Larry Lindsey on JFK, Conservative

October 11, 2017 at 10:31 am

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Forgive me for delighting again (here is an earlier post on the topic) in the degree to which President Kennedy's tax cut is being used as a model for President Trump's. Here is Lawrence Lindsey, writing in today's Wall Street Journal under the headline "Tax Reform Will Give Workers a Raise":

There actually is a historical analogue to the legislation currently under consideration. In 1964 Congress enacted a tax cut that similarly encouraged capital formation and entrepreneurship. It cut the top personal rate by 21 points. It cut the corporate rate and introduced accelerated depreciation. The result was a boom that went on for the rest of the decade.

When a supply-side tax bill like this is passed at a time of full employment, labor's share of the economic pie expands rapidly. That happened after the passage of the 1964 bill, and it will happen again if the current tax reform becomes law.

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Trump Versus the Press, Again

October 11, 2017 at 10:10 am

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President Trump is correct to detect bias in the press and to speak publicly about it, I write in my column this week. Please check out the full column at the New York Sun (here) and Newsmax (here).

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Hotel Fees

October 9, 2017 at 1:56 pm

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The New York Times travel section has an article about hotels that are making like airlines and adding on extra fees for things — like suburban parking, early arrival, the in-room safe, or minibar restocking — that used to be included in the basic room fee. Glancingly but intriguingly, the Times suggests that these fees may be tax-driven:

why not just include the fees in the room rate?

There are a number of reasons, though the only one that possibly benefits the consumer is that if fees were included in the nightly rate, they would be subjected to municipal occupancy taxes.

There's an unintended consequence for you: cities jack up hotel taxes, and the hotels respond by changing their pricing policies so that all of a sudden a chunk of the money they are charging customers isn't subject to the tax.

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Amazon Pharmacy

October 7, 2017 at 9:32 pm

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Online retailer Amazon is looking at getting into the pharmacy business, CNBC reports.

If the problem is soaring health care costs, in part related to prices for medicine, an Amazon-related solution — one that relies on bargaining clout, operational efficiency, market competition, and the profit motive — just might be able to make progress where government-driven solutions — ObamaCare, Medicare, Medicaid — have not fully succeeded. One might argue that the current drug system works reasonably well at creating incentives for innovation and at providing many people access to life-saving medicines at relatively low out of pocket costs. It will be interesting to watch, if Amazon does get into the business, whether it thinks it can actually add value, or whether it just wants to capture some of the market share and pharmacy dollars now flowing to other retailers.

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To Rein in Government Spending, Try The Ellen Stern Test

October 3, 2017 at 10:33 am

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My column this week begins:

The most illuminating recent article about the tax reform debate didn't appear on the front page of any newspaper. It wasn't in the business section, or on the editorial page. It was an interview with Ellen Stern that appeared on an inside page of the New York Times arts section.

Mrs. Stern isn't an academic economist or a politician or a tax policy expert at some Washington think tank. She's a widow. Her husband, Jerome, died in March.

Please read the rest of the article at the New York Sun (here) or Newsmax (here).

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Garage-Based Asset Manager

October 3, 2017 at 9:59 am

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Garage-based businesses have been a longtime obsession of this site — a short list includes Hiller Helicopter, Google, Apple, Amazon, Mattel, Hewlett-Packard, Lender's Bagels, and the company behind the Predator drone, as earlier coverage here and here and here explains.

The latest example comes courtesy of today's New York Times: Alpha Architect, a "$700 million asset management firm" run by an ex-marine, Wesley R. Gray, with seed funding from Edward J. Stern. The Times reports that "Mr. Gray still works out of his garage" in suburban Philadelphia.

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Reagan on Puerto Rican Statehood

October 2, 2017 at 3:41 pm

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Amid the attention to disaster relief in Puerto Rico, it's worth remembering this passage from Ronald Reagan's November 13, 1979 remarks announcing his candidacy for president of the United States:

It is now time to take stock of our own house and to resupply its strength.

Part of that process involves taking stock of our relationship with Puerto Rico. I favor statehood for Puerto Rico and if the people of Puerto Rico vote for statehood in their coming referendum I would, as President, initiate the enabling legislation to make this a reality.

There have been a series of such referenda with varying and close results. In the most recent such vote, in 2017, 97% of those who voted chose statehood. In a similar referendum in 1998, 46.6% chose statehood while 50.5% chose "none of the above."

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Trump Talks JFK, Conservative

September 28, 2017 at 9:37 am

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From President Trump's speech yesterday about tax reform:

Democrat President John F. Kennedy championed tax cuts that surged the economy and massively reduced unemployment. As President Kennedy very wisely said, "The single most important fiscal weapon available to strengthen the national economy is the federal tax policy. The right kind of tax cut at the right time" -- at the right time, this is the right time -- "is the most effective measure that this government could take to spur our economy forward." That was President Kennedy. (Applause.)

My fellow Americans, this is the right tax cut, and this is the right time.

This quote from Kennedy appears on page 130 of the book JFK, Conservative, which has a whole chapter about Kennedy as a tax cutter.

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Man of the Hour

September 27, 2017 at 3:16 pm

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Jennet Conant's new biography of her grandfather, James Bryant Conant, who was president of Harvard and who helped to develop the atom bomb during World War II, is called "Man of the Hour." It is also the topic of my column this week, which you can read in full over at Newsmax by clicking here.

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Atul Gawande in the New Yorker

September 27, 2017 at 2:57 pm

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Atul Gawande does some old-fashioned shoe-leather reporting for the New Yorker in his hometown of Athens, Ohio, and unearths some valuable insights:

A right makes no distinction between the deserving and the undeserving, and that felt perverse to Maria and Joe. They both told me about people they know who don't work and yet get Medicaid coverage with no premiums, no deductibles, no co-pays, no costs at all—coverage that the Duttons couldn't dream of.

"I see people on the same road I live on who have never worked a lick in their life," Joe said, his voice rising. "They're living on disability incomes, and they're healthier than I am." Maria described a relative who got disability payments and a Medicaid card for a supposedly bad back, while taking off-the-books roofing jobs....

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Yet Another Big Defeat for Preet

September 26, 2017 at 11:34 am

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A panel of judges on the U.S. Court of Appeals for the Second Circuit has vacated the conviction of Dean Skelos, a Republican who was the majority leader of the New York State Senate, because of a "charging error" by prosecutors in defining the term "official act" for the purpose of instructing jurors in the case. Mr. Skelos and his son Adam now join the former Speaker of the New York State Assembly, Sheldon Silver; Bank of America, Michael Steinberg, Rengan Rajaratnam, Javier Artajo and Julien Grout, Benjamin Wey, John Pauling, Todd Newman, and Anthony Chiasson on the list of people that federal prosecutor Preet Bharara and his associates at the FBI went after but who were later either cleared by courts or found to have been the victims of problematic prosecutions.

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America's Decline, in Two Photos

September 20, 2017 at 3:17 pm

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Change at a Central Massachusetts apple orchard is the topic of my column this week. Please check out the full column at the New Boston Post (here), New York Sun (here), and Newsmax (here). Best wishes for 5778.

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IPO Brain Damage

September 19, 2017 at 10:01 am

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Under the headline "The Profits of Going Public Without the 'Brain Damage,'" Andrew Ross Sorkin has a column about tech companies staying private rather than going public:

The number of companies listed on public stock exchanges is half what it was two decades ago. Last year, fewer companies went public than during the financial crisis.

It's an interesting column but there are a few areas that I wish had been explored more. First, maybe some of these companies remain private not entirely by choice but because they can't successfully find enough public shareholders to buy in to marginally profitable or unprofitable companies at stratospheric valuations. In other words, if they could go public, they would, but they can't, so they are portraying it as choosing to stay private longer.

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Our Unimperiled Democracy

September 19, 2017 at 9:34 am

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Alex Beam has a Boston Globe column:

the "democracy is imperiled" crowd insists that democracy has become endangered ever since Donald Trump took office. I disagree...

Playing the pitch pipe for the "democracy is imperiled" amen chorus is Yale professor Timothy Snyder, who has likened Trump to Adolf Hitler. Snyder preaches that "we are hanging by our teeth to the rule of law," and that a presidential coup attempt "is more or less inevitable."There is quite an audience for this pap, reinforced by Snyder's status as a once-respected professor at a university that people have heard of....

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Bill Gates on Trump and the Press

September 19, 2017 at 9:25 am

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The Bill and Melinda Gates Foundation has released what it says will be the first in a series of annual reports measuring progress on a series of measures of development and public health. The statistics show remarkable recent gains and are worth a look if you need cheering up.

The New York Times has an illuminating news article about the effort and some recent Gates appearances:

Health journalists are sunk in negativism, they say, focusing on failures in a sea of global health successes...

Surprisingly, the new report was not a reaction to Mr. Trump's threats to slash the foreign aid budget by 32 percent.

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