Some Non-Covid Links

by Don Boudreaux on March 29, 2022

in Books, Crony Capitalism, History, Other People's Money, Regulation, Seen and Unseen, Taxes, Trade, Virginia Political Economy

Samuel Gregg ponders the influence of classical liberalism. A slice:

On the left, illiberalism reigns in the form of cancel culture, wokeness, disdain for the Western civilization from which classical liberalism emerged, the propagation of junk history like the 1619 Project, disinterest in rule of law, and an ongoing desire to use the state to engage in extensive social engineering. Meanwhile on the right, there has been serious regression towards forms of economic interventionism not so different from policies long advocated by the left. Some conservatives also want to use government power in ways that indicate an illiberal impatience with due process and constitutionalism’s checks and balances.

In a way, these conditions represent a return to normalcy. Classical liberalism’s influence has always been uneven during the best of times. One reason for this is classical liberalism’s longstanding difficulty in sustaining the type of mass support that translates into political power in democratic systems.

The Wall Street Journal demystifies California’s high gasoline prices.

Gary Galles explains that “’Buying American’ has long been a protectionist ruse dressed up as patriotism.”

Clifford Thies reports on land ownership by blacks following emancipation. A slice:

Yes, following emancipation, black land ownership increased in the rural South, in some states dramatically. This history was first developed by Robert Higgs in his magnificent work Competition and Coercion: Blacks in the American Economy 1865-1914 (Cambridge, 1977). Higgs examined the pattern in Georgia. Robert Margo examined several other states (but see Higgs’ rejoinder regarding certain details).

The pattern is actually quite general, and not only in this country but in other places where sharecropping emerged. When land is rented via sharecropping (in which rent is paid with a fraction, often one-half, of the crop), the more diligent farmers do well (as do their landlords). These more diligent farmers tend to come to be owners of land (not necessarily the land they had worked as tenant farmers); and, it was not unusual for the pattern to repeat itself from one generation to the next. That is, for the tenant farmers of one generation to become the landlords of the next generation.

Eric Boehm reports on the Buffalo Bills bilking taxpayers.

Peter Suderman describes Biden’s new proposed tax on wealth as “a desperate policy gimmick by a White House struggling with low approval numbers on the economy.” Here’s Suderman’s conclusion:

Biden is willing to make an obvious phony of himself, embracing a policy he knows is punitive, divisive, unworkable, and virtually certain not to pass—and he’s willing to do so simply to get attention. Not only is Biden not a moderate, he is evidently not trustworthy either.

Also unimpressed with Biden’s proposed wealth tax is economist Allison Schrager. A slice:

Textbook economics argues that wealth taxes are the most distortionary and least efficient of all taxes. Governments need to raise revenue somehow, ideally via taxes that are relatively easy to collect and don’t alter behavior too much by, for example, discouraging people from working or investing. It follows that consumption taxes are efficient, since consumption (spending) is easy to observe, and people need to do it. Income taxes have become relatively easy to collect information on, since most employers need to share pay data with the IRS, and they don’t discourage work at low to moderate income levels. But it’s hard to observe wealth: the IRS does not collect information on it, many assets held by rich people are tricky to value (such as fine art), and the value of wealth can be volatile (consider the Bitcoin millionaire). Taxing wealth also encourages people to shift their assets abroad or into difficult-to-value assets, or simply to understate what their wealth is worth. Many European countries have given up taxing wealth, and those that do impose wealth taxes derive only a small share of revenue from them.

But the Biden administration is undeterred. Its Billionaire Minimum Income Tax would force households worth more than $100 million to pay a 20 percent tax on all their income, including unrealized capital gains on at least their liquid assets. For example, if your stock portfolio went up $100,000 last year, you’d pay $20,000 on that increase, whether or not you sold any stock. How the IRS will determine which households are worth $100 million is unclear; the agency does not have the capabilities or manpower to do such a thing. And considering the volatility of markets, on what day would this income be assessed? If you lose money, do you get a credit? Why is it called a “billionaire’s tax” when it applies to millionaires, too? What types of assets will be subject to it? So far, no answers have been given to these questions, likely because no good ones exist.

Randy Holcombe asks if voters make poor choices.

Bryan Caplan gets to the root of ineffective altruism.

Barton Swaim reviews William Novak’s New Democracy. A slice:

That point has been made before, most recently in David Bernstein’s “Rehabilitating Lochner” (2011), and it is a fair one. Conservative jurists differ sharply over whether Lochner was rightly decided. (Antonin Scalia, for example, thought it a dreadful decision, however stupid the law it struck down.) Mr. Novak’s description of the case itself, though, suggests a broader failure to query his own optimistic assumptions about state power. “The New York Bakeshop Act,” he writes, “was a quintessential state police power regulation and progressive reform aimed at ameliorating sanitary and health conditions in fetid bakeries and establishing maximum hours for laborers at a ten-hour day and sixty-hour workweek.” Was it, though? The Bakeshop Act had been backed in the state legislature by large bakeries and their unions as a way to cripple smaller family-owned competitors. The law’s public-safety packaging was strategic, as such regulations so often are.

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