think thank thunk

When widely followed public figures feel free to say anything, without any fact-checking, we have a problem. It becomes impossible for a democracy to think intelligently about big issues — deficit reduction, health care, taxes, energy/climate — let alone act on them. Facts, opinions and fabrications just blend together. But the carnival barkers that so dominate our public debate today are not going away — and neither is the Internet. All you can hope is that more people will do what Cooper did — so when the next crazy lie races around the world, people’s first instinct will be to doubt it, not repeat it.

I'd like everyone to take a deep breath and listen for a minute.

The point of terrorism is to cause terror, sometimes to further a political goal and sometimes out of sheer hatred. The people terrorists kill are not the targets; they are collateral damage. And blowing up planes, trains, markets or buses is not the goal; those are just tactics.

The real targets of terrorism are the rest of us: the billions of us who are not killed but are terrorized because of the killing. The real point of terrorism is not the act itself, but our reaction to the act.

And we're doing exactly what the terrorists want.

As economist David Ricardo pointed out in 1817 in the “On Wages” chapter of his book On the Principles of Political Economy and Taxation, take-home pay is also generally what a person will work for. Employers know this: Ricardo’s “Iron Law of Wages” is rooted in the notion that there is a “market” for labor, driven in part by supply and demand.

So, if a worker is earning, for example, a gross salary of $75,000, his 2009 federal income tax would have been about $18,000, leaving him a take-home pay of $57,000. Both he and his employer know that he’ll do the job for that $57,000 take-home pay.

So let’s take a look at what happens if the government raises income taxes. For our average $75,000-per-year worker, his takehome pay might decrease from $57,000 to $52,000. So, in the short run, increased taxes have an immediate negative effect on him.

But here comes the part the conservatives don’t like to talk about. Our own history shows that within a short time—usually between one and three years—that same worker’s wages will increase enough to more than compensate for his lost income.

Similarly, when the government enacts a tax cut, workingclass people’s taxes go down; but sure enough, over time, their wages also go down so their inflation-adjusted take-home pay remains the same.

Taxes as the Great Stabilizer

Beyond fairness, holding back the landed gentry that the Founders worried about—America had no billionaires in today’s money until after the Civil War, with John D. Rockefeller being our first—in and of itself is an important reason to increase the top marginal tax rate and to do so now.

Novelist Larry Beinhart was the first to bring this to my attention. He looked over the history of tax cuts and economic bubbles and found a clear relationship between the two. High top marginal tax rates—generally well above 60 percent—on rich people actually stabilize the economy, prevent economic bubbles from forming, prevent the subsequent economic crashes, and lead to steady and sustained economic growth as well as steady and sustained wage growth for working people.

On the other hand, when top marginal rates drop below 50 percent, the opposite happens.

The math is pretty simple. When the über-rich are heavily taxed, economies prosper and wages for working people steadily rise. When taxes for the rich are cut, working people suffer and economies turn into casinos.

So why is it that Americans have come to believe that tax cuts are good for everyone? The answer is that for decades now the überrich have relentlessly spent money to make Americans believe that lower taxes are the answer to all of America’s problems. They’ve done this partly through the media they own and partly through funding “think tanks” that legitimize their Great Tax Con.

Here's how...

Stop and think about it.

Women in the Netherlands work less than men, have lesser titles, and have a big gender pay gap — and they love it.

Though the Netherlands is consistently ranked in the top five countries for women, less than 10 percent of women here are employed full-time. And they like it this way.

Incentives to nudge women into full-time work have consistently failed. Less than 4 percent of Dutch women wish they had more working hours or increased responsibility in the workplace, and most refuse extended hours even when the opportunity for advancement arises.

In a simplified way, the story of the collapse of the Soviet Union could be told as a story about grain and oil.

The solution to the need for security at US airports is not a government bureaucracy. The solution is to allow the private sector, preferably the airlines themselves, to provide for the security of their property. As a recent article in Forbes magazine eloquently stated, “The airlines have enormous sums of money riding on passenger safety, and the notion that a government bureaucracy has better incentives to provide safe travels than airlines with billions of dollars worth of capital and goodwill on the line strains credibility.

"Israelis, unlike Canadians and Americans, don't take s--- from anybody. When the security agency in Israel (the ISA) started to tighten security and we had to wait in line for — not for hours — but 30 or 40 minutes, all hell broke loose here. We said, 'We're not going to do this. You're going to find a way that will take care of security without touching the efficiency of the airport."

That, in a nutshell is "Israelification" - a system that protects life and limb without annoying you to death. The goal at Ben-Gurion is to move fliers from the parking lot to the airport lounge in a maximum of 25 minutes.

Eight years after 9/11, why are we still so reactive, so un-Israelified?

"We have a saying in Hebrew that it's much easier to look for a lost key under the light, than to look for the key where you actually lost it, because it's dark over there. That's exactly how (North American airport security officials) act," Sela said. "You can easily do what we do. You don't have to replace anything. You have to add just a little bit — technology, training. But you have to completely change the way you go about doing airport security. And that is something that the bureaucrats have a problem with. They are very well enclosed in their own concept."

And rather than fear, he suggests that outrage would be a far more powerful spur to provoking that change.

"But, what can you do? Americans and Canadians are nice people and they will do anything because they were told to do so and because they don't know any different."