The Conspiracy to Keep You Poor and Stupid is a trademark of Donald L. Luskin

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Republicans and the Populist Temptation
Wall Street Journal
February 9, 2010
Why Taxing Stock Trades Is a Really Bad Idea
Wall Street Journal
January 6, 2010

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Peter Sellers and Peter Bull in ''Dr. Strangelove'' Columbia Pictures, 1964 -- Click to order!

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Donald Luskin."
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The Happy Body
Aniela and Jerzy Gregorek

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Langley Schools Music Project

What I'm watching:
Star Trek

What I'm playing:
Speed Racer

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Donald L. Luskin
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"The Conspiracy to
Keep You Poor and Stupid"
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Donald L. Luskin

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"The road is cleared," said Galt.
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Join us as we discover, document, expose and challenge the bad people, the bad institutions and the bad ideas that stand in the way of wealth creation -- and show you how to fight back!

Saturday, December 09, 2006

DO THIS NOW   It's free. You have no excuse. Just do this now.

Posted by Donald L. Luskin at 8:06 PM | link  

BAD POLITICS, FUNNY PROMO   How come the Left is so much more adept at packaging its messages in engaging ways? Here's one about so-called "net neutrality."

Posted by Donald L. Luskin at 7:34 PM | link  

Friday, December 08, 2006


Thanks to reader David Duval.

Posted by Donald L. Luskin at 7:02 AM | link  

I'M SURE THE FEELING IS MUTUAL   Reuters eagerly covers the story:
European Socialists eager to work with U.S. Democrats

OPORTO, Portugal (Reuters) - European Socialists promised on Thursday to work to rebuild Europe's strategic alliance with the United States now that the Democrats control Congress after last month's elections.

Socialist leaders attending a meeting of the European Socialist Party pledged that with the Democrats on the rise, strong ties could be renewed with the United States after years of cool relations with Republican President George W. Bush.

Howard Dean, chairman of the national committee of the U.S. Democratic Party, is attending the two-day conference together with the leaders of leftist governments of several countries and party leaders from across Europe.

Thanks to reader Tim Daniel.

Posted by Donald L. Luskin at 6:58 AM | link  

Wednesday, December 06, 2006

OUTSTANDING NEWS FOR SPENDING RESTRAINT   Club for Growth-sponsored Jeb Hensarling has been elected the new head of the House's Republican Study Group. Outgoing Group champion Mike Pence had this to say:
"Jeb Hensarling is a friend of freedom like no other. Over the past two years, Jeb has been at the center of every battle where House conservatives made a difference for fiscal discipline and reform. Jeb Hensarling is the right man to lead House conservatives in the 110th Congress.

"For his integrity, his personal courage and his unparalleled devotion to the conservative agenda, I welcome the election of my friend, and freedom's friend, Jeb Hensarling of Texas as the next chairman of the Republican Study Committee."

In other news, on the Senate side, Jim DeMint has been named the new chairman of the Senate Steering Committee, a caucus of conservative senators that includes the majority of the Republican Conference.

If the GOP keeps making smart picks like this, then 2008 is just looking brighter and brighter.

Posted by Donald L. Luskin at 7:21 PM | link  

TALKING SOME SOCIAL SECURITY SENSE   My friends at National Review have stepped in to settle the debate about whether conservatives ought to negoatiate Social Security reform with Democrats with "everything on the table." I find their view sensible and constructive -- because it agrees so much with mine, and stands against the narcissistic dogmatism of Peter Ferrara and Tom Giovanetti.
Two years ago, Bush was so eager to enact personal accounts that he signaled his openness to tax increases to get them. If personal accounts are off the table, the tax increases should be, too. That leaves three possible areas for cooperation.

First, the program could be put on a sound fiscal footing by reducing the future growth of benefits. Republicans will like this proposal better than Democrats, but few Democrats have ruled it out. Second, the government could provide tax credits to help low-income workers begin investing. Democrats have proposed this policy for years, and Republicans have objected. But if Republicans are as interested as they say they are in expanding the investor class — and they should be — they should drop their objections. Third, the taxes that fund Social Security could be made more progressive. There is a cap on the amount of wages that is subject to the payroll tax. That cap could be raised. This is where Democrats want to go, and Republicans have good reasons for resisting: It would increase marginal tax rates for the affected workers quite a bit, and it would not raise much money. But if the cap were not raised much, and the revenues gained were used to fund the tax credits or to lower the payroll-tax rate, Republicans might find their objections dwindling.

Meanwile, here are some fragments of an excellent document from an anonymous source passed on to me by a White House friend, making some of the same points and adding a few notes of urgency:
Some conservative commentators suggest that the current composition of Congress makes any attempt to reach a deal on Social Security impractical, even foolhardy. If Democrats are unwilling to embrace personal accounts financed from payroll taxes, these pundits reason, then it would be best to wait and address the issue when reform-oriented conservatives possess the requisite political control. Although this reasoning is superficially compelling...[t]he same arithmetic that makes current promises unaffordable will soon make amending those promises politically unfeasible.

...Measured as a percentage of the economy, Social Security benefits are scheduled to grow by 47 percent over the 75-year actuarial window. The problem is that 85 percent of this increase is forecast to come within the next 20 years...

In 2005, the President explicitly omitted workers over the age of 55 from any changes proposed to Social Security. Yet the over-55 cohort was the group most opposed to personal accounts (56 percent to 29 percent), and any other changes to the program. Does anyone really believe Congress will have a greater appetite for reform when the share of the putative AARP vote is twice as large as it is today?...As Social Security’s finances worsen, so too will chances for a constructive resolution to the problem. When policy options dwindle and the political obstacles to reform become insurmountable, a cumulative string of punishing tax increases becomes the path of least resistance, as the experience of the European social welfare states illustrates.

Time is not on the side of those who wish to solve this problem without massive tax increases. Some conservatives need to gain a better appreciation of this fact.

Posted by Donald L. Luskin at 6:55 PM | link  

Monday, December 04, 2006

YES, IT'S ANOTHER OF THOSE LIST ISSUES   Always fun. This time it's The Atlantic, with its list of the 100 Most Influential Americans. Okay, I agree with the top three -- Abraham Lincoln, George Washington and Thomas Jefferson. But they are in exactly the wrong order. Didn't Jefferson have to invent America before Washington could deliver it or Lincoln could save it? And how about number 4 -- Franklin Delano Roosevelt? Please! How could FDR trample the Constitution until James Madison wrote it -- yet Madison only makes number 13?

Ayn Rand didn't make the list -- though it's hard to think of too many more influential twentieth century intellectuals. But in a sidebar list of "Influential Architects," Rand's greatest character, Howard Roark, is honored -- the only fictional person to make any list.

Posted by Donald L. Luskin at 9:02 PM | link  

Sunday, December 03, 2006

THE CAPGAINS TRIUMPH   The evidence for the supply-side success of the 2003 tax cuts on dividends and capital gains continues to pour in. Dan Clifton of the American Shareholders Association reports:
...our model suggests CBO's most recent, revised estimate is still too low by $28 billion for fiscal years 2004-2006, or roughly by 12 percent. In fact, capital gains tax revenue has nearly doubled since fiscal year 2003, growing from $50 billion in fiscal year 2003 to $98 billion in fiscal year 2006.

Taken altogether, the initial capital gains tax revenue forecast was for $192 billion of tax collections in fiscal year 2003-2006. Instead, we believe this number is actually $292 billion, a $100 billion difference or 52 percent. What was supposed to be a $5.4 billion loss has actually turned into a $100 billion gain.

Posted by Donald L. Luskin at 12:07 PM | link  

ON THE TABLE   In a new blog posting, Tom Giovanetti has cooled his jets a bit since his unsubstantiated counterattack to my critique of Peter Ferrara's recent unconstructive approach to reform. After defending himself for deceptively misquoting me on the grounds that he provided a link to what I actually said, he gets into some ideological substance: is there any circumstance under which a principled pro-growth advocate ought to permit a hike in payroll taxes to be "on the table" in congressional negotiations about Social Security reform? If one were to be truly principled, one wouldn't permit any congressional debate about Social Security reform other than abolition. All of us have already compromised on that -- indeed Ferrara's bloated plan could be seen as an heroic attempt to prop up a corrupt institution of government coercion and economic interference by dressing it up with the lipstick of private accounts.

To Ferrara, that compromise -- his compromise -- makes sense. So why be so dogmatic about other compromises? All else equal, I'm just as opposed to raising the payroll tax as anyone. But can Giovanetti and Ferrara say with confidence that, in a negotiation, all else would be equal? Would they not trade a hike in the payroll tax for something? Anything? How about a 5% increase in the payroll tax maximum-wage cap in exchange for a 5% decrease in the top personal income tax rate? For the abolition of capital gains taxes? I trust you see my point. And so does the White House. Why not listen to any and all ideas? You can always say "no" later. And why not even compromise with bad ideas, if they can be offset with brilliant ideas? Isn't it the net result that counts?

I appreciate that Ferrara is trying to create an atmosphere of watchfulness among conservatives in which the White House won't be able to get away with a really stupid mistake. But Ferrara's approach is unconstructive -- it is preventing the necessary engagement with the enemies of reform. Conservatives don't have the votes to go it alone. And even if they did, it is unlikely they would embrace Ferrara's plan -- every particular of which Ferrara wrongly insists upon as the one and only true faith of Social Security reform.

Posted by Donald L. Luskin at 11:40 AM | link