How's That New Mass. Millionaire Tax Working Out?

February 16, 2024 at 3:52 pm

Under the headline, "Boston Faces $1 Billion Tax Deficit from Faltering Office Market," Bloomberg reports, "without a meaningful uptick in office demand, the city is on track for an annual collection shortfall of roughly $500 million starting in 2029, around 10% of total revenues, the report said. At the state level, Massachusetts tax revenues have missed budget forecasts for seven straight months through January."

Massachusetts imposed a new state millionaire tax this year after voters narrowly approved a ballot resolution heavily backed by the teachers unions. As I predicted, it hasn't produced the state revenue windfall that its proponents gave the misleading impression would be forthcoming.

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Spending, Not Tax Cuts, Drives Federal Budget Deficits

February 14, 2024 at 3:38 pm

Clive Crook writes in Bloomberg: "Republicans want lower taxes and lower spending. Democrats want higher spending and higher taxes (on companies and the rich). How to strike a deal? Easy. Cut taxes and raise spending – hence higher borrowing." That sounds like it makes sense, but when you look at the numbers over the past few decades the pattern actually doesn't empirically hold up.

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University of Chicago Faculty Campaign Contributions

February 13, 2024 at 3:28 pm

The University of Chicago student newspaper analyzed Federal Election Commission data about political campaign contributions by University of Chicago faculty between January 2015 and December 2023 and found that "97 percent of all donations were to Democratic-leaning candidates and political action committees." Democrats collected about $2.4 million, while Republicans collected about $80,000.

The article notes that "In years past, UChicago earned a reputation as a particularly conservative institution, perhaps due to the law school, the economics department, or the University's strident protection of free speech."

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Preet Bharara's Mistake

February 13, 2024 at 1:31 pm

Preet Bharara, the former U.S. attorney for the Southern District of New York, is now a partner at WilmerHale, where he's offering "solutions" including "white collar defense and investigations." He spoke to Bloomberg Markets, which asked him, "What was your biggest mistake?" Bharara replied:

As a general matter, when we open an investigation with respect to somebody—you know, because an FBI agent comes to your door, or we ask for your phone, or we issue you a subpoena—there's a policy of not telling you when we close the case.

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Biden Targets "Corporate Greed"

February 9, 2024 at 4:29 pm

From "Remarks by President Biden During Greet With MGM Resorts Management and Culinary Leaders," Las Vegas, Nevada, February 5, 2024:

And guess what? You've heard me say it before, and I mean it. And when I first said it, everybody thought I was going to get in real trouble, but I didn't care. Wall Street did not build America. The middle class did — built America, and unions built the middle class. ...

We have the best economy in the world. Inflation is coming down. There are still too expensive — too much is at expense and a little bit of corporate greed going on, too, nationwide. (Laughter.)

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Racial Wealth Gap Widens Under Biden

February 9, 2024 at 2:09 pm

The "Liberty Street Economics" blog operated by the Federal Reserve Bank of New York has a study, "Racial and Ethnic Wealth Inequality in the Post-Pandemic Era," showing that racial wealth gaps have widened during the Biden administration. The figure with the key finding is here:

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Biden's 'Existential Threat'

February 8, 2024 at 1:11 pm

From "Remarks by President Biden at a Campaign Reception," New York, N.Y., February 7, 2024:

There is only one existential threat we face in this world, and that's the environment. I mean, it literally is the existential threat. It's even more consequential than nuclear power, nuclear war. That would be horrible and awful and it would just make the environment incredibly worse. But it's about the environment.

Later on, in the same remarks, the president returned to the idea of an "existential threat":

I'll end by saying there is one existential threat, and it's Donald Trump. It's not about me; it's about Trump.

So Biden is sure there is "only one existential threat," he just can't quite make up his mind about whether it is "the environment" or "Donald Trump."

One thing Biden sure seems not at all confused about is when he expresses the wish that, "It's not about me; it's about Trump."

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Deterrence Against Iran Doesn't Work

February 8, 2024 at 9:28 am

Dan Henninger's latest Wall Street Journal column makes a super-important point about America's current mix of enemies: deterrence doesn't work against them:

Not one of these countries is a conventional opponent, subject—as the Biden national-security team believes—to incentives offered through diplomatic overtures to reduce their aggressive behavior. Iran, Russia and China aren't just military threats. None of them operate inside the West's traditional understanding of power relationships governed by a balance of interests. Instead, all three under their current leadership have become messianic political movements.

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Biden and the Rule of Law

February 6, 2024 at 2:35 pm

United Auto Workers president Shawn Fain, in a January 29, 2024 tweet supporting the Newton Teachers Association in its illegal strike that shut down the Newton public schools for 11 days: "The UAW stands with the @NewtonTeachers in Newton, Massachusetts who are Standing Up for a better life for their coworkers, their students, and their families. It doesn't matter what the law says: it is ALWAYS right to stand up for what's right. Stand Up for public education!" [emphasis added]

President Biden, February 1, 2024, at the Region 1 Union Hall in Warren, Michigan, in "Remarks by President Biden at a Political Event With United Auto Workers Members": "I tell you a guy I owe. I owe this guy named Shawn. He stood up — he gets it. (Applause.) No, no, no. He gets it. He — come here. Come here."

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Biden Bashes Wall Street

February 5, 2024 at 12:01 pm

Joe Biden used this line or a variation on it quite a bit during the closing days of the 2020 campaign. He had taken it out of the rotation, but here we are in a presidential campaign year and somehow it's back. Here it is, in "Remarks by President Biden at a Political Event with United Auto Workers Members," February 1, 2024, Warren, Michigan: "To me, it's a basic, basic thing. And I mean this sincerely. You know, Wall Street didn't build the middle class. Labor built the middle class. (Applause.) And the middle class built the country. Really."

This is such phony nonsense. Who does Biden think floats the stock and bond offerings of all those unionized companies? Who does Biden think manages retirement funds for the unions and for the members of the middle class? Who securitizes mortgage debt to make housing widely affordable for the middle class?

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The Great Recession Was Good for Health

February 5, 2024 at 9:49 am

A new working paper by economists from MIT, the University of Chicago, and McMaster University in Canada finds that higher unemployment during the Great Recession of 2007 to 2009 reduced mortality rates. "These estimates imply that the GreatRecession provided one in twenty five 55-year-olds with an extra year of life," they write.

They think the main mechanism is not that out-of-work people have more time to go to the gym and cook health meals, or less money to spend on cigarettes and beer, or that nursing homes have an easier time hiring better staff during a recession; instead, they say a big factor seems to be "recession-induced declines in air pollution."

They caution that their focus on mortality "may miss...important non-mortality health impacts, particularly at younger ages where mortality may be a worse proxy for overall health."

The National Bureau of Economic Research working paper is "Lives Versus Livelihoods: The Impact of the Great Recession on Mortality and Welfare," by Amy Finkelstein, Matthew Notowidigdo, Frank Schilbach, and Jonathan Zhang.

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Bret Stephens on Media Credibility

January 30, 2024 at 8:46 pm

New York Times columnist Bret Stephens:

I worry that we — the news media in general — let ourselves off the hook a little too easily in explaining why the floor is falling out from under our business. Yes, the internet is part of the story. So is a general decline in public literacy.

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EU Exports Antitrust Law to America

January 29, 2024 at 4:34 pm

One of the drawbacks of a global economy is that it enables regulators in less-free parts of the world to essentially export their rules and impose them on American companies. The example that brings this to mind is the deal by Amazon to acquire iRobot. The acquisition was originally announced back in August, 2022. Today Seattle-based Amazon and Bedford, Mass.-based iRobot jointly announced that the deal is off.

Amazon's general counsel, David Zapolsky, is quoted in the release as saying, "Undue and disproportionate regulatory hurdles discourage entrepreneurs, who should be able to see acquisition as one path to success, and that hurts both consumers and competition—the very things that regulators say they're trying to protect."

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Striking Newton Schoolteachers Storm City Hall

January 26, 2024 at 4:21 pm

Schools in Newton, Massachusetts have been mostly closed this week as the teachers union has waged an illegal strike. Things got particularly interesting yesterday as the teachers stormed City Hall to the door of office of the mayor, who called police for protection.

The Newton Beacon quotes the city's mayor, Ruthanne Fuller, saying of the teachers, "What they did today was not role-modeling what I think our adults should be doing here in Newton." She went on, "They pushed past the office staff, they crowded down the hall in front of my office, they started pounding on the door."

In 2021, the most recent year for which data is available from the state, the average Newton teacher earned $93,031.

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Backlash Against "Big" Is Smallminded

January 26, 2024 at 12:27 pm

The leading presidential candidates from both major parties are running against big business. Or, often, more precisely, "Big" business, with the capitalized "B" being a sign of something particularly sinister.

President Biden's January 11 statement on the December Consumer Price Index number bashed "big" four times in three sentences. The Democrat accused Republicans of planning "massive giveaways to the super wealthy and big corporations." He said Republicans have "locked arms with Big Pharma and Big Oil to try to stop us from lowering prescription drug costs and utility bills." And he said, "They're doing everything in their power to allow Big Banks to keep charging you steep hidden fees."

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