The sacred cow of public policy

As I've said before, I'm pretty solidly against the home mortgage interest rate deduction. However, I thought it was about as entrenched as our silly farm subsidies and thought it would never go away. Then I read this, "Killing (or Maiming) A Sacred Cow: Mortgage Interest Deductions." Apparently, another optimistic fellow argues that this too can be up for debate.

The Great Depression provided an opportunity to rethink old policies in a major way. In the current morass, everything should, once again, be open for debate. One sacred cow that has long been in need of a good stockyard is the home mortgage interest deduction. So, in the spirit of libertarian progressivism, I suggest gradually reducing the upper limit on the deduction to loans of up to $300,000, and then refunding the tax revenues in a more productive manner.

Hizzah for a tax reduction in lieu of the convoluted MID!

Hat tip: John

Optimistic look at this crisis of opportunity

One of my GMU profs Jeremy Mayer offers up a silver lining:

A crisis of this magnitude comes along once every three or four generations and shakes up the rules of politics as usual. In such times, a good idea that has been stopped by normal politics can suddenly win. The politically impossible becomes appealing or even unstoppable.

While Mayer and I may not agree on what previously politically impossible things should be made possible (he was once a Ron Paul fan but alas has strayed), I dig the traction that ending the Cuban embargo seems to be getting. Mayer also suggests the legalization of marijuana or even entitlement reform might be feasible. Here's hoping!

This Keynes craze...

A couple weeks ago, I walked out of my first graduate school class. Funny it didn't happen when I was called a nazi (fall of 2007) or a person who affiliated with devil people like Phyllis Schafly or Charles Murray (spring 2008). I just got fed up.

We had a guest lecturer come talk to us about Keynes in our macroeconomics course. Fine. Ok, I was mentally prepared for a tedious class. What I wasn't prepared for was the ensuing Keynes lovefest coupled with derogatory comments about those crazy and unrealistic free market ideas that have "thankfully been proven wrong" etc. I bit my tongue and concentrated on keeping my cool. Unfortunately my laptop died or I would have vented my frustrations live on my blog. I made it all the way until 9:15pm (the class ends at 9:45) and the professor had obviously finished his prepared lecture and was just grinding his axe. Some snotty faced eager beaver in the front row eagerly raised his hand (why raise your hand when you're 3 feet away from the prof is beyond me), "Don't you think these irresponsible and greedy executives deserve some punitive damage for what they've done?"

As the professor started to calmly respond to this absurd question, I gathered my things and left the room. Unfortunately, my exit was punctuated inadvertently with the slamming of the door behind me. To which the professory commented, "Well, she must be an investment banker!"

No, my good sir, I am not, but I feel their pain.

The primary problem I have with Keynes is the same problem I have with neoclassical economics and all that other mainstream econ you learn in most undergraduate programs - it's assuming too much. Whether is perfect information on behalf of the neoclassical model or better information by the Keynesian planners, it assumes that some central authority is better equipped to make decisions than individual participants in the economy.

Here's a good explanation on the current Keynes craze and what Keynes was really all about.

Hat tip: David

What's your backup country?

If things continue to go south, I've seriously contemplated moving to New Zealand - Ireland is a close second. Perhaps I should visit first before I make this decision. My friends tease me that if I moved to New Zealand, I would be living amongst sheep, but I tell them I'd be living amongst sheep and men. Apparently the guy/girl ratio would be in my favor. The real reasons I picked those two countries are because #1 I can still speak English there, #2 they are in the top 10 of the Heritage Resource Bank's Economic Index of Freedom, and #3 beautiful landscapes.



Perhaps, I need to consider Denmark. Will Wilkinson has an interesting post on the possibility of government being Big and Free. He's not condoning big government, but he's giving us limited government fans hope that big government can still somehow be restrained. Counterintuitive? yes. Unlikely? yes. But here's hoping!

That's no fun...

No kissing allowed on the train platform says Brits and they have the signs to enforce it!

No Taxation Without Representation

First of all, can I just say Eleanor Holmes Norton may be an obnoxious, irrational fruit fly of a woman, but at least she has a sense of humor as evidenced by her repeated barbs with my man, Colbert.

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Putting aside her entertainment value though, I truly hope that this new ploy for DC voting rights doesn't actually pan out. I fear, however, it's gaining steam because of the op-eds I've seen recently:

Washington’s lack of representation is profoundly undemocratic. Its residents are American citizens who pay taxes, vote for the president and serve and die in the military. Although the city is relatively small, it is more populous than Wyoming and nearly equal to those of Vermont and Alaska.

Now this isn't some vast right-wing, racist conspiracy to keep the predominantly African-Americans in D.C. from having voting rights...it's simply a matter of the Constitution. D.C. is NOT a state! I sympathize with the bureaucracy involved in having to have Congress approve it's budget, set school policies, etc. but it's NOT a state! Nor do I think it should be - it's economy is far too dependent upon the federal government for it to ever function properly.

The one point of sympathy I do have is that D.C. residents have to pay federal taxes. The age-old argument of "no taxation without representation" is still relevant today. So, I say fine! Don't require D.C. residents to pay federal taxes - problem solved.

Incentivizing policymakers

Not that this is in anyway realistic, but Chris Buckley suggests making policymakers' pay somewhat tied to performance.

How many votes would we have for the stimulus package if senators would be held personally accountable for the results? Probably not as much!