Jasper Smith

Commentary on politics, economics, culture and sports.

Archive for June 2008

Obama and Ottawa

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Commenting on John McCain’s enthusiastic pro-Nafta speech this week north of the border, John Ibbitson writes:

Mr. Obama,  on the other hand, is a NAFTA skeptic. “NAFTA and its potential were oversold to the American people,” his website declares. “Obama will work with the leaders of Canada and Mexico to fix NAFTA so that it works for American workers.” When Austan Goolsbee, Mr. Obama’s chief economic adviser, reportedly told Canadian diplomats that Mr. Obama’s statements on NAFTA were mere campaign rhetoric, the ensuing controversy embarrassed both the candidate and the Canadian government. Mr. Obama does appear to be trying to distance himself from some of his earlier tough talk, telling Fortune magazine that some of his trade rhetoric was “overheated and amplified.” But his support for increased trade ties with Canada is lukewarm at best, and he could actually prove hostile to the bilateral trading relationship.

I think the significant majority of Canadians who feel Obama’s politics more closely match their own political ideals (and therefore are inclined to favor his candidacy over McCain’s) are right not to worry too much about the Illinois senator’s nods to the protectionists and anti-globalists in the Democratic party. Nearly all parties of the left in rich democracies count within their ranks substantial numbers of people opposed to the further integration of the global economy. And the thing is, a number of states Obama either badly wants to win (Ohio) or absolutely must win (Pennsylvania) are home to large number of culturally conservative unemployed/marginalized blue collar workers who may abandon the culturally liberal Obama if they perceive he’s an excessively enthusiastic fan of free trade.

I believe it’s clear Obama knows the path to securing the living standards of working people lies in strengthening the safety net and not in erecting barriers to trade.

This is simply American presidential politics 101. There’s no serious prospect of an Obama administration’s igniting a trade war between the US and Canada. And in the unlikely event that a President Obama were to broach the subject of labor standards and worker protections with Ottawa (over the Nafta issue), Canadians would have nothing to worry about, since any resulting action would mean it is the US that would be beefing up its standards to match the practices of the more Western European-style Canadians.

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June 21, 2008 at 12:40 pm

Obama, McCain and the tax code.

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On the topic of the Obama’s and McCain’s views on taxation, Clive Crook writes:

With their fixation on the fate of the Bush tax cuts, both of them are missing the main point: comprehensive reform is needed–and needed so badly it may be unavoidable. The key is to broaden the income-tax base. Income-tax rates are moderate in the United States by international standards, but the income-tax base is narrow, so the total raised is less than you would expect. Raising significant amounts of additional revenue–which is going to be necessary, even if no new spending is undertaken–would push income-tax rates quite high. The country needs to broaden its tax base and simplify the rate structure, and much the best way to do this is as part of a thorough overhaul of the code. A lot of what should be done is neither liberal nor conservative. Ordinarily one thinks of a trade-off between equity and efficiency. At some point, those choices do have to be made, but the United States is not at that point. The current system is so inept, so complicated, and so replete with unintended consequences that it is easy to devise a win-win alternative–fairer and more conducive to growth at the same time. Yet neither Obama nor McCain gives any sign of embracing comprehensive reform. Quarreling over the fiscal legacy of the Bush administration is more to their liking. So much for post-partisan politics.

Although I couldn’t agree more that the country badly needs reform of the tax code, I strongly suspect neither Obama nor McCain is so much “missing” this point as avoiding it, for reasons of politics. Any reform of the tax code that is sufficiently radical to do any real good will require a bloody political fight.

I don’t see much prospect of any decent reform plan getting enacted under a McCain presidency, given the likely composition of the Congress (though you never know, and of course McCain has shown some proclivity for working with Democrats). I reckon Obama is the more plausible agent of change in this regard. If I were he I’d avoid getting into specifics with respect to tax reform ideas if such an agenda were part of my plans (one can only hope tax code reform is part of his plans). Obama displayed admirable unwillingness to pander to the electorate on gasoline taxes — an unwillingness that probably helped him finish off Hillary Clinton. But I don’t think he can count on a similarly happy outcome flowing from the effects of candor on the tax code in general, at least to the extent that any substantive reform cannot wholly ignore the mortgage interest deduction

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June 7, 2008 at 4:08 pm

Name change

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My several hundred thousand regular readers may have noticed I decided to tweak the blog with a name change. I was just getting tired of the old one, and it seemed rather lame to use the title of a song by a way past prime band. I mean, I’m not in college any more. Hell, I’m almost old enough to be a college president.

And yes, it’s a pseudonym.

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June 7, 2008 at 4:02 pm

Posted in Miscellania

Helsinki as Hell

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McMegan ponders the sustainability of the Scandinavian welfare state:

It occurs to me that Scandinavia, with its homogeneous population, may have been spending down the accumulated social capital of its pre-welfare state society. Before the widespread welfare state, people who attempted to free ride by collecting benefit when they could be working faced both internal guilt and considerable external social pressure; the neighbors essentially functioned as the fraud police. But as the generations who grew up before the kribbe-to-grav safety net die off, and are replaced by a newer generation perfectly comfortable with broad public charity, this is clearly breaking down. Sweden’s rates of long term disability, sick leave, and so forth, are very high. The Scandinavians I know generally report that the once-famous work ethic is not really all that impressive any more, and there’s little stigma attached to malingering on long-term sick leave.

Yes, but is the Nordic system really “breaking down” just because people take advantage of its opportunities for leisure?

I was under the impression that these countries were really beginning to suffer from dismal growth and its attendant problems (worsening public sector finances, declining living standards, joblessness, etc.) in the 80s and early 90s. But I also thought that, over the last ten years or so, they had pretty much gotten their acts together, tweaked the incentives their systems create, and undertaken some non-trivial structural reforms — and that as a result they were all once again growing at a pretty decent clip. Am I wrong?

Relatedly, what I’ve often wondered is, wouldn’t the average Scandinavian who was gainfully employed enjoy a substantially higher standard of living than what who stayed home to live life on the dole? In other words, I would imagine you could structure a generous and expensive array of social programs and still have a society where nonetheless rational actors possess a strong incentive to achieve successful careers.

I think libertarian efforts to portray the Nordic countries as grim dystopian hells (not saying that’s what Megan’s doing here, by the bye) are comically handhanded. It’s plain to see these countries simply rock.

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June 2, 2008 at 5:48 pm

Posted in Economics, Nordic, Sweden

Obama on the brink

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I see Yglesias has been pondering the delegate math along the same lines as yours truly:

If it’s really true, as many people are saying, that Barack Obama has a “bank” of 2-3 dozen superdelegates prepared to endorse him then wouldn’t this weekend be a good time to start making withdrawals? The literal impact of him getting a bunch of superdelegate endorsements today and tomorrow in order to ensure that the primaries on Tuesday and Wednesday put him over the finish line, and him getting a bunch of superdelegate endorsements that put him over the line on Thursday and Friday is identical, but on a symbolic plane it seems to me that you want to clinch things with an election result rather than an endorsement announcement.

Matt’s entirely correct, of course. Such an unfolding of events would undercut any potential plans on the part of Hillary to mount a last stand, because the heart of any potential ressentiment strategy rests on branding the process as undemocratic. Several dozen party hacks formalizing your opponent’s presumptive status looks undemocratic in a way getting the same thing from thousands of ordinary voters does not.

So, the non-existence of the much talked about “bank” (a big pool of unannounced Obama-supporting SDs) seems clear; the real question is why doesn’t this bank exist, given Obama’s strength, and the near certitude of his eventual nomination. One supposes this points to the residual strength of the Clinton brand in Democratic circles — kind of a last vestige of their once ironclad hold on the party.

I’ve grown weary of the near impossible task of trying to keep up with intricacies (and changes) of the delegate math, but, given Obama’s likely haul today and Tuesday, he would probably need, what, not much more than a dozen or so SDs to put him over the top (right? does that jive with anybody else’s understanding?). So, maybe we will hear of a mediumish clutch of new SDs pledging for Obama tonight, tomorrow and Tuesday morning.

UPDATE: AP is reporting that, if Obama and Clinton split the delegate haul from Tuesday’s contests, Obama will be about thirty shy of going over the top. I’m guesstimating he’ll get more than 50% on Tuesday, so that likely means he needs about two dozen superdelegates to become the presumptive nominee.

Written by Jasper

June 1, 2008 at 3:10 pm