Libertarian Think Tank

Will Bunch at philly.com has this to say to ABC debate moderators Charlie Gibson and George Stephanopoulos.

With your performance tonight — your focus on issues that were at best trivial wastes of valuable airtime and at worst restatements of right-wing falsehoods, punctuated by inane “issue” questions that in no way resembled the real world concerns of American voters – you disgraced my profession of journalism, and, by association, me and a lot of hard-working colleagues…

Sounds good. I’m always happy to read a good criticism of the mainstream media. The same entrenchment that allows for William Kristol to secure a job at the New York Times after proving consistently wrong for the last ten years, also allows George Stephanopoulos to continue existing and Chuck Gibson to continue sagging. But then I read part of Will Bunch’s beef:

 …me and a lot of hard-working colleagues who do still try to ferret out the truth, rather than worry about who can give us the best deal on our capital gains taxes….And Charlie…could you be any more out of touch with your viewers? Most people aren’t millionaires like you, and if Pennsylvanians are losing sleep over economic matters, it is not over whether the capital gains tax will go back up again.

Is it common for journalists to misunderstand the impact of capital gains taxes on our economy? I doubt that I see more yield from my capital investments than the average Pennsylvanian, but I’m nonetheless concerned with how they will be levied in the future. Here is why:

For a while until the Bush tax cuts of 2001 capital gains taxes rivaled the highest levels of income taxes. So if I invested in an American business that turned a profit, I would likely have to pay around 40% of my returns to the federal government. The same goes if invested in gold, petroleum, grain, or classic automobiles. The problem is that, while that sounds like a windfall for the government, it has a chilling effect on investment. When the market is up, the chilling effect is negligible- prices still go up and investors still realize returns, so everything continues swimmingly.

The problem is that value sometimes depreciates, especially when market bubbles burst. When that happens and the markets start to look bear-ish, investors flee like they were breaking from the penitentiary. Worse, the first investors to leave are the foreigners who tend to have more liquid investments and readier access to other markets. This leaves American investors holding the bag, often with capital investments that are worth less than what the investors originally paid.

But why should non-millionaire Pennsylvanians like Will Bunch care about all that? First, if non-millionaires are not investing in capital assets, they should be. The federal government adds your income to your capital gains together to determine which tax rate to apply. Those who are in the lowest tax brackets are taxed on their capital gains lower than they have been in years, thanks (again) to the Bush tax cuts.

Second, and perhaps more important, where does Will Bunch think jobs come from? About half the jobs in the United States come from publicly-traded companies. That means that over half the jobs come from companies that are equipped to buy and sell their capital assets as casually as their officers flirt with their secretaries. If they lose investors -and they *will* lose investors if the Democrats raise the capital gains tax as they have sworn in blood to do- they will only be able to expand the job supply by leveraging existing profits. This reduces shareholder dividends, which also drives away investors.

For some real-world examples, consider the fallout after the bubble burst of 2000. Then, foreign investment dwindled to almost-nothing. Only the Bush tax cuts brought them back (sorry if you don’t like Bush, but there’s really no question that it worked). The reciprocal to that, of course, is that the threat of a Democrat President could drive it all away again between the months of November and January. This time, the American investors may be more savvy, aware of the foreign flight, and may follow suit. That could knock the the bottom out of the entire market. So, sorry Will Bunch, but capital investment is a pertinent question if one cares about the economy.  If Will Bunch thinks that capital gains taxes are unrelated to overall economic conditions…or if he thinks that Pennsylvanians don’t care about them, he is mistaken and they should.

Sure, Gibson and Stephanopoulos probably stunk last night, but I wouldn’t trust another journalist to tell me why.

This is a bit telling isn’t it? If Nixon hadn’t floated the dollar or if we had returned to some pseudo-gold standard, the price of oil would be about $15/barrel right now. Currently, it is at $115/barrel. I remember a conversation with someone who identified herself as a libertartian about Ron Paul’s monetary platform. She said that one of the things that she found crazy was the idea of a return to the gold standard. For the record, Paul never advocated a return to the gold standard, but he did advocate lifting the capital gains taxes on gold, which would allow people to trade it freely and force the dollar to compete. Instead, the Looney Toons characters on Capital Hill have a complete monopoly over currency, which is hardly a backdrop for a sound monetary policy. So while Paul’s policy on gold may be a little remote, it’s hardly crazy.

My theory on why we haven’t fixed an obviously broken monetary policy? It’s because all the politicians who know shit from Shinola (Shinola was a shoe polish) run on a platform of fixing it. Sure, we want it fixed, but we don’t know shit either. Everything sounds crazy to us. If it takes longer than 15 seconds to explain to the public, politicians are better off just doing it.

Mostly comic relief, mostly

Chris Peden is a longshot candiate who is running for the Republican nomination against Congressman Ron Paul in the 14th Conrgessional District of Texas. His slogan promises “Conservative Results…for a change”. You see, in Pedenland the Iraq War with its attending budget deficits, loss of American lives, and rampant, destructive corporatism…is conservative. And of course, his website calls Ron Paul a “liberal in disguise“. You know…because strict constitutionalists are liberals now.

Peden hails from the new school of conservatism, which doesn’t bother to define itself so long as it cites Jesus. It’s hard to say what the logical extremes of a term without definition are, so let’s just assume it’s somewhere within the nexus of kissing Bush’s ass, killing more soldiers, and forcing people into churches at gunpoint (evangelical churches, of course). Barry Goldwater is rolling in his grave. Oh, I guess Buckley is now, too.

Never missing an opportunity to spazz, the website Wonkette.com has endorsed Chris Peden for no other reason than to irk Paul supporters. No, Wonkette doesn’t have a problem with Paul’s politics. The worst they have accused him of is failing to represent his district. His district apparently disagrees, as they have sent him back to Congress ten times. Yet, Wonkette’s Sara K. Smith cannot help herself:

 To most American political fanatics, Ron Paul is just a goofy hobbit whose hilariously doomed online presidential campaign provided standout entertainment in a year that offered a wealth of hilariously doomed campaigns.

But to many of his constituents in Texas Congressional District 14, Ron Paul is just a blame-America-first attention whore who completely ignores the people who put him in office. There are no Democrats running in the 14th District primary next Tuesday — so if Ron Paul loses, he will have the honor of being a double loser in the eyes of his beloved constituents. With this in mind, Wonkette enthusiastically endorses Chris Peden for Congress.

<Yawn> How Clever. Of course, Wonkette doesn’t care about Peden’s politics either. They don’t seem to care about politics at all. They’re the kids in high school with Doc Martins and dark lipstick (yes, the males too) who compensated for their lack of substance with cynicism. No, not your high school: the rich kids’ high school. And while they have found quite a following among the rest of the jaded-by-self-imposition, they didn’t impose this on themselves before they tried out for the cheer sqaud.

Yet Megan McArdle finds them interesting enough to post the above blurb and I find McArdle interesting enough to add her comment:

 To be sure, I’d probably be happier if more congressmen busied themselves proposing no-hope bills to make a point. But when your congressman is the only one doing it, while all the other representatives focus on piling up the pork, you probably begin to wonder if you aren’t missing the main chance.

Well, with Paul absolutely routing Peden in the primaries, I don’t know if they’re wondering it that much. But I concede that is the sad motivation behind the Galveston Daily News’ endorsement of Peden:

In the next two years, leaders in Galveston County will join those from other counties in District 14 in asking for a lot of federal funding. They’ll ask for help on projects such as research at the Galveston National Laboratory and on NASA’s mission to Mars…Peden is the better choice.

In other words, why vote for someone whose politics make sense when you can be a whore for federal funding? Just kidding. Whores have better taste.

Good advice to readers, GDN. That oughta fix the country.