusetts to interfere with slavery in South Carolina. The Progressive Era was different, promising subsidy without interference. Of course Southerners seized this new opportunity.

Posted in Teaching macroeconomics, United States

Who I Am & Why I Am Where I Am by Kaitlyn Aurelia Smith

Not sure why I like this composition so much. pretty simple. Maybe because on my playlist it comes before Up With People by Lampchop. And hard not to like that, so the prelude feels very right.

Posted in Music

Kathryn Schulz in The New Yorker, on WIlliam Kelley, a fantastic short essay

I didn’t know who William Kelley was when I found that book but, like millions of Americans, I knew a term he is credited with first committing to print. “If You’re Woke, You Dig It” read the headline of a 1962 Op-Ed that Kelley published in the New York Times, in which he pointed out that much of what passed for “beatnik” slang (“dig,” “chick,” “cool”) originated with African-Americans.A fiction writer and occasional essayist, Kelley was, himself, notably woke. A half century before the poet Claudia Rankine used her MacArthur “genius” grant to establish an institute partly dedicated to the study of whiteness, Kelley turned his considerable intellect and imagination to the question of what it is like to be white in this country, and what it is like, for all Americans, to live under the conditions of white supremacy—not just the dramatic cross-burning, neo-Nazi manifestations of it common to his time and our own but also the everyday forms endemic to our national culture.

Source: The New Yorker

Posted in Burkina Faso

Damien Hirst documentary on Netflix “Treasures from the Wreck of the Unbelievable”

Sukie and I just stumbled on this, and greatly enjoyed the documentary. Excellent viewing with a kid from 12-16!

‘Treasures from the Wreck of the Unbelievable’. It is the first major solo exhibition dedicated to Damien Hirst in Italy since the 2004 retrospective at the Museo Archeologico Nazionale in Naples (“The Agony and Ecstasy”) and is curated by Elena Geuna, curator of the monographic shows dedicated to Rudolf Stingel (2013) and Sigmar Polke (2016) presented at Palazzo Grassi.The exhibition is displayed across 5,000 square meters of museum space and marks the first time that Palazzo Grassi and Punta della Dogana, the two Venetian venues of the Pinault Collection, are both dedicated to a single artist.Damien Hirst’s most ambitious and complex project to date, ‘Treasures from the Wreck of the Unbelievable’ has been almost ten years in the making. Exceptional in scale and scope, the exhibition tells the story of the ancient wreck of a vast ship, the ‘Unbelievable’ (Apistos in the original Koine Greek), and presents what was discovered of its precious cargo: the impressive collection of Aulus Calidius Amotan – a freed slave better known as Cif Amotan II – which was destined for a temple dedicated to the sun.

Source: Treasures from the Wreck of the Unbelievable – Palazzo Grassi

Posted in Burkina Faso

Sometimes you wish you were an historian (but then again…)

From Robin Einhorn’s review of Gordon Wood’s various books:

If Jefferson had known nearly as much about his society as Wood does, Empire of Liberty is the book he would have written. It is no coincidence that the title is Jefferson’s, a phrase encapsulating his brand of velvet-gloved imperialism. Wood seems to know that there was an iron fist lurking inside, but he identifies with an audience that treasures the national fantasy of egalitarian triumph that Jefferson represents. Like Jefferson, Wood nods to the evil of slavery and the violence of westward expansion. Unlike Jefferson, he realizes that there was something undesirable about the way men treated women. But Wood’s focus remains squarely on the subculture of white men–especially in the North–who energetically pursued their liberty and happiness in the “republicanized” world of postrevolutionary America.

Source: On the Make: Gordon Wood’s Jeffersonia | The Nation

Posted in Burkina Faso

University of Chicago event on macroeconomy and tax reforms… Roundtable Discussion with Austan Goolsbee and Edward Lazear

Notes on Goolsbee and Lazear

Interviewer:  What problems need solving through tax reform

Lazear
growth rate is way too low
growth rate out of recession is low (both recoveries, historical standards)
growth related to productivity and related to wages
so 11:20 focus on growth is “best affect the average american”

Goolsbee
growth is criticall important, and in ong run is only thing that matters
last 20 years of US has had trend break that producitivyt and wages grow together (sometime in the late 1980s)
75% of income distribution wages are not rising
hesitate to buy into premise of corporate tax cutting leading to higher profits which will be passed on to workers … nothing in last two decades says that will work… did same in 2001
argument about growth rates in 1980s leaves out that population growth rate was much higher

Interviewer: but we are at full employment why wages not rising?
Goolsbee does not really answer… repeats again wages and productivity diverging

Lazear – growth and productivity feed into average wages but maybe not median and lower
we have seen big increase in disparity between high-low education
we don’t address that with tax policy… that is a different problem
increase in the values of skill

Goolsbee – lazear views these as separate things, but
1- if have $1.5 trillion to add to debt… should use it to cut to taxes for very group whose income rising? or use it to college financial aid… business corporate cuts are second order effect on growth
2- if think bifurcation is a problem, again why exacerbate through tax changes?

Lazear – taxes not long run solution to inequality… can do things in short run but should not be focus
i think evidence is strong that tax cuts lead to growth – AER Auerbach et al…. if went to pure consumption tax would have very large increase in GDP… Romer&Romer AER… 1% increase in taxes reduces growth
but growth may not translate to lower part of income distribution

Interviewer: But President says this will be good for middle class average… do either of you buy that story? which part?
Goolsbee – nonsense…. anyway, mostly papers say taxes have no big effect… and they should not affect growth rate… tax cuts at top have zero impact…
Lazear – thinks plan is good… reductions in capital taxation. e.g. full expensing. deduct investment immediately forward and backward. all incentives are for new investments.

Goolsbee- in past 25 years profits have been “epically high” and tax rates very low, yet not translated to higher wages… they are taking Poterba-Lazear plan with full expensing permanent, GDP will be higher by 6% in 50 years…. Trump instead put it in for 5 years and then eliminate and just assume that will lead to all growth that permanent planned… making assumptions like that is dangersous.

Lazear – Inequality is largely because of change in technology that favors high skilled… happening everywhere regardless of tax changes

And there I gave up…. good clear discussion!

Posted in Teaching macroeconomics