When President Trump and a Republican-controlled Congress enacted a new tax on large private college endowments, it was widely interpreted in part as political payback by Republicans for higher education's leftist tilt. Now, though, the Democratic Party's nominee for governor of Massachusetts, Jay Gonzalez, who served in the administration of Democrat Deval Patrick, wants to levy a similar tax. WBUR reports:
His proposal would levy a 1.6 percent tax on private colleges with endowments in excess of $1 billion.
The tax would currently apply to nine schools in Massachusetts: Harvard University, MIT, Williams College, Boston College, Amherst College, Wellesley College, Boston University, Smith College and Tufts University.
Harvard and MIT would pay $563 million and $210 million, respectively, under the plan, according to the Gonzalez campaign.
In total, the campaign estimates the tax would generate $1 billion a year.
Some things don't quite add up about hedge fund manager Seth Klarman's interview with the New York Times in which he discloses that he will spend between $18 million and $20 million this election cycle on helping Democrats "because I think democracy is at stake."
For one, part of the idea of "democracy" is that every person gets a more or less equal voice in electing our leaders. One person, one vote. Yet here Klarman, because he's rich, is proposing to use his money to sway the outcome of the election. When the Koch brothers or Sheldon Adelson do this to elect Republicans, Democrats denounce it as profoundly undemocratic. One might argue that the end of electing Democrats justify doing so by undemocratic means. But in the Times article, there's a whole paragraph in which Klarman rejects ends-justify-means thinking when it comes to President Trump:
The mismatch between the Trump administration's poll numbers and its positive results on the two big issues — peace and prosperity — is the topic of my column this week. Please check the full column out at the New York Sun here and at Newsmax here.
The Economist's 175th anniversary "leader," or what Americans call an editorial, headlined "A Manifesto For Renewing Liberalism," includes plenty of wisdom, not least the advice that liberals, "must stop sneering at nationalism, but claim it for themselves and fill it with their own brand of inclusive civic pride. Rather than lodging power in centralised ministries and unaccountable technocracies, they should devolve it to regions and municipalities."
Amanda Ripley, writing in the Atlantic, takes a long and thorough look at the cost of college in America and concludes:
Ultimately, college is expensive in the U.S. for the same reason MRIs are expensive: There is no central mechanism to control price increases. "Universities extract money from students because they can," says Schleicher at the OECD. "It's the inevitable outcome of an unregulated fee structure." In places like the United Kingdom, the government limits how much universities can extract by capping tuition. The same is true when it comes to health care in most developed countries, where a centralized government authority contains the prices.
The U.S. federal government has historically been unwilling to perform this role. So Americans pay more for pharmaceuticals—and for college classes.
Some illuminating background from the New York Times about detaining child immigrants:
The Trump administration moved on Thursday to remove court-imposed time limits on the detention of migrant children, proposing to end 20 years of judicial oversight ...If approved, the new regulation would upend a body of rules for detaining migrant children that has been in place since 1997. Multiple administrations have challenged the rules, which stem from a consent decree in a federal class-action lawsuit over the physical and emotional harm done to children held in jail-like settings for extended periods....
The 1997 consent decree was reached after advocates successfully argued that federal detention was damaging, physically and emotionally, to children's health and limited their access to legal counsel. In 2016, the courts extended the settlement to apply not only to children who were crossing the border alone, but to migrant families.
If the Democrats succeed in taking over the House of Representatives in the midterm elections, part of the reason will be an approach more commonly associated with Republicans — decentralization and local decision-making.
The New York Times reported last month that the Democrats are "leaving it to candidates to tailor their own messages to their districts" and "have concluded that a unified campaign framework emanating from Capitol Hill would do more harm than good."
From the Times:
"We trust our candidates to know their districts and the challenges facing their communities better than anyone," said Representative Ben Ray Luján of New Mexico, the chairman of the House Democrats' campaign arm.
Here is a video of Damilare Sonoiki speaking at Harvard Class Day, part of the 2013 Commencement activities.
Here is a press release from the Justice Department announcing criminal charges filed against Sonoiki and a pro football linebacker, who said, "His background as a Harvard graduate and an employee of Goldman Sachs gave me a false sense of confidence." My column this week is about this situation. Please check out the full column at the New York Sun (here) and Newsmax (here).
Our friends at Baron Public Affairs LLC are out with an intriguing, if grim, new paper highlighting what they call "Super Trends: Drivers of U.S. Political Risk."
Among those trends, the firm says, is "social capital collapse." A series of statistics cited in the paper paint a somewhat dystopian picture. "Deaths of despair – defined as those caused by suicide or substance abuse – have more than doubled among certain demographics since 1990," according to a Brookings study.
Over this past weekend the Boston Red Sox were swept by the Tampa Bay Rays in a three-game series.
The Rays scored 24 runs over the three games and the Red Sox only scored 5. There were a variety of factors at play. The games were at Tropicana Field in St. Petersburg, so the Rays had the home advantage. The starting pitcher who has been the best for the Red Sox all year, Chris Sale, has been on the disabled list, so the Rays did not have to face him. The Red Sox, who are my own hometown team, have the best winning record in baseball overall this year.
But this is a website about capitalism, not sports, so it's worth noting, too, that the Red Sox have the largest annual player payroll in major league baseball, at $227,835,760, while the Rays have the smallest, at $71,083,023, according to Spotrac.
The Investigators, a book about the FBI written by James Q. Wilson, was the topic of my column last week. Please check out the full column at the New York Sun (here), Reason (here), and Newsmax (here).
Under the headline, "Beware Rich People Who Say They Want To Change The World," The Sunday Review section of the New York Times carries an attack on the businessman and philanthropist David Rubenstein. The article describes him as "one of the reasons the government is strapped" and blames him for what the Times calls "the carried interest loophole." The Times claims, "closing the loophole could give the government $180 billion over 10 years."
Managers of real estate, oil and gas, and other investment partnerships have been taxed on their profits at capital gains rates since long before Rubenstein started the Carlyle Group. Congress, not Rubenstein, writes the tax laws, so blaming him for them seems odd. And "give" is the nicest possible word to use what actually would be a "take" — a forced transfer of money away from private-sector investors and into the hands of politicians.