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An Alternative Vision, Part IV: The Pivot
Posted by: Bryan Pick on Saturday, December 27, 2008

This is the fourth in a series: see the introduction, the basics, and the specific policy proposals.

Now, coming back to the political situation of the party: the GOP has begun to lose the young, minorities (those it hadn’t already lost), and the educated. The GOP is not a strong force in most major cities, and it doesn’t perform well among the poor.

Instead, its base is in rural America, which becomes a smaller section of the American population every year. The GOP has tied electoral success in many places to a backwards agricultural policy, even knowing that agriculture isn’t about to explode into a major new sector of the economy.

To whom would the policies of Part III be attractive?
 
  • The young (full disclosure: that includes me) would have a great deal to gain from this. Inflated real estate prices make it hard for the young to acquire homes, and the young are the most likely to carry a high ratio of consumer debt to income. The young are also most likely to be mobile (moving around to take advantage of job opportunities), so policies favoring stable homeownership tend to disfavor the mobile.
    • Keep in mind: low-income members of the labor force are disproportionately young people, and vice versa. Typically, people start out their careers earning relatively little income, peak in middle age, and then their incomes drop off as they enter retirement territory (at which point they have more accumulated wealth than they did when they were young).
  • Anyone who has employees, is an employee, or wants to regain employment, particularly employees making less than next year’s SocSec income cap ($106,800), should be thrilled by the elimination of payroll taxes. Firms will immediately have reason to hire new employees and raise wages relative to their other costs.
  • Anyone who has had insecure employment (switching firms or even careers frequently) should be happy to have portable health insurance, some savings to fall back on, and easier credit. Employees who save up money, perhaps in a Health Savings Account or in the form of assets that can be quickly liquidated (e.g. stocks) with relatively low levels of taxation, could rely on that to get them through the time between jobs. Having to liquidate value locked up in your home or consumer goods during lean times is not only difficult but extremely uncomfortable.
  • Anyone who complains of stagnant wages: cutting payroll taxes would encourage firms to pay higher salaries in an absolute sense, since all firms would instantly be able to raise wages without affecting the bottom line. Also, as more individuals opted to buy their own health insurance, businesses would have every reason to increase wages/salaries relative to benefits.
  • Environmentalists and anyone else who complains that Americans are decadent and/or consume too much will have reason to back these policies. These policies favor greater efficiency (greater production relative to consumption) and greater prudence—the classic American values of thrift and personal responsibility that have been neglected under both the Democrats and the old guard of Republicans.
  • Americans who save, invest and borrow to start new productive ventures should be happy to see productive behavior rewarded. There is no reason that Silicon Valley and Manhattan bankers/investors should favor Democrats, if Republicans start acting like they believe in free enterprise and risk-taking again. Main Street should be happy to have easier credit and lower taxes on their businesses, and Wall Street and Silicon Valley have everything to gain from an infusion of capital, which would surely be forthcoming if these policies were enacted.
  • Even those in incumbent, struggling industries like the automobile industry have something to gain: with taxes on labor and investment curtailed, these industries wouldn’t struggle so much under their current labor cost and business-tax restraints, and they would enjoy an immediate infusion of private capital. If they’re really able to make the transition to a long-term profitable industry again, as they say they can, this will go a long way to letting them do it—without fleecing the American taxpayer.
    • Offloading health insurance responsibilities onto employees, if firms chose to do so, would give them greater flexibility in managing their costs, while allowing employees to choose a plan that best fits them and their family.
  • People with low incomes, who spend the greatest proportion of their incomes on shelter, clothing, food, water and fuel.
  • If the libertarian hobby-horse ideas were included, these policies would also be especially beneficial to urbanites, blacks and immigrant groups. And again, the poor.
And who would be relatively disfavored by these policies?
  • Those who have already overinvested in unproductive property (although, again, the transition would be eased by a capital gains tax cut). This includes homeowners, particularly those who are no longer able to work, and people who are currently paid not to farm.
  • Those who are heavily invested in relatively inefficient industries—those that have to consume more to produce the same. This includes farmers who would need to change their behavior if subsidies were no longer available, and those whose business depends on these farmers.
  • Those whose employer-provided insurance is most subsidized by younger, healthier workers—they would not appreciate having those younger, healthier workers in separate insurance risk pools.
  • Employees of certain regulatory agencies, obviously, have something to lose.
Obviously there are many people who fit in multiple categories, who would have to adjust their lifestyles accordingly. The good news is that these policies offer everyone affected a way to compensate: if you have over-invested in unproductive and inefficient assets, these policies will create opportunities for you to move your wealth to more productive places.

It has to be done sometime, to achieve long-term prosperity. Americans elected a man promising Change, but meaningful change often involves some painful adjustment. The traditional American Way of dealing with change has the logic of ripping a Band-aid off quickly: take the pain all at once, appraise the new situation, and move on. We do it better than anyone else in the world, which is how we stay at the forefront of innovation.

So Republicans should offer a broader vision of change, toward a more dynamic society that rewards work and thrift, and demands greater personal responsibility. It’s a vision of a society that allows consumption to follow from production, instead of trying to "consume first, figure out how to pay for it later." It’s a vision of a country that encourages innovation and entrepreneurship, and rides economic waves rather than fighting them.

And electorally, it’s a series of policies that would pivot the party away from narrow interests within shrinking constituencies, so that we can challenge the Democrats for increasingly influential parts of the electorate. The Republican Party could stake a greater claim to being the party of personal freedom and prudence, while at the same time focusing on creating opportunity for people starting at the bottom, including those who have been poorly served (or dis-served) by the current system. To these policies many Americans would owe their jobs, bigger paychecks, and greater security between jobs; and all the while, the GOP would be inducting the mass of America into the “investor class” and creating new markets.

I think that's a pretty attractive alternative vision. Let me know what you think.
 
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Excellent series of posts, Bryan.

Now a few questions after my first admittedly cursory read (I need to read it all again and more slowly).

1. How do you sell this not only to "non-Republicans", but the Republican constituency as well? This is going to take some rather in-depth explaining as you tie together all of the changes you advocate into something which promises to be "better". How do you, for instance, take away from the consumption side and sell it to consumers? If they don’t buy into it, it isn’t going anywhere in the world of politics.

2. I’m rather hardcore when it comes to taxation, and not a huge fan of "substitution", i.e. I’ll trade you my payroll tax for a consumption tax. How do you sell a ’revenue neutral’ idea to those who want a net tax cut?

3. I don’t want or think we need a carbon tax. How do sell such a tax to the rather large plurality which agree with me?

4. While I think the government shouldn’t be in the subsidy business for anyone, we’re talking Republicans here - how do you sell ending agricultural subsidies when, as you point out, the constituency of the Republicans can be found mostly in rural America which is heavily dependent on agri-business. This isn’t a "where will they go" instance (i.e. they will "go" with the party that promises to maintain the subsidy). They will vote to keep the subsidies (one of the insidious reasons subsides are so hard to kill).

5. I think your point about prohibition is spot on - the only reason we may see decriminalization of marijuana right now is the potential in tax revenue. But you’re still going to have to overcome stiff conservative (in both parties) resistance. Another hard concept to sell since most believe (whether true or not) that MJ is a gateway drug - how do you manage that sales job?

6. School vouchers - I think this is probably the signature issue (domestic issue) that Republicans can push. Again, however, pushing strictly secular schools as an alternative runs the risk of alienating a significant portion of the Republican base. I understand your point about "something is better than nothing" but will they? And, in your opinion, will they support such a split with a vague promise of inclusion at some unspecified date in the future?

Republicans must also address the hold teacher’s unions presently have on education. How do you anticipate doing that?

7. How would you reconcile all of the ideas you advocate with the statement "Republicans are for limited government"?

I’ll most likely come up with more on a second reading, but that’s a good start.
 
Written By: McQ
URL: http://www.QandO.net
Excellent post.

Re: Carbon tax vs. other consumption tax....if you can show me that a carbon tax is essentially very close to a straight up consumption tax like VAT or sales tax, then that could help doubters come aboard on that point. I suspect that it would be roughly close, because carbon is so damn plentiful anyways. Also, for the McQ folks out there, any spending cuts for them?

Re: whole shebang

Biting off more than you can chew? Maybe distill these down to 3 things, and think about the marketing. Lower payroll taxes - switch to carbon tax. School vouchers. Tough border control and anti-illegal along with freer overall immigration....1..2..3 I would also add aggressive federalism that would encourage states to liberalize pot laws and/or abortion or whatever, i.e. sneak in legalization by stealth in blue states while at the same time attracting anti-abortion folks in the red states.

I still think structural reforms like school vouchers do more to lay the ground work for future success than everything at once philosophy.

I’d still want to move tax day closer to election day. I think the price tag next to the product encourages economic thinking rather than "feelings."
 
Written By: Harun
URL: http://
The Republican brand has fallen on hard times for the simple reason that the people who were in charge of the party pushed many stupid and unpopular policies.

Many of which were not conservative and certainly not "classic liberal" or libertarian.

(1) Agriculture subsidies, corporate welfare, bailouts
(2) Over zealousness on the war on terror, while not fighting the war properly (for at least three years)
(3) The stupid war on drugs, and other (local) intrusions of the nanny state.
(4) In general big government, and big spending.
(5) and some in the party pushed for immigration amnesty.

What has to happen is that conservative and libertarian, and just "good government" policies have got to be articulated. And at the same time the democrats have to fail in order for the Republicans to make a comeback.

Of course, none of us really think the Dems have much of a chance at success.
 
Written By: kyleN
URL: http://impudent.blognation.us/blog
Honestly you guys are screwed. The Big Tent was always an illusion and it finally collapsed. You can’t win without Palin conservatives, and you can’t win with them. You have no niche.
 
Written By: TomD
URL: http://
Not quite Tom, you see, the big tent will expand again after the Obama team screws everything up. And they will, spectacularly, because they have all exactly the wrong things going on in the realm of energy, that is what will undo them.
 
Written By: kyleN
URL: http://impudent.blognation.us/blog
McQ - Thanks for the good questions.
1. How do you sell this not only to "non-Republicans", but the Republican constituency as well? This is going to take some rather in-depth explaining as you tie together all of the changes you advocate into something which promises to be "better". How do you, for instance, take away from the consumption side and sell it to consumers? If they don’t buy into it, it isn’t going anywhere in the world of politics.
I suppose I should do a little more thinking about the marketing aspect, but as I see it, here’s how you sell it to Republicans:

The key to communicating this agenda to the average voter is to stress that we’re trading one thing for another, slightly better thing.

Trading the mortgage interest deduction for lower capital gains (and other business) taxes is a mixed bag for homeowners: the loss of the deduction will make owning a home more expensive, but cutting capital gains taxes overall will create a sort of windfall for some of those who need to get out of homes that are depreciating in value, but don’t meet the standards for the massive home-sale capital gains deduction.

Meanwhile, with capital gains and other business taxes dropping, it’ll be easier to get higher returns on your savings, invest your money, and grow your business. It will make it easier to get credit so that you can move on. When businesses find it easier to raise money and face fewer tax burdens, it’s easier to create jobs, raise wages and create better products at lower prices.

Trading payroll taxes for consumption-based taxes means (besides stronger long-term growth) a bigger paycheck and more jobs, but also slightly higher prices. And to alleviate the effects of higher prices, we cut out several expensive policies that unnecessarily spend tax dollars inflating the prices of the staples of life (food, shelter, fuel, clothing). A consumption tax may increase the prices of those things, but it doesn’t spend money inefficiently to do so, and it accomplishes the supposedly good (Keynesian) parts of money-printing inflation without so many of the downsides.

Unlike printing money, this policy mix favors both debtors and creditors at the same time: creditors add extra savings to their asset line (rather than just seeing their assets depreciate) and have an easier time getting returns on their investments, and debtors get bigger paychecks with which to pay down their debt. I must admit, part of the reason I’d like to see more immigration is that we have a huge surplus housing stock that needs to get soaked up; while I don’t want to see shelter remain so expensive, they can help build a decent, natural price floor by coming here and renting/leasing/buying shelter.

To sell it in short phrases:
* More jobs, higher wages, more choices for what to do with it
* More liquid wealth, more savings, more security between jobs
* More competitive American businesses
* Lower prices per labor-hour for the essentials of life
* Getting out of debt (both at the personal and gov’t levels), without having to print a bunch of money and screw the creditors

Besides the general benefits accruing to any employee, employer, etc., here are the attractive parts for Republicans specifically:
  • This is an alternative to the Democrats’ plan of massive government spending (which leads to higher taxes), bailouts and inflation. If struggling firms need capital, this is a way to get them capital "naturally" rather than by fleecing the taxpayer. It’s also an alternative to straight-up government-subsidized "green-collar job" creation (on the order of 2.5 million jobs? Or was it 5m?), an alternative that promotes the most efficient changes in behavior first rather than those that appeal to central-planning technocrats.
  • This is also an alternative to universal healthcare and a host of other welfare programs. By raising individual pay, making it easier to acquire/save liquid capital, and lowering taxes on individual health insurance, we allow people that many more ways to provide for themselves in lean times. Increased portability for health insurance lowers demand for government services from the unemployed.
  • Finally we get to roll SocSec, Medicare and the like into the general budget. The political benefits of that might not be apparent to low-information voters, but for Republicans who broke against the rocks of Social Security reform in 2005, it has obvious appeal.
  • Less government redistribution, e.g. from cities and suburbs to rural areas. This has obvious demerits to rural Republicans, but there’s a significant number of middle-income and wealthy suburban Republicans who will be receptive to that.
  • Greater school choice. In some places, that will mean people can send their kids to church-founded schools; in other places, we’ll be increasing the long-term viability of that goal by introducing pilot programs.
  • Edit- this just occurred to me: Cultural conservatives have another reason to favor high property and consumption/carbon taxes relative to other taxes: they encourage people to live together, because they make it more expensive for people to live in separate homes, with more rooms per person, separately heated, each with their own appliances running concurrently. So this tax shift encourages marriage and tighter families, and discourages divorce.
  • This should also strike the Ron Paul crowd (relatively young, mobile, technologically proficient) and other libertarian-leaners nicely, since it involves greater free trade, more individual choice, striking at the Departments of Education and Agriculture, etc.
  • Actually, I recall reading that corn and cannabis grow extremely well together; something about complementary soil nutrients. That could help sweeten the deal.
2. I’m rather hardcore when it comes to taxation, and not a huge fan of "substitution", i.e. I’ll trade you my payroll tax for a consumption tax. How do you sell a ’revenue neutral’ idea to those who want a net tax cut?
First, you can achieve a net tax cut yourself via this substitution, simply by following the incentives more than the average person. Work, save and invest more; consume less.

Second, people "feel" consumption and property taxes more than they feel payroll and business taxes. A consumption tax is right in your face every time you buy anything, and property taxes (especially those collected once a year) arrive like a bill. Payroll taxes are automatically deducted before you even get to touch the money, and half of those taxes you never see because your employer pays them. And business taxes are invisible to most of us, although they do affect us in the form of fewer/lower-paying jobs, higher prices, lower product quality, etc.
In other words, we’re pushing for taxes that will make Americans more price-sensitive to government spending. That has political implications.

Third, since these tax shifts are designed as alternatives to massive government spending and money-printing, and involve cutting down the deficit, you do achieve a net tax cut, especially compared to the Democrat alternative. If Republicans want to add a more straightforward tax cut to the mix, since that’s a better economic stimulus than infrastructure spending, you know I’m all for it, but we should keep in mind that adding to our deficit just means we pay later, with interest. If we cut taxes commensurate with a cut in agricultural spending and a rise in revenues from cannabis, I’d lean toward supporting that.
3. I don’t want or think we need a carbon tax. How do sell such a tax to the rather large plurality which agree with me?
Even the Tax Foundation agrees that gasoline taxes are slightly below the Pigouvian optimum, i.e., where they make the best trade-off between known social costs (externalities) and private benefits. Now, you may not agree with them, but it’s a pretty good trade even if you don’t.

Why? Because you don’t want payroll taxes, either. As behavioral adjustments go, it’s easier to cut back on carbon consumption than to increase your paycheck. If you can make that trade, and bring conservation-minded voters on board (who maybe believe in things like energy independence or climate change, whether you agree or not), why not do so?
4. While I think the government shouldn’t be in the subsidy business for anyone, we’re talking Republicans here - how do you sell ending agricultural subsidies when, as you point out, the constituency of the Republicans can be found mostly in rural America which is heavily dependent on agri-business. This isn’t a "where will they go" instance (i.e. they will "go" with the party that promises to maintain the subsidy). They will vote to keep the subsidies (one of the insidious reasons subsides are so hard to kill).

5. I think your point about prohibition is spot on - the only reason we may see decriminalization of marijuana right now is the potential in tax revenue. But you’re still going to have to overcome stiff conservative (in both parties) resistance. Another hard concept to sell since most believe (whether true or not) that MJ is a gateway drug - how do you manage that sales job?
First, intensive communication: show the farmers that ending subsidies isn’t the end of the world. Some will no doubt have to change the crops they’re growing, some will lose their cushy payments for growing nothing at all. Some will simply not be able to grow on their current land without that subsidy. But New Zealand, a country more dependent on agriculture than America is, successfully weaned itself off subsidies and they’ve managed to grow their output considerably since that time.

Second, make it another trade-off: if they’ll give up on things like corn-ethanol and cotton subsidies, we’ll let them grow cannabis. Sure, the subsidies are worth tens of billions of dollars, but how much more money is there in hemp, the smoked stuff, etc.? Why, it even appeals to the mercantilists who get irked about us "sending money to foreigners."

As for the gateway drug thing, well, the usual argument we libertarians use—that it won’t be such a gateway drug if you take the relatively soft stuff out of the hands of dealers—will sell a lot better to Americans when they start making legitimate money selling it retail.
6. School vouchers - I think this is probably the signature issue (domestic issue) that Republicans can push. Again, however, pushing strictly secular schools as an alternative runs the risk of alienating a significant portion of the Republican base. I understand your point about "something is better than nothing" but will they? And, in your opinion, will they support such a split with a vague promise of inclusion at some unspecified date in the future?
I can’t pretend to know how this will play out, but my sense of things is, the local GOP can fall back on secular-only vouchers when it becomes apparent that church-founded schools aren’t going to win in that location. The religious Right may not like the outcome, but if they lose in a district despite their best efforts, because that secular argument wins out, the writing’s on the wall — and secular-only vouchers get them a step closer to nonsecular vouchers.
Republicans must also address the hold teacher’s unions presently have on education. How do you anticipate doing that?
Honestly, I don’t have an answer. I don’t have a problem with collective bargaining per se, but I do think when unions overreach (i.e., they press their demands to the detriment of the institution), the institutions they choke should have competition present to take up the slack. The only way to address teacher union overreach is to break up the public school monopoly by creating an alternative.
7. How would you reconcile all of the ideas you advocate with the statement "Republicans are for limited government"?
I’ve advocated cutting subsidies and other forms of protectionism, relaxing drug laws, and allowing new private initiatives to flourish.

And as I said earlier, my preferred policies are a substitute for massive government spending, bailouts and money-printing, which all lead to higher taxation. If we can shift taxation and make a few other cuts rather than start a New New Deal, I think we should do it.
-=-=-=-=-=-=-=-=-=-=-
Harun -
Re: Carbon tax vs. other consumption tax....if you can show me that a carbon tax is essentially very close to a straight up consumption tax like VAT or sales tax, then that could help doubters come aboard on that point. I suspect that it would be roughly close, because carbon is so damn plentiful anyways.
A carbon tax is a fairly broad-based tax, since so many people use "fossil fuels" and the products of those fuels, especially for transport and electricity production.
Re: whole shebang

Biting off more than you can chew? Maybe distill these down to 3 things, and think about the marketing.
The thing is, these things overlap and intersect. They complement each other, so that nobody is entirely screwed and we can reach out to people who haven’t been receptive to the old bumper-sticker formula of "generally less government = good!" I may be sympathetic to it, but we need a policy agenda that fits together into a cogent whole.

The simplified planks, I suppose, are:
* Trade away taxes on labor, savings/investment, and business in favor of taxes on consumption and property.
* Trade away agricultural subsidies for ending marijuana prohibition.
* More school choice, now and everywhere.
I still think structural reforms like school vouchers do more to lay the ground work for future success than everything at once philosophy.
I do think school choice is the most important victory the conservative/libertarian coalition could possibly win. But we need a broader policy agenda to address our current situation.
I’d still want to move tax day closer to election day. I think the price tag next to the product encourages economic thinking rather than "feelings."
Not a bad idea. Perhaps we should have biannual income tax deadlines, six months apart. One in April, and one in October.
-=-=-=-=-=-=-=-=-=-=-
Alice Finkel -
You are wrong about one point. Agriculture is poised to become an important economic power. The US needs a huge amount of new power but the US is going in the opposite direction. While China is adding 1 GW of power every week or two, the US is frozen and stagnant. Obama threatens to take coal, oil sands, oil shale, offshore oil, arctic oil, nuclear power, and almost every other form of energy off the table. That spells death to US industry, my friends.

Wind and solar are too unreliable, too intermittent, too difficult to store and balance on the grid, to replace fossil fuels and nuclear. That only leaves biofuels. Agriculture and forestry. Not any agriculture or forestry that we are familiar with, but something very big regardless.
Biofuels have their positives and negatives; I was an early enthusiast for thermal depolymerization, and I think other biofuels have their merits. But we grow an awful lot of our crops using petrochemicals, so I imagine there are diminishing returns as oil becomes expensive.

Then there are problems of scarcity in arable land and water, and the pollution caused by intensive farming.

I continue to believe nuclear should be a much bigger part of our energy portfolio at present, and I disagree with those who say it can’t be done profitably (maybe with current US regulations, yeah).

And as for solar, wind, hydro — I am far too much a believer in accelerating technological progress, including nanotechnology, to think that they won’t be economically viable energy sources. "Smart grids", powering our plug-ins at night (to spread out power consumption, which allows us to keep power plants running at higher capacity at night), collecting solar during peak daylight hours... there are lots of gains to be had there. I think we’ll get there.
-=-=-=-=-=-=-=-
TomD -
Be careful with your triumphalism. Back in 2003-04 I thought the Democrats were headed the way of the Whigs, and I used their awkward ad-hocracy of strangely allied interest groups as evidence. And here they are, back in commanding leadership of both houses of Congress and of the White House.
 
Written By: Bryan Pick
URL: http://www.QandO.net
Bryan,

Biannual payment of taxes is probably easier to do and "close enough."

I wonder if the agriculture subsidy issue is really that important, compared to say health care? Also, Caplan’s "Myth of the Rational Voter" found that the public really likes food subsidies for some reason- urban, rural, almost everyone. I’m not so sure that’s the plank I would want rest my case on, if only for tactical reasons.

About corporate taxes, I think John Kerry actually had a little plan in 2004 about reducing the rate while eliminating loopholes, corporate welfare, etc. Though I would almost consider ignoring capital gains and corporate taxes at first and focusing on the payroll tax, because one of the GOP’s problems is a perception that its all about fat cats. Rolling it over to consumption based on carbon is good because it encourages savings, but in green clothing.

What about conservative voters, though? So far, its all been libertarian economics, which is fine by me, but will that be enough for them? I think strongly asserting federalism regarding "cultural issues" such as gay marriage, abortion, and even the marijuana issue would be a good way to go. (Frankly, on legalization, I’d make than an "open issue" where party members would be allowed to agree to disagree.)

 
Written By: Harun
URL: http://
Biannual payment of taxes is probably easier to do and "close enough."
The more I think about it, the better it sounds. October 15, "Tax Day 2" — woof. That would still be fresh in everyone’s minds in the first eight days of November.
I wonder if the agriculture subsidy issue is really that important, compared to say health care? Also, Caplan’s "Myth of the Rational Voter" found that the public really likes food subsidies for some reason- urban, rural, almost everyone. I’m not so sure that’s the plank I would want rest my case on, if only for tactical reasons.
I understand, but once a broad-based consumption tax is passed, getting rid of policies that unnaturally prop up the price of food/water/clothing/fuel takes on a new urgency. Then we can make an especially good argument that we’re doing it to help the poor.

Health care is a very, very big deal. That’s part of the reason we should be aggressively marketing an alternative: private, flexible, portable.
I just didn’t see the value in attacking Medicare and massive regulation of health care head-on. We need a compelling alternative that we can sell, or at least something Americans don’t want to give up (in the case of Hillarycare, it was telling people that they’d have to give up their current insurance).

Personally, I think we can make a damn good case that the FDA denies patients access to life-saving drugs, and steal part of this issue directly out from under the Left. The FDA doesn’t let Americans accept treatments that have already been tested and approved in Western Europe.
Once again, we’d show that we care about the little guy, the patient, and we think he and his doctor should be able to determine his own preferred level of risk. Who wants to be on the receiving end of the outrage over a bureaucrat deciding from On High what a cancer patient can and cannot try in an attempt to save his life?

And that helps us move up the value chain, connecting the value of personal freedom/choice to health care, which moves the ball on the whole issue. "If the government can’t even get that right, why should we trust them with our whole health care industry?" And so on.
About corporate taxes, I think John Kerry actually had a little plan in 2004 about reducing the rate while eliminating loopholes, corporate welfare, etc.
In purely outline form, that doesn’t sound half-bad. Less room for corruption, less room for favoring incumbents over new competition.
Though I would almost consider ignoring capital gains and corporate taxes at first and focusing on the payroll tax, because one of the GOP’s problems is a perception that its all about fat cats. Rolling it over to consumption based on carbon is good because it encourages savings, but in green clothing.
Yeah, although the capital gains and other business taxes deny us an attractive place to put our saved money. We need an outlet for that money, and we need to attract capital to our businesses, so we can get people back to work pronto. Cutting payroll taxes gets us part of the way there, but once we raise consumption taxes (which hit them, their suppliers and their American customers), they’ll need a little something more.
What about conservative voters, though? So far, its all been libertarian economics, which is fine by me, but will that be enough for them? I think strongly asserting federalism regarding "cultural issues" such as gay marriage, abortion, and even the marijuana issue would be a good way to go. (Frankly, on legalization, I’d make than an "open issue" where party members would be allowed to agree to disagree.)
Federalism on gay marriage doesn’t work for the religious Right, because gays can get married in one state and all other states have to recognize the validity of the contract.

On abortion, I think asserting federalism is the only way to go, frankly. There is no reason to even talk about a federal ban on abortion — it won’t happen, and if by some miracle it did, it would be political suicide. We should concentrate on getting good judges on the Supreme Court who will recognize that, even if you’re pro-choice, Roe v Wade was bad law. It should go to the states — but then, everyone’s a little unhappy because they have to do state-by-state political action, instead of getting to fight it out on the federal hill of Armageddon.
And if Roe v Wade is ever overturned, I’ll put down a high-probability bet of a political realignment in this country. It’s a powerful wedge issue, keeping people on sides they’d normally abandon if not for that issue. It could be quite cathartic, really.

On marijuana — if it’s going to be taxed and regulated, you won’t be able to keep the feds out. Especially not if they switch to a consumption tax.
 
Written By: Bryan Pick
URL: http://www.QandO.net
Edit- this just occurred to me: Cultural conservatives have another reason to favor high property and consumption/carbon taxes relative to other taxes: they encourage people to live together, because they make it more expensive for people to live in separate homes, with more rooms per person, separately heated, each with their own appliances running concurrently. So this tax shift encourages marriage and tighter families, and discourages divorce.

Actually, it only encourages rooming together and shacking up. People can share electric bills without benefit of clergy.

I think that some of your ideas need refinement, and posted a comment in Part III on the specifics because I think that’s where it belongs, but in general I don’t have much to argue with you (other than the general problem of how exactly do you sell this?) The only major concern I have is with health insurance. Whatever solution you offer to that must take into account that 1)there is an enormous number of people who have high medical bills and 2)insurance companies have an economic incentive to avoid covering such people.
(I have a chronic illness for which I take medicines that total in excess of $500 a month at full retail, plus periodic examinations that cost, overall, about $3000 each time I take them (which is approximately every one or two years). Fortunately, my work-provided insurance covers most of it (for instance, reducing my payments for prescriptions down to about $150 a month). But would you want to be the insurance company that covers my bills?)
And in reference to:
Who wants to be on the receiving end of the outrage over a bureaucrat deciding from On High what a cancer patient can and cannot try in an attempt to save his life?
Remember when making that argument that most people now deal with insurance bureaucrats deciding on what is an appropriate treatment (and that’s happened to me, although fortunately without any life-threatening implications)—which is why the "bureaucrats will decide your health care" argument against NHS style insurance systems is a loser—for most people, national insurance would merely be substituting one sort of bureaucrat (government)for another (insurance company)—and, moreover, the replacement is much more amenable to political pressure and will (initially at least) be seen as costing less.
 
Written By: kishnevi
URL: http://kishnevi.wordpress.com
You made good points here and in Part III, kishnevi.
Actually, it only encourages rooming together and shacking up. People can share electric bills without benefit of clergy.
Granted. But that encourages activities that involve shacking up, and discourages the opposite, does it not?
in general I don’t have much to argue with you (other than the general problem of how exactly do you sell this?)
Indeed. I think keeping it short and focusing on the marginal benefit of each trade-off is the key. I wrote in a comment above:
To sell it in short phrases:
* More jobs, higher wages, more choices for what to do with it
* More liquid wealth, more savings, more security between jobs
* More competitive American businesses
* Lower prices per labor-hour for the essentials of life
* Getting out of debt (both at the personal and gov’t levels), without having to print a bunch of money and screw the creditors
These things speak directly to the concerns of a lot of Americans right now.
I could add "better schools" to the list, and that’s in addition to the personal-freedom, smaller-government, and environmental benefits.
Whatever solution you offer to that must take into account that 1)there is an enormous number of people who have high medical bills and 2)insurance companies have an economic incentive to avoid covering such people.
And that’s a tough knot, which will not easily be untied or cut.

The way I see it, though, insurance companies don’t want to cover those people because they aren’t able to place those people in the proper risk pools, and charge them accordingly. A single employer may cover all kinds of people of varying risk profiles, and while companies can negotiate lower prices by using their scale, they also introduce a lot of uncertainty into the business of insurance.

I could try, from my non-expert position, to explain all the ways that government increases the cost of your care, but ultimately, I don’t have a whole lot of policy prescriptions — a problem I’m hoping to remedy.
  • I do think that you should get the same tax break your employer gets when buying insurance for you, so that your care is portable (you don’t have to dread what happens if you have to change employers) and you can get a plan that fits you and your family best. Some people can’t get the job they want (or can’t leave for an otherwise better job) because they or their children have a condition that isn’t covered by their favored employer(s). Lots of people lose their coverage between jobs, or their new employers don’t cover them for some period of time.
  • I do think that Republicans need to encourage cross-state competition by removing state-by-state benefit mandates. Having a regulatory patchwork all across the country is more trouble than it’s worth.
  • I generally think that a free market would lead to actual insurance rather than what we have now, which is insulation. I think patients would demand a lot more data, in relatively consumer-friendly form—about their coverage, their referrals and which specific treatments were available at which cost—if they were insured rather than insulated. And that would lead to more patient surveys to follow up and see what is working and what is not, which should be relatively easy in the internet era. No doubt, insurers and doctors could mine this data and find out some fascinating things about themselves.
  • Obviously, once it comes down to emergencies, price sensitivity is kaput, and in our country, nobody can deny emergency care (which is politically bulletproof), so perhaps we need a new mechanism for making that affordable, and deterring people from treating it as their primary health care. Some have suggested mandating catastrophic or emergency care insurance; I wonder if there’s a market to be had in medical loans, once the patient regains consciousness or the next-of-kin shows up, to defray this cost. The interest rate and payment period could be based on recidivism rates, life expectancy, and other factors. The young, who often elect not to buy health insurance, would have the most time ahead of them to pay off such a loan, opening up the option of longer-term loans.
Unfortunately, I don’t know all the issues involved as well as I’d like, so I left them out of my recommendations. Feedback is welcome.
 
Written By: Bryan Pick
URL: http://www.QandO.net
Federalism on gay marriage doesn’t work for the religious Right, because gays can get married in one state and all other states have to recognize the validity of the contract.
Why? My TX concealed carry permit isn’t recognized in Chicago. Or is this another example of some contracts being more valid than others?
 
Written By: SDN
URL: http://
SDN -
The Contract Clause, Article I, Section 10 is why. "No State shall [...] pass any [...] Law impairing the Obligation of Contracts"
A permit to engage in an activity in Texas is not a contract between two parties extending outside the state. I’d stick with the Second Amendment — or the Ninth and Tenth — if I were you.
 
Written By: Bryan Pick
URL: http://www.QandO.net
As I said, "Some contracts are more equal than others." Or maybe that should have been government documents. A marraige license is a piece of paper saying that this state permits this activity. Why should a gun license be different?
 
Written By: SDN
URL: http://
My sense of things is this:
A marriage license gives you permission to form a particular kind of contract. One’s contractual obligation to the other party extends across state lines.

A gun license is different. It permits you to possess a particular kind of property in that territory without interference by officials of that state.

In any case, we shouldn’t get off-track: I didn’t write these laws. I’m just informing Harun of the way things are w.r.t. federalism.
 
Written By: Bryan Pick
URL: http://www.QandO.net

 
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