The Old Roman by Orlando Plumbe

WSJ.com - Harvard Board Weighs Summers's Presidency

Link: WSJ.com - Harvard Board Weighs Summers's Presidency.

These people say members of the board, known as the Harvard Corporation, have become increasingly concerned that continued faculty discontent with Mr. Summers, a former U.S. treasury secretary, is hurting the university. Mr. Summers, who took over as president in 2001, has alienated some faculty members with a brusque management style and sometimes-outspoken views.

Some Democrats Are Sensing Missed Opportunities - New York Times

Link: Some Democrats Are Sensing Missed Opportunities - New York Times.

"We're selling our party short; you've got to stand for a lot more than just blasting the other side," said Gov. Phil Bredesen of Tennessee. "The country is wide open to hear some alternatives, but I don't think it's wide open to all these criticisms. I am sitting here and getting all my e-mail about the things we are supposed to say about the president's speech, but it's extremely light on ideas. It's like, 'We're for jobs and we're for America.' "

Liberals for Tax Cuts!

Link: WSJ.com - Liberals for Tax Cuts!.

A strange and astonishing thing is happening in Washington as a House-Senate conference committee debates its final tax bill: Democrats are discovering the virtues of cutting taxes for "the rich." Of course there's a catch, but the political by-play is too amusing to ignore and might even help tax cutting in the future. This new-found liberal demand for tax relief concerns one of their own creations -- the alternative minimum tax. The notorious AMT is the IRS's revenge on taxpayers who dare to take entirely legal tax deductions. Make enough money while deducting for (say) state taxes and the child tax credit, and the AMT sweeps you up lest you pay too little tax. As a friend of ours quips, it should really be called the RMT, for required maximum tax.

NYT Article on Mobility Crticized

Link: The Becker-Posner Blog.

The NYTimes article that referred to my 1987 Presidential address to the American Economic Association badly misstated what I said. I did not claim that children’s income was not much related to the income of their parents. In fact I assumed for the sake of discussion that about 40% of the parents’ income advantage was passed on to children. Note that grandchildren would then only have about 16% of the advantages of their grandparents. It is true that some recent work claims the fraction passed on might be as high as 50% rather than 40%, but that is controversial, as Dean Lillard of Cornell and others have argued. I also stand by my claim that there is no credible evidence that the degree of intergenerational mobility has fallen during the past few decades.

Was the Election About This

Apparently I am not the only one who is dismayed by how unrpomising the second term of Bush II is turning out to be. Reform is going nowehere, we are spending like drunken sailors, and Republican's are pushing stupid and devisive issue like the judicial fillibuster and limitations on stem cell. What happened to getting government off the backs of the American people as a guiding principle, if not always a reality? From Larry Kudlow at RealClearPolitics.

Conservatives were near ecstatic last November when President Bush won handily and the Republicans strengthened their hold in Congress. Hopes were high that little could stop the implementation of a true conservative agenda, one that featured supply-side economic reform, investor-owned Social Security reform, serious budget restraint, large-scale energy deregulation, legal-abuse-curbing tort reform, and the confirmation of pro-business, pro-life judicial nominees. But the hoped-for domestic-reform agenda has gone nowhere.

It is as if the Republican's had a rare power play potential in 2005, but the window is closing  Tthe democrats are going to have a comeback in 2006 and 2008, and an opportunity to achieve all sorts of more moderate reform is going to be lost.

Retirement Programs Face an "Aging-Population Tsunami" - Knowledge@Wharton

Link: Retirement Programs Face an "Aging-Population Tsunami" - Knowledge@Wharton.

Demographic changes, along with volatile capital markets and interest-rate swings, will require continued examination of pension systems across the board, said Olivia Mitchell, executive director of the Pension Research Council and director of the Boettner Center for Pensions and Retirement Research at Wharton. "This is a crucial moment in world history for retirement security. In the United States, the baby boomers are just three years away from receiving Social Security checks and an aging-population tsunami is sweeping the rest of the world as well." After months of warning that the Social Security system is in danger of future collapse, President Bush has begun to lay out some details in his plan to reform the government-sponsored retirement system. The Bush proposal would cut Social Security benefits by 20% for retirees leaving the workforce in 2055. Those earning the maximum pay subject to Social Security taxes would face a 40% cut in benefits from what is promised under current law. Despite concerns raised by Democrats and some Republicans, Bush remains committed to converting at least part of Social Security into a private investment system.

Retirement at 70

From economiste grise Samuelson. Link: Retirement at 70.

Our Social Security problem is just one aspect of a larger retirement revolution -- an upheaval in medicine, life expectancy, work and lifestyles. Since Social Security's creation in 1935, life spans have increased dramatically. Someone who now reaches 65 can expect to live almost 20 more years. Meanwhile, government has constantly made Social Security and Medicare more generous. The result is "middle-aged retirement," as Eugene Steuerle of the Urban Institute calls it. If people retired for the same number of years now as in Social Security's early years, he says, they'd work until 74. In fact, half of Social Security recipients start getting benefits at age 62. We can no longer afford this system: It will overburden future generations and could weaken the economy. Congress ought to design a broad makeover of retirement. Americans should work longer. We're healthier (thanks to medical advances and the decline of physical labor) and -- as the number of new workers shrinks -- society will need older workers. Social Security and Medicare were intended to protect the neediest among the elderly; they should not subsidize ever-longer retirements.

High stakes poker-but who wins?

Link: law.com - Article.

Senate Democratic Leader Harry Reid of Nevada has said that if the judicial filibuster is eliminated, his party would bring much of the Senate's business to a halt. Given the Senate's need for unanimous consent for even the simplest actions, that threat could be easy to carry out. Frist set a schedule Wednesday that calls for each party to alternate one hour of debate on both Owen and, presumably, the validity of the judicial filibuster itself. Formal debate was set to end at 7:45 p.m. EDT, Wednesday. It was not immediately clear whether debate on Owen, first nominated just more than four years ago for a seat on the 5th U.S. Circuit Court of Appeals, will continue today or even until Friday. But it is widely expected that Frist will make an effort to end debate on Owen by the end of the week by laying down a cloture petition. The petition would then require at least one intervening day that the Senate is in session to "ripen." Under normal Senate rules, a three-fifths majority, or 60 votes, is required to end debate. If that number is not reached, the debate theoretically can continue unabated, with the nominee never coming to the floor for a vote. Senate Republicans, who hold 55 seats, may not win over enough Democrats to invoke cloture and shut off debate, especially on Owen, who was successf

A well founded plea for a little civility

law.com - Article.

A federal judge whose family was murdered asked the Senate on Wednesday to condemn harsh remarks about the judiciary by commentators such as evangelist Pat Robertson and members of Congress, saying their words could spark more violence. "Fostering disrespect for judges can only encourage those that are on the edge, or on the fringe, to exact revenge on a judge who displeases them," U.S. District Judge Joan Humphrey Lefkow told the Senate Judiciary Committee. Her husband and mother were slain in the couple's Chicago home in February. Bart Ross, a 57-year-old unemployed electrician from Chicago, committed suicide in suburban Milwaukee in March after leaving a note confessing to the murders. He had been angered when Lefkow dismissed a malpractice suit he had filed, authorities said.

Breathe esaier-Social mobility Still Exists

If you have been reading "Challenges to the American Dream." in the WSJ or the NYT series called "Class in America," both of which assert that  the U.S. is still a land of opportunity, you may want to check out. Link: WSJ.com - For the Record, a statistics rich and cogent argument against such arrant nonsense.

Yet the scholarship commonly cited in support of such assertions -- new research by Gary Solon of the University of Michigan, David I. Levine of Berkeley, and Bhashkar Mazumder of the Chicago Fed, among others -- says no such thing. A paper last fall by Mr. Solon observed that several of the newest estimates, including two from Messrs. Levine and Mazumder, suggest that it has become substantially easier to move from one economic class to another (as a 1997 Urban Institute study also concluded). Those new results were statistically weak, however, and an alternative estimate from Messrs. Levine and Mazumder pointed in the opposite direction -- implying family background might have grown more important between the early 1980s and early 1990s. But they described the latter result as merely "suggestive," and Mr. Solon now suspects the data were distorted. As for the latter's own research, he concluded that "our estimates are still too imprecise to rule out modest trends in either direction."

**** Reynolds adds an interesting inter-generational twist at the end.

A kernel of truth within the income mobility confusion is that good parenting matters to a child's lifetime success. Economics Nobel laureate James Heckman notes that "good families promote cognitive, social and behavioral skills," but "single parent families are known to produce impaired children who perform poorly in school, the workplace and society at large." Yes, there are many attentive parents with low incomes who spend hours reading to toddlers, and there are negligent parents with high incomes. But many dysfunctional families do have low incomes, and collecting more taxes from functional families in order to send more transfer payments to dysfunctional families can have perverse results. Mr. Heckman points out that "generous social welfare programs . . . discourage work and hence investment in workplace based skills. . . . Subsidizing work through the EITC . . . can reduce the incentives to acquire skills and so perpetuate poverty across generations."

Recent "news" reports implying it has become more difficult for young Americans to live better than their parents fail to identify any genuine problem.