Category Archives: Regulations

Is America Headed for a New Kind of Civil War?

By Robin Wright – The more relevant question after Charlottesville—and other deadly episodes in Ferguson, Charleston, Dallas, St. Paul, Baltimore, Baton Rouge, and Alexandria—is where the United States is headed. How fragile is the Union, our republic, and a country that has long been considered the world’s most stable democracy?

The dangers are now bigger than the collective episodes of violence. America’s stability is increasingly an undercurrent in political discourse.

Based on his experience in civil wars on three continents, Keith Mines cited five conditions that support his prediction: entrenched national polarization, with no obvious meeting place for resolution; increasingly divisive press coverage and information flows; weakened institutions, notably Congress and the judiciary; a sellout or abandonment of responsibility by political leadership; and the legitimization of violence as the “in” way to either conduct discourse or solve disputes. more> https://goo.gl/W6awUm

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Why a Consumption Tax May not Make any Sense at All

By Steve Roth – You often hear calls out there — mostly from Right economists but also from some on the Left — for a consumption tax in the U.S. As presented, it’s a super-simple idea: tally your income, subtract your saving, and what’s left is your consumption. You pay taxes on that.

We want to encourage thrifty saving and discourage profligate consumption, so what’s not to like?

Start with a simple pared-down household. The only accounting complication is that they own a house.

How much did this household “save”? Should the interest payments count as consumption? The principal payments almost certainly should not. But what about home maintenance? A new paint job increases your home’s asset value. Should you depreciate that asset value over some years? Or say you buy new appliances for your kitchen: You’re cash out of pocket, but your home is worth more. Are those purchases “consumption”?

This notion of some simple tally of your “saving” starts to look more complicated.

The tuition line raises a particularly vexing question, and brings us back to the second question: what economic effects would we see from a consumption tax, under various accounting and taxation rules? Clearly, if you tax tuition, you discourage education.

And consider more-prosperous families paying for private school. Are those families “consuming” more education than public-school families? Those households would be especially hard hit if tuition counts as taxable consumption — as would those private schools. Is that A Good Thing? more> https://goo.gl/LZSRZd

The limits of tolerance

BOOK REVIEW

The Limits of Free Will, Author: Paul Russell.

By Paul Russell – Race, gender and, more recently, sexual orientation are forms of identity that have been especially prominent in politics during the past century. What is striking about these forms of identity is not only that they are generally unchosen, but that they are not based on any ideological or value-laden set of commitments of a political or ethical nature.

Of course, the significance and interpretation of non-ideological identities, the ways in which they can be viewed as threatened or disrespected, is itself an ideological matter; but the identities themselves are not constituted by any ideological content (systems of belief, value, practices, etc), and the groups concerned could vary greatly in the particular ideologies that they endorse or reject.

It would, for example, be absurd to praise or blame Martin Luther King Jr for being black, or Margaret Thatcher for being a woman. There is no ideological content to their identity to assess or debate – the relevant identity is an inappropriate target for praise or blame, since there are no relevant assessable beliefs, values, practices or institutions to serve as the grounds of such responses. The identity of the group turns on natural qualities and features that cannot be discarded in light of critical scrutiny or reflection of any kind.

With ideological or value-laden identities the situation is different. The most obvious of these identities are political, constituted by doctrines, beliefs and values that have implications for our social and ethical practices and institutions.

The crucial question for tolerance, is: where does religion stand in relation to this divide? more> https://goo.gl/H6df7Z

The Battle for the Judiciary

By Joseph P. Williams – Besides depriving the president Obama of an opportunity to shape the lower courts, Senate Majority Leader Mitch McConnell‘s gambit denied Obama his right to create, among other things, a left-leaning feeder system for future Supreme Court nominees. The blockade seemed to pay big dividends: When President Donald Trump won the White House, he inherited more than 100 judicial vacancies McConnell forced Obama to leave behind.

The GOP’s well-laid plans to move the federal courts to the right, however, has been ambushed by the Democrats’ counterattack.

Using the political equivalent of guerrilla warfare – insisting on following arcane legislative rules, withholding approval of home-state nominees and generally throwing sand in the Senate machinery – the minority party has ground Republicans’ judicial agenda to a halt.

Those tactics have kept Trump and his Senate allies from addressing a judicial system with so many vacancies that legal experts on both sides have called it a crisis.

Nan Aron says she believes the debate over healthcare – and the fact that some Republican senators allied with Democrats to fight off the GOP’s attempts to repeal a popular government program – could become a watershed moment in the fight over Trump’s nominees.

“It’s important to note that the political winds are shifting,” Caroline Fredrickson says. “That, with Trump’s poll numbers continuing to decline, greater numbers of individuals will want the courts to stand as a check on his excesses. The more people come to understand what courts and judges do, we believe, the more they will begin to weigh in on judgeships” and pressure Republicans. more> https://goo.gl/JTRoqY

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Bribery, Cooperation, and the Evolution of Prosocial Institutions

By Michael Muthukrishna – There is nothing natural about democracy. There is nothing natural about living in communities with complete strangers. There is nothing natural about large-scale anonymous cooperation.

There is something very natural about prioritizing your family over other people. There is something very natural about helping your friends and others in your social circle. And there is something very natural about returning favors given to you.

The trouble is that these smaller scales of cooperation can undermine the larger-scale cooperation of modern states. One scale of cooperation, typically the one that’s smaller and easier to sustain, undermines another.

When a leader gives his daughter a government contract, it’s nepotism. But it’s also cooperation at the level of the family, well explained by inclusive fitness, undermining cooperation at the level of the state. When a manager gives her friend a job, it’s cronyism. But it’s also cooperation at the level of friends, well explained by reciprocal altruism , undermining the meritocracy.

Bribery is a cooperative act between two people, and so on. It’s no surprise that family-oriented cultures like India and China are also high on corruption, particularly nepotism.

Even in the Western world, it’s no surprise that Australia, a country of mates, might be susceptible to cronyism.

Part of the problem is that these smaller scales of cooperation are easier to sustain and explain than the kind of large-scale anonymous cooperation that we in the Western world have grown accustomed to.

So how is it that some states prevent these smaller scales of cooperation from undermining large-scale anonymous cooperation? more> https://goo.gl/gZg5mY

Going to BAT for American workers: Why the border adjustment tax was a genuinely good idea

By Adam Looney – Although it has now been killed by the Republican congressional leadership and the White House, it’s worth understanding why it would be better for the U.S. economy and American workers than any available alternative.

If the goal is to disincentivize firms from inverting—moving their residence abroad—or shifting profits and activities to lower-tax countries, reforms must address why firms move abroad or start overseas to begin with. Firms don’t move abroad to pay lower taxes on foreign-source income—after all, they don’t pay that much now—but to reduce the taxes they owe on their domestic profits.

The BAT addresses the fundamental problem: as long as there is a lower-tax country out there, there is always going to be a tax incentive to produce abroad and sell it in America, rather than to make it in America in the first place.

Under the BAT (border adjustment tax), all companies would pay tax if they sold to Americans, no matter where the goods and services were produced or where the company makes its headquarters. If firms don’t sell to Americans, they don’t pay U.S. tax. And if something is produced in America and consumed abroad, that’s tax free too. In this world, the U.S. tax rate or tax burden no longer matters for the firm’s decision on where to locate. more> https://goo.gl/Vwcocw

Republicans learn the limits of reconciliation with failed ACA repeal

By Molly E. Reynolds – In Congress, we expect that the majority party’s choices about what to work on and how to work on it will be guided, in large part, by their desire to maintain and grow their majority in the future. As the process went on over the past several months, it became increasingly clear that, for the current GOP leadership, what they thought was best for the party’s collective fortunes was adopting something that they could credibly claim “repeals Obamacare.”

The rules of the budget process, including the Byrd Rule, place restrictions on the content of reconciliation bills and amendments to them. While it can be difficult to know exactly how these rules shape a particular piece of legislation, one consequence of them is that leadership does not necessarily have as much room to maneuver in terms of deal-making as they might have on other bills.

What’s more, by turning to a process that did not require the support of any Democrats to move forward, Republicans could not rely on the opposition of the other party as a useful foil while they sought to build a winning coalition.

Instead, all attention was focused on the party’s internal conflicts and inability to reach agreement—a task made harder by the presence of a same-party president without the policy expertise or interest to help broker the necessary deals. more> https://goo.gl/gLaUNR

TPPs for success: Here is how India can use this gamechanger agreement

By Harsha Vardhana Singh – With the US, the largest economy in the TPP, withdrawing from the agreement, the future of TPP is uncertain. This situation provides some relief to India because the TPP would have eroded India’s access to certain key international markets. Interestingly, the present situation provides more than just relief: It creates several important opportunities for India.

Like any new trade agreement, the TPP is a combination of initiatives such as those embodying good governance principles, i.e., transparency of procedures and regulations, timely decision, processes to facilitate transactions, standards of review, and support to improve institutional capabilities.

Further, it establishes collaborative and consultative mechanisms amongst policy-makers and regulatory agencies in different countries, and provides a template with steps that improve cost-effectiveness of domestic production and trade. The agreement increases predictable market access, combining it with flexibilities to protect domestic industries if required, shows agreement on regulatory regimes in general as well as for certain specific products, and establishes a platform to discuss and seek solutions for emerging concerns and new issues.

Further, the TPP covers a range of disciplines, from soft ones such as guidelines or best-effort agreement, to strong legally binding disciplines for large tariff reduction.

The TPP provides a useful template for India to facilitate domestic policy reform, promote regional or multilateral collaborative initiatives such as for regulatory coherence, and even prepare for negotiations at the regional or WTO level (a Brookings India working paper gives more detail). more> https://goo.gl/M565B1

The Fall of the Deal-Maker

By Kenneth T. Walsh – America’s polarization and political dysfunction have become structural, built into the system as never before. President Donald Trump didn’t create the situation in which the country finds itself, increasingly divided into irreconcilable camps, but Trump is intensifying the hard feelings all around. And things are getting worse.

Trump has suffered a huge blow to his reputation as a deal-maker.

The billionaire real-estate developer pledged during the campaign to use his deal-making skills to outsmart and overpower the power structure in Washington and force the elites bend to his will. It isn’t happening. And he has little of consequence to show legislatively for his first six months in office, aside from winning Senate confirmation of Neil Gorsuch to the Supreme Court.

One of Trump’s problems is that he can’t keep from tripping over himself. When things seem to be going his way, he unleashes angry and off-message comments on Twitter, and he appears to be a bully, an undisciplined braggart and a nasty politician who strikes many as unlikable.

Washington insiders generally say he would be better off staying on message – talking about his steps to improve the economy, cut regulations, stimulate the business sector, reduce the size and cost of government, and attack the status quo in Washington. more> https://goo.gl/njA1P1