TigerHawk

New Jersey's Governor Chris Christie this afternoon traveled in to the belly of the beast -- the Princeton Public Library -- and spoke truth to liberals. I missed the show on account of family obligations, but a friend was there with his camera. So here is some never-before-seen Governor Awesome footage!

On taxing the "rich":

On the tax code in general:

The claim that "here in New Jersey the top 1% pay 41%" is accurate, by the way, or at least it was for me. For the 2010 tax year, my federal, state, and local direct taxes -- income tax, employment taxes, and property tax -- came to almost exactly 41% of my adjusted gross income. Of course, that does not include the many other taxes I paid, including sales taxes, utility taxes, and excise taxes. Excluding the indirect impact of corporation taxes and my employer's share of "my" employment taxes, the government takes at least half of what I earn. Am I paying my "fair share"? One cannot prove fairness or unfairness, but it seems to me that the case for taxing me even more on the grounds of "fairness" is not open and shut no matter how loudly President Obama declares that it is.

UPDATE: See the comments for a different interpretation of the governor's remarks from the person who shot the videos.

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Not good:

The amount of customer money missing from the collapsed trading firm MF Global may be more than $1.2 billion — double previous estimates — the trustee dismantling the firm’s brokerage unit said on Monday.

But the surprise finding, which caught regulators off guard, may be overstated, according to a person briefed on the investigation. Some regulators say they believe that the trustee double-counted $220 million that had been transferred between units of MF Global, this person said.

Still, the much higher number highlights the disarray of MF Global’s records and raises significantly the hurdle for tens of thousands of customers seeking to get their money back. The trustee’s estimate represents a significant portion of customer funds held by MF Global.

How do you screw up your records that badly if you are not intending to screw them up? Well, it can happen. But only if your internal auditors have no power or no brains.
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Having absolutely and without qualification failed in its obligation to secure for posterity the fiscal solvency of our great nation, the United States Congress is considering forbidding airlines from charging fees for checking luggage.

“Many airlines consider checking a bag not to be a right, but a privilege — and one with a hefty fee attached,” said Sen. Mary Landrieu (D-La.), who has introduced legislation that would “guarantee passengers one checked bag without the financial burden of paying a fee, or the headache of trying to fit everything into a carry-on.”

Airlines, of course, will make up most of the lost revenue some other way. So, those of us who avoid bag fees -- and there are many routes to avoiding them -- are now to subsidize people who do not make the right choices, all because Mary Landrieu has some constituents who don't know how to pack?

I am no big fan of checked bag fees for precisely the reasons described elsewhere in the linked article -- that they have made already crowded cabins a lot more crowded. Unfortunately, neither the airlines nor Senator Landrieu would appreciate my preferred solution, which is fees for carry on bags. Allow one "personal item" -- a purse or computer bag -- for free, and charge for anything else, and you will clean up the cabin in a trice.

We need a new national commitment to mock any politician of either party who proposes silly new laws about trivial subjects to distract our attention from their own transporting incompetence.
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Stock market futures are down a lot this morning because of news that the "Supercommittee" charged with reaching a Congressional compromise on taxes and spending has failed.

Curiously, if you believe in the Congressional Budget Office's "static model" -- and that is the device used in Washington for these discussions -- there are substantial deficit reductions already baked in. The "Bush" tax cuts are expiring on January 1, 2013, and the automatic cuts will disproportionately hit defense spending -- a traditional target of Democrats -- without any Congressional vote. All of that adds up to $7.1 trillion in deficit reduction over the next ten years, a substantial reduction that would put the United States in a much better position than its current trajectory.

Then why don't the markets like the result? There are at least three reasons.

First, one has to believe the CBO's static model. Only politicians and journalists are so fey. Or disingenuous. Most of us believe that massive new taxes in 2013 with no corresponding reform will do a lot of damage to economic growth in the next few years. The impact of that increase would have been muted if it were coupled with a huge reduction in future tax liability (by reforming entitlements), but there is no such relief in sight.

Second, one has to believe that Congress never enacts another incremental spending bill without cutting something equivalent. Those of us on the right look at all the incremental revenue in 2013 (the massive baked in tax increase minus the economic impact of the tax increase) and expect that politicians of both parties will find a way to buy votes with it.

Third, the failure of Supercommittee reminds everybody how freaking hideous our political class has become.

It is extremely frustrating.

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From my perspective, it is fine--not optimal, but fine--that Barack Obama is not a liberal. Somebody pursuing effective technocratic centrist policies that work would be an enormous asset to the world right now.

- Brad DeLong

Actually, Brad, I'd rather he was a liberal and were biased against "technocratic centrist policies". This is just another version of "If only the smart people (like me!) were in charge". As far as I can tell, "centrist technocrats" turned controversial safety net policies into completely unsustainable univeral entitlements; demands for better working wages into unkeepable retirement promises, and financial regulation into a giant, brittle triple-A safe harbor.

Centrist technocrats are the government version of an all-pizza diet.

Alas, many political persuasions fall into this trap. Consider Peggy Noonan this weekend:

The theory applies also to our politics. America is in political decline in part because we've elevated salesmen—people good on the hustings and good in the room, facile creatures with good people skills—above people who love the product, which is sound and coherent government—"good government," as they used to say. To make that product you need a certain depth of experience. You need to know the facts, the history, how the system works, what the people want, what the moment demands.

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This hilarious yet unbelievable error can only reflect one thing: A corporate culture with few if any mainstream American males.

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The political humor bestseller list on Amazon rather strongly suggests that our president may have some popularity issues.

Remember, when you buy something on Amazon -- anything, actually -- consider clicking through the link of a blogger you enjoy. There are many more deserving than me, I am sure, but since it costs you nothing there is no reason not to direct a tip from Jeff Bezos to somebody who entertains you.

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The BBC has a very interesting clickable graph that shows which countries owe what to which other countries, plus their debt burden compared to GDP and per capita. More reasons, in effect, why the great democracies of the world are going to have to solve their long-term fiscal problems or cease being great democracies.

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A strong defense of Newt Gingrich, who sparked a pseudo-controversy by proposing that schools "fire the janitors" and get the kids to clean up.

Politico offers a headline calculated and designed to make you hate Newt Gingrich more than you already do: Newt: Fire the janitors, hire kids to clean schools. And when you click it open and actually read it from top to bottom, you find the former House Speaker is making all kinds of sense, no wonder they want him gone. Hey Politico! Yeah, there is someone I trust a little tiny bit less than I did three minutes ago, but it ain’t Newt Gingrich.

It is a good idea, actually, within limits. If the rising generation is missing anything, it is a basic understanding that successful human existence requires a lot of work (and, no, 37.5 hours a week is not a "lot of work") under even the best of circumstances. And, in any case, many private schools hold the students accountable for some measure of, well, custodial work. Both my children learned a lot and were none the worse for wear for having to clean their schools. I have long wondered why we should not expect the same of public school students.
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That is a prediction, of course, but the signs are pointing that way. The Washington Post reports that this morning, just a few days before Wednesday's deadline, the "Supercommittee" is at an impasse. Republicans are offering a deal that Democrats just will not take -- small tax increases that nonetheless offend the Tea Party stalwarts in the House in exchange for the permanent extension of the "Bush" tax cuts.

This nifty article in Salon explains how the Democrats outmaneuvered the Republicans, in part because George W. Bush himself gamed the CBO process when he enacted the cuts ten years ago.

The smarter course for Democrats, it would seem, is to do nothing and let the automatic spending cuts triggered by a supercommittee failure go into effect and then hope that Obama is reelected and the Bush tax cuts go away once and for all at the end of next year. That would have a more meaningful impact on deficit reduction than any realistic compromise with the GOP now would, and it would spare the sort of deep social safety net cuts that Republicans are also after. More and more voices on the left have been making this case in recent days....

And Democrats on Capitol Hill seem to be hearing it. Thursday began with plenty of buzz about the GOP’s sudden openness to new revenues. But it ended with Democrats offering a clear response: There’ll be no deal as long as you want the Bush rates extended.

So, basically, Republicans will have to choose between substantial tax increases and deep cuts in defense spending.

There is a growing awareness among the "rich" that higher taxes are on the way, either through a last-minute Republican collapse (unlikely, given the thunder in the House) or by deadlock (the Bush "cuts" will expire at the end of 2012, and they will not get reinstated unless the GOP has both the White House and 60 solid votes in the Senate, which seems very unlikely).

Therefore, higher taxes on the 1% are coming almost regardless of the Supercommittee's negotiations.

Therefore, the Republicans should try to get something good for the higher taxes.

I believe that a very large number of the "rich" would support higher taxes in return for large and demonstrable cuts in entitlements.

The only way to do that without inflicting immediate pain on voters is to extend the retirement age substantially, on a sliding scale, starting now. My proposal for doing just that is here. We simply must get out of the business of subsidizing retirement (as opposed to disability, whether or not that disability is caused by geriatrics).

Therefore, Republicans should propose a wholesale repeal of the Bush tax cuts -- all of them -- in return for a substantial and permanent extension of the retirement age under all federal entitlement programs.

That would be a trade worth taking, and it would send a very positive signal to the financial markets that we will not go the way of Italy, Greece, and other irresponsible countries. That would give our economy huge room to maneuver.

Otherwise, Republicans will achieve no sustainable deficit reduction, the defense budget will be slashed massively, taxes will go up substantially but the government will spend the increase on entitlements, and the press will ensure that everybody understands it is the fault of the GOP.

Bad deal.
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Saudi authorities have so little regard for the self-restraint of Saudi men that they are now trying to require women with attractive eyes to conceal their orbs in public. Right, eyes, not cleavage, legs, ankles, or even hair, all of which have been banned.

Women with attractive eyes may be forced to cover them up under Saudi Arabia's latest repressive measure, it was revealed today.

The ultra-conservative Islamic state has said it has the right to stop women revealing 'tempting' eyes in public.

A spokesperson for Saudi Arabia's Committee for the Promotion of Virtue and the Prevention of Vice, Sheikh Motlab al Nabet, said a proposal to enshrine the measure in law has been tabled.

This is, of course, disgusting, as are many Saudi policies. The question we are not allowed to ask in polite company is this: How many Muslims around the world would, under the influence of truth serum, support the adoption of Saudi rules, or close approximations, in their own countries?
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The official caption from this official White House photo is, well, not entirely persuasive:

President Barack Obama waves to people in the gallery after addressing the Australian Parliament in the House of Representatives at Parliament House in Canberra, Australia, Nov.17, 2011.

We all know that you, our endlessly clever readers, can do better than that!

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A nifty Chart of the Day on the housing bubble worth digesting by both left and right:

The linked post makes the point,

If you really think it was all Fannie and Freddie's fault, then you have to explain why the U.S. just happened to have the same (roughly) arc of a housing boom as basically every other industrialized country all around the world at the same time.

True dat, and the same goes for conservatives who put it all on federal mandates for more minority lending. But the chart also discredits lefties and populists who blame the crisis on the compensation systems in American banks or on the degradation of lending standards on account of credit securitization or on the repeal of Glass-Steagall.

There were many reckless lenders and borrowers over the last decade, all over the world. The original and most basic reason is that there was too much competition in lending, which pushed banks and other financial institutions to offer ridiculous terms to irresponsible or incompetent borrowers. Those lenders competed so aggressively because they had too much capital on their balance sheets, money that for all intents and purposes had to be lent (or the stockholders would essentially fire the bankers in question for losing money). Those huge balance sheets were the consequence of too much credit created or suffered to exist by the world's central banks, including but not exclusively the Federal Reserve Bank of the United States. Why did the Fed and other banks allow credit creation in excess of GDP for so many years in a row? Partly because nobody wants to stop a bull market before its time -- there is more or less no better way to piss people off -- but also because the usual signal for too much credit -- consumer products price inflation -- was masked by the one-time migration of the world's production to China. Tons of credit, soaring asset prices, and tame inflation. What's not too like?

Oops.
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Fintan O'Toole -- dontja just love Irish names? -- persuasively explains why neither the fantasies of right nor left will save the European Union. Sadly, his own proposed solution is not as persuasive as his rather grim diagnosis.

Before you mock the European experiment, remember (i) it did foreclose a ruinous fourth war between France and Germany, and (ii) American prosperity depends on European prosperity, at least in the short term and at the margin.

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