A professor of economics at Harvard, Martin Feldstein, who served in the Reagan administration, has a new paper out from the National Bureau of Economic Research discussing how to reduce the federal debt. The whole paper, "Preventing a National Debt Explosion" is interesting, and there's a neat little discussion about the problems with a "millionaire's tax" — "In short, a ten percentage point millionaire surcharge would produce at most only $44 billion of extra revenue and would cause a deadweight loss of more than $47 billion or one dollar of pure waste for every extra dollar that is transferred from the millionaires to the Treasury." My favorite part, though, is the discussion of what Professor Feldstein calls "tax expenditures" — items like the home mortgage interest deduction, the subsidy for employer-provided health insurance, the child credit. Here is his discussion of the "political economy" of the issue:

Under the headline "The Story of the 1990s Economy," a commentary from the think tank Economic Policies for the 21st Century attributes the growth in the late 1990s to faster computers:

what explains the productivity surge and the sharp rise in economic growth during the late 1990s? In a 2007 paper, a team of economists lead by Harvard's Dale Jorgenson found the economic expansion was driven by efficiency increases in the production of IT, including computers, software and telecommunications components. Improvements in IT production "resulted in higher rates of decline in IT prices, stimulating decisions by firms, households, and governments to invest in IT equipment and software."

The Republicans haven't even yet won control of the House of Representatives, yet the left-wing press is already racing to attribute the Republican Party's impending gains to criminal behavior on the scale of Watergate. A managing editor of the New York Times, Jill Abramson, wrote the cover story for yesterday's Times Week in Review section, quoting campaign finance advocate Fred Wertheimer and asserting, "the fund-raising practices that earned people convictions in Watergate — giving direct corporate money to a campaign and doing so secretly — are back in a different form in 2010."

The New York Times has a blog post and a news article about a Columbia University conference of academics called the "Elites Research Network," which "drew in scholars focused on inequality across academic disciplines, like economics, political science, sociology and history."

From the blog post: "One of the academics at the conference, Sudhir Venkatesh, a professor of sociology at Columbia, argued, 'You have to come in accepting that there will always be poor people in society and there will always be wealthy people in society, and neither of the two reached that status by their own efforts.'"

If Professor Venketesh really believes this, he should also believe that tenured professors at Ivy League universities don't reach that status by their own efforts, either.

From the article:

The Wall Street Journal has a look at the attitude toward charity of Carlos Slim, listed by Forbes as the world's richest man: "The only way to fight poverty is with employment," he said. "Trillions of dollars have been given to charity in the last 50 years, and they don't solve anything."

Don't look for Mr. Slim to sign on to the Warren Buffett-Bill Gates "giving pledge" anytime soon.

Amity Shlaes has a really wonderful piece in the weekend Wall Street Journal reviewing the book American Colossus: The Triumph of Capitalism 1865-1900 by H.W. Brands:

The president of Bowdoin College, Barry Mills, whose wife, Karen Mills, was appointed by President Obama as the administrator of the Small Business Administration, writes an article about the effects of the health care legislation on his educational institution:

the complexity of all this has increased exponentially with the new health care law recently enacted, and our costs are going to go up....

The fact is that wherever you come out on the policy of health care reform, Bowdoin's costs for health care are going up because we are taking on greater expense. This will obviously affect the College because we will have to pay for these increased costs with existing revenues, reallocating funds from some other priority to health care.

No one knows for sure whether the new law will actually result in lower health care costs by reducing the underlying cost of health care in this country. Many are skeptical that costs will moderate based on the current law, and I am among the skeptics.

The Microsoft founder reviews a book called Energy Myths and Realities: Bringing Science to the Energy Policy Debate, by Vaclav Smil, published by the American Enterprise Institute:

Smil is appropriately tough on the ethanol crowd. This is one energy approach that is unlikely to ever have a significant impact due to fundamental problems. The fact that the U.S. has subsidized this activity at a cost of $5 billion to $7 billion per year – even as it raises the cost of food – is incredible. The U.S. won't allow foreign ethanol to get the same tax credit, which suggests that the policy is not really focused on the energy benefits of ethanol. A large lobby, which now extends even beyond the corn farmers, manages to keep the policy intact.

The Wall Street Journal has a humdinger of an editorial today on Rep. Barney Frank's re-election battle in Massachusetts:

The Boston Herald reports that Mr. Frank and his domestic partner travelled to St. Thomas in the U.S. Virgin Islands last winter on a private jet owned by hedge-fund operator Donald Sussman. Mr. Sussman is the fiancé of Representative Chellie Pingree (D., Maine), who was also aboard.

In a Wall Street Journal op-ed, Kenneth Langone recalls starting Home Depot in 1979:

If we tried to start Home Depot today, under the kind of onerous regulatory controls that you have advocated, it's a stone cold certainty that our business would never get off the ground, much less thrive. Rules against providing stock options would have prevented us from incentivizing worthy employees in the start-up phase—never mind the incredibly high cost of regulatory compliance overall and mandatory health insurance. Still worse are the ever-rapacious trial lawyers.

I'm as critical of President Obama as just about anyone, but the nostalgia for 1979, when the top marginal federal income tax rate was 70%, strikes me as maybe a little misplaced. There are plenty of ways in which technological advances have decreased the cost of starting a business today as opposed to in 1979, too.

From a front-page news article in today's New York Times: "The Tea Party candidate in Nevada, Sharron Angle, has improved the odds that Senator Harry Reid, the leader of Democratic majority, hangs onto his seat."

I understand this is what passes for conventional wisdom, but what is the evidence for it? At least three recent public polls (Rasmussen, Fox, and a Las Vegas newspaper) have shown Ms. Angle with a narrow lead, and even the Times itself reported earlier this week that "Mr. Reid finds himself trapped in the race he has, in many ways, always feared."

The Obama administration has spent about $3 million in government funds on pre-election television commercials touting the supposed benefits of ObamaCare, Mike Allen's Politico Playbook reports. "The Department of Health and Human Services insists that the ads are not political," the report says.

The new Bloomberg Businessweek cover story is "Why Business Doesn't Trust the Tea Party." It frames the Tea Party as "extreme and inflexible," as opposed to "business leaders who prize pragmatism and stability." It all depends on what adjectives one chooses; the Tea Party might also be characterized as "principled" as opposed to business leaders who are "unprincipled" and "stubbornly opposed to change."

More:

The Republican candidate for Senate in Nevada, Sharron Angle, scored victories in both substance and style in an hourlong nationally televised debate with the Senate Majority Leader, Harry Reid.

On the substance, Ms. Angle emerged as a champion of the Constitution, faulting Mr. Reid for backing "unconstitutional bills like ObamaCare," invoking Nevada's "Tenth Amendment Rights" to control its education dollars, and reminding Mr. Reid, her Democratic opponent, that, "our founding fathers knew that the best government was a limited government." She framed the choice for voters as between Harry Reid and "big government" and herself and "limited, Constitutional government."

When we think about the federal government and redistribution of wealth or "progressivity," we often think of either welfare benefits for the poor like food stamps and Medicaid or about the different tax brackets based on income. But it's worth remembering too, all the special tax breaks and credits that "phase out" once a taxpayer reaches a certain level of income. The Wall Street Journal has an article about President Obama asking Congress to make permanent something called the "American Opportunity Tax Credit," which offers a refundable tax credit for $2,500 a year in college expenses. Families can qualify for the full credit with "a modified adjusted gross income of $80,000 or less, or $160,000 for joint filers." At "$90,000 in modified adjusted incomes, or $180,000 for joint filers," it phases out completely.