Yes, my faithful readers are probably trying to figure out what more I could possibly say about Shirley Sherrod. (I wouldn't be surprised if CNN plans to petition the Vatican to have Ms. Sherrod declared a living saint based on the potential of what she can do to improve race relations... I can just see it now: Ms. Sherrod's next act of racial transformation will be inviting Andrew Breitbart over to dinner. They'll toast marshmallows over the campfire and sing Kumbuya.)
The truth is, I don't feel comfortable discussing race. I attended racially and ethnically diverse schools; my dad was in a fully integrated military. However, I didn't feel all that powerful being a single white male. [Being a Franco American whose ancestors migrated to the Fall River area (then a textile capital) during the Quebec diaspora), one of 11.8 million (including other ethnicities, such as Cajun and Louisiana Creole) out of 308 million people, isn't that common. Probably the most prominent French Canadian entertainer is Céline Dion, and singer/actress Madonna and actress Angelina Jolie had Franco-American mothers.] Being a single white male certainly didn't help me get job interviews in academia with colleges actively promoting diversity criteria; I remember campaigning for a campus visit to a private Oklahoma university, but they didn't have a woman on their department roster.
I don't underestimate the difficulties faced by people of color, including Ms. Sherrod. I think, though, most of us from other ethnicities seem to identity with the great American melting pot. Many of these came from cultures with a deep reverence for education; in fact, many Vietnamese immigrants were valedictorians of their high school; I mentioned in other posts the Honduran immigrant appellate court nominee Miguel Estrada, whom barely spoke English at 17 when he immigrated and then graduated with high honors from Columbia and Harvard Law School respectively. It's not clear that American culture really appreciates higher education. You find the familiar encouragement, e.g., by Obama or Sherrod, for young people to get professional degrees (e.g., law school or medical school)--as if we need any more lawyers! It would be nice if we saw more emphasis on bright young people getting degrees in the basic sciences or engineering...When I was a grad student at UH, one of the organization behavior professors on the faculty went to Europe to teach for a semester or two; he returned, mentioning how he was treated like royalty. My students, on the other hand, often tried calling me, without asking, by my given name, and when I returned to professional data processing after my brief academic career, I was confidentially advised to drop mention of the PhD.
Senator Jim Webb (D-VA) (no, not the talented songwriter Jimmy Webb who wrote "MacArthur Park" and "All I Know") wrote an article last week in the Wall Street Journal entitled, "Diversity and the Myth of White Privilege." He doesn't quite phrase his thesis as I would; but basically affirmative action programs have grown in complexity over the years to cover almost all ethnicities, including some categories which have not suffered the historic disadvantages. He's not backtracking on the continuing relevance of affirmative action to blacks, but he points out that in many cases, poor whites in the South experience similar issues. In a certain sense, he is arguing that the affirmative action program should have been oriented towards socioeconomically challenged regions, in particular the old South, which has had less income and tax money available for public education.
What does this have to do with Shirley Sherrod? (In fact, Jim Webb doesn't mention Sherrod in his article.) Well, keep in mind what Shirley said in terms of her own racial transformation: she became aware of the fact that this white farmer facing bankruptcy was facing the same type of problems as her black clients. Thus, they had a common adversary: the white moneyed interests. In fact, Jim Webb makes a very similar point in alleging the white elite used racial tensions to divide and conquer the lower class.
I'm not convinced in most cases that "training wheel" affirmative action programs have lived up to their promise (or the money spent), and this tree has gained many rings over the years, following the typical pattern of progressive government empire building. The idea that you can continue to blame all of society's problems on a shrinking pool of white males is intuitively absurd; Jim Webb rightly calls the status quo procrustean.
Former Justice Sandra Day O'Connor fervently wished that the need for affirmation action would melt away in time, i.e., that it would no longer be necessary to provide an institutional helping hand to help target disadvantaged individuals and businesses to succeed. In fact, I think Senator Webb is right (although he didn't conclude as I do here): we need to streamline processes, focus limited resources, validate results, and recognize the limitations of government. Putting someone into college whom is not ready for college-level work doesn't help the school or student. Not every business succeeds or deserves to succeed. At some point you have to take the training wheels off the bike and ride just like everybody else.
The Democrats Won't Let Go Of Class Warfare on Taxes
The Democrats refuse to let go of the Bill Clinton tax rate increase for the upper-income as the Holy Grail of right taxation. I oppose this, and I've never made enough money to have to pay the top rate.
If I hear one more progressive cite how Warren Buffett pays a lower tax rate than his secretary, I'm going to play a game of whack-a-mole. Tax rates are RELATIVE, not absolute. We don't pay progressive rates for other goods or services. For example, we check out at the supermarket counter, we don't pay based on our adjusted gross income off last year's tax form. We don't pay $1 for a loaf of bread, but Warren has to pay $90. (If the supermarket was stupid enough to do that, I'll be happy to sell my loaf of bread to Warren for $45.) So let's say Warren Buffett makes $5M at a 25% overall tax burden, and his secretary makes $50K at 28%. (These numbers are fictitious just to make a point. Assume no payroll tax and uniform application of the tax rate in question.) The secretary pays $14K in taxes and Warren Buffett pays $1.25M. Now why is it Buffett getting a break when he gets no more common defense or Supreme Court or other government expenditures than the secretary but he pays 90 times the amount of tax as the secretary. The idea that it's only right that he should pay a 40% tax burden, or $2M just seems wildly unfair.
Let's first remember that the well-to-do don't just pay federal taxes. They also face progressive state and/or local income taxes, among other taxes. Moreover, many small businesses are taxed at the owner's tax rate, which means while big corporations are taxed at, say, 35%, the effective tax rate for the small business can top that rate.
What the President and most of the Congressional Democrats are trying to do is force more revenue from the same stream of income. Raising tax rates never achieves its desired results. It essentially raises the cost of earning income. There are a number of things I can do: for example, I can defer income, I can take more of my compensation package in stock (paying lower capital gains taxes), I can shift more of my capital into tax-advantaged investments, I can move to a place with lower taxes, or I can decide to take an extended vacation.
This cherry-picking by the Democrats (everybody gets tax cuts except the top 3 to 5%) is penny-wise and pound-foolish. The last thing you want to do is make an already too progressive tax system even more progressive. It punishes someone for being economically successful. It can deprive companies of capital needed to expand. More importantly, even if you tax away all income, you run out of rich people very quickly. You need to treat people fairly--either everybody gets tax breaks, or nobody gets tax breaks. But allowing tax cuts to expire at the end of the year may help federal revenues this year, i.e., basically rich people will have an incentive to push up income from future periods. This may be good for this calendar year's receipts, but it will be long-term foolish.
No wonder Bernanke urged the Congress to renew all the Bush tax cuts--to prop up next year's growth. Echoing this point of view are three prominent more conservative Democrats: Bayh, Conrad, and Nelson (NE). Let's hope that the tax cuts (actually, the current status quo) continue. Tax rate increases in a fragile economy are never a good idea. But if you are going to let the tax cuts expire, as Greenspan notes, you can't pick winners and losers. Everyone, including the middle-class, has to go back to the old rates.Obama may not agree but that's because his objection is based on ideology, not sound economics.
Political Cartoon
Lisa Benson spoofs how Obama doesn't see why job recovery in the private sector is so weak. Oh, gosh, I wonder... Taxes are going up at the end of the year; with a tax-tax here, and a tax-tax there, here a bank tax, there a health tax, everywhere a tax-tax... And a takeover here, and a bankruptcy there; And a shakedown here, and a pay czar there. And let's look at the government's current portfolio of private sector subsidiaries: AIG, the GSE's, GM, Chrysler,... You can see 101 examples of how Obama's policies distort the economy and create uncertainty, e.g., the cash for clunkers bill, subsidies for new home buyers, etc. If and when these type programs run out of money or end, sales crash in the sense the policy borrows customer purchases from the near future. Obama frequently explains we can't afford to do nothing. He's dead wrong; desperation in economic policy (as well as in life) can be unproductive; patience is a virtue. Obama's hiring spree, in the middle of a weak economy, constitutes a permanent increase in the cost of federal operations, at the very time we should be downsizing ultra-expensive federal employees, whom by some estimates cost on average $100K each in wages and benefits, far above the average household income/benefits. Also, the massive federal deficit and national debt requires significant interest expenses, crowding out other expenditures, and the debt competes with the private sector for investment dollars.
Quote of the Day
I am extraordinarily patient, provided I get my own way in the end.
Margaret Thatcher
Musical Interlude: Chart Hits of 2005
Kelly Clarkson, "Since U Been Gone"
Mariah Carey, "We Belong Together"
Rob Thomas, "Lonely No More"
Kelly Clarkson, "Because of You"
