I wanted to comment on Richard Rubin’s report at the Wall Street Journal on the argument over the federal corporate income tax. Here’s where he sets the stage:

WASHINGTON—The 21% U.S. corporate tax rate is the biggest single variable in the sprawling 2025 tax debate, and the two parties are trying to turn that dial in opposite directions with major consequences for companies’ profits and federal revenue.

The rate could climb as high as 28% if Democrats sweep November’s elections and move as low as 15% if Republicans gain full power.

President Biden’s plan for a 28% rate would reverse half of Republicans’ 2017 rate cut, pushing the U.S. corporate rate back near the highest among major economies. A 15% rate—some Republicans are heading that way, but the party hasn’t settled on a plan—would match the lowest level since 1935, boosting profits and rewarding shareholders. Presumptive Republican presidential nominee Donald Trump told corporate executives last week that he wanted a 20% rate.

Each percentage point is worth more than $130 billion over a decade in tax revenue, creating a $1 trillion-plus gap between the poles of the parties’ positions and giving the largest U.S. companies an outsize interest in the election’s outcome.

I found Mr. Rubin’s report fair and balanced and he does make some good points, for example:

The corporate tax is one of the most progressive ways of raising revenue, with much of the burden falling on higher-income households, but the reality of who pays it is more nuanced than just saying “companies” or “rich people.” Economists and government agencies generally agree that shareholders ultimately bear much of the cost, with workers and consumers paying some, too. Shareholders, generally, are wealthier than the population as a whole.

The corporate tax is one of the few ways the U.S. can, indirectly, tax foreign investors in U.S. securities and nonprofits with large tax-free endowments.

But the shareholder base also includes pension funds, 401(k) accounts and some middle-income households. Biden and Democrats play down effects on those groups. They also don’t count corporate tax increases as violating the president’s pledge to protect households making under $400,000 from tax hikes.

I thought this post might be a good opportunity for me to put down on marker on taxes more generally.

First, from an economic standpoint the corporate income tax is one of the least efficient taxes. The most efficient corporate income tax rate is 0%. Plus, as has been noted at the rate of 28% which President Biden has advocated our corporate income tax would be higher than those of Italy, Canada, France, Netherlands, India, Belgium, Spain, and Luxembourg. It would also be higher than those of Denmark, Norway, and Sweden. As noted that puts U. S. companies at a competitive disadvantage.

In my view if you want to spend more there are several alternatives:

• Raise the personal income tax and increase the effective tax rate (the taxes that people actually pay). The highest effective tax rate in the United States has been around 21% which is where we are now. Retorting that other countries pay higher rates is an inadequate reply. What works in one country does not necessarily work in another. In some countries they eat bats or snails. We don’t in the United States. Plus just about everything the government does in the United States is more expensive than anywhere else to get the same results. As a consequence people in other places trust their governments more than we do.
• Just issue ourselves credit. That is what we have been doing for some time. Not only is that regressive but we should be prepared for our ability to do that to end suddenly and, potentially, catastrophically.
• Cut spending somewhere else. The most tempting target for economization is interest on the debt which would either require us to default on the debt which would be catastrophic or pay the debt down which would be extremely difficult.
• The perennial: eliminate waste, fraud, and abuse. That has proven a lot harder than it sounds which has led some people to conclude that waste, fraud, and abuse are the purpose of our system.
• Increase production. That has proven harder to accomplish than you might expect.

Raising the corporate tax rate is probably the worst alternative.

I also think that we need more basic reorganization of the federal government but that is a topic for another post. Do we really need 73 federal agencies to have armed enforcement officers and police powers?

I think at the very least we need to follow the law of holes. Stop digging or, in this case, stop cutting taxes. Beyond that spend on what we really want and need to spend on, measured by willingness to pay.

I concur with the editors of the Washington Post:

The only problem is that Justice Thomas was correct to point out that the 2018 regulation, issued by the Bureau of Alcohol, Tobacco, Firearms and Explosives, did not represent that agency’s consistent view. In fact, it represented a 180-degree reversal of ATF’s position on bump stocks before the Las Vegas massacre, which had been more or less the same one that Justice Thomas articulated in his opinion. This history shows what can go wrong when such clearly legislative matters are left up to the bureaucracy and the courts. It would be far preferable for Congress to provide fresh guidance, instead of relying on regulators and judges to parse a 90-year-old statutory text.

That is, the surest way to effectuate a bump stock ban that so many Americans clearly want, and which is so clearly consistent with common sense, is through a law.

The regulation was not struck down on Second Amendment grounds but as exceeding the limits of the pre-existing statute.

This problem isn’t restricted to bump stocks but infuses many of the issues producing so much heat these days. There is a word for rule by executive branch regulations and court decisions and it isn’t democracy. It is authoritarianism.

I believe that what we are doing now is not just authoritarian but cowardly. When groups influential with the White House can’t cobble together enough votes to pass legislation or don’t want to leave their fingers on policies they know are unpopular, they get their way through regulations and compliant courts. The Congress needs to amend the National Firearms Act to ban bump stocks. They should also act to control immigration, take a position on abortion, and enact the environmental laws they see fit to put in place. Don’t leave the heavy lifting to the executive branch regulations and the courts.

Unsurprisingly, I disagreed with Nikolas Kristof’s latest column at the New York Times in which he proposes that the reason that West Coast progressives have made such a hash of their states is that ideological purity has become more important to them that outcomes. Here are some examples of the mess that he cites:

The two states with the highest rates of unsheltered homelessness are California and Oregon. The three states with the lowest rates of unsheltered homelessness are all blue ones in the Northeast: Vermont, New York and Maine. Liberal Massachusetts has some of the finest public schools in the country, while liberal Washington and Oregon have below-average high school graduation rates.

Oregon ranks dead last for youth mental health services, according to Mental Health America, while Washington, D.C., and Delaware rank best.

Drug overdoses appear to have risen last year in every Democratic state on the West Coast, while they dropped last year in each Democratic state in the Northeast. The homicide rate in Portland last year was more than double that of New York City.

Why does Democratic Party governance seem less effective on the West Coast than on the East Coast?

and here’s his conclusion:

So my take is that the West Coast’s central problem is not so much that it’s unserious as that it’s infected with an ideological purity that is focused more on intentions than on oversight and outcomes.

I think he’s not connecting the dots. The demographics of California, Oregon, and Washington are drastically different than those of Vermont or Maine. Or New York for that matter. With respect to homelessness the ratios of different races and ethnicities who are homeless don’t vary that much from state to state but the demographics of the states do vary. Asians and people of primarily European ancestry tend to have a lower proportion of the homeless; people of sub-Saharan ancestry and Hispanics higher proportions. Furthermore, there is a strong correlation between substance abuse and homelessness and West Coast states have tended to be more lenient in their treatment of recreational drug use than other states. Combine lax treatment of recreational drug use and more benign climates and you have a perfect formula for homelessness.

Similarly, with on time high school graduation rates. The on time high school graduation rates by race and ethnicity don’t vary that much from state to state but the states’ demographics do.

At the European Center for Foreign Relations Célia Belin, Majda Ruge, Jeremy Shapiro present “six scary policy scenarios” if Donald Trump is re-elected in November. They posit three strains of foreign policy opinion among Republicans:

• Donald Trump remains erratic and inconsistent when it comes to foreign policy. But the broader Republican foreign policy ecosystem forming around his administration is increasingly clear and organised.
• This ecosystem comprises three main “tribes” – restrainers who want US foreign policy to focus on America; prioritisers who want it to focus on Asia; and primacists who want it to continue to focus globally.

and the scenarios they present include a return to the Minsk Accords and a foreign policy crisis in the Indo-Pacific. I found the piece thought-provoking.

I have found Donald Trump’s thought processes puzzling since well prior to 2017. However, I think the authors overestimate how much can be determined about what a hypothetical second Trump term would bring based on prevailing strains of Republican foreign policy thought. Might they consider the first Trump term as a sign of what a second would bring? Maybe that, in fact, is what they’re considering and Trump’s previous European policies are what worry them.

My own observation is that Mr. Trump’s approach to foreign policy is completely transactional—he assesses what’s the best “deal” he can get from any particular situation, “deal” measured variably. I can well see how that would be disconcerting to European leaders.

While I cannot tell you what a second Trump term would do in any given situation, I can give you my impressions of European leadership. I think that the Europeans, particularly the Germans, are very accustomed to pursuing their own national interests, having America pick up the tab, and any change in that is very concerning to them. I also think they’re putting far too much weight on the “2% of GDP” NATO guideline for defense spending when they should be focusing more on readiness. When you’ve spent far less than you needed to for any reasonable level of readiness for over a generation, how much do you need to spend to achieve a satisfactory level of readiness? It could be 2%, 10%, or more? It could be 1%. I’m no expert on European militaries but even the French military, probably that at the highest level of readiness at this point, could probably use some sprucing up, protestations to the contrary notwithstanding.

Furthermore, what do the recent EU elections portend for future European defense spending? My take on the EU elections was that the Europeans were voting their pocketbooks and they’re tired of leadership policies that raise prices and taxes which would include increased defense spending.

I found the result of this study from Pew Research distressing:

While many Black Americans view themselves as at least somewhat successful and are optimistic about their financial future, they are also critical of U.S. institutions. Most say several systems in the United States need significant changes to ensure Black people are treated fairly.

Black Americans’ doubts about the fairness of institutions are accompanied by suspicion. Indeed, most Black adults say the prison (74%), political (67%) and economic (65%) systems in the U.S., among others, are designed to hold Black people back, according to a new Pew Research Center survey of Black adults conducted in September 2023.

The survey also finds that most Black Americans are familiar with specific racial conspiracy theories about U.S. institutions and believe they are true.

Rather than wringing our hands about whether these “theories” are true, I would rather reflect on what so many black Americans believe they are true and the implications of those beliefs.

I believe these beliefs are held because, like most Americans, black Americans derive most of their information from television and social media and that’s what television and social media are telling them. Note, too, that most of the black population is urban or suburban—80% or more—and the cities in which black Americans live tend to have governments controlled by Democrats. In other words this is not a complaint about Republicans. It’s either a complaint about the “uniparty” or about Democrats.

It reminds me of what a black friend of mine told me many years ago to the effect that the same things may happen to each of us but we won’t have the same experiences from them. That’s the world in which our black neighbors live.

I think that Zachary D. Carter has the wrong end of the stick in his piece at Slate, musing over why President Biden’s approval rating is so low:

In January of 1980, Jimmy Carter had been in office for three years, and the economy was terrible. Cumulatively, consumer prices were up more than 32 percent since he had entered the White House, and they had been rising steadily for more than 18 months. The unemployment rate was on the rise, after averaging 6.3 percent across his time in office. Wages, adjusted for inflation, had been falling for a year, gas prices were surging, and the interest rate on a typical home mortgage was over 15 percent. Things were very bad, and getting worse.

In the most preposterous corners of American economic discourse, Biden’s economy is still being compared to Carter’s, even though by every available metric, the 1970s were in a miserable league of their own, and today’s economy is among the most prosperous on record. Biden isn’t just clearing the low bar set by the Carter administration, he’s besting every other leader in the developed world, with the United States enjoying stronger wages, lower inflation, and better job growth than any nation in the G7, and its best labor market in at least half a century.

It’s interesting that he should characterize Lawrence Summers as “preposterous”. Hasn’t Dr. Summers been consistently and persistently critical of President Biden’s economic policy? To assess the validity of the comparison all you need do is compare the price of gasoline in January 2021 ($2.25/gallon) with the price today ($3.47). You could go through a similar exercise for a dozen eggs, a loaf of bread, a pound of hamburger, your automobile insurance, etc.

The reality of being president is that presidents get blamed for what happens during their terms of office (“their watch”) regardless of whether they’re own actions were responsible and far from being the return to normalcy (so to speak) on which Candidate Biden ran, he has presided over the fastest increase in inflation in the last 40 years, the start of two wars in which we are embroiled if not actually at war, more deaths due to COVID-19 than in the previous three and a half years, and more migration across our southern border than during his predecessor’s term.

I could go on. Keep in mind that Mr. Biden ran for president twice before (in 1988 and 2008) and was rejected soundly by Democrats in the primaries. I would submit that he was elected this time around because just enough people in just enough places saw him as better than Trump.

Consequently, I think that rather than asking why President Biden’s approval rating is so low he should be asking why is it so high? His RCP Poll Average is 39.8% Clearly, he has significantly more favorable press coverage than his predecessor experienced. Why else?

I wanted to comment about David Brooks’s most recent New York Times column before it disappeared into the memory hole. Most of the column is devoted to a lament over what has happened to our “educated elite” in recent years:

I went to an elite university and have taught at them. I find them wonderful in most ways and deeply screwed up in a few ways. But over the decades and especially recently, I’ve found the elite, educated-class progressivism a lot less attractive than the working-class progressivism of Frances Perkins that I read about when I was young. Like a lot of people, I’ve looked on with a kind of dismay as elite university dynamics have spread across national life and politics, making America worse in all sorts of ways. Let me try to be more specific about these dynamics.

The first is false consciousness. To be progressive is to be against privilege. But today progressives dominate elite institutions like the exclusive universities, the big foundations and the top cultural institutions. American adults who identify as very progressive skew white, well educated and urban and hail from relatively advantaged backgrounds.

This is the contradiction of the educated class. Virtue is defined by being anti-elite. But today’s educated class constitutes the elite, or at least a big part of it. Many of the curiosities of our culture flow as highly educated people try to resolve the contradiction between their identity as an enemy of privilege, and the fact that, at least educationally and culturally, and often economically, they are privileged.

But the one passage to which I wanted to draw attention was this:

I really can’t tell what al-Gharbi’s politics are — some mixture of positions from across the spectrum maybe. He does note that he is writing from the tradition of Black thinkers — stretching back to W.E.B. Du Bois — who argue that white liberals use social justice issues to build status and make themselves feel good while ultimately offering up “little more than symbolic gestures and platitudes to redress the material harms they decry (and often exacerbate).”

He observes that today’s educated-class activists are conveniently content to restrict their political action to the realm of symbols. In his telling, land acknowledgments — when people open public events by naming the Indigenous peoples who had their land stolen from them — are the quintessential progressive gesture.

It’s often non-Indigenous people signaling their virtue to other non-Indigenous people while doing little or nothing for the descendants of those who were actually displaced. Educated elites rename this or that school to erase the names of disfavored historical figures, but they don’t improve the education that goes on within them. Student activists stage messy protests on campus but don’t even see the custodial staff who will clean up afterward.

Al-Gharbi notes that Black people made most of their progress between the late 1940s and the mid-1960s, before the rise of the educated class in the late 1960s, and that the educated class may have derailed that progress. He notes that gaps in wealth and homeownership between white and Black Americans have grown larger since 1968.

The emphasis is mine.

The question that passage raised for me is why? Some of the potential explanations that occurred to me were:

1. It’s not true.
2. On a percentage basis you make greater gains when you start from a lower basis. It’s that last gap that’s hard to fill (according to the Census Bureau the median income for black Americans is about 80% of the median income of white Americans).
3. Whatever its intentions the Great Society program was a flop. It had an adverse effect if any.
4. Black nationalism. When race became more important than making progress progress stopped.
5. The mass immigration from Latin American that began with the Immigration and Nationality Act of 1965 ended black economic progress, reversed it even.
6. De-industrialization. Good paying jobs making things have been vanishing for 50 years. The low end service jobs we have been creating don’t produce economic progress (at least not in the United States).

It could be all of the above but I think the most important factors are the last two.

BTW the “elite overproduction” Mr. Brooks mentions is something I’ve been writing about here for the last 20 years. Example: according to the BLS there 58,500 jobs in journalism in the United States. Every year nearly 14,000 journalism majors are produced by our institutions of higher learning.

While I’m thinking about Hollywood, I wanted to mention that my wife has been on a Mary Astor kick lately. If you’re not a film buff and you’ve heard of Mary Astor at all you probably associate her with Bridget O’Shaughnessy in The Maltese Falcon or Judy Garland’s mother in Meet Me in St. Louis but she’s a much more notable figure than that. Her Hollywood career began in 1921, playing adult female leads at age 14, and her last credit was in Hush, Hush Sweet Charlotte in 1964. She had more than 150 movie and television credits and played on Broadway as well.

What do I mean by “a Mary Astor kick”? She just finished reading Mary Astor’s two autobiographies side-by-side concurrently. Then she read one of her novels (we’re looking for others). Now she’s watching as many of her films as she can.

That’s one thing I’ll say about the Internet. If you dig around enough you can find quite a bit of stuff.

At The Strategist Joseph Nye proposes eight lessons that could be learned from the Ukraine war so far. It’s an expansion of his post of two years ago. Here’s his conclusion:

The most important lesson from the Ukraine war remains one of the oldest. Two years ago many expected a quick Russian victory, and just one year ago there were great expectations of a triumphant Ukrainian summer offensive. But as Shakespeare wrote more than four centuries ago, it is dangerous for a leader to ‘cry “Havoc!” and let slip the dogs of war.’

The promise of a short war is seductive. Putin certainly never expected to be bogged down indefinitely. He has managed to sell his war of attrition to the Russian people as a great patriotic struggle against the West. But the dogs he has unleashed could still turn around and bite him.

I wish I were as sanguine as he about nuclear deterrence:

Second, nuclear deterrence works, but it depends on relative stakes more than capabilities. The West has been deterred, but only up to a point. Putin’s nuclear threat has kept NATO governments from sending troops (though not equipment) to Ukraine. But the reason is not that Russia has superior nuclear capabilities; rather, it is that Putin has designated Ukraine a vital national interest for Russia, whereas Western governments have not. Meanwhile, Putin’s nuclear sabre rattling has not prevented the West from extending the range of the weapons it provides to Ukraine; and the West, so far, has deterred Putin from attacking any NATO countries.

My concern has a number of facets. First, as he notes, nuclear deterrence has not prevented the West from “extending the range of the weapons it provides”. Is NATO deterrable? I don’t know. It should also be noted that “Putin has designated Ukraine a vital national interest for Russia” is an understatement. It has been a vital national interest of Russia’s for centuries. George Kennan pointed that out decades ago: