Thursday, January 17, 2019
Trump & The Russians
The Guardian (UK) Russian billionaire set up US company before Trump Tower meeting
"A Russian billionaire who orchestrated the June 2016 Trump Tower meeting formed a new American shell company a month beforehand with an accountant who has had clients accused of money laundering and embezzlement. The billionaire, Aras Agalarov, created the US company anonymously while preparing to move almost $20m into the country during the time of the presidential election campaign, according to interviews and corporate filings. The company was set up for him in May 2016 by his Russian-born accountant, who has also managed the US finances of compatriots accused of mishandling millions of dollars. One of those clients has its own connection to the Trump Tower meeting. In June 2016, Agalarov allegedly offered Trump’s team damaging information from the Kremlin about Hillary Clinton, their Democratic opponent. The offer led Trump’s eldest son to hold a meeting at their Manhattan offices that is now a focus of the inquiry into Moscow’s election interference by Robert Mueller, the special counsel. Agalarov’s previously unreported shell company is another example of intriguing financial activity around the time of the Trump Tower meeting. Mueller is looking into such activity and whether any of the money involved could have been used to fund Russian meddling in the US election, which Agalarov denies..."
The Guardian (UK) Russian billionaire set up US company before Trump Tower meeting
"A Russian billionaire who orchestrated the June 2016 Trump Tower meeting formed a new American shell company a month beforehand with an accountant who has had clients accused of money laundering and embezzlement. The billionaire, Aras Agalarov, created the US company anonymously while preparing to move almost $20m into the country during the time of the presidential election campaign, according to interviews and corporate filings. The company was set up for him in May 2016 by his Russian-born accountant, who has also managed the US finances of compatriots accused of mishandling millions of dollars. One of those clients has its own connection to the Trump Tower meeting. In June 2016, Agalarov allegedly offered Trump’s team damaging information from the Kremlin about Hillary Clinton, their Democratic opponent. The offer led Trump’s eldest son to hold a meeting at their Manhattan offices that is now a focus of the inquiry into Moscow’s election interference by Robert Mueller, the special counsel. Agalarov’s previously unreported shell company is another example of intriguing financial activity around the time of the Trump Tower meeting. Mueller is looking into such activity and whether any of the money involved could have been used to fund Russian meddling in the US election, which Agalarov denies..."
Friday, January 11, 2019
Taxes:
Paul Krugman: The Economics of Soaking the Rich
"...The right’s denunciation of AOC’s “insane” policy ideas serves as a very good reminder of who is actually insane. The controversy of the moment involves AOC’s advocacy of a tax rate of 70-80 percent on very high incomes, which is obviously crazy, right? I mean, who thinks that makes sense? Only ignorant people like … um, Peter Diamond, Nobel laureate in economics and arguably the world’s leading expert on public finance. (Although Republicans blocked him from an appointment to the Federal Reserve Board with claims that he was unqualified. Really.) And it’s a policy nobody has ever implemented, aside from … the United States, for 35 years after World War II — including the most successful period of economic growth in our history. To be more specific, Diamond, in work with Emmanuel Saez — one of our leading experts on inequality — estimated the optimal top tax rate to be 73 percent. Some put it higher: Christina Romer, top macroeconomist and former head of President Obama’s Council of Economic Advisers, estimates it at more than 80 percent. Where do these numbers come from? Underlying the Diamond-Saez analysis are two propositions: Diminishing marginal utility and competitive markets. Diminishing marginal utility is the common-sense notion that an extra dollar is worth a lot less in satisfaction to people with very high incomes than to those with low incomes. Give a family with an annual income of $20,000 an extra $1,000 and it will make a big difference to their lives. Give a guy who makes $1 million an extra thousand and he’ll barely notice it.
What this implies for economic policy is that we shouldn’t care what a policy does to the incomes of the very rich. A policy that makes the rich a bit poorer will affect only a handful of people, and will barely affect their life satisfaction, since they will still be able to buy whatever they want. So why not tax them at 100 percent? The answer is that this would eliminate any incentive to do whatever it is they do to earn that much money, which would hurt the economy. In other words, tax policy toward the rich should have nothing to do with the interests of the rich, per se, but should only be concerned with how incentive effects change the behavior of the rich, and how this affects the rest of the population.
But here’s where competitive markets come in. In a perfectly competitive economy, with no monopoly power or other distortions — which is the kind of economy conservatives want us to believe we have — everyone gets paid his or her marginal product. That is, if you get paid $1000 an hour, it’s because each extra hour you work adds $1000 worth to the economy’s output. In that case, however, why do we care how hard the rich work? If a rich man works an extra hour, adding $1000 to the economy, but gets paid $1000 for his efforts, the combined income of everyone else doesn’t change, does it? Ah, but it does — because he pays taxes on that extra $1000. So the social benefit from getting high-income individuals to work a bit harder is the tax revenue generated by that extra effort — and conversely the cost of their working less is the reduction in the taxes they pay. Or to put it a bit more succinctly, when taxing the rich, all we should care about is how much revenue we raise. The optimal tax rate on people with very high incomes is the rate that raises the maximum possible revenue. And that’s something we can estimate, given evidence on how responsive the pre-tax income of the wealthy actually is to tax rates. As I said, Diamond and Saez put the optimal rate at 73 percent, Romer at over 80 percent — which is consistent with what AOC said..."
Health Care
Patricia O’Toole: Theodore Roosevelt, Health Care Progressive
"...Roosevelt’s efforts in the field of health yielded more defeats than triumphs. No politician relishes defeat, but as the preacher of the risk-taking strenuous life, he could hardly whine about his losses. Ultimately he decided that the man who mattered most was the man in the arena, taking his lumps and carrying on. Such a man might make mistakes, Roosevelt said, and he might come up short, but he is striving valiantly, spending himself in a worthy cause, and “if he fails, he at least fails while daring greatly.” If life dealt Theodore Roosevelt the high cards of wealth and privilege, the long suit of his boyhood was a life-threatening illness. The experience might have produced a man who lived on his inheritance and shied away from all things strenuous. This boy, willing and able to make himself strong, entered the political arena and fought against long odds for the health and well-being of his fellow citizens — a worthy cause if ever there was one. There may be no better way for the country to honor his memory than to get off its duff and persevere until all Americans have decent health care."
Paul Krugman: The Economics of Soaking the Rich
"...The right’s denunciation of AOC’s “insane” policy ideas serves as a very good reminder of who is actually insane. The controversy of the moment involves AOC’s advocacy of a tax rate of 70-80 percent on very high incomes, which is obviously crazy, right? I mean, who thinks that makes sense? Only ignorant people like … um, Peter Diamond, Nobel laureate in economics and arguably the world’s leading expert on public finance. (Although Republicans blocked him from an appointment to the Federal Reserve Board with claims that he was unqualified. Really.) And it’s a policy nobody has ever implemented, aside from … the United States, for 35 years after World War II — including the most successful period of economic growth in our history. To be more specific, Diamond, in work with Emmanuel Saez — one of our leading experts on inequality — estimated the optimal top tax rate to be 73 percent. Some put it higher: Christina Romer, top macroeconomist and former head of President Obama’s Council of Economic Advisers, estimates it at more than 80 percent. Where do these numbers come from? Underlying the Diamond-Saez analysis are two propositions: Diminishing marginal utility and competitive markets. Diminishing marginal utility is the common-sense notion that an extra dollar is worth a lot less in satisfaction to people with very high incomes than to those with low incomes. Give a family with an annual income of $20,000 an extra $1,000 and it will make a big difference to their lives. Give a guy who makes $1 million an extra thousand and he’ll barely notice it.
What this implies for economic policy is that we shouldn’t care what a policy does to the incomes of the very rich. A policy that makes the rich a bit poorer will affect only a handful of people, and will barely affect their life satisfaction, since they will still be able to buy whatever they want. So why not tax them at 100 percent? The answer is that this would eliminate any incentive to do whatever it is they do to earn that much money, which would hurt the economy. In other words, tax policy toward the rich should have nothing to do with the interests of the rich, per se, but should only be concerned with how incentive effects change the behavior of the rich, and how this affects the rest of the population.
But here’s where competitive markets come in. In a perfectly competitive economy, with no monopoly power or other distortions — which is the kind of economy conservatives want us to believe we have — everyone gets paid his or her marginal product. That is, if you get paid $1000 an hour, it’s because each extra hour you work adds $1000 worth to the economy’s output. In that case, however, why do we care how hard the rich work? If a rich man works an extra hour, adding $1000 to the economy, but gets paid $1000 for his efforts, the combined income of everyone else doesn’t change, does it? Ah, but it does — because he pays taxes on that extra $1000. So the social benefit from getting high-income individuals to work a bit harder is the tax revenue generated by that extra effort — and conversely the cost of their working less is the reduction in the taxes they pay. Or to put it a bit more succinctly, when taxing the rich, all we should care about is how much revenue we raise. The optimal tax rate on people with very high incomes is the rate that raises the maximum possible revenue. And that’s something we can estimate, given evidence on how responsive the pre-tax income of the wealthy actually is to tax rates. As I said, Diamond and Saez put the optimal rate at 73 percent, Romer at over 80 percent — which is consistent with what AOC said..."
Health Care
Patricia O’Toole: Theodore Roosevelt, Health Care Progressive
"...Roosevelt’s efforts in the field of health yielded more defeats than triumphs. No politician relishes defeat, but as the preacher of the risk-taking strenuous life, he could hardly whine about his losses. Ultimately he decided that the man who mattered most was the man in the arena, taking his lumps and carrying on. Such a man might make mistakes, Roosevelt said, and he might come up short, but he is striving valiantly, spending himself in a worthy cause, and “if he fails, he at least fails while daring greatly.” If life dealt Theodore Roosevelt the high cards of wealth and privilege, the long suit of his boyhood was a life-threatening illness. The experience might have produced a man who lived on his inheritance and shied away from all things strenuous. This boy, willing and able to make himself strong, entered the political arena and fought against long odds for the health and well-being of his fellow citizens — a worthy cause if ever there was one. There may be no better way for the country to honor his memory than to get off its duff and persevere until all Americans have decent health care."
