Hi! It seems to be somewhat of a refrain from centrists, at least that I've heard, that Harris has bad ideas and Democrats are weak on the economy. But the only concrete example of this I've come across (at least that I remember right now) is the price gouging idea. I get the impression it's much more than just that... where can I read more about this?
This would honestly be its own post, but Kamala is one individual, but what actually ends up happening is decided by coalitions. For example, Vox talks about how in reality, Biden repeatedly did giveaways to progressives like Bernie and Warren, who are much worse on the economy than Kamala https://www.vox.com/2024-elections/377170/kamala-harris-economic-policy-new-progressive-economics
What ends up happening is you have Biden, who is okay on economics but not great, fill his administration with warrenites, who are much worse. Warren and to a lesser extent Biden and Kamala's ideas basically boil down to "anti-bigness" ie if a company is large, they should be broken up, and increasing wealth taxes https://www.cnn.com/2019/12/12/politics/warren-wealth-tax-analysts-penn-wharton-study/index.html
You also get little case studies when looking at appointments, like when Biden's CFTC appointments tried banning prediction markets and the Republicans disagreed. In general, even on non high salience issues, Democratic appointments are anti-market - which is bad.
Among economists, these ideas are unpopular and generally don't receive warm reception. Kamala floating Price controls is a representation of how she thinks: "When I talk about economics, I want to make sure that what I say makes progressives clap." This is the coalitional thing at play and it's about appeasing groups of people instead of one person's individual beliefs.
It's just bad to kowtow to socialists and leftists when it comes to economic policy - and the coalition of the Democratic party is quite a ways to the left on this issue. The primary motivating idea behind Bernie, Biden, Warren, and Kamala is that Obama was basically wrong and that we need to reimagine the economy in a progressive direction (Paywall): https://www.slowboring.com/p/obama-mostly-got-things-right
Thanks so much for the in-depth and well-cited post!! I've got a lot to read now.
First, though, I took a look at the wealth tax related links. It seems that the main objections are:
1. It's difficult to enforce
2. "The rich will invest less in the economy"
From my own research, elaborated:
1. Some billionaires will leave the country and spend/invest their money elsewhere.
2. It's not just difficult to enforce, it's EXTREMELY difficult to enforce. "Many assets, like artwork or fractional interests in a family corporation, are nearly impossible to value, impossible to sell, or both". Trying to assess all these would be an administrative nightmare, and avoiding them only to tax stocks and bonds would largely fail in the objective of the wealth tax beyond what taxes already exist today.
3. This also means less capital investment by the wealthy.
4. Historically, wealth taxes have not worked out.
I've got two main thoughts on all this:
1. What's the better alternative? I support higher marginal tax rates on the uber wealthy, but I could see it having some of the same marginal negative side effects. Maybe the point is simply that income tax has fewer of those bad side effects? I could imagine an ideal balance might involve a nonzero but close-to-zero wealth tax, although that would incur the aforementioned administrative (and litigative) costs.
2. I've basically been a supporter of wealth tax my whole life. It basically boils down to a desire to have more wealth redistribution and never having encountered good enough arguments to the contrary--and I probably pay more attention to stuff like this than the average American. If the wealth tax is indeed bad and the Right is indeed correct on economic policies such as this, how can it be communicated to the Left? Or is the wealth tax and similar proposals never going to go away, because they will always be popular among non-economically-trained Leftists?
2. What wealth actually represents is ownership. So say Elon has a wealth of 300 billion. What is actually happening is that is the calculation of the value of his ownership in Tesla and Space X. We're saying that the level of control he has over those companies is worth 300 billion, as priced on the stock market. https://finance.yahoo.com/quote/TSLA/
So what happens when you have a wealth tax, is that you have to pay a tax bill based on your wealth, which is an outsized number representing a hypothetical value if it was all sold. So you have to sell the stock to pay the tax. The problem with this is that when you put your shares on the market, you are increasing the supply of shares which lowers it's value, because of supply and demand. This shifts the value of the wealth that you wanted to tax down - but you still have to pay a large bill based on the *previous* value of the shares, before you flooded the market with them by selling, which lowers the value of the shares you do sell.
There are other problems, but all the policy is doing is saying, "whatever shares you own of a company, you have to sell those shares to the market." What this means is that institutional investors like blackrock will pick up the shares (at cheaper price because the market is being flooded with them now) giving them a nice deal on Tesla and Space X.
Now, we can debate the merit of Elon owning Tesla versus the market owning it, but we are now into pretty far-out territory when the original purpose was to just have a tax to raise money to pay for social spending. I suppose it can be argued that the actual *secret* purpose is to destroy founders, owners, and investors, but these are our private institutions. Ideally you don't want to just destroy your society. These people make up the bulk of the S&P 500, and represent growth for all americans who have money in the market, and who have jobs at these places, so their success is actually important, and not in some Ayn-Rand way, but actually important in the real world we live in.
So the alternatives would be better taxes, which is a topic that is talked about in depth, but I'm not a tax expert so I can't go into more detail on this question.
This is one case study in what this looks like in practice, when you levy wealth taxes against companies with higher valuations than they have income (this is because the stock is not sold, so they do not have operating income, because they have no money) basically you are making them sell prematurely before they could grow and make a bigger return, which disincentivizes investing but in this case caused the founder to leave the country.
Not so close. And I am not even counting the Jan 6 Coup attempt.
Republicans historically were better on economics/growth, but have been moving away and now on the two biggest economic issues deficits and immigration are much worse. Probably that is true on trade, although Democrats have moved very much anti-trade, too.
One would like to believe that Republicans would come in with ideas for making the bureaucracy actually behave according to cost-benefit principles, but have never (Reagan, Bush, Bush, Trump) actually done so. Their "deregulation" seems to have been just aimed at regulations with high financial costs to key constituencies.
"Drill baby drill" is OK, but in fact they did no better than Biden. And Biden's approach to climate change is too high cost per unit of CO2 avoided, but it is and approach. Denial of the problem cannot be reformed.
Even idle talk about politicizing the Fed is disqualifying.
I agree with all of these points, but I would say that these are either verifiable (Trump can and likely would politicize the fed) or quantifiable (deficits/immigration numbers). I think that since Dems are the party of bureaucracy, that the negative effects of their appointments, laws, and rulings are much less quantifiable (no one will do the work to quantify it).
Take the Federal code for example. Say Kamala adds 20,000 pages to the code of regulations. Say more abstract still, they are more strongly-worded pages. Also judicial appointments, as no one will do the complex work of adjudicating the economic effects of rulings. My argument is that this is impossible to quantify. What we can say is that if we look at Democratic states, we see movement away from those states and towards Republican states, and we can perhaps attribute this to regulatory barriers or labor/business/tax law.
There have been some attempts at quantifying this, but for the most part we are left with a mysterious effect of poor Democratic governance. I am assuming Kamala mostly agrees with policies you would find in these states, which is an assumption but not a big one.
On the one hand, yours is the most reasonable “reasonable liberal” take I’ve heard on why someone who is pro-abundance (pro-free-enterprise) might vote for border czar Kamala.
I won’t try to take on your other arguments. I only take on the claim that “competence” is your deciding factor.
IMO you should be heeding William F Buckley Jr.’s claim that he’d rather be ruled by the first 400 names in the Boston phone book than by the faculty of Harvard (and note this was at least 50 years ago’s Harvard faculty!)
Trump is basically one of the 400 names (a particularly odd, highly highly imperfect one, to be sure).
I take the label of reasonable liberal as a very high complement.
I would say that I'm more like 80/20 on this issue and could be swayed to some degree. I don't take it as a given that Kamala is clearly better, just that I think she's regularly better. I do think Buckley's argument from the 60s was good, but I am less sure now given polarization. I wouldn't want to be ruled by Harvard, but I think the best people in politics right now are the Neoliberals, who I assume go to Ivies.
“I wouldn't want to be ruled by Harvard, but I think the best people in politics right now are the Neoliberals, who I assume go to Ivies.”
Idk where neoliberals go, nor for the purposes of elections do I really care. I assume neoliberals are mostly on the right, so I confess I don’t grok the relevance at all. But even if you say this suggesting they are on the left, you are completely missing the Buckley point that the right policies however implemented are FAR better than the wrong policies competently implemented.
It is more clear now than ever that when you vote for a candidate for president or Congress, you are primarily voting for a party.
Despite your quoted sentence, a vote for Kamala IS a vote for being ruled by the Harvard faculty, so in the end that is what you are doing.
The policies of the border czar Kamala Harris-Biden administration are so far from being pro-market that it’s not funny. Her policies will either be a) equally as bad, b) slightly worse, or c) materially worse. I confess that I honestly don’t know which of those choices it will be. But “much better” is NOT one of the options.
If you are happy with the policies of the last 4 years, and not concerned about the possibility that they will not only continue but will get worse, than I agree you should vote for Kamala. But all the other distraction about Trump the person notwithstanding, that is the ONLY legit reason to vote for Kamala. Re: competence, he has a demonstrated track record; she does not, so suggesting that competence is a reason to vote for her is prima facie absurd.
Hi! It seems to be somewhat of a refrain from centrists, at least that I've heard, that Harris has bad ideas and Democrats are weak on the economy. But the only concrete example of this I've come across (at least that I remember right now) is the price gouging idea. I get the impression it's much more than just that... where can I read more about this?
Polls: https://www.kentclarkcenter.org/surveys/national-rent-caps/
https://www.kentclarkcenter.org/surveys/rent-control/
https://www.kentclarkcenter.org/surveys/election-economic-policy-ideas/
https://www.kentclarkcenter.org/surveys/15-minimum-wage/
https://www.kentclarkcenter.org/surveys/the-us-minimum-wage/
https://www.kentclarkcenter.org/surveys/student-debt-forgiveness/
https://www.kentclarkcenter.org/surveys/inflation-market-power-and-price-controls/
https://www.kentclarkcenter.org/surveys/wealth-taxes/
kent clark article on the FTC and noncompetes: https://www.kentclarkcenter.org/filterable-categories/evidence-based-policymaking-or-policy-making-the-evidence/
Why you should care about these polls: https://joshgg.com/p/why-have-your-own-political-opinions?r=2clhmu&utm_campaign=post&utm_medium=web
This would honestly be its own post, but Kamala is one individual, but what actually ends up happening is decided by coalitions. For example, Vox talks about how in reality, Biden repeatedly did giveaways to progressives like Bernie and Warren, who are much worse on the economy than Kamala https://www.vox.com/2024-elections/377170/kamala-harris-economic-policy-new-progressive-economics
What ends up happening is you have Biden, who is okay on economics but not great, fill his administration with warrenites, who are much worse. Warren and to a lesser extent Biden and Kamala's ideas basically boil down to "anti-bigness" ie if a company is large, they should be broken up, and increasing wealth taxes https://www.cnn.com/2019/12/12/politics/warren-wealth-tax-analysts-penn-wharton-study/index.html
You also get little case studies when looking at appointments, like when Biden's CFTC appointments tried banning prediction markets and the Republicans disagreed. In general, even on non high salience issues, Democratic appointments are anti-market - which is bad.
Among economists, these ideas are unpopular and generally don't receive warm reception. Kamala floating Price controls is a representation of how she thinks: "When I talk about economics, I want to make sure that what I say makes progressives clap." This is the coalitional thing at play and it's about appeasing groups of people instead of one person's individual beliefs.
It's just bad to kowtow to socialists and leftists when it comes to economic policy - and the coalition of the Democratic party is quite a ways to the left on this issue. The primary motivating idea behind Bernie, Biden, Warren, and Kamala is that Obama was basically wrong and that we need to reimagine the economy in a progressive direction (Paywall): https://www.slowboring.com/p/obama-mostly-got-things-right
This is a similar one outlining some of these differences between party factions: https://www.slowboring.com/p/a-common-sense-economic-agenda
More reading: https://www.vox.com/housing/365063/kamala-harris-housing-rent-control-landlords
https://www.slowboring.com/p/greedflation-is-fake
https://www.richardhanania.com/p/forty-years-of-economic-freedom-winning
Thanks so much for the in-depth and well-cited post!! I've got a lot to read now.
First, though, I took a look at the wealth tax related links. It seems that the main objections are:
1. It's difficult to enforce
2. "The rich will invest less in the economy"
From my own research, elaborated:
1. Some billionaires will leave the country and spend/invest their money elsewhere.
2. It's not just difficult to enforce, it's EXTREMELY difficult to enforce. "Many assets, like artwork or fractional interests in a family corporation, are nearly impossible to value, impossible to sell, or both". Trying to assess all these would be an administrative nightmare, and avoiding them only to tax stocks and bonds would largely fail in the objective of the wealth tax beyond what taxes already exist today.
3. This also means less capital investment by the wealthy.
4. Historically, wealth taxes have not worked out.
I've got two main thoughts on all this:
1. What's the better alternative? I support higher marginal tax rates on the uber wealthy, but I could see it having some of the same marginal negative side effects. Maybe the point is simply that income tax has fewer of those bad side effects? I could imagine an ideal balance might involve a nonzero but close-to-zero wealth tax, although that would incur the aforementioned administrative (and litigative) costs.
2. I've basically been a supporter of wealth tax my whole life. It basically boils down to a desire to have more wealth redistribution and never having encountered good enough arguments to the contrary--and I probably pay more attention to stuff like this than the average American. If the wealth tax is indeed bad and the Right is indeed correct on economic policies such as this, how can it be communicated to the Left? Or is the wealth tax and similar proposals never going to go away, because they will always be popular among non-economically-trained Leftists?
There are a few points:
1. Wealth is a very fuzzy concept, and there's not that much of it anyway.
https://www.noahpinion.blog/p/theres-not-that-much-wealth-in-the
https://www.slowboring.com/p/wealth-weirdness
2. What wealth actually represents is ownership. So say Elon has a wealth of 300 billion. What is actually happening is that is the calculation of the value of his ownership in Tesla and Space X. We're saying that the level of control he has over those companies is worth 300 billion, as priced on the stock market. https://finance.yahoo.com/quote/TSLA/
So what happens when you have a wealth tax, is that you have to pay a tax bill based on your wealth, which is an outsized number representing a hypothetical value if it was all sold. So you have to sell the stock to pay the tax. The problem with this is that when you put your shares on the market, you are increasing the supply of shares which lowers it's value, because of supply and demand. This shifts the value of the wealth that you wanted to tax down - but you still have to pay a large bill based on the *previous* value of the shares, before you flooded the market with them by selling, which lowers the value of the shares you do sell.
There are other problems, but all the policy is doing is saying, "whatever shares you own of a company, you have to sell those shares to the market." What this means is that institutional investors like blackrock will pick up the shares (at cheaper price because the market is being flooded with them now) giving them a nice deal on Tesla and Space X.
Now, we can debate the merit of Elon owning Tesla versus the market owning it, but we are now into pretty far-out territory when the original purpose was to just have a tax to raise money to pay for social spending. I suppose it can be argued that the actual *secret* purpose is to destroy founders, owners, and investors, but these are our private institutions. Ideally you don't want to just destroy your society. These people make up the bulk of the S&P 500, and represent growth for all americans who have money in the market, and who have jobs at these places, so their success is actually important, and not in some Ayn-Rand way, but actually important in the real world we live in.
So the alternatives would be better taxes, which is a topic that is talked about in depth, but I'm not a tax expert so I can't go into more detail on this question.
This is one case study in what this looks like in practice, when you levy wealth taxes against companies with higher valuations than they have income (this is because the stock is not sold, so they do not have operating income, because they have no money) basically you are making them sell prematurely before they could grow and make a bigger return, which disincentivizes investing but in this case caused the founder to leave the country.
https://x.com/hagaetc/status/1857676671572435016
Thank you again for taking the time to respond to me! I'll be reading up on all of this, thank you thank you.
Not so close. And I am not even counting the Jan 6 Coup attempt.
Republicans historically were better on economics/growth, but have been moving away and now on the two biggest economic issues deficits and immigration are much worse. Probably that is true on trade, although Democrats have moved very much anti-trade, too.
One would like to believe that Republicans would come in with ideas for making the bureaucracy actually behave according to cost-benefit principles, but have never (Reagan, Bush, Bush, Trump) actually done so. Their "deregulation" seems to have been just aimed at regulations with high financial costs to key constituencies.
"Drill baby drill" is OK, but in fact they did no better than Biden. And Biden's approach to climate change is too high cost per unit of CO2 avoided, but it is and approach. Denial of the problem cannot be reformed.
Even idle talk about politicizing the Fed is disqualifying.
https://thomaslhutcheson.substack.com/p/an-unfair-evaluation-of-bidens-economic
https://thomaslhutcheson.substack.com/p/fairness-for-harris
Ukraine.
I agree with all of these points, but I would say that these are either verifiable (Trump can and likely would politicize the fed) or quantifiable (deficits/immigration numbers). I think that since Dems are the party of bureaucracy, that the negative effects of their appointments, laws, and rulings are much less quantifiable (no one will do the work to quantify it).
Take the Federal code for example. Say Kamala adds 20,000 pages to the code of regulations. Say more abstract still, they are more strongly-worded pages. Also judicial appointments, as no one will do the complex work of adjudicating the economic effects of rulings. My argument is that this is impossible to quantify. What we can say is that if we look at Democratic states, we see movement away from those states and towards Republican states, and we can perhaps attribute this to regulatory barriers or labor/business/tax law.
There have been some attempts at quantifying this, but for the most part we are left with a mysterious effect of poor Democratic governance. I am assuming Kamala mostly agrees with policies you would find in these states, which is an assumption but not a big one.
On the one hand, yours is the most reasonable “reasonable liberal” take I’ve heard on why someone who is pro-abundance (pro-free-enterprise) might vote for border czar Kamala.
I won’t try to take on your other arguments. I only take on the claim that “competence” is your deciding factor.
IMO you should be heeding William F Buckley Jr.’s claim that he’d rather be ruled by the first 400 names in the Boston phone book than by the faculty of Harvard (and note this was at least 50 years ago’s Harvard faculty!)
Trump is basically one of the 400 names (a particularly odd, highly highly imperfect one, to be sure).
Kamala IS the faculty of Harvard.
I take the label of reasonable liberal as a very high complement.
I would say that I'm more like 80/20 on this issue and could be swayed to some degree. I don't take it as a given that Kamala is clearly better, just that I think she's regularly better. I do think Buckley's argument from the 60s was good, but I am less sure now given polarization. I wouldn't want to be ruled by Harvard, but I think the best people in politics right now are the Neoliberals, who I assume go to Ivies.
“I take the label of reasonable liberal as a very high complement.”
You’re welcome 😉
“I wouldn't want to be ruled by Harvard, but I think the best people in politics right now are the Neoliberals, who I assume go to Ivies.”
Idk where neoliberals go, nor for the purposes of elections do I really care. I assume neoliberals are mostly on the right, so I confess I don’t grok the relevance at all. But even if you say this suggesting they are on the left, you are completely missing the Buckley point that the right policies however implemented are FAR better than the wrong policies competently implemented.
It is more clear now than ever that when you vote for a candidate for president or Congress, you are primarily voting for a party.
Despite your quoted sentence, a vote for Kamala IS a vote for being ruled by the Harvard faculty, so in the end that is what you are doing.
The policies of the border czar Kamala Harris-Biden administration are so far from being pro-market that it’s not funny. Her policies will either be a) equally as bad, b) slightly worse, or c) materially worse. I confess that I honestly don’t know which of those choices it will be. But “much better” is NOT one of the options.
If you are happy with the policies of the last 4 years, and not concerned about the possibility that they will not only continue but will get worse, than I agree you should vote for Kamala. But all the other distraction about Trump the person notwithstanding, that is the ONLY legit reason to vote for Kamala. Re: competence, he has a demonstrated track record; she does not, so suggesting that competence is a reason to vote for her is prima facie absurd.