Quotulatiousness

January 10, 2013

Narcissism on the rise (again) among college students

Filed under: Education, Media, Randomness, USA — Tags: , , , — Nicholas @ 09:04

I know you won’t believe this, but college students have an inflated sense of self-worth that has been further enabled by those new-fangled social media tools.

A new analysis of the American Freshman Survey, which has accumulated data for the past 47 years from 9 million young adults, reveals that college students are more likely than ever to call themselves gifted and driven to succeed, even though their test scores and time spent studying are decreasing.

Psychologist Jean Twenge, the lead author of the analysis, is also the author of a study showing that the tendency toward narcissism in students is up 30 percent in the last thirty-odd years.
This data is not unexpected. I have been writing a great deal over the past few years about the toxic psychological impact of media and technology on children, adolescents and young adults, particularly as it regards turning them into faux celebrities — the equivalent of lead actors in their own fictionalized life stories.

On Facebook, young people can fool themselves into thinking they have hundreds or thousands of “friends.” They can delete unflattering comments. They can block anyone who disagrees with them or pokes holes in their inflated self-esteem. They can choose to show the world only flattering, sexy or funny photographs of themselves (dozens of albums full, by the way), “speak” in pithy short posts and publicly connect to movie stars and professional athletes and musicians they “like.”

While the specifics of today’s worries differ, I’m reminded of this classic, attributed to Socrates (but not authenticated):

The children now love luxury; they have bad manners, contempt for authority; they show disrespect for elders and love chatter in place of exercise. Children are now tyrants, not the servants of their households. They no longer rise when elders enter the room. They contradict their parents, chatter before company, gobble up dainties at the table, cross their legs, and tyrannize their teachers.

January 9, 2013

Why stop at a mere trillion dollars?

Filed under: Economics, Government, USA — Tags: , , , , , — Nicholas @ 08:59

Zero Hedge on the trillion dollar platinum coin nonsense:

A year ago, out of nowhere, the grotesque suggestion to “resolve” the US debt ceiling with a platinum dollar coin came, and like a bad dream, mercifully disappeared even as the debt ceiling negotiations dragged until the last minute, without this idea being remotely considered for implementation, for one simple reason: it is sheer political, monetary and financial lunacy. And yet there are those, supposedly intelligent people, who one year later, continue dragging this ridiculous farce, as a cheap parlor trick which is nothing but a transparent attempt for media trolling and exposure, which only distracts from America’s unsustainable spending problem and does nothing to address the real crisis the US welfare state finds itself in. And while numerous respected people have taken the time to explain the stupidity of the trillion dollar coin, few have done so as an integral part of the statist mainstream for one simple reason — it might provide a loophole opportunity, however tiny, to perpetuate the broken American model even for a day or two, if “everyone is in on it.” Luckily, that is no longer the case and as even Ethan Harris from Bank of America (a firm that would be significantly impaired if America was forced to suddenly live within its means), the whole idea is nothing more than “the latest bad idea” straight “from the land of fiscal make believe.” We can only hope that this finally puts this whole farce to bed.

[. . .]

Taking these sorts of actions would almost certainly worsen, not ease, the coming battles over the spending — a second reason to be skeptical of the idea of the trillion dollar coin. As we have noted before, the debt ceiling is just one of three brinkmanship moments looming in the next few months. The across-the-board spending cuts that constitute the sequester have only been delayed for two months, and absent new legislation, will start in March. Even more troubling, on March 27 the latest continuing resolution ends and, absent new legislation, all nonessential government programs would have to shut down for lack of funding.

Third, throwing the trillion dollar coin into this mix would not only intensify these two other fights, it would likely poison the well even further in future budget negotiations. With split government, fiscal policy making requires bipartisan agreement. The cliff compromise earned support from both parties, marking a welcome — if brief — respite from partisan politics. The last thing Washington needs is a further escalation in gamesmanship.

Finally, there is a slippery slope from avoiding the debt limit to outright debt monetization. Although proponents see it as a technical fix to a problem that, in their view, never should occur, it means the Treasury would have established a precedent to thwart Congressional limitations on spending and the debt ceiling.

Outside of the legal questions, nothing precludes the Treasury from issuing a coin to pay down the full $16.4 trillion in debt in one fell swoop: true monetization. A trillion dollar coin also would subvert the whole budget process, undermining already fragile public confidence and spooking financial markets. And based on the criteria put forth by the rating agencies, it would represent a stunning failure to devise credible political processes to resolve the longer-term budget issues for the US. A downgrade would very likely follow, in our view.

January 7, 2013

Discounting for total political dysfunction

Filed under: Business, Economics, Government, USA — Tags: , , , , , — Nicholas @ 10:30

The Economist reports on last week’s “deal” in Congress and why the markets are still able to function in spite of the almost unprecedented level of political uncertainty:

Markets now live in the policy equivalent of Beirut in 1982. They have adjusted to perpetual political dysfunction. Over the last eight weeks, as the fiscal cliff talks stumbled, revived, collapsed, then came to life again, market movements were surprisingly narrow, and much of them could be explained by tax considerations as investors prepared for higher capital gains and dividend rates. The sang froid perplexed many of us who follow the policy process for a living and knew how high the stakes were. But perhaps we were too close to it. You can steep yourself in the intricacies of political coalitions, the electoral calendar, the makeup of the executive, senate and house, the interaction of permanent and temporary fiscal policy and such arcana as reconciliation, filibusters and blue slips, and yet still not know how to model the outcome. The fiscal cliff perfectly illustrated this: the people closest to the process didn’t know any better how it would end than those reading the newspapers, or not reading the newspapers, for that matter. There were just too many moving parts.

Richard Bookstaber once attributed the evolutionary success of the cockroach to coarse decision rules: it ignores most of the information around it and responds only to simple signals. Investors do something similar when confronted with hopeless complexity. They boil it down to a binary question: disaster/no disaster. Then they ignore all the idiosyncratic inputs and ask: what does experience suggest the probability of disaster is? Four times in the last two years, politicians went up to some do-or-die deadline without going over: in December, 2010, when the Bush tax cuts first came up for expiration; in April, 2011, when the federal government nearly shut down for lack of discretionary spending authority; the following August, when Treasury was days away from hitting the hard debt ceiling; and December, 2011, when the payroll tax cut first came up for expiration. In each case, one side, or both blinked; tax rates never went up, the government never shut down, and Treasury did not stop paying bills, much less default. It was, arguably, a better record than in 1995-96 when the federal government shut down twice and Bill Clinton threatened to suspend social security payments if Newt Gingrich’s Republicans didn’t raise the debt ceiling. Ignore the specifics of the latest episodes, and the logical conclusion is that despite their differences, both sides have powerful incentives to avoid disaster, so they will.

And who are the policy experts to say otherwise? For all the twists and turns, the cliff negotiations ended up where the median market participant a few months ago assumed they would: with a short-term fix and the remainder stuffed in a can and kicked down the road.

What’s that odd whistling sound coming from Wall Street?

January 5, 2013

LA terminates luxury option for electric car owners

Filed under: Environment, Technology, USA — Tags: , , , , , — Nicholas @ 12:43

It’s telling that one of the folks quoted in this article clearly identified the free parking at the airport as a primary reason for buying an electric vehicle:

On a recent morning, Jack Luu parked his plug-in Toyota Prius in one of the most expensive lots at Los Angeles International Airport before flying off to a film shoot in Canada. The lot, where Mr. Luu leaves his car as many as 10 times a month for business trips, normally charges $30 a day.

But when Mr. Luu returned home three weeks later, he drove out, as usual, without paying a dime.

“That was a huge reason why I bought the car in the first place,” says the 35-year-old Santa Monica, Calif., postproduction company executive, whose car qualifies for free parking for up to a month at a time in two of LAX’s most convenient—and costly—short-term lots.

Other than that, he says his ride is “expensive, underpowered and not really all that green,” because it can run just 12 miles on electricity before switching to gas.

For years, LAX has offered electric-vehicle owners one of the most generous incentives of its kind in the country: free parking for 30 days in two of its terminal lots, which contain, altogether, 38 charging stations. The rule was meant to encourage people to buy greener cars, but lately it has turned the lots into a mob scene, with some electric-vehicle drivers circling the stations desperately for electricity or running extension cords while others hog the charging spaces for weeks at a time.

January 4, 2013

On politicians needing to kick their own asses

Filed under: Government, Media, Politics, USA — Tags: , , , , — Nicholas @ 11:58

Nick Gillespie responds to a recent Bob Woodward column:

In sort-of documenting the dysfunction of a government that can’t even trim chump change from its petty cash drawer, much less write and pass a goddamned budget, Woodward manages to also illustrate why press solons are pretty useless in this whole process too. Sequestration cuts aren’t odious, except to congenital pants-wetters on both sides of the aisle (such as the neo-con defense hawks at the American Enterprise Institute and Leon Panetta, who can’t abide a single dollar ever being cut from any military budget, even after the Second Coming of Christ and the beating of swords into non-voting GM shares). We’ve been racking up trillion-dollar annual deficits for years now, and the idea of cutting $3 trillion from future deficits over a 10-year period causes things to explode? That shouldn’t be a reach under any circumstances, but especially under one in which both parties agree that we need to stop spending money we don’t have on things we don’t need. If the leadership of both parties couldn’t agree to $3 trillion in deficit trims over a decade in which they expect to spend between $40 trillion and $47 trillion, they weren’t going to agree to cuts of $1.2 trillion anyway. That’s the the real story, and it’s one that need to be retold every single day.

Woodward’s invocation of today’s “vulture politics” and his by-comparison invocation of the good old Reagan days is ridiculously ahistorical, especially coming from one of the guys who presided over the past 40-plus years of American history. Today’s political situation isn’t unique in its “demonization” of the opposition. Jesus Christ, George McGovern likened Nixon to Hitler and Reagan was attacked in similar terms. As was Clinton (by Jerry Falwell, who credited the Man from Hope with multiple murders in Arkansas). And then there was also the Bushitler stuff and novels and faux-documentaries about Dubya’s assassination. Somehow, both sides somehow managed to pass budgets (as awful as they were). The fact that Boehner takes a lot of man-tan heat and Obama is called a socialist is light fare by comparison. What is different is the inability of our top men to freaking complete the most basic tasks required of them: to hash out what they government is going to spend each year according to basic and simple-to-understand legislative rule.

In the end, that is not something mystical or overly complicated or tough because they belong to different parties. It’s the easiest thing in the world to get done and while of course “staffers” will do most of the grunt work, Boehner and Obama — and Harry Reid, the hugely incompetent Senate leader who is arguably the single-most responsible villain in the whole dramedy, need to be running the show.

And when it comes to kicking their own asses, our triumvirate of leaders — Obama, Boehner, and Reid — should get in line behind the rest of us. In the end, we pay their tab, so we should be at the front of the line.

January 3, 2013

Comic book capers of expatriate Americans

Filed under: Media, USA — Tags: , — Nicholas @ 10:17

Wendy McElroy on Superman’s renunciation of American citizenship:

How do you know when the content of a nation’s character is bankrupt? One way is to examine the dynamic symbols that embody its character and which shift in reaction to circumstance. These symbols are often found within literature and other cultural expressions.

In last year’s Action Comic #900, Superman declared an intention to renounce his US citizenship. The Man of Steel explained, “I’m tired of having my actions construed as instruments of US policy. ‘Truth, justice, and the American Way’ – it’s not enough any more.” Many readers were outraged because, despite being an illegal alien in the most literal sense, Superman epitomized the American Way.

[. . .]

As it happened, Action Comic #900 was issued only days before the killing of Osama bin Laden. Afterward, there was a surge of general patriotism and of sharp criticism directed at Superman. The comic book publishers retreated faster than a speeding bullet. The mainstream media and elites were once again able to settle comfortably into the notion that only villains, cynics, and the irredeemably selfish would abandon US citizenship for a global identity.

And, yet, people on the street then and now sensed that something else was going on. When Forbes ran an expat article, an obviously knowledgeable commentator wrote that leaving America was not […] fundamentally about taxes for most people. “[T]he larger issue is the complete betrayal by one’s country in an attempt to gouge for money to make up for the horrific [US] debt…It is high time…Americans learn that the country they grew up in, no longer exists. The ‘American exceptionalism’ that we were taught to believe in, needs to be seen for what it has become, an excuse for the government to do whatever it wants with no concern for the consequences. ALL Americans lose in this process.” The United States has become what it used to denounce – a fascist police state. To love America (the ideal), you must now leave America (the reality) — either physically or spiritually.

It is wise to do so quietly because the very hint of ‘going expat’ can drive some people into fury. In his article “Citizenship is a problem to be solved,” Phil Hodgen addressed the ‘furious’. He admonished them, “Put down your pitchforks. The point of…an article like this is not to answer with ‘You’re right!’ or ‘You’re wrong!’ The point of the article…is to explore the ideas. There are some important concepts here that transcend taxation…

January 2, 2013

The corporate welfare pork in the fiscal cliff negotiations

Filed under: Business, Government, USA — Tags: , , , , — Nicholas @ 09:57

As widely expected, Congress did finally put something to a vote to “save” the country from going over the fiscal cliff. And as everyone should have expected, even a bill to “save” the country was still amply provided with pork for certain corporations:

Throughout the months of November and December, a steady stream of corporate CEOs flowed in and out of the White House to discuss the impending fiscal cliff. Many of them, such as Lloyd Blankfein of Goldman Sachs, would then publicly come out and talk about how modest increases of tax rates on the wealthy were reasonable in order to deal with the deficit problem. What wasn’t mentioned is what these leaders wanted, which is what’s known as “tax extenders”, or roughly $205B of tax breaks for corporations. With such a banal name, and boring and difficult to read line items in the bill, few political operatives have bothered to pay attention to this part of the bill. But it is critical to understanding what is going on.

The negotiations over the fiscal cliff involve more than the Democrats, Republicans, the middle class and the wealthy. The corporate sector is here in force as well. One of the core shifts in the Reagan era was the convergence of wealthy individuals who wanted to pay less in taxes — many from the growing South — with corporations that wanted tax breaks. Previously, these groups fought over the pie, because the idea of endless deficits did not make sense. Once Reagan figured out how to finance yawning deficits, the GOP was able to wield the corporate sector and the new sun state wealthy into one force, epitomized today by Grover Norquist. What Obama is (sort of) trying to do is split this coalition, and the extenders are the carrot he’s dangling in front of the corporate sector to do it.

Most tax credits drop straight to the bottom line — it’s why companies like Enron considered its tax compliance section a “profit center”. A few hundred billion dollars of tax expenditures is a major carrot to offer. Surely, a modest hike in income taxes for people who make more than $400k in income and stupid enough not to take that money in capital gain would be worth trading off for the few hundred billion dollars in corporate pork. This is what the fiscal cliff is about — who gets the money. And by leaving out the corporate sector, nearly anyone who talks about this debate is leaving out a key negotiating partner.

December 31, 2012

Railroads see traffic boom as pipelines are delayed

Filed under: Business, Economics, Railways, USA — Tags: , — Nicholas @ 12:53

The increase in railroad traffic from handling shipments of shale oil is having a very positive effect on the rail companies’ bottom lines:

Energy companies behind the oil boom on the Northern Plains are increasingly turning to an industrial-age workhorse — the locomotive — to move their crude to refineries across the U.S., as plans for new pipelines stall and existing lines can’t keep up with demand.

Delivering oil thousands of miles by rail from the heartland to refineries on the East, West and Gulf coasts costs more, but it can mean increased profits — up to $10 or more a barrel — because of higher oil prices on the coasts. That works out to roughly $700,000 per train.

The parade of mile-long trains carrying hazardous material out of North Dakota and Montana and across the country has experts and federal regulators concerned. Rail transport is less safe than pipelines, they say, and the proliferation of oil trains raises the risk of a major derailment and spill.

Since 2009, the number of train cars carrying crude hauled by major railroads has jumped from about 10,000 a year to a projected 200,000 in 2012. Much of it has been in the Northern Plains’ Bakken crude patch, but companies say oil trains are rolling or will be soon from Texas, Colorado and western Canada.

December 30, 2012

“We Have Passed The Point Of No Return”

Filed under: Economics, Government, Politics, USA — Tags: , , , , , , — Nicholas @ 11:22

Zero Hedge recommends that everyone listen to outgoing Congressman Ron Paul’s analysis of the fiscal cliff negotiations:

In a little under three minutes, Ron Paul explains to a somewhat nonplussed CNBC anchor just how ridiculous the charade that is occurring in D.C. actually is. This succinct spin-free clip should be required viewing for each and every asset-manager, talking-head, propagandist, and mom-and-pop who are viewing the last-minute idiocy of the ‘fiscal cliff’ debacle with some hope that things will be different this time. “We have passed the point of no return where we can actually get our house back in order,” Paul begins, adding that “they pretend they are fighting up there, but they really aren’t. They are arguing over power, spin, who looks good, who looks bad; all trying to preserve the system where they can spend what they want, take care of their friends and print money when they need it.” With social safety nets available to rich and poor, there is no impetus for change and “the country loses,” but Paul concludes, the markets are starting to say “there is a limit to this.”

December 28, 2012

The new Zero-Sum era of American politics

Filed under: Economics, Government, USA — Tags: , , , — Nicholas @ 10:18

P.J. O’Rourke offers some mild congratulations to President Obama for a few accomplishments during his first term, then explains why the way he won his second term is a bad thing both for the United States and for the rest of the world:

You sent a message to America in your re-election campaign. Therefore you sent a message to the world. The message is that we live in a zero-sum universe.

There is a fixed amount of good things. Life is a pizza. If some people have too many slices, other people have to eat the pizza box. You had no answer to Mitt Romney’s argument for more pizza parlors baking more pizzas. The solution to our problems, you said, is redistribution of the pizzas we’ve got — with low-cost, government-subsidized pepperoni somehow materializing as the result of higher taxes on pizza-parlor owners.

In this zero-sum universe there is only so much happiness. The idea is that if we wipe the smile off the faces of people with prosperous businesses and successful careers, that will make the rest of us grin.

There is only so much money. The people who have money are hogging it. The way for the rest of us to get money is to turn the hogs into bacon.

Mr. President, your entire campaign platform was redistribution. Take from the rich and give to the . . . Well, actually, you didn’t mention the poor. What you talked and talked about was the middle class, something most well-off Americans consider themselves to be members of. So your plan is to take from the more rich and the more or less rich and give to the less rich, more or less. It is as if Robin Hood stole treasure from the Sheriff of Nottingham and bestowed it on the Deputy Sheriff.

But never mind. The evil of zero-sum thinking and redistributive politics has nothing to do with which things are taken or to whom those things are given or what the sum of zero things is supposed to be. The evil lies in denying people the right, the means, and, indeed, the duty to make more things.

The Military-Industrial Complex leads to “a bloated corporate state and a less dynamic private economy”

Filed under: Bureaucracy, Economics, Government, Military, USA — Tags: , , , , , — Nicholas @ 09:59

An older article from Christopher A. Preble, reposted at the Cato Institute website:

The true costs of the military-industrial complex, they explain, “have so far been understated, as they do not take into account the full forgone opportunities of the resources drawn into the war economy.” A dollar spent on planes and ships cannot also be spent on roads and bridges. What’s more, the existence of a permanent war economy, the specific condition which President Dwight Eisenhower warned of in his famous farewell address, has shifted some entrepreneurial behavior away from private enterprise, and toward the necessarily less efficient public sector. “The result,” Coyne and Duncan declaim, “is a bloated corporate state and a less dynamic private economy, the vibrancy of which is at the heart of increased standards of living.”

The process perpetuates itself. As more and more resources are diverted into the war economy, that may stifle — or at least impede — a healthy political debate over the proper size and scope of the entire national security infrastructure, another fact that Eisenhower anticipated. Simply put, people don’t like to bite the hand that feeds them.

And that hand feeds a lot of people. The Department of Defense is the single largest employer in the United States, with 1.4 million uniformed personnel on active duty, and more than 700,000 full-time civilians. The defense industry, meanwhile, is believed to employ another 3 million people, either directly or indirectly.

What’s more, these are high paying jobs. In 2010, when the average worker in the United States earned $44,400 in wages and benefits, the average within the aerospace and defense industry was $80,100, according to a study by the consulting firm Deloitte. And 80 percent of that industry’s revenue comes from the government.

December 27, 2012

Remember this next time you hear about a drone strike on “suspected militants”

Filed under: Media, Middle East, Military, USA — Tags: , , , , , — Nicholas @ 10:39

Matt Welch rounds up the actual events which were originally euphemistically described as a successful strike against “suspected” al Qaeda militants:

What enables such state-sanctioned murder? One crucial ingredient is highlighted in the next paragraph:

    Quoting unnamed Yemeni officials, local and international media initially described the victims of the Sept. 2 airstrike in al-Bayda governorate as al Qaeda militants.

Follow that link to the Sept. 2 Reuters article, and you’ll see this loaded lead paragraph:

    Five suspected militants linked to al Qaeda were killed by a U.S. drone attack on Sunday in central Yemen, in what appears to be stepped up strikes by unmanned aircraft on Islamists.

Note that “suspected” only modifies “militants”; Reuters treated as fact that the charred bodies were “linked to al Qaeda,” and part of a broader campaign against “Islamists” who don’t qualify as being “suspected.”

This isn’t just linguistic nitpicking of journalismese; this is how you midwife propaganda — straight from anonymous government sources who have a huge incentive to legitimize targeted death-dealing against undesirables, and unadorned with the kind of protective skepticism that such ultimate power (let alone fog of war) so richly deserves.

December 26, 2012

“Quentin Tarantino finally comes of age as a filmmaker”

Filed under: History, Media, USA — Tags: , — Nicholas @ 12:04

While I doubt I’ll catch this in the theatre, Kurt Loder makes this sound like an interesting film:

With Django Unchained, Quentin Tarantino finally comes of age as a filmmaker. Tarantino’s brilliance as a writer and craftsman have always been clear. But even his last picture, the Holocaust revenge fantasy Inglourious Basterds, was overwhelmed by his geeky obsession with vintage genres (in that case, old war movies). When he showed us a group of Jews huddled in a basement being shot through the floorboards above, but declined to go below and show them actually dying (it might have clouded the film’s comedy), he shortchanged the movie’s putative subject.

With Django, the director has brought off a perfect marriage of style and history. He has appropriated the universe of another beloved genre, the spaghetti western (in particular Sergio Corbucci’s brutal 1966 cult film, Django), and set within it an unsparing tale of American slavery. The movie is outrageously funny, but it’s also unflinchingly committed to a full exploration of the horrors of its subject. Where many movies about black bondage are diluted by liberal hankie-wringing, this one feels fueled by a black rage that still simmers today. It might be the most savage cinematic depiction of slavery ever made.

Some early reviewers have expressed dismay about the movie’s extensive deployment of the word “nigger.” (“It’s a nigger on a horse,” says one marveling cretin as a black man rides by on his mount.) It’s hard to know what to say about such a reaction, except to point out that, hey, it’s a movie about slavery.

QotD: Those who have given up liberty for “security”

Filed under: Government, Liberty, Quotations, USA — Tags: , , , , , — Nicholas @ 11:13

Furthermore, do we really want to live in a world of police checkpoints, surveillance cameras, metal detectors, X-ray scanners, and warrantless physical searches? We see this culture in our airports: witness the shabby spectacle of once proud, happy Americans shuffling through long lines while uniformed TSA agents bark orders. This is the world of government provided “security,” a world far too many Americans now seem to accept or even endorse. School shootings, no matter how horrific, do not justify creating an Orwellian surveillance state in America.

Do we really believe government can provide total security? Do we want to involuntarily commit every disaffected, disturbed, or alienated person who fantasizes about violence? Or can we accept that liberty is more important than the illusion of state-provided security? Government cannot create a world without risks, nor would we really wish to live in such a fictional place. Only a totalitarian society would even claim absolute safety as a worthy ideal, because it would require total state control over its citizens’ lives. We shouldn’t settle for substituting one type of violence for another. Government role is to protect liberty, not to pursue unobtainable safety.

Our freedoms as Americans preceded gun control laws, the TSA, or the Department of Homeland Security. Freedom is defined by the ability of citizens to live without government interference, not by safety. It is easy to clamor for government security when terrible things happen; but liberty is given true meaning when we support it without exception, and we will be safer for it.

Ron Paul, “Seeking Total Security Leads to a Totalitarian Society”, Eurasia Review, 2012-12-26

December 24, 2012

What is the French for “voting with your feet”?

Filed under: Europe, Government, Media, USA — Tags: , , , — Nicholas @ 10:03

Put your tax rates up too high and people start to look at alternative living and working arrangements:

Actor Gérard Depardieu’s decision to flee France for Belgium to avoid a 75 percent marginal tax rate on incomes above $1.3 million sends a message we here in America should heed: Those who are singled out for tax increases are not stationary targets. The means of avoiding and evading the taxman are legion.

U.S. government agencies routinely issue estimates of how changes in the tax code will affect the flow of revenues to the treasury. President Obama says the tax changes he has been seeking will bring in $1.6 trillion over a decade. But such estimates assume taxpayers are something other than human beings who engage in purposive action. People like to keep the money they make — why shouldn’t they? — and they typically avail themselves of every legal (and not-so-legal) strategy to do so. Change the tax environment by raising rates or adversely modifying the rules, and taxpayers, especially those in the upper echelons of earners, can be counted on to modify their conduct accordingly; there’s no reason to think their wish to hold on to their money has diminished just because the tax code has changed.

Economists as far back at J. B. Say and Gustave de Molinari in the 19th century understood this. As Molinari wrote in his 1899 book, The Society of To-morrow, “The laws of fiscal equilibrium set a strict limit to the degree within which it is possible to impose new taxes, or to increase the rates of those already in force. The relative productivity of taxes soon shows when this point has been overstepped, for then returns not only cease to rise, but immediately begin to fall.”

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