Chart of the Day

Kevin Drum does cool charts too, though he borrows his from among the coolest and most useful chart-makers out there, the Center on Budget Policy and Priorities:

Now that Democrats are pretty much set to let the Bush tax cuts expire  on the wealthiest Americans, Republicans are back to pulling out their, “oh no, what about small business, the driver of the economy!!” canard.  As you can see, these small businesses represent less than 2% of top earners, and the 1.9% figure actually overestimates them.  To Drum:

“To those who are pushing the higher marginal rates,” thundered Sen. Chuck Grassley (R–Iowa) earlier this week, “I say the burden is on you to show that you are not harming our primary job creators, small business.”

OK then. Let’s show it. Step 1: The Brookings Tax Policy Center estimates that only 1.9% of small businesses are in the two top brackets that would be affected. That’s a little better than the dozen small farms affected by the estate tax, but not by much.

Step 2: About half of that 1.9% aren’t really small business owners at all. They’re high-income investors who get part of their income from investments in small businesses. So we’re down to about 1% of small businesses that would be affected.

Step 3: The top brackets are just that: brackets. When the top rate goes up, it doesn’t affect your entire income, just the portion in the top bracket. So if the top rate goes back up from 35% to 39.6%, it only affects the portion of income above approximately $400,000. A small business owner making $500,000 would see an increase of about $5,000. This is a fairly modest amount for someone making a half million dollars, and anything higher than that is hardly a “small” business to begin with. And the marginal effect is even smaller for the second highest bracket.

Step 4: The Office of Management and Budget estimates that the 10-year cost of these upper-income tax cuts is $678 billion, the vast majority of which hits wealthy individuals, not small businesses no matter how you define them. That’s a fair chunk of change for anyone concerned about the deficit.

So, to reiterate a theme of mine of late, if you hear anybody pulling out this small business nonsense on personal income tax rates, remember that they are either, a) lying to you; b) hopelessly uninformed, or c) a Republican elite and probably guilty of both and b.

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It’s always the economy, stupid

Not quite sure how I missed this past Sunday’s column from Ezra Klein.  It nicely sums up a common (and quite correct) theme throughout the liberal blogosphere of late, that Obama’s popularity (or lack thereof at the moment) is far more determined by the state of the economy than any actions he taken.  What’s especially cool about this column, though, is that it actually quotes a number of political scientists on the matter (even some I personally know).

But maybe we don’t have to choose. For decades now, political scientists have been building election models that attempt to predict who will win in November without making any reference to candidates or campaigns. They can generally get within two percentage points of the final vote, and they don’t need to know anything about the ads, the gaffes or the ground games to do it. All they really need to know about is the economy.

“In presidential elections,” Princeton political scientist Larry Bartels says, “a 1 percent boost in election-year income growth has typically increased the incumbent party’s vote share by about 2 percent. So an incumbent party that won 51 percent of the vote in an average economic year like 2004 would be expected to win only 46 percent in a recession year like 2008.” Which is, as you may remember, pretty much exactly what happened.

Congressional elections are a bit more difficult because they’re more local, but they end up being predictable, too. Gary Jacobson, a political scientist at the University of California at San Diego, has a model that uses the number of seats the majority party holds, the approval rating of the president and the change in real disposable income, and predicts about 70 percent of the change from one election to the next.

All of this suggests political scientists have a pretty good handle on what wins elections, so I began asking them the question that some say is bedeviling the White House: Should the White House focus on polls or paychecks?

So, anytime you read an article (there’s one every day, it seems) tying Obama’s public support to the Gulf oil spill, health care, his “lack of leadership” or whatever, just ask yourself what the article would be saying if unemployment were at 4%.

Good time to always link here to Yglesias‘ recent post about the unpopularity of so many world’s leaders (and its very useful to get past our typical myopia and provincialism.  Great point:

Now you can try to construct a theory in which the political leaders of the US, Japan, Germany, France, and the UK are all politically inept but it seems more likely that all the major developed economies are mired in recession.

Insulated

Jon Chait makes a great point today in that the media and political elites who debate what to do about unemployment are largely unaffected by what is a genuine crisis for millions of Americans.  Somebody had a chart the other day (Chait, maybe, I read too many blogs to remember) that showed unemployment by education and for the well-educated, there’s really not much of  a problem now.  Okay, I got un-lazy, here’s a chart:

Source: BLS

Anyway, here’s the Chait quote that got me started:

I’m not the first person to make this point, but this is a social catastrophe that large parts of the establishment have deemed basically acceptable. They’re not in favor of mass unemployment. But they don’t consider it a real emergency, like a war or natural disaster, than justifies huge spending to lift us out of it. It’s hard to escape the conclusion that this attitude reflects the enormous distance between elite circles, where unemployment is fairly low, and less-educated communities that are experiencing a real depression.

Tea Party and the Constitution

NPR ran a story the other day about how the Tea Party types and how they’re all about the Contitution now.  Thank God those Tea Party patriots are out defending the Constitution against Obama’s creeping socialism.  Here’a a great excerpt (even better when you listen):

Karen Cole says she carries a copy in her purse. “The Democrats are eviscerating our Constitution,” she says. Her friend Betty Anne Olsen agrees. “This current administration is trashing our Constitution; they couldn’t care less about the values. They’re breaking the laws.”

And how does she know that?

“I do not study the Constitution, no, but I’m well aware of my history,” Olsen says. “I’m well aware of how this country was founded, and I’m well aware of what has happened to it in current years.”

She’s well aware damn it!  Who are you snide liberal reader to question whether she actually knows anything about government or history whatsoever– she’s well aware.  Something tells me she was not so aware when the Bush administration was expanding presidential powers to a truly unprecedented degree, and, in fact, directly rebuked by the Supreme Court in so doing (Guantanamo cases).   Now that Rush and Hannity are telling her about Obama the socialist (which, you can certainly implement in a Constitutional manner regardless) she’s quite knowledgable about how Democrats are subverting the Constitution.  Yes, you could argue I’m just cherry-picking the comments of a particularly embarrassing maroon, but the whole reason all these people were out was to “protect the Constitution from Obama.”  Given that I doubt a single one of them ever protested Bush’s extra-Constitutional expansion of presidential powers, the whole movement has the intellectual credibility of John Calipari on ethics in college sports.

DNA database

North Carolina’s governor signed a law yesterday that will have the state collect DNA and add to the state database from everybody arrested for, i.e., not convicted of, a crime.  Obviously, that means, a fair amount of innocent people will have their DNA in the database.  Then again, if their DNA then turns up at the scene of  a crime later, they’re really not that innocent, are they?  Still, it’s a very interesting issue.  Do we really think that the government should have everybody’s DNA on record to help fight crime?  There’s all sorts of things the government could do more of that would cut down on crime (i.e., random and arbitrary searches) that we do not allow, because we value liberty.  Not sure how this fits in, though.  I suppose the questions is: does it infringe your liberty to be in a DNA criminal database even if you’ve never been convicted of a crime?  It’s a tough issue, so I’m not going to take a firm stand on this one, just bring it up because I think it is interesting.  And, I’m actually intrigued by issues that I cannot make up my mind on.  Feel free to try and persuade me :-).

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