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Booksellers versus Bestsellers

  • Haiku U: Little Women

    by John MacBeath Watkins

    While I've been contemplating starting a Doggerel Night at Twice Sold Tales, I've been thinking of some of my favorite light verse. Very little of it has been written in Haiku, but I recommend to you a book by David Bader, Haiku U: 100 great books in Haiku.

    Here's his take on Little Women:



    Louisa May Alcott, Little Women
    Snow-drops hang like tears.
    Shy, sweet, saintly Beth has died.
    One down, three to go. 

    http://www.extremely.com/greatbooks-main.html


  • P.G. Wodehouse on inherited wealth

    from The Adventures of Sally, Chapter 1:

    'If there are any young men whom inherited wealth improves, Fillmore was not one. He seemed to regard himself these days as a sort of Man of Destiny. To converse with him was for the ordinary human being like being received in audience by some more than stand-offish monarch.'

  • The Doggerel Manifesto

    by John MacBeath Watkins

    As those of you who follow us on facebook already know, Twice Sold Tales in Ballard is considering starting a Doggerel Night at Twice Sold Tales.

    The only trouble is, several people to whom I've broached the idea have not known what doggerel is.

    From the Merriam-Webster Learner's Dictionary:

    doggerel

    noun
    : poetry that is poorly written and that often is not meant to be taken seriously.
     In short, doggerel is a disparaging term for unpretentious poetry that aims to entertain, and has no pretension of being high art. I do not think it has to be written poorly; after all, Ogden Nash once said he'd decided to be a good bad poet rather than a bad good poet, and I think that captures the distinction between "poetry" and doggerel.

    Consider an example of folk poetry that is not intended to be taken seriously:

    What the Blind Man Saw

    One fine day in the middle of the night
    two dead boys got up to fight
    Back to back they faced each other
    drew their swords and shot each other.

    If you don't believe what I say is true,
    ask the blind man, he saw it too.
    Iambic verse with four feet to the line, in rhyming heroic couplets. Nothing wrong with that, although the first line isn't Iambic all the way through, when voiced it scans well enough. Continuity errors aside, it's well written.

    The idea of doggerel is different from what we now call poetry. It is a means to tell a story and often a means to tell a joke. At one time, poetry and jokes were our oral traditions, the poetry often put to music.

    But we've elevated poetry to the status of high art. I've been to a reading where someone was throwing out random numbers and calling them a poem, sort of equivalent to Robert Rauschenberg's White Painting, a 1951 three-canvas work that the artists said represented nothing (more on the flight from meaning here.)

    White Painting
    There was a time when poetry could be art, but this was not the essence of poetry. Its essence was that it was a way to tell a story. The tale could be told well or badly, and its popularity depended on the taste of the public, not on any arbiters of taste. Because it was a means of storytelling, most of it didn't have to be terribly good, it just had to tell a tale people wanted to hear. Casey at the Bat, that most American of poems, ran in a daily newspaper.

    In some cases, popular poetry disparaged as doggerel produced parodies more famous than the original. When I was a lad, I learned this comic poem:
    The boy stood on the burning deck, his feet were full of blisters
    he could not find his own shoes, so he had to wear his sister's.
    The ocean was deserted, not a streetcar was in sight
    the forest fires were burning, for it rained all day that night.
    It wasn't until a few years ago that I found Casabianca, the poem the one above parodied. It was first published in 1826, based on events that had occurred in 1798 at the Battle of the Nile. The dreadful thing came to be taught in American and British schools from about 1850 to 1950, mercifully disappearing from the syllabus about the time I was born, though I take no credit for that. It was thought the poem taught children to be virtuous:
    The boy stood on the burning deckWhence all but he had fled;The flame that lit the battle's wreckShone round him o'er the dead. The boy in Casabianca stands on the deck where his father told him to, unaware that his father is dead and can't countermand the order, until the powder magazine blows up and kills him.

    Twat.

    Generations of school children rebelled against this and produced several versions of parodies that had greater comic and artistic merit than the original.

    And that's the beauty of doggerel. It can be awful, but if it is awful and pretentious, there's always someone willing to come along and burst the bubble.

    The problem is, the entire institutional organism that supports poetry has become pretentious. It's time to burst the bubble, and write poetry that is intended to amuse, to tell a story or to tell a joke, that has no pretense of being written for the ages.

    I say it is ominous that so little poetry written in the last century is worthy of parody. Our poetry has become so irrelevant that little of it is iconic enough to have people know what you're doing when you parody it. The only one that comes readily to mind is Robert Frost's The Road not Taken. And that was a parody that fit on a button -- "I took the road less traveled by -- what was I thinking!"

    I say we need poetry worth repeating, the way a dirty joke is worth repeating, a return to the oral tradition that spread anonymous poems like What the Blind Man Saw without the backing of foundations or grants or small, incestuous poetry journals.

    It doesn't have to be funny. In fact, without sincere, and popular, poems like Casabianca, we can't have brilliant parodies. Without Against Idleness and Mischief, by Isaac Watts:
    How doth the little busy Bee
       Improve each shining Hour,
    And gather Honey all the day
       From every opening Flower! ...we would not have Lewis Carroll's parody:
    How doth the little crocodileImprove his shining tail,And pour the waters of the NileOn every golden scale!How cheerfully he seems to grin,How neatly spreads his claws,And welcomes little fishes inWith gently smiling jaws!  I call both of these doggerel. I class the whole of Edgar Guest's oeuvre as doggerel, and so is Dorothy Parker's review of his work:
    I'd rather flunk my Wasserman test
     Than read the poetry of Edgar Guest.But a Reader's Digest poet like Guest had his place in a healthy ecology of poetry. His poetry was maudlin, his language hackneyed, but if a thing is worth doing, there's a market for people who do it badly as well as for those who do it perfectly.  Just as the romance and the mystery novel have a market for the less auspicious practitioners as well as for Jane Austen and P.D. James, a healthy market for poetry would have room for Casabianca as well as the works of W.S. Merwin.

    I suggest we cease to regard poetry as an art form and return to viewing it as a storytelling technique. A poem may have artistic merit, but it need not have such merit to be a poem that gets passed around and enjoyed.

    So let's tell stories with this technique we call poetry, either reading our favorites or writing our own. We won't aim to produce high art. We will aspire to amuse our friends.







  • In rememberance of the Goliard poets: Father Golias Lives for Bling

    The Goliard poets were renegade priests in the 12th through the 13th centuries (and a little bit into the 14th) who wrote satiric verse about the corruption of the Catholic Church, usually featuring Father Golias, who exemplified all that was wrong with the Church.

    more here: http://booksellersvsbestsellers.blogspot.com/2010/05/bohemians.html

    In remembrance of their bravery and humor:



    Father Golias Lives for Bling

    Father Golias lives for bling
    and covers up the "little things."

    He knows some things he knows would shock
    but doesn't wish to shock the flock

    So Father Golias gets his bling
    and silences the "little things."

  • Burning the booksellers: Religious freedom and the secular state

    by John MacBeath Watkins

    My copy of Foxe's Book of Christian Martyrs has a woodcut illustrating a particularly odious form of book burning -- a bookseller being burned with his books.

    Not that the punishment was without an internal logic. The booksellers had been selling Holy Scripture in English. The Catholic Church objected to this, and any other Protestant heresy that involved removing the priest's mediation of scripture. The Bible, the Church decreed, was meant to be in Latin, a language taught mainly to the clergy.

    The booksellers were therefore heretics, spreading the false gospel of a personal relationship with God. They had to be punished, and not just their bodies. At the time, the Church taught that to be resurrected on Judgement Day, your body needed to be buried more or less intact.

    The booksellers were being burned so that they could not be resurrected on Judgement Day.

    This dispute was part of the genesis of liberalism, of the separation of church and state and of free speech. It also relates to the belief in the literal interpretation of the Bible.


    The Anglo-Saxons had translated the Bible into their language, no problem. But the Norman French did not speak their language, and the Catholic Church was trying to assert more control over peoples' religious lives. They cracked down on the Goliard poets in the late 13th century and early 14th, labeling them "Bohemians" in an effort to link them to the gypsies, who they called by that name. John Wycliffe, an Oxford don, translated the Vulgate Bible into English, and while he was allowed to die of natural  causes in 1384, his body was burned to prevent his resurrection (ironically, the Vulgat Bible was translated from Hebrew and Greek into Latin so that citizens of Rome could read it in their own language.)

    William Tyndale, a scholar born about a century after Wycliffe's body was burned, went back to the Hebrew and Greek text to produce a better translation into English. He did much of this while hiding in the Netherlands, but the Church caught up with him in 1535, and in 1536 he was sentenced to death by strangulation and his body was burned at the stake.

    Two years later, Henry VIII broke with the Catholic Church and decreed that the Bible should be published in English, resulting in the Great Bible, largely based on Tyndale's work.

    Hank8 did not intend to separate church and state. He intended for the state to take over the church. Thomas More, that martyr of conscience, died for the principle that the Pope should be able to tell monarchs whether they could have their marriages annulled, thereby ruling on who was a legitimate heir.

    English kings continued to rely on religion for the legitimacy of their rule. James I wrote The True Law of Free Monarchies and Basilikon Doron (Royal Gift), both asserting the divine right of kings, and following the Gunpowder Plot in 1605, he required Catholics to sign an oath of allegiance denying the Pope's authority over the king.

    But he married a French princess who was Catholic, and his son, Charles I was Catholic as well as being, like his father, a believer in the divine right of kings.

    And that's where it gets interesting.

    If you are a Catholic in a nation that is divided between Catholics, Anglicans, and non-conformist protestants such as Puritans, Quakers, Ranters, Anabaptists, Diggers, Muggletonians and other more obscure groups, whose God gives you the right to rule?

    Chuck1 was an apostate to most of his subjects, but also an arrogant and high-handed ruler based on his claim of divine right. In the end, he rather lost his head.



    Which led his son's tutor, the redoubtable Thomas Hobbes, to look for a new source of legitimacy for English kings.

    He imported the values of the marketplace into politics, asserting that a nation needs a ruler to keep order, or chaos will reign, no life will be safe, there will be no point in planting crops or shipping merchandise, and in short, you will be reduced to a state of nature, which in his pessimistic view was nasty, brutish and short. In fact, his vision of the state of nature was similar to the breakdown of civilization that had been produced in many areas by the then recently concluded 30-Years-War.

    Thus, the need for a secular government was created by a crisis in faith, the splintering of the Church into a dizzying array of churches. The blossoming of the Protestant churches could only happen in a secular state, because freedom of religion requires that you be free from the religions of others.

    We tend to forget what the establishment of religion means. Here's an example from Wikipedia:
     http://en.wikipedia.org/wiki/Pilgrims_(Plymouth_Colony)
    The Separatists had long been controversial. Under the 1559 Act of Uniformity, it was illegal not to attend official Church of England services, with a fine of one shilling (£0.05; about £16 today[3]) for each missed Sunday and holy day. The penalties for conducting unofficial services included imprisonment and larger fines. Under the policy of this time, Barrowe and Greenwood were executed for sedition in 1593. The Pilgrims came to America in 1620, a generation before the English Civil War, to be free of the state religion of England, free to practice their religion as they saw fit. Not that they wanted a secular state; they wanted to set up their own colony with their own state religion. One of my ancestors was kicked out of this group for sheltering some Quakers from a storm, and became a Quaker as a consequence.

    For different groups to share the new land with freedom to practice religion as they saw fit, they needed to be free of each other's religion. I've noticed that deeply religious people sometimes have trouble wrapping their brains around this. They tend to focus on the practice of their religion, and, not having been forced to practice the religion of others, not think about what this could mean.

    After all, it was back in England that people were executed for conducting unofficial services, and that was a long time ago. And no one has been executed for blasphemy in the United Kingdom since 1697, nor has anyone been executed for it here.

    But those were real penalties for holding the wrong religious beliefs under an established church. We still see them today in places like Iran where religious authorities reign supreme.

    America's founding fathers knew what it was like to live under an established church. After British officers of the Catholic faith turned their positions over to their Catholic co-religionists during the war for the Netherlands' independence, Queen Elizabeth decreed that only Anglicans could be officers in the military or practice law or hold public office.

    In the American revolutionary army, you could be of any faith. Col. Mordecai Sheftall, for example, was Jewish  But how did our founding fathers feel about the role of religion after they got independence?

    Well, the first amendment to the constitution decrees that congress shall make no law regarding establisment of religion. That seems clear enough. And in 1797, congress unanimously passed the Treaty of Tripoli, which decreed that:
    As the Government of the United States of America is not, in any sense, founded on the Christian religion,--as it has in itself no character of enmity against the laws, religion, or tranquility, of Mussulmen [Muslims],--and as the said States never entered into any war or act of hostility against any Mahometan [Mohammedan] nation, it is declared by the parties that no pretext arising from religious opinions shall ever produce an interruption of the harmony existing between the two countries. That seems clear enough.

    However, not everyone respects history or the original intent of the founders. For example, World Net Daily confronts us with the headline, America: A Christian Nation, Like it or Not. An Evangelical group points to some 19th century Supreme Court decisions that indicated that at the time, a majority of justices viewed America as a Christian nation.

    Just as kings never had to make the argument that they possessed their power by divine right until that was in doubt, conservative Christians seldom had to make that argument until an increasingly large proportion of the population were either unchurched or belonged to non-Christian faiths. The percentage of the population professing no religion in 1953 was 1 percent, the number in 2013 was 15 percent. In the same period, the percentage of the population identifying as Protestant declined from 70 percent to 41 percent. Non-specified Christian, a group not counted in 1953, is now 9 percent, and Catholic has held steady at 24 percent.

    The percent Jewish has declined from 4 percent to 2 percent, and the percentage "other" has risen from 1-2 percent to 5 percent.

    This has accompanied a radical change in our nation's ethnic makeup. The reason Catholics have held up as a percentage of the population is the vast number who have immigrated from Latin America. The reason "other" keeps increasing is that we have so many immigrants from areas where Christianity is a minority religion, in Asia, the middle east, and Africa.

    The drive to define this country as a Christian nation is not led by traditionally black denominations. It is led by traditionally white denominations who are concerned about how America is changing.

    Most people would say that after WW II, America came into its own as the most powerful nation in the world, supplanting the battered British Empire. Yet to those who wish to define America as a Christian nation, this appears to be a period of decline, starting with a 1947 ruling:
    From the time of Everson until today, decisions by the U.S. Supreme Court have helped to bring about the greatest decline in American civilization. It was as if the Supreme Court had declared a bloodless revolution in America -- a revolution more subtle than yet just as destructive as the Russian revolution under Lenin. Over the next three decades, we witnessed a stream of liberal court rulings that gradually reshaped who we are as a nation.  The author quotes Alexis de Tocqueville saying that America's greatness is connected with America's goodness, which the author claims is lost when we don't regard America as a Christian nation. This ignores Tocqueville's own views on religion, as revealed in an interview he did with an American newspaper:
    Q. In your opinion, what would be the best way to render to religion its natural empire? 

    A. I believe the Catholic religion less apt than the reformed to accord with ideas of liberty. However, if the clergy were entirely separated from all temporal power, I cannot but believe that with time it would regain the intellectual influence which naturally belongs to it. I think that to appear to forget the church, without being unfriendly to it, is the best way and even the only way to serve it. Pursuing this policy you will see public education little by little falling into its hands, and the youth will with time adopt a different attitude....  It seems he was right. The nations which had established churches are not typically as religious as America. Separating the church from all temporal power may well be what's made it so influential in our culture.

    But there does seem to be a group of people who really want to define America as a Christian nation, and in effect, establish Christianity as the national religion. First, there are the Dominionists, relatively few in number, who believe that God gave Christians dominion over the earth, so they should rule. Then, there is the broader public of the Christian right, which World Net Daily appeals to, who long for a time when white protestants dominated our culture and politics more than they do now. This is a larger, and in fact, vast group, though far from a majority in the country.

    This is the group that supported Rick Santorum for president, and he provided them with a suitably Dominionist critique of President Obama, which I've mentioned before:

    Obama's agenda is "not about you. It's not about your quality of life. It's not about your jobs. It's about some phony ideal. Some phony theology. Oh, not a theology based on the Bible. A different theology," Santorum told supporters of the conservative Tea Party movement at a Columbus hotel. He enlarged on the theme when talking about environmentalism:
     "When you have a worldview that elevates the Earth above man and says we can't take those resources because we're going to harm the Earth ...  it's just all an attempt to centralize power, to give more power to the government."Santorum's supporters, in addition to wanting Christianity to dominate our government, have shown themselves intent on riding the Republican Party of people they consider RINOs -- Republicans In Name Only. Put them in charge, give them their wish of a theocratic state, and soon you'd see them suppressing those they consider CRINO -- Christian In Name Only. This would doubtless apply to the church my 89 year old mother has attended for 42 years, which has a female preacher and is happy to accommodate gay marriage.

    There is a reason the people who want to define America as a Christian nation don't want to include churches like hers. Evangelical churches didn't become politically active until the IRS started cracking down on "white academies" -- private schools, often associated with a historically white church, which sprang up in the South after school integration began to spread to the region. The Christian right has long been tainted by an association with this effort to revive segregation. In short, the problem isn't just a desire to see Christianity dominant, it is also an element of ethnic panic,  a fear that the identity of their nation will no longer be associated with their ethnicity.

    That's why the more tolerant Christian sects are anathema to those who want to see America defined as a Christian nation. As a political matter, these sects tend to belong to different parties. Stanley Greenberg, a pollster, has described the Democratic coalition as "diverse America and the whites who are comfortable with diverse America."

    And the Republican Party, because of its reliance on a conservative Christian movement associated with the white academies, consists in part of whites who are not comfortable with diverse America.

    I should note that there are many white evangelicals, often Northern, who don't have a problem with diverse America, or with sending their kids to public schools. They remain culturally conservative, and generally fall in the Republican camp politically. But then, most of them aren't big on gaining temporal power for religion.

    Perhaps they should remember where the freedom to start their churches came from, and what could happen to that freedom.


  • Books to prescribe for the convalescent

    by John MacBeath Watkins

    Recovering from abdominal surgery is taking longer than I had anticipated, and has given me an opportunity to test various books for their medicinal effects.

    For the first week or so, I was taking narcotic pain killers at four-hour intervals and spending most of my time sleeping. Even this was not enough to tamp down my brain activity sufficiently to make television intellectually stimulating. I requested the same books I prescribe to others for periods of recuperation, the light romantic comedies of P.G. Wodehouse.

    These books work very well at keeping you sitting still while your wounds heal, and the mood is light enough to raise your spirits. Mood and pacing are important aspects of a book for treating illness. If your attention wanders, it will be difficult to get enough rest. If the mood is too dark, it will not help you evade the financial worries that often accompany a period of illness, or counteract the effects of the central nervous system depressants often prescribed as painkillers.

    Humor is an important aspect in keeping your mood up, so authors like Tom Holt and Terry Pratchett are good as well, but humor is hard, so Wodehouse is sovereign in the treatment of almost any illness, because he was the greatest humorist in the English language. There are non-fiction works that function pretty well in this regard, such as They Call Me Naughty Lola: Personal Ads from the London Review of Books, by David Rose.While American personal ads tend to be earnest and aspirational, telling how good a prospect you are, the English seem to prefer a display of wit such as:
    "Shy, ugly man, fond of extended periods of self-pity, middle aged, flatulent and overweight, seeks the impossible" Or:
    "Bald, fat, short, and ugly male, 53, seeks short-sighted woman with tremendous sexual appetite."Or:
    "Blah blah, whatever. Indifferent woman. Go ahead and write. Box no. 3253. Like I care." Or
    "Your stars for today: A pretty Cancerian, 35, will cook you a lovely meal, caress your hair softly, then squeeze every damn penny from your adulterous bank account before slashing the tyres of your Beamer. Let that serve as a warning. Now then, risotto?"The other thing a book must have is the ability to grip your attention and not let you go. Remember, one of the reviews of Robert Ludlum's first books was "this is a terrible book, so I stayed up until 3 a.m. reading it." A book need not have a great literary reputation to have the therapeutic effect of making your stay in bed tolerable. I read several of Steven Brust's books about his cheerful assassin/gangster, Vlad Taltos, with enjoyment during my convalescence on this principle.

    There is a book about a police officer recuperating while trying to solve a crime committed centuries earlier, The Daughter of Time, by Josephine Tey. I find the history a bit suspect -- Richard III probably did kill those lads or have them killed -- but the book is enjoyable.

    And of course, any mystery by Agatha Christie, Raymond Chandler or Dashiell Hammett will grip you enough to keep you occupied while you must remain in bed.

    Steer clear of episodic, long books, like Moby Dick, a book I think should be read in small bites over a long period of time. Few of the great books are as easy as a person taking large doses of painkiller needs. Convalescent boredom is not like ordinary boredom, it is accompanied by the fact that you are not at your intellectual peak.

    So, give yourself a break and read something enjoyable and easy.


    .

  • Inequality in two charts

    by John MacBeath Watlkins

    Inequality went down at a time when taxes were more progressive, up when they became less progressive. Should we go back to that model?


    (from Voteview: http://voteview.com/Top_Marginal_Income_Tax_Rate.htm )

  • Wodehouse on optimism

    Cyril frowned. But a man who has spent most of his life trying out a series of patent medicines is always an optimist.

    from Strychnine in the Soup, by P.G. Wodehouse

  • Apologies for the hiatus

    by John MacBeath Watkins

    Sorry we haven't been posting. I was sick all last week, finally went into the hospital, and had my appendix removed. I'd left the thing a little late, and the ghastly organ was deeper in my abdomen than is common, so when they rummaged around and found it, it was swollen up like an over-filled water balloon and it burst before they could get it out.

    Many thanks to the good folks at Group Health Urgent Care, especially my surgeon, Gakyung Chung, and to my business partner, Jamie Lutton, and her boyfriend, Bernard Chester, for taking care of me.

    And, of course, to my mother, my sisters, and all my friends for their support. And Thad Higa for stepping up and taking care of the store.

    And since this is starting to sound like one of those interminable Oscar acceptance speeches, I suppose I should end this before they cut off the mike.

  • A plan to reduce inequity: Working versus owning

    by John MacBeath Watkins

    Everyone talks about inequity, but no one does anything about it. I propose to examine how we got where we are, and what we should do to reverse the situation. It seems to me that on both left and right, there is a longing for a time when the economy worked better for the average Joe, and I mean to find out how we lost it and how to get it back.

    I am now well stricken in years. My legs are grey. My ears are gnarled. My eyes are old and bent. I remember the time conservatives long for, when a man could call his home his own, his wife would be waiting with a martini when he got home, everyone smoked, even your doctor, and if you worked hard and remembered to be white and male, the world was your oyster or some similar mollusk.

    One feature of this world was that the middle class had a decent income. A one-income family could afford to own a house, run a couple of cars and even send the kids to college.

    Things have changed. Median income for male workers has been declining since 1973, while women are more likely to be working and are making better money.


    (from here: http://marginalrevolution.com/marginalrevolution/2011/06/the-great-male-stagnation.html)

    For a while, two-income households managed to keep the median household income rising until 2000. Now, median household income has fallen to the level of about 1979.


    (from here: http://www.cleveland.com/datacentral/index.ssf/2012/09/historical_median_household_in.html


    As you can see from this chart, most of the increases in income have gone to those at the higher end of the income scale, while the poor haven't gained much since the mid-1980s, and the median have gained some, then lost some. As society as a whole has become more prosperous, the gains have mostly gone to those at the higher end of the scale. How did that happen?

    Part of the story is taxes. During World War II, congress imposed a 94% top tax bracket. Few people paid it, but it was a way of saying, we're all making sacrifices, we're all in this together. Now, say what you will about Arthur Laffer, the Laffer Curve, which he did not invent (that honor belongs to an Arab thinker about 1,000 years ago) if you have high enough taxes, it does apply. Recent research indicates it applies to rates above 70%, which means that Jack Kennedy took care of that problem in the 1964.

    Attempts to apply the Laffer Curve after the problem was already solved did nothing but help increase the share of national income the richest people got to keep. It did not stimulate the economy so much that tax revenues actually increased, as Laffer promised. It just resulted in more debt.
    from here.
    During the Reagan Administration, we lowered the top marginal tax rate from 70% to, eventually, 28%. But some taxes were increased. When Reagan entered office, payroll taxes (Social Security and Medicare) were 9.9%. By the time George H. W. Bush left office, they were 12.4%.

    Now, something that occasionally makes the rounds is the idea of a flat tax, as if calculating our tax rate were particularly difficult after we'd worked out all our deductions. Usually, the idea is to not tax incomes below a certain level, so that it's fairer for the poor. The payroll tax is a flat tax turned upside down: It applies to the first dollar you make, but any amount you make above the base wage ($117,000 for 2014) isn't taxed.

    Since payroll taxes are part of the unified budget, this amounted to cutting the top tax rate while increasing the regressive inverted flat tax of the payroll tax. Meanwhile, the capital gains tax, which peaked above 40% during the Ford Administration, is now 15%, the lowest it has been since shortly after Herbert Hoover left office.

    People who make a living by owning things, which used to be called the rentier class, tend to be the ones paying the capital gains tax rather than the payroll tax or ordinary income tax. The system can also be manipulated to turning what looks like ordinary income into "capital gains" for tax purposes. Greg Mankiw provides an example of that in what I suppose was intended to be a defense of capital gains taxation of, for example, hedge fund managers.

    Here are some of Mankiw's examples:
    o Carl is a real estate investor and a carpenter. He buys a dilapidated house for $800,000. After spending his weekends fixing it up, he sells it a couple of years later for $1 million. Once again, the profit is $200,000 o Dan is a real estate investor and a carpenter, but he is short of capital. He approaches his friend, Ms. Moneybags, and they become partners. Together, they buy a dilapidated house for $800,000 and sell it later for $1 million. She puts up the money, and he spends his weekends fixing up the house. They divide the $200,000 profit equally. o Earl is a carpenter. Ms. Moneybags buys a dilapidated house for $800,000 and hires Earl to fix it up. After paying Earl $100,000 for his services, Ms. Moneybags sells the home for $1 million, for a profit of $100,000.... ...(snip)... This brings us to Dan and his partnership with Ms. Moneybags. The tax law treats this partnership as exactly equivalent to Carl's situation. In this case, however, the $200,000 capital gain is divided into halves: some of it goes to Ms. Moneybags, who provided the cash, and some goes to Dan, who provided the sweat equity. Once again, nothing is treated as ordinary income.  Now, here's a question. If it's hard to say which tax applies, why are we charging different rates? It appears we have decided to reward owning over working, and tax dodges designed to make it look like we're owning over admitting that we're working.

    In fact, we're so sure owning is better than working, we have a top marginal rate of 39.6% on earned income, and a top capital gains tax rate of 15%. We are so in love with the virtues of owning, we reward it by charging a lower tax rate for it, and charge 2.64 times as much tax for those misguided saps who work for a living. Add in the payroll taxes, it's more like 3 times the tax rate if you're working instead of owning.

    Well, what makes owning better than working? The oft-repeated theory is that if we encourage investment, the economy will be better and we'll all be better off. Another version of the argument is that we should use consumption taxes to encourage savings, because saving is better than consuming. This is an odd argument, because encouraging saving is also encouraging borrowing. In national income accounting, savings has to equal investment -- government borrowing and private borrowing have to equal private savings and foreign capital inflows. This isn't controversial, it's how the savings accounting identity is defined.

    So when you complain about the financialization of the economy, remember, all that investment income is savings, and when you have a giant pool of money, it has to be loaned in order to make it grow. One reason that the pool of money in the 2000s was so giant was that China was operating its economy much the way America was in the 1920s. They were exporting mightily, and when you earn a lot of money this way, it usually means that lots of money comes into your country and that causes inflation, so that the low wages that  made you a super-competitive exporter increase, and you lose your advantage.

    The people running China didn't want that to happen. So, they didn't keep the money in China. They "sterilized" their export income by buying securities in countries they wanted to export to. America and France did something similar in the 1920s, and it ultimately undermined international trade and contributed to the financial collapse that led to the Depression. The problem is, these actions produce a giant pool of money -- excess savings -- chasing good investments in the country targeted for sterilization. And that produces financial bubbles.

    A model that says savings and investment are better than working and consuming will tend to this sort of thing. And surely, the whole point of an economy is to produce things and consume them. So why have we valorized owning things over making and consuming them?

    Well, one way of justifying this view is to say that if we encourage people to invest and realize capital gains instead or working for a living, we'll have a more prosperous society in the end, and a rising tide sinks raises all boats. A low capital gains tax will encourage this sort of prosperity, we're told.

    Only there's no actual evidence this is so. Len Burman, a professor of economics at Syracuse University's Maxwell School, has run the numbers on all the natural experiments we've had in this regard as the capital gains tax has gone up and down. Here's what he found:




      If low capital gains tax rates catalyzed economic growth, you'd expect to see a negative relationship-high gains rates, low growth, and vice versa-but there is no apparent relationship between the two time series. The correlation is 0.12, the wrong sign and not statistically different from zero. I've tried lags up to five years and also looking at moving averages of the tax rates and growth. There is never a statistically significant relationship. Does this prove that capital gains taxes are unrelated to economic growth? Of course not. Many other things have changed at the same time as gains rates and many other factors affect economic growth. But the graph should dispel the silver bullet theory of capital gains taxes. Cutting capital gains taxes will not turbocharge the economy and raising them would not usher in a depression.
    If low capital gains tax rates catalyzed economic growth, you'd expect to see a negative relationship-high gains rates, low growth, and vice versa-but there is no apparent relationship between the two time series.  The correlation is 0.12, the wrong sign and not statistically different from zero.  I've tried lags up to five years and also looking at moving averages of the tax rates and growth.  There is never a statistically significant relationship. - See more at: http://taxvox.taxpolicycenter.org/2012/03/19/no-obvious-relationship-between-capital-gains-tax-rates-and-economic-growth/#sthash.SX6N1KCe.dpuf
     That's from here: http://taxvox.taxpolicycenter.org/2012/03/19/no-obvious-relationship-between-capital-gains-tax-rates-and-economic-growth/

    At a minimum, Leonard Burman has shown that raising or lowering the capital gains tax doesn't seem all that influential. So why penalize earning money as wages relative to making money on investments?

    Well, it may have something to do with power. People who make the bulk of their money as capital gains tend to be wealthier and better connected. And they tend, more than wage earners do, to be U.S. senators.

    About 1% of Americans have a net worth of $1 million or more. In the U.S. Senate, 66 of 100, or two-thirds, are millionaires. High net worth individuals, by definition, own a lot of stuff, so capital gains taxes are important to them. Both your senator and his or her biggest campaign donors and bundlers tend to care a lot about capital gains. So if you expect them to be treated no better than working for a living, you're starting in hard luck. The people writing the laws are rich, the people writing the checks to the people writing the laws are rich, and the rich get most of their income from capital gains.

    We've had enough experience to know Burman is right, so the only possible explanation for the continued coddling of the rich is that the tax laws are written for and by them. The way to change that is to bring it front and center in our national conversation, so that they can stop lying about their reasons for treating their investments better than your wages.

    If we're going to value work as much as owning, we need to do something about the upside-down flat tax on wages. We ought not to be charging any payroll taxes on people's earnings below the poverty line. We can make up for that by raising the base wage, and by taxing all income the same for social insurance purposes. If you are making less than $11,490 and you are a single person, why should you pay 12.4 percent tax, when the Koch brothers, when they sell off a $100 million block of stock, pay hardly any more tax on it (if their accountants haven't found a way to make sure they pay no tax at all.)

    Now, suppose they paid $90 million for that stock, and their profit is $10 million. Should they pay less tax on that $10 million than a basketball player with a $10 million salary? I can't see why they should. They didn't work any harder, and even if they didn't make a dime on that stock, they'd still have $90 million.


    And why should there be no payroll tax on earned income above $117,000 a year? Why not $500,000 a year? The higher the base wage, the lower the rate needs to be. We can make up for the payroll taxes lost by not taxing the poor by taxing the affluent a bit more. Reagan sold an increase in the tax rate on payrolls as needed to keep the Social Security Fund solvent, but raising the base wage would have worked as well. For that matter, when the Highway Trust Fund became insolvent, congress didn't increase taxes, they just topped it up from the general fund. Keep this in mind when you hear people hyperventilating about the Social Security trust fund.

    In effect, he raised taxes on working families and lowered taxes on the rich, with the revenues from tax increase on workers making the lost revenue of his tax cuts on the rich look less like an invitation to bankrupting the country.

    This represented a major transfer of wealth from people who make less than the maximum basis wage to those who make a whole lot of money. And since then, we've lowered taxes on the way the rich tend to make money -- capital gains -- while keeping that higher payroll tax in place on people working for wages.

    George W. Bush pushed for what he called an "ownership society," in which, for example, we'd all own investments in a retirement account instead of having a guaranteed benefit through Social Security. But as we've seen, one man's savings is another man's debt, unless, like Smaug, you choose to sleep on a bed of gold. And by taking his wealth out of circulation (and by frying anyone who tried to work the land) Smaug made the world poorer.

    The alternative to owning investments and building up debt is the "pay as you go society." That's how Social Security is designed, so that it works as a compact between the generations. People of working age are taking care of old people, knowing that the next generation will take care of them.

    While savings and debt certainly have a place, no one has yet explained to me why a pyramid of savings and debt is better than paying your way, which makes our treatment of investing as contributing more to wealth than working all the more puzzling.

    Wealth tax:

    Redistributing earnings from the middle class and the poor to high earners is one way of increasing inequity. We might redress some of this with a tax on wealth.

    Henry George, a 19th century political economist, advocated a "single tax," a tax on land value, which he argued would go some way to solving the problem of inequity.

    George argued that the reason increasing poverty accompanied increasing wealth was that as population increased, land values increased, so that working men had to pay more for the privilege of working the land.

    There are some problems with this idea. Study after study has shown that property valuations are essentially regressive. When properties sell, you can compare their valuation to their selling prices. High-value properties are consistently under valued by this standard, and low-value properties are typically over valued.

    The only place something like this has been made to work was Hong Kong, where the colony leased the land from China and subleased it to businesses and homeowners. Leases went for market rates, and by all accounts, the system worked very well. Without those special circumstances, I doubt the single tax is really workable.

    Other than property taxes, the wealth tax we have now is the estate tax, which has been under assault by certain politicians and their paymasters for years. In 2001, it applied to estates above $675,000 in value, and the top rate was 55%. Currently, it applies to estates of more than $5.25 million, and the top rate is 40%. This has had a predictable effect on the number of estates to which the estate tax applies:
    (The chart is from here: http://en.wikipedia.org/wiki/Estate_tax_in_the_United_States )

    As you can see, the number of estates affected by the tax went down dramatically during the Reagan and George W. Bush administrations, up during the George H.W. Bush and Clinton administrations. Reagan and Bush II both exploded the national debt, while Bush I and Clinton worked to reduce it.

    We have, in effect, reduced taxes on high incomes, investment incomes, and large estates, while increasing taxes on low and ordinary incomes and on wages.

    And we wonder why inequity increases.

    A Plan

    So, to start with, let's lower taxes on working and on low wages, by exempting wages below the poverty line from the payroll tax. We can make up for this by applying payroll taxes to higher incomes than we do now.

    Let's stop privileging owning over working. Tax capital gains like earned income. Face it, creating giant pools of money leads to financial bubbles, and in a mature economy, to have investment opportunities, you need consumption. That means you need people working and paying as they go, not just saving and lending. We've got the balance wrong right now, and we need to move it back toward working.

    As I write this, we're slowly coming out of a recession, which means we have too much unemployment because of a lack of aggregate demand in the economy. But there is such a thing as a "natural rate" of unemployment, defined as the rate at which lowering interest rates produces more inflation without producing more jobs. To a great extent, this means workers' skills don't match the remaining work that needs doing. We can reduce the natural rate of unemployment by increasing worker skills.

    Unfortunately, we've been moving in the other direction, defunding schools and forcing people to go deeply into debt to acquire the skills they need to develop a career.

    We need to provide funds for educating our workforce. Public universities can't push tuition up indefinitely and students can't take on unlimited debt. A skilled workforce works and pays taxes. We seem to have forgotten the public benefit of helping people get better skills.

    There's been some speculation that we are entering a period of stagnation. Bullshit. If we didn't invest in our factories, we'd enter a period of stagnation. We've greatly slowed our investment in public goods, and that's producing stagnation. Dwight Eisenhower thought the greatest achievement of his presidency was the Interstate Highway System. He understood that to mobilize a great nation, you need to get the logistics right, and building the highways would make the country more productive.

    But since the late 1960s, we've spent too little on public goods. Democrats cared more about programs like Social Security, Republicans cared more about defense spending and cutting taxes. Here's the result:


    (from this source: http://www.economist.com/blogs/gulliver/2010/12/age_americas_infrastructure)

    President Obama has the right idea with his notion of an infrastructure bank, but the loyal opposition seems to think that only private investment increases productivity. Next time you're stuck in a traffic jam, think of all the hours being lost for the want of some transportation spending. Another problem is that we don't get as much per dollar for our infrastructure spending as other developed countries, so we should take a good hard look at the way they do this and learn what we can.

    It's always easier to divvy up a growing pie, and we can grow the pie. In doing so, we can put the country back to work.

    And if we're to get back to an economy where we work and pay our way, growth and greater equality will have to go hand in hand. As economist Walter Frick noted, "given the diminishing marginal utility of income, it's hugely wasteful for the super rich to have so much income."



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