Ear Rational Thoughts

The power to do good

From this piece in Der Spiegel referring to the recent news that 40 billionaires (led by Bill Gates) would donate large sums of their own money to charity:

I find the US initiative highly problematic. You can write donations off in your taxes to a large degree in the USA. So the rich make a choice: Would I rather donate or pay taxes? The donors are taking the place of the state. That's unacceptable. ... It is all just a bad transfer of power from the state to billionaires. So it's not the state that determines what is good for the people, but rather the rich want to decide. That's a development that I find really bad. What legitimacy do these people have to decide where massive sums of money will flow? ... In this case, 40 superwealthy people want to decide what their money will be used for. That runs counter to the democratically legitimate state. In the end the billionaires are indulging in hobbies that might be in the common good, but are very personal.** [emphasis mine]

It's not clear to what extent this person - himself a multi-millionaire - speaks for the rest of Germany. But it's a really interesting (and frankly, terrifying) look into the European-social-democrat mind. "It's not the state that determines what is good for people"? "People want to decide what their money will be used for. That runs counter to the democratically legitimate state."? What? Those are notions so foreign to me - and I believe to most Americans - that it seems caricatured. As in, I would almost expect to see this in a Republican smear campaign of Nancy Pelosi.

If this is what the modern American Progressive movement is thinking, that's really, really bad for the rest of us.

H/T my brother.

What does it mean to be ahead?

In general, Europeans do drive different automobiles, which tend to be smaller and more efficient. ... In Europe, the scooter is far more popular and differentiated (the scooter with roof is a common sight). Bicycles are also more common and differentiated, and the institutional supports for cyclists are more highly developed (cycle superhighways are old news in Europe).

And then there's public transport. From buses to trams to trains to high-speed rail, Europe is well ahead of America.

That's quoted by Megan McArdle in this post on carbon taxes and innovation.

I don't dispute any of the facts of what is said above (or any in the rest of the post). But it's interesting to use the word "ahead" to refer to public transportation - that seems to be a matter of opinion. Why is having more public transportation considered better than the alternative?

I mean, single family homes are much less efficient then a single large gymnasium capable of housing thousands of people. And restaurants with 2 or 4-person tables are much less efficient than a giant cafeteria. And yet I don't think anyone would say that a country where the majority of people live 1000 per in large gymnasiums, or eat all of their meals in large cafeterias was "ahead" of America. Ditto tiny cars, scooters and bicycles in comparison to a Camry.

I understand the point that without a carbon tax, the true cost of the Camry isn't necessarily included in the operating cost. But it's worth noting that the "solution" is actually a reduction in living standards. Which is not what you would assume when you hear the word "ahead".

Laffer on tax rates

Arthur Laffer on soaking the rich:

As a result of higher tax rates on those people in the highest tax brackets, there will be less employment, output, sales, profits and capital gains—all leading to lower payrolls and lower total tax receipts. There will also be higher unemployment, poverty and lower incomes, all of which require more government spending. It's a Catch-22.

Higher tax rates on the rich create the very poverty and unemployment that is used to justify their presence. It is a vicious cycle that well-trained economists should know to avoid.