Audio Clips

26 March 2009

How We Stop AIG

Really!? This is What the Senate Should Worry About?

For years now I have been bitterly disappointed by Senator Orrin Hatch. He wrote a prelude to one of my favorite books, The 5,000 Year Leap, and so I had expected him to be a constitutionalist. However, he continually proves himself to be someone who is willing to exercise government power in ludicrous fashion. This is no exception.

Senator Hatch now wants the Senate to introduce legislation to control how the college football champion is determined. Really!? We have border problems with Mexican cartels. Our military is in harm's way in Afghanistan and the situation is deteriorating. We have seemingly insurmountable social welfare obligations piling up in Medicare and Social Security. We have a trillion dollar deficit. This is just the beginning of an enormous laundry list of SERIOUS problems and Senator Hatch wants to take on the BCS?! We are off the rails. Unbelievable.

25 March 2009

Obama to Harm Charities?

Martin Feldstein, Harvard University Economics Professor and one of President Obama's economic advisors on his Economic Recovery Advisory Board has said that the idea to lower the deduction for charitable contributions would not go well for charities. He says:

In effect, the change would be a tax on the charities, reducing their receipts by a dollar for every dollar of extra revenue the government collects.
He goes on to explain how this would work in practice.
Suppose someone would give $10,000 to a university if that amount were deductible at 35 percent. That deduction would reduce the individual's tax bill by $3,500. Limiting the deduction to 28 percent would lower the individual's tax saving on a $10,000 gift to $2,800.

This is where things get interesting: If the 10 percent increase in the cost of giving caused the person to reduce his gift by 10 percent, to $9,000, his tax savings would be 28 percent of $9,000, or $2,520. The government's revenue loss would be reduced by $980 (from $3,500 to $2,520). The person's gift to the university would be reduced by $1,000, almost the same amount. Since this high-income person would pay $980 more in taxes but give away $1,000 less, he would end up with an extra $20 for personal consumption.

He estimates that if this rule had been in place in 2007 charitable contribution would have been $16.5 billion rather than the actual $23 billion. That's a big twinkie. (Obscure Ghostbusters reference)

Obama's Plan for Charities

President Obama has said that reducing the tax deduction for those who give to charities will not have an impact on charitable giving. He said to "look at the evidence", because according to him there is very little evidence that his proposal would hurt charitable giving. I'm not sure what evidence he is using so I can't speak to that but I think most people can intuitively sense that if there is less of a deduction for our donations to charity then it will be one less reason to give. So if the deduction was the thing that pushed you to donate then you will probably reconsider.

I found one of President Obama's arguments particularly faulty. He said that it wasn't fair that a person who donates $100 and is in the 28% bracket and a person who donates $100 and is in the 39% bracket get differing benefits. The first person gets about $28 off their taxes, the other gets about $39. According to President Obama that's "not fair". Putting aside the fact that this sounds like playground whining, the second person likely has more disposable income than the first so they may be the one more likely to give money to charity. Particularly if there is an incentive. It seems silly for us as a society to continue whining about incomes not being fair. The fact of the matter is that the person paying 39% is paying about 40% more in taxes than the person paying 28%. ($3,900 - $2,800 = $1,100. $1,100 / $2,800 = 39.2%). If they are paying more, then OF COURSE they get a larger benefit from their tax deductions. Why do we call that unfair? I would say that the fact that "Mr. 39%" having to pay 40% more in taxes is unfair.

The main problem I have with this is that President Obama seems to feel that it is better that the government take the money and distribute it how they see fit rather than the millions of us making that decision. That is a fundamental difference in philosophy. Who is better at making good decisions with YOUR money: you or the government?

24 March 2009

Plenty of Blame to Go Around

I find it amusing that Barney Frank and Chris Dodd have been so busily trying to revise history over the past several months. Both of those men were active participants in the inflation of the housing bubble. There are many Republicans and Democrats at fault for this mess and if we are too busy pointing our finger at the other party saying that they are the bad guys we're going to miss the people in our own party who were equally at fault. The point is that there is more in common between our federal elected officials, regardless of party, than there is that differentiates them. They're all power-hungry and their primary goal is reelection. The good of the people is secondary to that goal.

Purpose of Marriage

I found this article very interesting. I agree with the author that we need to have open, frank and respectful dialogue as we make societal decisions regarding marriage. Too often we resort to name-calling and vilifying and paint the opposition as "evil" instead of talking and figuring out where the other person is coming from.

Privatizing Marriage is not the Answer to the Same-Sex Marriage Debate
by Jennifer Morse March 10, 2009

Far from settling the marriage debate, ‘getting the state out of marriage’ will reduce liberty, leave cultural questions simmering, and harm our nation’s children.

One proposed solution to the divisiveness of the same-sex marriage debate is to have the government get out of the marriage business altogether. This proposal is appealing because it seems to remove marriage from the realm of political contentiousness. We could mimic a market-type solution, in which individuals can make their own decisions about the meaning of marriage, and we need not make any collective decision. But these appearances are deceiving. We need to think through what it actually means to say that the government should “get out of the marriage business.”

What is the social function of marriage? We can answer this by taking the perspective of the child as a rights-bearing person and asking what it is owed. Unlike adults, the child does not need autonomy or independence. The child is entitled to a relationship with and care from both of the people who brought him into being. Therefore, the child has a legitimate interest in the stability of his parents’ union. No child, however, can defend these entitlements himself. Nor is it adequate to make restitution after these rights have been violated. The child’s rights to care and relationship must be supported pro-actively, before harm is done, if those rights are to be protected at all.

Marriage is adult society’s institutional structure for protecting the legitimate interests of children. Marriage attaches mothers—and especially fathers—to their children, and attaches mothers and fathers to one another. As a result, marriage is every society’s preferred context for sexual activity and child-rearing. The often-heard objection that some marriages don’t have children stands the rationale for marriage on its head. It views marriage strictly from the adult’s perspective.

This is why marriage is not simply a special case of the market, and family law is not simply a subset of property and contract law. Marriage exists to meet the social necessity of caring for children, who are not and cannot be contracting parties. They are protected parties. At the same time, marriage should protect the interests of both parents in pursuing their common project of rearing their children.

The genius of marriage as an institution is just this: by providing an extremely minimal legal structure, the state facilitates a huge amount of voluntary cooperation. The state doesn’t care about the details of particular couples’ arrangements. As long as they fulfill the basic requirements, the state has no further concern. Marriage is a largely self-regulating, voluntary system of long-term cooperation between parents. If we “get the state out of the marriage business,” though, this is the structure we need to replace.

But what would it even mean for the state to “get out of the marriage business?” Presumably any couple, gay or straight, could create any “contract” they like to govern their relationship. In effect, everyone would have civil unions, and no one would have the default contract now known as marriage. At the same time, presumably, a couple could have any house of worship bless their union, on any terms agreeable to the couple and to the house of worship. We could have a Muslim contract that mandates that the bride be a virgin, a Las Vegas drive-through wedding contract, and anything in between. Religious bodies could only impose religious penalties, such as banning offenders from the sacraments or temple worship.

Part of the appeal of this proposal is that the state appears to be neutral and even-handed. The state is not favoring any one religious group, or any particular form of relational contract. But this appearance is deceptive.

The motivation to form a contract of a particular kind or indeed any contract at all depends largely on the “default” alternative position. For instance, a strong social safety net decreases the mother’s economic need to form a stable parenting alliance with the father. The state may decline to enforce certain kinds of agreements if it perceives things like sexual exclusivity or permanence to be oppressive relics of a backward time. Through the combination of tax policy, parental leave policy, education, housing and many other policies, the state can show implicit favoritism toward parenting as a solo activity or as a partnered activity, without ever explicitly declaring a preference for one over the other.

This is why the idea of “getting the government out of marriage” is an illusion. The state can, by changing the terms of these and many other social parameters, greatly influence the types of contracts people form. We have simply moved the problem, and the conflict, back a step. Instead of fighting over marriage, we will still have to slug it out over these background conditions. “Government neutrality” sounds good on the chalkboard, but in fact, it is not possible.

In one sense, the government has already removed itself from the marriage business by ceasing to enforce the most basic features of the current “default” marriage contract: stability and sexual fidelity. The no-fault divorce revolution makes marriage less than an ordinary contract. In most contracts, the person who breaches must make some kind of compensation to those who relied on his performance of the contract. Only in marriage does the law permit people to dissolve the contract for any reason or no reason and never even offer an account of themselves.

Couples today are on their own when it comes to maintaining a relationship stable enough to rear their children to adulthood. They may obtain some support from their faith communities and social circles, but parents must make substantial investments of human and financial capital, over a long period of time, with minimal contractual protection.

Now we can see what “getting the state out of marriage” likely means in actual practice. It means eliminating the default marriage contract, with these background conditions. We know that the state has already shown itself to be uninterested in enforcing sexual exclusivity and permanence. Social pressures to form stable unions are almost non-existent. Yet the “social safety net” for unmarried mothers and their children will not go away, and in fact would probably be strengthened if the government didn't recognize marriage as such.

The most likely outcome, therefore, is that few people would even attempt to create a lifelong contract. The “prisoners’ dilemma” problem is at work here: it is publicly beneficial for society to have a norm of long-term marital stability, but it is in each couple’s private interests to write an escape clause for themselves into their own contract.

Would getting the state out of marriage make us freer? We can get a glimpse of the answer to this by looking at the impact of no-fault divorce. Presented to the public in the name of personal liberty, no-fault divorce has led to an increase in the power of the government over individual private lives. Family courts are one of the most intrusive institutions of the modern state, regulating how mothers and fathers spend their time and money. People under the jurisdiction of family courts can have virtually all of their private lives subject to its scrutiny. This is not an increase in freedom: it is an unprecedented insertion of the state into domestic matters.

Neither will an increase in “multi-partner fertility” (we won’t be able to call it “out-of-wedlock” childbearing any more) increase personal liberty. The state currently gets involved in regulating disputes between never-married parents, with all the same problems of intrusive family courts. Historically, the state’s attempts to make unmarried fathers to pay child support are much less successful than attempts to get divorced fathers to pay. And taxpayers will be on the hook for even greater expenditures for additional social services, since the outcomes for children are predictably dismal. Personal liberty will decrease, whether liberty is defined in terms of privacy or economics.

Some might say we should completely deregulate relationships between adults. The only interest the state should have is in the protection of children. The state shouldn’t care at all about the relationship between the adults, only whether the child’s needs are being met.

But this is essentially what we are already doing with the children of unmarried parents. The outcomes for these children are not the sort of thing we would want to expand to the entire population. These children have poorer life chances in virtually every dimension we can measure, even taking into account their parents’ lower incomes. The fact that the children of unmarried mothers so often end up in the child welfare system tells us that their needs are not being met. Besides, we would have to come to some consensus about what needs children have that warrant state protection.

In short, we cannot avoid the large, public questions involved in the definition of marriage, even if we want to. One way or another, every society does have preferences and beliefs about the proper context for sexual behavior and child rearing. One way or another, we have to answer the question of what is owed to children. We would be much better off having that discussion, honestly and openly. As things now stand, we are obsessing over fairness to adults while avoiding even talking about what is owed to children. “Getting the state out of the marriage business” is not a reasonable compromise but a complete abdication of our responsibility to face the important question of how we provide children with their just entitlements.

Dr. Jennifer Roback Morse is the Founder and President of the Ruth Institute, a nonprofit whose mission is to promote lifelong married love to the young by creating an intellectual and social climate favorable to marriage.

12 March 2009

06 March 2009

I Love Weekend Update

Weekend Update has always been one of my favorite SNL segments and I missed this one a few months ago but found it hilarious. Enjoy!

03 March 2009

Milton Friedman

A very good friend of mine runs a blog largely about the educational system that I think you would find of interest. He follows education closely and knows his stuff so I encourage you to check it out. In the meantime though I am embedding a video that he pointed out to me. It is a video of Milton Friedman, defender of the free enterprise system responding to questions about the "failures" of capitalism. It's an admirable defense and I thought you might like to see it. It's only about 2 1/2 minutes so enjoy.