In the early 1970's, American chicken hatcheries began killing their stocks of chicks. One hatchery manager, to make a point, drowned 43,000 on television for all the world to see. It was cruel. It was also the farmers' rational economic response to a government policy that turned chicks from assets to liabilities by fixing the price that farmers could charge for their stock. Feed prices rose; chicken prices didn't. Cue the dirge.
One might assume that a socialist-leaning Democrat was responsible for such a policy. After all, the chick slaughters were reminiscent of scenes from the Grapes of Wrath, in which John Steinbeck described the perverse outcome of Roosevelt-era efforts to artificially prop up food prices by torching produce and limiting supply. ("And children dying of pellagra must die because a profit cannot be taken from an orange.").
In fact, the chicks had Richard Nixon, a theoretically pro-free market Republican, to thank for their early demises. Richard Nixon had been a critic of government price controls ever since he worked as an attorney during World War II for a government tire-rationing office. But as president, he built a persona as a champion of the working man and a crusader against foreign influence, and he had no qualms about exercising his executive power to--and beyond--its fullest extent.
So, when pressured to do something (anything) about rising inflation in 1971, Nixon took swift and sweeping action. On Sunday, August 15, he interrupted the Western hit television series, Bonanza, to declare that "the time has come for decisive action." Taking a measure that seems unthinkable today, Nixon ordered "a freeze on all prices and wages throughout the United States" for ninety days. Inflation would stop. Because Nixon said so.
The price controls were necessary, Nixon explained, because "international money speculators" were waging an all-out war on the American economy and profiting from the inflation crises at the expense of American paychecks.
Indeed, foreign powers were the primary targets of Nixon's program, under which the United States devalued foreign currencies by disallowing foreign governments to convert dollars to gold, imposed a 10% tariff on imports, and cut foreign aid. America, Nixon explained, had rescued foreign economies from the fallout of World War II; now it was time for them to contribute their fair share.
Politically, the gamble paid off. As Nixon had intended, the public viewed him as a decisive commander. Nixon bolstered his credentials as the champion of the working man and the enemy of international speculators. The price controls artificially curbed inflation long and well enough for Nixon to win reelection in 1972.
But as famed economist Milton Friedman predicted, the wage and price controls proved to be merely a cosmetic fix to mask a systemic problem. When the administration lifted controls, prices shot up. By 1973 inflation reached 9 percent. Although Nixon warned that "we must not let controls become a narcotic," he needed to appear strong more than ever in the face of the looming Watergate scandal. To that end, he reimposed price controls and increased government staff to sanction businesses who raised prices. In the long-term, the price controls did not resolve the inflation crisis. By the time Nixon left office and the controls were fully lifted in April 1974, inflation had soared to 12 percent.
There are lessons to be had from the failure of Nixon's price controls. For one, they prove that prices are more obedient to the invisible hand of the market than presidential orders. To Nixon's head of the Office of Management and Budget, this was the silver lining. "At least," he told Nixon, "we convinced everyone else of the rightness of our original position that wage-price controls are not the answer."
Perhaps more importantly, the "Nixon shock" should be remembered as a cautionary tale about the dangers of giving broad authority to a president who will use his power to build a strong-man persona rather than protect the interests of his constituents.
There are deep parallels between Trump and Nixon. Like Nixon, Trump pushes policies that bolster his tough-nosed persona, even when--or especially when--they run contrary to well-established economic truths. Most notably, he invokes Nixon-esque xenophobia to justify trade tariffs that are certain to do more harm than good to the U.S. economy.
But lecturing Trump about the vices of protectionism are futile, because, like Nixon, Trump is less interested in the pursuit of national prosperity and more interested in the pursuit of a masculine persona built on a sentimental narrative in which foreigners are a threat and he is the protector.
Apologists will undoubtedly deflect criticism of Trump's irresponsible trade policies by invoking ad hominems against Obama and his socialist band of Democrats. But history proves that traitors make the best assassins. As Nixon proved, a Republican president with an appetite for "decisive action" can wield executive power with far more impunity than a Democrat, because his own loyalty-fragmented party is a meager obstacle.
Fortunately, Nixon's wage and price controls lost their allure after Nixon's disgraceful departure gave Republicans the opportunity to resume their place as the party of the free market, ready and willing to check and reverse bureaucratic solutions to free market problems, a role that they solidified during the oil crisis of 1979.
Trumpism marks a worrisome departure from that post-Nixon political order. In a stunning reversal, a large majority of Republicans now favor tariff increases. Even those harmed by his trade policies seem inclined to follow the Trump persona over free market ideas; after Harley-Davidson announced that it would move manufacturing operations out of the United States in response to Trump's tariffs, the company's employees were still apt to trust the president's instincts and blame foreigners for their predicament. Persona is a powerful thing.
America will be fortunate if Trump leaves before he can break all of our nice things. It would also help if he would take his trade policies with him, so that Republicans can go back to pushing against Democrats for a freer market and an executive branch less inclined to Nixon's brand of "decisive action."
For another perspective:
Peter Navarro, an economic adviser to President Trump, offers a rationale for raising tariffs.
Megan McArdle wrote an op-ed arguing that free trade is under fire because people care more about their identity as producers than consumers.
Further Reading:
For more background on Nixon's economic policy and conditions during his presidency, PBS has a section on a web page titled "Commanding Heights" based on a book with the same title.
For a full video of Nixon's August 15, 1971 speech, click here.
Friday, June 29, 2018
Monday, February 26, 2018
It's Hard for the Government to Isolate and Treat Potential Mass Shooters--And For Good Reason
The NRA has a talking point that never seems to generate much discussion: its call for the government to prevent mass shootings by isolating and treating the mentally ill. Some law enforcement authorities have recently made the same call for reform, arguing that laws need to make it easier for them to detain suspicious people, such as the man who went on a shooting rampage in Parkland, Florida, and bring them to mental health professionals. These sound like reasonable, even compassionate proposals, especially after massacres by deranged shooters who, in hindsight, were exhibiting signs of trouble.
I have some experience in this area. As an attorney, I have had gone before a judge and asked him to commit law-abiding citizens to a psychiatric facility against their will. It can be an uncomfortable job for an attorney who feels passionately, as I do, about the virtues of constitutional rights and limited government. In the world of involuntary commitments, many of the features that would normally constrain a state's ability to lock up its citizens--juries, proof of guilt beyond a reasonable doubt, the right to bail, extensive discovery procedures--don't exist. A citizen whose liberty is at stake doesn't get a public trial, just a short hearing at the psychiatric hospital itself. Judges appear by teleconference and routinely rely on the expert opinion of the state's own experts (patients can but generally don't have experts of their own). The whole thing lasts little more than thirty minutes.
It's not a broken system, but it is a system of relaxed constitutional protections that relies heavily on the honesty and integrity of the professionals within it. And for that reason, it represents a potential constitutional loophole that a government, hamstrung by the constitutional protections, but nevertheless pressured to guarantee public safety, could exploit.
Since the notions of freedom and liberty became vogue, institutionalization on the grounds of mental illness has become a convenient loophole to imprison dissidents without proof of guilt. And no case study better illustrates how the legal mechanism of involuntary commitments can become a tool for oppressive regimes than Soviet Russia.
Toward the end of the Cold War, American psychiatrists examined Pyotr Grigorievich Grigorenko. Grigorenko was a highly-decorated major general for the Soviet Union until he became a vocal dissident. Authorities brought him to government psychiatrists, who decided that Grigorenko's political views were the symptom of a mental disorder. They reasoned that his fear of the government was paranoia--though he was actually being closely monitored by the KGB--and that his obstinate criticism of authorities--something that could have gotten him shot--was suicidal lunacy. Over his objections, psychiatrists committed him to a facility to cure him of "reformism."
But when American psychiatrists examined Grigorenko, they found no sign that he was, or ever had been, psychotic. To them, his willingness to advocate reform despite the inherent dangers was a mark of conviction, not a symptom of madness. Grigorenko's confinement raised suspicions that the Soviets were using psychiatric hospitals as political prisons and tools for social control.
A delegation confirmed those suspicions after visiting and inspecting Soviet psychiatric hospitals in 1989. On paper, the Soviet laws for involuntary commitments are similar to those here in the United States. In both cases, the government can only commit those who both suffer from a mental disorder and pose a danger to themselves or others.
But in practice, the Soviet system was much different. The delegation learned that Soviet psychiatrists' notions of what constituted a mental illness and when someone posed a threat of harm were so broad and elastic that they could confine healthy individuals who posed no threat of violence. Thanks to the uncertainties inherent to psychiatry, psychiatrists could commit virtually anyone that the KGB wanted them to. Soviet psychiatrists became notorious for using an invented diagnosis, "sluggish schizophrenia" to label neurotic behavior as a symptom of a mental disorder. Patients like General Grigorenko who espoused disfavored views were considered diseased. Patients also could be committed even when they posed no danger of physical harm to themselves because political harm itself was dangerous. Those who spoke out against the government, became religious, or illegally crossed a border were considered dangers to society.
Like the American system of involuntary confinements, these psychiatrists were effectively the gatekeepers to their hospitals. But the professional integrity of Soviet psychiatrists proved no match for pressure from the KGB. American observers met a patient who came to a psychiatric facility after the KGB caught him visiting the apartment of a political subversive. Instead of doing an examination, his examining psychiatrist told him, "I have a family and I need this job. I and the rest of the Commission will do what we are asked by the KGB." Observers also saw that clinicians would skew the results of their examination by interviewing them in an adversarial way--they compared exams to courtroom cross-examinations. Patients who responded with hostility were described as paranoid.
Not surprisingly, involuntary confinements became a Soviet tool of repression like the GULAGs of old. But in some ways, involuntary commitments were even better at suppressing dissent than the GULAGs. By declaring someone mentally ill and dangerous, the Soviets could simultaneously avoid embarrassing public trials while also stigmatizing and discrediting political or religious dissidents, whose views could then be shrugged off as lunacy.
Fortunately, involuntary commitments here in the United States are not systematically abused. Psychiatrists don't face reprisals when they don't recommend commitment. Commitment periods are limited in duration. Concepts of mental disorder and risk of harm are narrowly applied. Law enforcement generally respects a person's right to refuse treatment and uses involuntary commitment as a last resort.
Of course, these features that separate the American and Soviet systems also render involuntary commitment a woefully inadequate tool for protecting the public from mass shooters such as the one that went on a rampage in Parkland, Florida.
If Americans wanted to rid themselves of the weirdos who aren't breaking the law but who make us nervous nonetheless, the government could wield involuntary commitments in a heavier way. Commitments could become a first resort when arrest isn't an option. Mental health examiners could confine more mentally ill people by labelling any minor symptom as a mental disorder. Courts could read lawful, even constitutionally-protected behavior--stockpiling weapons, posting controversial speech on an online forum, attending a mosque with a reputation for radicalism--as signs of danger. Psychiatric hospitals could become quasi-prisons for a new class of quasi-criminals: a holding place for those who make the neighbors squirm but can't be convicted of a crime.
Times like these call for a few important reminders. First, the limitations of involuntary commitments are the system's saving virtues. Second, our legal system is not designed to find and punish criminals before they become criminals--and for good reason. Third, we should not expect law enforcement to seek out and detain such people.
Finally, it is worth remembering that the NRA is not an advocate for freedom in general, just one particular freedom. Those of us who value freedom in general will beware a call for reform that would protect one freedom at the expense of many others.
Further Reading:
You can read more about the story of General Grigorenko here.
Richard Bonnie has written extensively on the political abuse of psychiatry in the Soviet Union and elsewhere. You can read one of his papers here.
For Another Perspective:
The Atlantic recently published an exchange with John Snook, the director of an organization that advocates for more robust mental health treatment. Snook favors a relaxation of the standards needed for involuntary commitments; specifically, a relaxation of the requirement that a person pose a danger before being committed.
Changes to involuntary commitment laws are not the only reforms being proposed. Five states have implemented "red flag laws" that allow law enforcement to temporarilly confiscate someone's firearms when they show signs of trouble. Such laws have been at least somewhat effective, especially in preventing suicides.
Note: Though I have some experience with involuntary commitments as an attorney, I don't purport to be an expert in that practice area.
I have some experience in this area. As an attorney, I have had gone before a judge and asked him to commit law-abiding citizens to a psychiatric facility against their will. It can be an uncomfortable job for an attorney who feels passionately, as I do, about the virtues of constitutional rights and limited government. In the world of involuntary commitments, many of the features that would normally constrain a state's ability to lock up its citizens--juries, proof of guilt beyond a reasonable doubt, the right to bail, extensive discovery procedures--don't exist. A citizen whose liberty is at stake doesn't get a public trial, just a short hearing at the psychiatric hospital itself. Judges appear by teleconference and routinely rely on the expert opinion of the state's own experts (patients can but generally don't have experts of their own). The whole thing lasts little more than thirty minutes.
It's not a broken system, but it is a system of relaxed constitutional protections that relies heavily on the honesty and integrity of the professionals within it. And for that reason, it represents a potential constitutional loophole that a government, hamstrung by the constitutional protections, but nevertheless pressured to guarantee public safety, could exploit.
Since the notions of freedom and liberty became vogue, institutionalization on the grounds of mental illness has become a convenient loophole to imprison dissidents without proof of guilt. And no case study better illustrates how the legal mechanism of involuntary commitments can become a tool for oppressive regimes than Soviet Russia.
Toward the end of the Cold War, American psychiatrists examined Pyotr Grigorievich Grigorenko. Grigorenko was a highly-decorated major general for the Soviet Union until he became a vocal dissident. Authorities brought him to government psychiatrists, who decided that Grigorenko's political views were the symptom of a mental disorder. They reasoned that his fear of the government was paranoia--though he was actually being closely monitored by the KGB--and that his obstinate criticism of authorities--something that could have gotten him shot--was suicidal lunacy. Over his objections, psychiatrists committed him to a facility to cure him of "reformism."
But when American psychiatrists examined Grigorenko, they found no sign that he was, or ever had been, psychotic. To them, his willingness to advocate reform despite the inherent dangers was a mark of conviction, not a symptom of madness. Grigorenko's confinement raised suspicions that the Soviets were using psychiatric hospitals as political prisons and tools for social control.
A delegation confirmed those suspicions after visiting and inspecting Soviet psychiatric hospitals in 1989. On paper, the Soviet laws for involuntary commitments are similar to those here in the United States. In both cases, the government can only commit those who both suffer from a mental disorder and pose a danger to themselves or others.
But in practice, the Soviet system was much different. The delegation learned that Soviet psychiatrists' notions of what constituted a mental illness and when someone posed a threat of harm were so broad and elastic that they could confine healthy individuals who posed no threat of violence. Thanks to the uncertainties inherent to psychiatry, psychiatrists could commit virtually anyone that the KGB wanted them to. Soviet psychiatrists became notorious for using an invented diagnosis, "sluggish schizophrenia" to label neurotic behavior as a symptom of a mental disorder. Patients like General Grigorenko who espoused disfavored views were considered diseased. Patients also could be committed even when they posed no danger of physical harm to themselves because political harm itself was dangerous. Those who spoke out against the government, became religious, or illegally crossed a border were considered dangers to society.
Like the American system of involuntary confinements, these psychiatrists were effectively the gatekeepers to their hospitals. But the professional integrity of Soviet psychiatrists proved no match for pressure from the KGB. American observers met a patient who came to a psychiatric facility after the KGB caught him visiting the apartment of a political subversive. Instead of doing an examination, his examining psychiatrist told him, "I have a family and I need this job. I and the rest of the Commission will do what we are asked by the KGB." Observers also saw that clinicians would skew the results of their examination by interviewing them in an adversarial way--they compared exams to courtroom cross-examinations. Patients who responded with hostility were described as paranoid.
Not surprisingly, involuntary confinements became a Soviet tool of repression like the GULAGs of old. But in some ways, involuntary commitments were even better at suppressing dissent than the GULAGs. By declaring someone mentally ill and dangerous, the Soviets could simultaneously avoid embarrassing public trials while also stigmatizing and discrediting political or religious dissidents, whose views could then be shrugged off as lunacy.
Fortunately, involuntary commitments here in the United States are not systematically abused. Psychiatrists don't face reprisals when they don't recommend commitment. Commitment periods are limited in duration. Concepts of mental disorder and risk of harm are narrowly applied. Law enforcement generally respects a person's right to refuse treatment and uses involuntary commitment as a last resort.
Of course, these features that separate the American and Soviet systems also render involuntary commitment a woefully inadequate tool for protecting the public from mass shooters such as the one that went on a rampage in Parkland, Florida.
If Americans wanted to rid themselves of the weirdos who aren't breaking the law but who make us nervous nonetheless, the government could wield involuntary commitments in a heavier way. Commitments could become a first resort when arrest isn't an option. Mental health examiners could confine more mentally ill people by labelling any minor symptom as a mental disorder. Courts could read lawful, even constitutionally-protected behavior--stockpiling weapons, posting controversial speech on an online forum, attending a mosque with a reputation for radicalism--as signs of danger. Psychiatric hospitals could become quasi-prisons for a new class of quasi-criminals: a holding place for those who make the neighbors squirm but can't be convicted of a crime.
Times like these call for a few important reminders. First, the limitations of involuntary commitments are the system's saving virtues. Second, our legal system is not designed to find and punish criminals before they become criminals--and for good reason. Third, we should not expect law enforcement to seek out and detain such people.
Finally, it is worth remembering that the NRA is not an advocate for freedom in general, just one particular freedom. Those of us who value freedom in general will beware a call for reform that would protect one freedom at the expense of many others.
Further Reading:
You can read more about the story of General Grigorenko here.
Richard Bonnie has written extensively on the political abuse of psychiatry in the Soviet Union and elsewhere. You can read one of his papers here.
For Another Perspective:
The Atlantic recently published an exchange with John Snook, the director of an organization that advocates for more robust mental health treatment. Snook favors a relaxation of the standards needed for involuntary commitments; specifically, a relaxation of the requirement that a person pose a danger before being committed.
Changes to involuntary commitment laws are not the only reforms being proposed. Five states have implemented "red flag laws" that allow law enforcement to temporarilly confiscate someone's firearms when they show signs of trouble. Such laws have been at least somewhat effective, especially in preventing suicides.
Note: Though I have some experience with involuntary commitments as an attorney, I don't purport to be an expert in that practice area.
Friday, February 9, 2018
Let Them Play
It's nice that Americans can test the patriotism of their citizens with North Korean ease. Those who stand during the national anthem and applaud speeches from their Commander-in-Chief are the faithful. Those who do not are the traitors. It's that simple. These days no one gets too bogged down in the nuances of John F. Kennedy's call to "ask what you can do for your country." If Americans did concern themselves with such things, then those True Patriots who have been so adament that the NFL coerce its players into standing for the national anthem might send a suggestion to the NHL, which refused to let its players play for their countries during the 2018 Winter Olympics.
The NHL's disappointing stance follows five consecutive winter games in which the world's best professional hockey players asked what they could do for their respective countries and answered by doing what they do best. The league owners generously accomodated their players by skipping the annual All-Star Game and taking a two-and-a-half week break from the regular season schedule. It felt like a win for everyone. The players had the privilege of playing for their countries, while their countrymen had the privilege of watching some of the purest competition that sports has to offer. Though an inconvenience, the Olympics served as an opportunity for the league to showcase its product on the most international of stages before an audience that ordinarilly doesn't care for hockey.
But in the year leading up to the Olympics, NHL ownership smelled an opportunity to capitalize on the patriotism of its players by using their participation as a bargaining chip in labor negotiations--a charge the owners tepidly deny. When the players refused to bend, ownership grounded them from attending the games, trotting out excuses that were either nakedly hypocritical (they expect us to believe that owners who hire goons specifically for their ability to punch other players' faces in but don't require facemasks are suddenly concerned about player safety?) or unapologetically pragmatic. "We certainly understand and appreciate the players want to be a part of the Olympics," one owner lamented, "but from our perspective, it is difficult for our business."
Thus we meet at the dubious intersection of capitalism and patriotism. It is an intersection where tax evaders and profiteers have put their own interests first. Robert La Follette said in the midst of World War I that "wealth has never yet sacrificed itself on the altar of patriotism."
But it is also an intersection where some of the most unsentimental industrialists have put their country's welfare over personal wealth. Cornelius Vanderbilt, for example, often said that "there is no friendship in trade." But in 1862, when a confederate iron-clad warship threatened to destroy the entire wood-hulled U.S. Navy, Secretary of War Edwin Stanton desperately telegrammed sent him a telegram, asking how much it would cost for Vanderbilt to use his private fleet to stop the confederate threat. Vanderbilt surprised Stanton by dedicating his prized $1 million steamship--the Vanderbilt--into the fray, free of charge, on the one condition that he could personally equip it for battle.
NHL owners might take a cue from Commodore Vanderbilt.
In the interest of fairness, let us concede a couple points. First, NHL owners have every right to tell their players where they can and can't play hockey. Second, sending players to the Olympics during prime hockey-viewing season is no small sacrifice, even once every four years. But even in the most sympathetic light, the owners still look ugly. Patriotic sacrifices are never convenient, as anyone who has voted, served on a jury, or held a job open for a soldier on military leave knows. Moreover, the players' vocal enthusiasm for donning their nation's colors puts the owners to shame. Just as the players deserve praise for being ready and willing to pad up for their homeland, the owners deserve criticism for standing in their way.
The casualty of the owners' pragmatism will be the unifying experience that comes from watching America's best push and shove not for money but for America herself. Perhaps the owners can think about that the next time they stand for the national anthem.
The NHL's disappointing stance follows five consecutive winter games in which the world's best professional hockey players asked what they could do for their respective countries and answered by doing what they do best. The league owners generously accomodated their players by skipping the annual All-Star Game and taking a two-and-a-half week break from the regular season schedule. It felt like a win for everyone. The players had the privilege of playing for their countries, while their countrymen had the privilege of watching some of the purest competition that sports has to offer. Though an inconvenience, the Olympics served as an opportunity for the league to showcase its product on the most international of stages before an audience that ordinarilly doesn't care for hockey.
But in the year leading up to the Olympics, NHL ownership smelled an opportunity to capitalize on the patriotism of its players by using their participation as a bargaining chip in labor negotiations--a charge the owners tepidly deny. When the players refused to bend, ownership grounded them from attending the games, trotting out excuses that were either nakedly hypocritical (they expect us to believe that owners who hire goons specifically for their ability to punch other players' faces in but don't require facemasks are suddenly concerned about player safety?) or unapologetically pragmatic. "We certainly understand and appreciate the players want to be a part of the Olympics," one owner lamented, "but from our perspective, it is difficult for our business."
Thus we meet at the dubious intersection of capitalism and patriotism. It is an intersection where tax evaders and profiteers have put their own interests first. Robert La Follette said in the midst of World War I that "wealth has never yet sacrificed itself on the altar of patriotism."
But it is also an intersection where some of the most unsentimental industrialists have put their country's welfare over personal wealth. Cornelius Vanderbilt, for example, often said that "there is no friendship in trade." But in 1862, when a confederate iron-clad warship threatened to destroy the entire wood-hulled U.S. Navy, Secretary of War Edwin Stanton desperately telegrammed sent him a telegram, asking how much it would cost for Vanderbilt to use his private fleet to stop the confederate threat. Vanderbilt surprised Stanton by dedicating his prized $1 million steamship--the Vanderbilt--into the fray, free of charge, on the one condition that he could personally equip it for battle.
NHL owners might take a cue from Commodore Vanderbilt.
In the interest of fairness, let us concede a couple points. First, NHL owners have every right to tell their players where they can and can't play hockey. Second, sending players to the Olympics during prime hockey-viewing season is no small sacrifice, even once every four years. But even in the most sympathetic light, the owners still look ugly. Patriotic sacrifices are never convenient, as anyone who has voted, served on a jury, or held a job open for a soldier on military leave knows. Moreover, the players' vocal enthusiasm for donning their nation's colors puts the owners to shame. Just as the players deserve praise for being ready and willing to pad up for their homeland, the owners deserve criticism for standing in their way.
The casualty of the owners' pragmatism will be the unifying experience that comes from watching America's best push and shove not for money but for America herself. Perhaps the owners can think about that the next time they stand for the national anthem.
Wednesday, January 24, 2018
What Monkeys Can Tell Us About Tax Reform
According to Albert Einstein, the hardest thing in the world to understand is the income tax. Perhaps only the United States Congress could concoct a paper quagmire of tax breaks and loopholes thick enough to stump a man whose name is synonymous with genius. But as difficult as the U.S. Tax Code is to understand, reforming it is even more difficult. Tax reform is like getting 300 million people to agree on how to arrange their furniture; decades of lobbying and bickering have given us the tax equivalent of a sofa on the pool table.
Congress's most recent endeavor--imperfect as it might be--looks like a step in the right direction. For most Americans, filing taxes will become simpler (though they won't be filing their returns on postcards anytime soon). Most Americans will also see their taxes go down. Perhaps most importantly, the tax reform will spur economic growth that will translate to higher household incomes (though the tax cuts certainly won't pay for themselves).
But the rules of party politics are such that it has fallen on Democrats to form a resistance against a reform that will bring broad and tangible benefits to the majority of the electorate voters. Their task has been daunting, but not impossible. They could emphasize the fact that the tax cut will cost future generations trillions of dollars and the swelling public debt will probably push up interest rates as consumers and businesses compete for loans against a debt-crazy Uncle Sam.
But debt conservativism has never been a theme of the Democratic platform, so it should be no surprise that the main thrust of the resistance's argument is a familiar one: that tax cuts benefit the wealthy at the expense of the poor.
That would be a tough argument even if it were true; the wealthier 51% of Americans-- those who actually pay income taxes--might reply that it is about time for the other 49% to make a token contribution. But the real problem with the democrats' argument is that it isn't true at all. Under the Republican tax reform, the vast majority of taxpayers at every income level will get a tax cut. Earners in the top 0.1% are actually the most likely to see a tax increase. And yet Democrats have raised another banner in their crusade against the wealthy few on behalf of the exploited masses.
Democrats aren't stupid, and their opposition to the tax reform isn't doomed to fail. After all, they have a curious human tendency on their side.
Monkeys may shed light on why many Americans who stand to gain from the Republican tax cuts nevertheless oppose them. In 2003, two scientists tested how female monkeys react to unequal treatment by simultaneously rewarding one monkey with a cucumber--something that monkeys like--and another with grapes--something that monkeys like even more.
The results were enlightening. The monkeys consistently reacted negatively when they got a mere cucumber for returning a token when they saw another monkey getting a grape for doing the same thing. It isn't surprising that monkeys, like humans, have a sense of fairness. But the monkeys didn't just chafe at getting the short end of a bad deal, they reacted to being shorted in a way that was contrary to their self-interest. Once they saw another monkey getting grapes, the monkeys spurned a reward that they ordinarilly would enjoy, refusing to return their tokens or throwing their cucumbers out of the test area.
Scientists have observed this same phenomena in humans and given it a fancy name: inequity aversion. Its understanding has added nuance to economics, a field of study that traditionally assumed that people will act rationally for their own gain. Inequity aversion could help explain why people don't respond to incentives as one would expect. The recent fixation on the disparity between "the 99%" and the wealthy could be the missing key to explaining why Americans are staying out of the labor force even as jobs become more readily available.
Social inequity aversion also explains why tax reform is so politically perilous: even reforms that will improve the efficiency of the tax code and benefit the vast majority of taxpayers may nevertheless prove deeply unpopular if it is perceived as giving grapes to some and cucumbers to others. Democrats may have success appealing to the less rational angels of our nature if they can convince enough Americans that their somewhat lower taxes and modest pay increases are insults relative to the billions of dollars that corporations will save. But if they succeed in undoing tax reform, their constituents will suffer economically with no consolation other than the deeper economic suffering of the wealthy.
Of course, tax debates would be more fruitful if politicians could agree that a good tax code is one that taxes undesireable activity--overconsumption, pollution, etc.--and encourages desireable activity such as production and child-rearing. Then they could stop wasting time arguing about what segment of the population needs to pay its "fair share" (whatever that means).
For now, we'll have to be content with fewer chairs on the pool table.
Congress's most recent endeavor--imperfect as it might be--looks like a step in the right direction. For most Americans, filing taxes will become simpler (though they won't be filing their returns on postcards anytime soon). Most Americans will also see their taxes go down. Perhaps most importantly, the tax reform will spur economic growth that will translate to higher household incomes (though the tax cuts certainly won't pay for themselves).
But the rules of party politics are such that it has fallen on Democrats to form a resistance against a reform that will bring broad and tangible benefits to the majority of the electorate voters. Their task has been daunting, but not impossible. They could emphasize the fact that the tax cut will cost future generations trillions of dollars and the swelling public debt will probably push up interest rates as consumers and businesses compete for loans against a debt-crazy Uncle Sam.
But debt conservativism has never been a theme of the Democratic platform, so it should be no surprise that the main thrust of the resistance's argument is a familiar one: that tax cuts benefit the wealthy at the expense of the poor.
That would be a tough argument even if it were true; the wealthier 51% of Americans-- those who actually pay income taxes--might reply that it is about time for the other 49% to make a token contribution. But the real problem with the democrats' argument is that it isn't true at all. Under the Republican tax reform, the vast majority of taxpayers at every income level will get a tax cut. Earners in the top 0.1% are actually the most likely to see a tax increase. And yet Democrats have raised another banner in their crusade against the wealthy few on behalf of the exploited masses.
Democrats aren't stupid, and their opposition to the tax reform isn't doomed to fail. After all, they have a curious human tendency on their side.
Monkeys may shed light on why many Americans who stand to gain from the Republican tax cuts nevertheless oppose them. In 2003, two scientists tested how female monkeys react to unequal treatment by simultaneously rewarding one monkey with a cucumber--something that monkeys like--and another with grapes--something that monkeys like even more.
The results were enlightening. The monkeys consistently reacted negatively when they got a mere cucumber for returning a token when they saw another monkey getting a grape for doing the same thing. It isn't surprising that monkeys, like humans, have a sense of fairness. But the monkeys didn't just chafe at getting the short end of a bad deal, they reacted to being shorted in a way that was contrary to their self-interest. Once they saw another monkey getting grapes, the monkeys spurned a reward that they ordinarilly would enjoy, refusing to return their tokens or throwing their cucumbers out of the test area.
Scientists have observed this same phenomena in humans and given it a fancy name: inequity aversion. Its understanding has added nuance to economics, a field of study that traditionally assumed that people will act rationally for their own gain. Inequity aversion could help explain why people don't respond to incentives as one would expect. The recent fixation on the disparity between "the 99%" and the wealthy could be the missing key to explaining why Americans are staying out of the labor force even as jobs become more readily available.
Social inequity aversion also explains why tax reform is so politically perilous: even reforms that will improve the efficiency of the tax code and benefit the vast majority of taxpayers may nevertheless prove deeply unpopular if it is perceived as giving grapes to some and cucumbers to others. Democrats may have success appealing to the less rational angels of our nature if they can convince enough Americans that their somewhat lower taxes and modest pay increases are insults relative to the billions of dollars that corporations will save. But if they succeed in undoing tax reform, their constituents will suffer economically with no consolation other than the deeper economic suffering of the wealthy.
Of course, tax debates would be more fruitful if politicians could agree that a good tax code is one that taxes undesireable activity--overconsumption, pollution, etc.--and encourages desireable activity such as production and child-rearing. Then they could stop wasting time arguing about what segment of the population needs to pay its "fair share" (whatever that means).
For now, we'll have to be content with fewer chairs on the pool table.
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