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Monday message board

August 30th, 2005

I haven’t got time to post anything substantive right now, but I’ll put up the Monday Message Board as usual Civilised discussion and no coarse language. Also, again, nothing about football this week, please.

Categories: Regular Features Tags:
  1. Katz
    August 30th, 2005 at 13:12 | #1

    What the Lions did on Saturday wasn’t football.

  2. Homer Paxton
    August 30th, 2005 at 14:16 | #2

    no it was Aussie rules which of course isn’t football.

  3. August 30th, 2005 at 14:19 | #3

    For anyone interested in the ongoing saga between Federal Labor MP Michael Danby and free speech, read on:

    http://antonyloewenstein.blogspot.com/2005/08/and-it-continues.html

  4. craigm
    August 30th, 2005 at 14:34 | #4

    As opposed to Pommy rules.

  5. Homer Paxton
    August 30th, 2005 at 14:40 | #5

    isn’t that cricket?

  6. craigm
    August 30th, 2005 at 14:46 | #6

    You can call your preferred sport whatever you like.

  7. August 30th, 2005 at 14:59 | #7

    With oil hitting USD$70 per barrel briefly and also Hurricane Katrina doing this:

    “Hurricane Katrina forced operators to shut in over a million barrels of oil per day, according to the MMS. A total of nearly 2,800 platforms, more than 500 of them manned, were within the areas affected by the storm.” from
    http://www.rigzone.com/news/article.asp?a_id=24789

    What do you thing the chances of oil hitting USD$80?

  8. Paul Norton
    August 30th, 2005 at 16:23 | #8

    I have won equal third prize in my Department’s tipping competition in a sport which cannot be mentioned by name, but which can be identified by observing that it is most anomalous that the competition was won by a New Zealand expatriate, with an Irish expat second and an English expat sharing third with me, and none of the other southern state people getting withing cooee of the placings. On the other hand there is probably an omen for the Melbourne Cup in this result.

  9. August 30th, 2005 at 17:28 | #9

    Did anybody see this article by Philip Adams in today’s Australian? I thought it was most interesting. I mention this in my blog post, but I think the vast majority of major changes made in the world are made by the people who are most “unlikely” to have made that decision. This is because, I think, they can (since it is supposedly “foreign” to them) pass off the change as necessary. Have a read of Adam’s article, it’s not long but interesting.

  10. observa
    August 30th, 2005 at 18:06 | #10

    Well Katz, down at the Shire of Albitton a resolute gathering of little rovers and big ruckmen has begun their quest to bring light and happiness across the blackened land. Some recent interlopers have been repelled and banished from the Shire. Lately evil Crows from Mordor have been circling overhead and darkness has again descended upon the Shire. Chocko the Wizard has anointed this brave band with secret rituals and holy rites. In our darkest hour, a sacred jar has been carefully removed from its traditional resting place. The lid has been reverently lifted and the heady smell of Fos Williams preserved jocks allowed to inundate this trusty gathering. Now they are completely ready to sally forth and do great deeds, to liberate lost silverware and bring the precious to its true resting place. Fear them now for they have come to shake the very foundations of Mordor and banish all the shadow dwellers back from whence they came.

  11. August 30th, 2005 at 18:52 | #11

    Does anyone still read Philip Adams, or at least admit in public to doing so?

  12. joe2
    August 30th, 2005 at 19:34 | #12

    How sad is it that,tonight, taxpayers funds are being used to protect Steve Forbes and the entourage from democratic protest.

    Our great leaders worship of the “wealth creators” is sycophantic and revolting. He has surely lost the plot. Bring on Pete.

    In biblical terms, john the baptist is spent, and we might as well go for the next one on line. At least, it would be less boring.

  13. Stephen
    August 30th, 2005 at 19:41 | #13

    In the wake of the devastation wrecked by Hurricane Kristina there’s been some discussion of the likely economic impact. Some commentators have argued that America’s growth will rise as people rush to rebuild their houses.

    I understand that GDP is not the same thing as wealth, and that we pay a lot more attention to the former than the latter. I can also see how a disaster might lead to a temporary increase in GDP.

    What I’m curious about is whether it really is the case that *in the long run* a disaster that wipes out $25-100 billion worth of assets could actually lead to increased GDP, or even have no negative effect.

    This is a question that has long troubled me about economics, and I thought this might be the place to get an answer (or more likely several conflicting answers).

  14. joe2
    August 30th, 2005 at 20:19 | #14

    Stephen,one of the things that has troubled me about economics for some time, is that when people are sitting on roofs, with water swirling ,others, think it is time to buy shares in house repair companys.

  15. August 30th, 2005 at 21:18 | #15

    joe2 Says:

    August 30th, 2005 at 7:34 pm
    How sad is it that,tonight, taxpayers funds are being used to protect Steve Forbes and the entourage from democratic protest.

    Yes Joe I agree, why should taxpayers funds be used to protect people (who are having a meeting) from demonstrators. I guess, if there wasn’t that protection, the people at the meeting would be running amok beating up all those poor, defenseless protestors, while chanting mantras like, oh let me see? “We are your great leaders worship of the wealth creators” .

    Oh to be young and naive again!

  16. Peter
    August 30th, 2005 at 22:18 | #16

    Stephen –

    Regarding your question about the longrun economic consequences on GDP of a natural disaster: The things destroyed (homes, cars, etc) will need to be replaced. To the extent that people use their savings to purchase these replacements (either directly themselves, or indirectly through Governments transfers from tax-payers to hurricane victims), then we should expect an increase in GDP — more will be spent and more will be produced than otherwise.

    My guess is that the well-known failings of GDP as a measure of activity (eg, pollution clean-up activities are measured, while many pollution-prevention activities are not), will exacerbate this.

  17. Terje
    August 31st, 2005 at 00:17 | #18

    Jude Wanniski has died of a heart attack. For over five years I have participated in his free online university. He was a great teacher, never too important to field a question from little guys like me.

    http://tooconservative.blogspot.com/2005/08/supply-side-economics-loses-parent-who.html

    Jude was an economic advisor to Ronald Reagan. Unlike many other American conservatives he was a very vocal critic of the Iraq war (both before and after the event). He wrote prolifically on this and many other topics. He was an independent thinker and a great teacher.

    I am a little shocked. He was only 67.

    http://en.wikipedia.org/wiki/Jude_Wanniski

  18. Jill Rush
    August 31st, 2005 at 00:39 | #19

    Brendan Nelson has raised the issue of teaching aussie values in schools – especially Muslim schools. These schools have responded by stating that they do indeed teach Australian values.

    However the comments by Bronwyn Bishop in regard to the wearing of the hijab in public schools shows that there are values which are not common in the importance we place on them.

    The issue of the wearing of a hijab is very emotionally loaded with many arguments for and against. The impracticality of a garment which needs constant readjustment is rarely mentioned, nor its inability to provide protection from the sun as other sun hats can. The other issue which rarely rates a mention is that of the value of modesty.

    Modesty is something that many women value – however for most it has a very different practical application to Muslim women. There are Muslim women who take the point of view that women who dress differently to them are immodest and therefore are whores. They will use these arguments to reinforce the wearing of the hajib by their daughters and other female relatives.

    Non- Muslim women are offended by these judgemental views which are just as wrong as the judgements made by some others about the wearing of the hajib.
    The hajib may not be a sign of a terrorist but it is iconic just as Bronwyn Bishop stated. It makes a religious statement as being the most important thing about a woman.

    It is not limited to a few in the way that a nun’s habit is but by many and it is an affront to many non-Muslims – just as in an Islamic country it is an affront to not wear a head scarf. In an Islamic country a woman walking around without a head covering is a target for attack. Here the same impulse leads to attacks on women wearing head scarves – both are morally wrong but almost inevitable because of meaning ascribed to them.

    When it comes to schools however the health and safety reasons need to be made clear and if this piece of clothing presents a danger then the wearer will need to be excluded from a particular activity for example some technology classes – in the same way as netballers must wear the proper shoes and uniform.

    If we are to teach Aussie values we need to define what they are in relative terms. For instance where does modesty sit in the scale. Is it at the top or the bottom quartile and do we believe in limiting a girl’s opportunities if her choices are not modest. This is where the debate should be – not with hajib’s fostering terrorism.

  19. brian
    August 31st, 2005 at 00:43 | #20

    Yes Elizabeth,Lots of us read Philip Adams, ..avidly…you should read his excellent piece on Ariel Sharon,liar,war criminal and Israeli P>M ,in yesterday’s Australian..It will enlighten you I’m sure . As to Jude Wanniski,I found him wonderfully lucid…and like another Reagan supporter.Craig Paul Roberts…he had emerged as a trenchent critic of Mad George Bush and the neo-cons,and the Likudiks in the White House. Do read Roberts ..He write regularly in “Counterpunch”,and like another conservative,Pat Buchanan he has got a very clear,sharp critique of Bush,and the disaster into which they(and Howard and Blair ) are now headed full tilt!!

  20. abb1
    August 31st, 2005 at 03:47 | #21

    Yeah, I’ve read quite a few Wanniski’s pieces too in the last few years. Good honest paleo-conservative. Hard to imagine that not too long ago these paleos were actually the ‘bad guys’ – before the lunatics took over the asylum, that is.

  21. Ros
    August 31st, 2005 at 09:02 | #22

    Don’t know about sunburn

    A comment from Al-Hewar – The Free Islamic Dialogue Network

    Salamu yalakum Sisters in Islam

    So, how does vitamin D relate to the topic of hijab…?

    Well, something came to my attention the other day which i thought might be important for all us girls that do wear the hijab (& for the girls that will wear one in the future inshallah) to know of this infomation.

    My mum recently took my grandmother to a specialist regarding alot of pain that she kept complaining about in her bones. With the results of her tests, we found out that she had osteoporosis (hope thats how u spell it! :ermm: ) which is a disease that eats away at your bones.

    Anyway, the specialist was telling my mother that he had been in the practise for a very long time now. He also mentioned that the majority of his patients were infact the female muslim population that were in hijab.
    He said women that wear the hijab from a young age and never expose their bodies to the sun will indeed suffer in life.
    The sun provides a much needed vitamin to our bones which is vitamin D.
    Without having this source of vitamin from the sun, the chances of having osteoporosis is high.
    He advises all of us women to go outside in the sun (obvioulsly when there are no men around! ) for at least 15min in the day and expose our arms and legs in order to let our bodies take in the vitamin…

    My mum wore the scarf when she reverted into the religon at the age of 19. She is now 40 and has discovered in a blood test that she has a deficiency of Vitamin D. She now has to have a vitamin D injection every year to try and prevent osteoporosis…

    Please girls, take care of yourselves. May Allah (swt) keep such diseases away from all of us.

    or this item 2001

    A medical study in Melbourne, Australia, has found that 80% of dark-skinned women who wear both the hijab and niqab are likely to suffer from severe vitamin d deficiencies because of lack of exposure to ultraviolet radiation from the sun. Lack of vitamin d leads to a much greater risk of bone disease. people with large amounts of pigment in their skin produce less vitamin d than lighter skinned people, and so require more exposure top direct sunlight.
    The problem is compounded even further when the woman wearing hijab and niqab is pregnant. This can lead to the child developing rickets.

    The results of the study, which are backed up by a previous study from Kuwait, will be published in the Medical Journal of Australia tomorrow.

    http://www.blackwell-synergy.com/links/doi/10.1046%2Fj.1442-200x.2000.01230.x?cookieSet=1
    includes lack of exposure to sunlight

    Banning should certainly be considered for girls in Burkha or Chador. if informed grown women want to risk harm that is their business. However it has been the case in Australia that a woman (Queensland?) has been prosecuted for harm to her unborn child. As there is evidence of rickets in new borns from at least burkha, then political correctness aside, it has to be researched and if necessary action taken.

  22. Homer Paxton
    August 31st, 2005 at 12:41 | #23

    Wanniski, roberts were all supply siders who believed that if you cut taxes then revenes would increase.

    they were a teeny weeeny bit wrong.

  23. joe2
    August 31st, 2005 at 12:56 | #24

    Me , “young and naive” ,Elizabeth?
    Flattery will get you everywhere.

    Remember to catch L.N.Live on radio national.
    P. Adams is a broadcaster of high repute,as well.

  24. Katz
    August 31st, 2005 at 13:52 | #25

    If the wearing of the hijab were an example of the tyranny of abusive patriarchy, then the banning of the hijab constitutes compelling girls to make a dangerous choice between disobeying the law of the land and disobeying patriarchal power.

    That being the case, wouldn’t it be just to resist the easy temptation to penalise girls by banning them from state schools. Instead, the patriarchs, who by this argument are the malefactors, might be prosecuted as child abusers.

    Or do Bronwyn and Sophie and these abusive patriarchs share one very widely held Aussie value: it’s less dangerous to victimise the defenseless than to pick on someone your own size?

  25. Homer Paxton
    August 31st, 2005 at 14:11 | #26

    If I was at LP I would say Wanniski and Roberts were having a Laffer at us all.
    however since I am not I won’t.

  26. August 31st, 2005 at 14:54 | #27

    Elizabeth: I only read Adams for the amusement factor, but yesterday’s article (link above) was actually was quite interesting.

  27. August 31st, 2005 at 15:20 | #28

    Observa just remember if the Power fail you can always do what us poor old Lions supporters are doing; watching re-runs of previous Grand Finals!

  28. Razor
    August 31st, 2005 at 16:35 | #29

    joe2 said “one of the things that has troubled me about economics for some time, is that when people are sitting on roofs, with water swirling ,others, think it is time to buy shares in house repair companys.”

    Firstly – that is not economics that you have an issue with it is the market in a capitalist system that you have an issue with. If you can show me a better way for increasing the well-being of all in a community I’ll gladly follow, but so far nothing beats capitalism, especially in a democratic framework.

    Secondly, those buying the shares are putting their money on the line to invest in these companies that will help get people back on their feet. So, there is actually a (probabably small) element of altruism. If there were no investors in those companies where would the businesses come from to do these jobs??????

    As for your comments about security for the Forbes meeting – so you think that the thugs should be allowed to disrupt the meeting because they don’t like it? You obviously aren’t a supporter of free speech.

    And Philip Adams is a plagiarising hipocrit whose opinions’ aren’t worth the newsprint they are smeared on. I wouldn’t roll up my dog’s crap in his words.

  29. joe2
    August 31st, 2005 at 17:00 | #30

    Can i just recommend an interview on last nights Late Night Live?

    It is titled “Jesus and Jurusalem: Christian Zionists in Israel”. Possible to stream from R.N. SITE and a link to the interviewie, Rebecca Sinderlands article.

    Enjoy it Elizabeth and Razor it is a mind opener.

  30. abb1
    August 31st, 2005 at 18:34 | #31

    What I’m curious about is whether it really is the case that in the long run a disaster that wipes out $25-100 billion worth of assets could actually lead to increased GDP, or even have no negative effect.
    .

    I believe this is called the “broken window fallacy”, first addressed by Bastiat some 150 years ago.

  31. Ian Gould
    August 31st, 2005 at 19:15 | #32

    I don”t want to in any way make light of John Brogden’s suicide attempt but it seems ot me that anyone accepting the post of Parliamentary leader of the Liberal Party in any of the Australian states would almost have to be suicidal, at least in career terms.

    The contrast between John Howard’s total dominance of Federal politics and the overwhelming success of Labor at the state level is one of the great mysteries of Australian politcal life.

    I know Australians tend to prefer a division of power but even when Federal Labor was at its worst in electoral terms under Keating some state Labour governments managed to hang on.

  32. observa
    August 31st, 2005 at 21:52 | #33

    Beats me too Ian. Right fish for right ponds perhaps?

  33. Terje
    August 31st, 2005 at 22:54 | #34

    Homer,

    Wanniski was not wrong on tax renvue. Following the 1981 tax cuts (the top rate was reduced from 70% to 28%) tax revenues subsequently increased in real terms. However I suspect that arguing the point will not get me very far. The guy is now dead and I think it is a great loss.

    http://en.wikipedia.org/wiki/Supply-side_economics#U.S._monetary_and_fiscal_experience

    Regards,
    Terje.

  34. August 31st, 2005 at 22:56 | #35

    On reading further, it turns out that Jude Wanniski was in fact 69, not 67.

    The Hijab/vitamin D thing turned up in Hindu women in the UK. It was asserted that their dietary deficiency was not caused by their clothing, which had similarly reduced their skin exposure in their countries of origin, but of the “improved” western food they ate. Even when it used the same sort of ingredients and cuisine as before, improved standards of cleanliness kept down the insects and bacteria that would otherwise have altered a mainly vegetarian diet. If so, it’s not the Hijab that needs fixing but the diet – either by going western or reverting to contaminated ingredients.

  35. Homer Paxton
    September 1st, 2005 at 08:13 | #36

    Paul Craig roberts would always say the same thing too.
    the budget figures say you were wrong.
    David Stockman gave the game away in his book.

    Remember Terge it took Clinton to get Reagan’s fiscal extravagance under control.

    would his death be called a deadweight loss.

    Didn’t he write the leaders for the WSJ?

  36. Ros
    September 1st, 2005 at 10:19 | #37

    PM it may have been the case that for the Hindu women studied in the UK diet was a greater contributing factor. However a report here a couple of years back nominated being covered up as a major contributing factor.
    There is some body of research from Kuwait and saudi Arabia that also nominates being covered up and babies being born with rickets as a result. And in Europe the covering when a woman or girl is dark skinned adding to the increase of the occurrence of vitamin D deficiency and rickets.
    I speak of it because it is an issue and needs to be addressed, the health of women and children should not take second place to ideological arguments.

    There was a report here that those living in aged hostels and nursing homes were suffering vitamin D deficiency because of being inside all the time.

    “However multiple reports have appeared from other countries, such as Saudi Arabia, India and Australia, where sunlight is plentiful. Here cultural practices (prolonged exclusivebreast feeding compounded by forms of dress that limit the skin’s exposure to light) are usually the main aetiological factors. ”

    It has long been held, both in Europe and in North America, that all children need at least 400 IU (10micrograms) of vitamin D daily (Koo, et al., 1993; Tsang, et al., 1997)

    A study of veiledMuslim women in Denmark concluded that even an intake of 600 IU a day was probably not enough tomaintain 25-hydroxyvitamin D concentrations, and that 1000 IU a day might be more effective (Glerup,et al., 2000). ”

    http://www.blackwellpublishing.com/medicine/bmj/nnf4/pdfs/vitdcomment.pdf.

    Supplements are clealrly an answer but if the problem is denied it makes it much harder to ensure that these women and children are going to get that advice and the medication.

  37. Razor
    September 1st, 2005 at 13:24 | #38

    Has anybody seen a spare Joe2 lying around. The one that was here seems to be broken. Maybe he has taken a day off in symathy with the anti-Forbes protestors who have called it quits due to lack of interest.

  38. what the
    September 1st, 2005 at 17:07 | #39

    …apparently getting around somewhere as a bumper sticker -

    “I Believe In Separation Of Church And Hate”

    :)

  39. Ian Gould
    September 1st, 2005 at 17:43 | #40

    Terje – are you familiar with the expression “correlation does not prove causality”?

    The US cut taxes in 1981 – about seven years later tax revenues reached the same level in dollar terms as in 1981. (I seem to recall that this was in nominal non-inflation-adjusted terms rather than in conatant dollars though.)

    This does not mean that the tax cuts “paid for themselves” it simply means that eventually economic growth acted to raise the amount of tax revenue received. If you’re prepared to wait long enough for the “proof”, the only way for tax cuts not to pay for themselves is if they permanently halt economci growth.

    For what it’s worth, The Economist recently estimated that the additional tax revenue resulting from the economic stimulus provided by tax cuts was only (from memory) around 20 or 30 cents per dollar of tax cut.

    Finally, a question I’ve never read a good answer to from a supply-sider: if tax cuts increase tax revenue why did the Bush and Clinton tax increases not reduce tax revenue?

  40. joe2
    September 1st, 2005 at 19:08 | #41

    Razor and ‘what the says’, love your work, too!

  41. Jill Rush
    September 1st, 2005 at 22:40 | #42

    Ros

    Thanks for the information.

    I remember similar types of discussion over wedge shoes which are another piece of inappropriate clothing chosen by some women. There has been negative publicity about that as well and as a piece of fashion it won’t asts long.

    The hijab deserves similar attention if it is a piece of clothing which limits opportunity and creates ill health. This is especially so if it doesn’t protect from unprovoked attacks but offends some so much that they attack blindly.

    It is time to take the hajib out of the religious perspective and looked at it scientifically. It’s a little like the idea of evolution vs Intelligent Design in the Christian community.

  42. Peter
    September 2nd, 2005 at 01:59 | #43

    To Abb1:

    Regarding the broken window fallacy: “The Cars that Ate Paris” is a nice film treatment of the parable.

  43. Ian Gould
    September 2nd, 2005 at 10:48 | #44

    >The hijab deserves similar attention if it is a piece of clothing which limits opportunity and creates ill health

    The hijab is a head-dress worn by Palestinian women and women in some other arab states – it is quite similar both physcially and in its cultural signficance to the scarves worn by women in conservative areas of southern Europe such as parts of Greece. (For the Chrisitian cultural context see Saint Paul’s admonition that owmen should keep their heads coveredin church.)

    It should not be confused with the Burqa.

    First of all, let’s get our terminology right.

    Second, does anyone want to argue that the traditional habit of nuns should also be banned on health gorunds and for their own good?

  44. Homer Paxton
    September 2nd, 2005 at 11:50 | #45

    correction,
    Paul did not say woman had to wear covering over their head he merely suggested as the best thing for Corinthinian church.
    He makes it clear it was not a command.

  45. Katz
    September 2nd, 2005 at 13:48 | #46

    Who says international Islamist terrorism is all bad?

    But for al Qaeda, I imagine that many earnest contributors to blogs wouldn’t make the effort to express their deep concern about vitamin D deficiencies.

    Osama bin Laden, bringing the world a little closer together.

  46. Ian Gould
    September 2nd, 2005 at 14:03 | #47

    Homer.

    Yes – and Mohammed simply wrote that “Men and women should dress modestly”.

    In both cases, some of the receiving cultures interpreted those statements to support their pre-existing misogynistic tendencies.

  47. Ros
    September 2nd, 2005 at 15:22 | #48

    Hijab means
    The headscarf worn by Muslim women, sometimes including a veil that covers the face except for the eyes.
    or
    The institution of protection of women in some Islamic societies through veiling or seclusion.

    Plenty of variations around to trip us up. Purdah and Chadar aur Chaardhiwaaree, (the sheet and the four walls) Khimar and nijab. I think nijab is hijab

    As there is considerable debate amongst Muslims (not just Arabs) as to what all these terms mean and entail it is hardly surprising that us non-Mulsims may struggle.
    Example, Khimar (Arabic) seems to mean
    “Everything that covers something else is called its khimaar. But in common usage khimaar has come to be used as a name for the garment with which a woman covers her head; Some of the fuqahaa’ have defined it as that which covers the head, the temples and the neck. The difference between the hijaab and the khimaar is that the hijaab is something which covers all of a woman’s body, whilst the khimaar in general is something with which a woman covers her head.” the khimar covers the head not the “face”.â€?
    As this consideration says that hijab is about all of a women’s body, whereas khimaar refers to head, it may be that hijab does not mean or describe head scarves. That is burkha and chador are more correctly known as hijab than head scarves. Nijab seems to be used as describing covering whole body which would reinforce that hijab is not just a scarf.

    I made a point of referring to the burkha and chador. It was my understanding however that they were forms of hijab and hijab was not a scarf, and see no reason to change my mind.

    Oh quite Katz. Of course there are far more important issues than the harm done to repressed women, so why would earnest contributors waste their time and yours discussing the possible harm of the hijab. The fact that there has been researchers interested for a number of years because they were seeing the problem presenting is a plot to attack Islam, as a result of Al-Qaeda.

    One has to wonder though, along with the Muslim women who have said so, if it is such a great idea to cover oneself from head to foot, and include the face, why aren’t Muslim men required to whenever they step outside the four walls..

  48. September 2nd, 2005 at 15:28 | #49

    Latest Patel update:
    The Queensland Supreme Court has disqualified Morris and his commissioners from continuing because of their bias. News.com.au report here; my initial thoughts – for what they’re worth – here.

  49. what the
    September 2nd, 2005 at 16:56 | #50

    Osama is Dead.

  50. Terje
    September 2nd, 2005 at 17:59 | #51

    Homer,

    Laffer outlines the revenue data for the Reagans “Economic Recovery Tax Act” (ERTA) in the following article.

    EXTRACT:-

    The ERTA slashed marginal earned income tax rates by 25 percent across the board over a three-year period. The highest marginal tax rate on unearned income dropped to 50 percent from 70 percent (as a result of the Broadhead Amendment), and the tax rate on capital gains also fell immediately from 28 percent to 20 percent. Five percentage points of the 25 percent cut went into effect on October 1, 1981. An additional 10 percentage points of the cut then went into effect on July 1, 1982. The final 10 percentage points of the cut began on July 1, 1983.

    Looking at the cumulative effects of the ERTA in terms of tax (calendar) years, the tax cut reduced tax rates by 1.25 percent through the entirety of 1981, 10 percent through 1982, 20 percent through 1983, and the full 25 percent through 1984.

    A provision of ERTA also ensured that tax brackets were indexed for inflation beginning in 1985.

    Prior to the tax cut, the economy was choking on high inflation, high interest rates, and high unemployment. All three of these economic bellwethers dropped sharply after the tax cuts. The unemployment rate, which peaked at 9.7 percent in 1982, began a steady decline, reaching 7.0 percent by 1986 and 5.3 percent when Reagan left office in January 1989.

    Inflation-adjusted revenue growth dramatically improved. Over the four years prior to 1983, federal income tax revenue declined at an average rate of 2.8 percent per year, and total government income tax revenue declined at an annual rate of 2.6 percent. Between 1983 and 1986, federal income tax revenue increased by 2.7 percent annually, and total government income tax revenue increased by 3.5 percent annually.

    The most controversial portion of Reagan’s tax revolution was reducing the highest marginal income tax rate from 70 percent (when he took office in 1981) to 28 percent in 1988. However, Internal Revenue Service data reveal that tax collections from the wealthy, as measured by personal income taxes paid by top percentile earners, increased between 1980 and 1988–despite significantly lower tax rates.

    ~~~ end extract ~~~

    The full article shows the tables of revenue data.

    Even if revenues had fallen by a few percent (the data suggests it rose) the fact that the top rate was reduced from 70% to 28% would have meant the accumulation of a massive private sector benefit with only marginal decline in the well being of the public sector finances.

  51. Ian Gould
    September 2nd, 2005 at 18:55 | #52

    Terje,

    Feel free to answer my question regarding the Bush/Clinton tax increases any time.

    although judging by your final paragraph the answer is “Claims that tax cuts increase revenue are false but who cares?”

    The answer, of course, is that everyone agrees that taxes should be as low as possible. however most responsible people care if the government cuts taxes while maintaining or increasing spending resulting in an increase in the national debt.

    Had Reagan or Bush Jr. cut spending first then cut taxes by an amount equivalent too or lower than the tax cuts, their actions would not be anywhere near as irresponsible.

  52. Terje Petersen
    September 4th, 2005 at 22:31 | #53

    Ian,

    Regarging your question about the Bush/Clinton tax increases. I will happily go and review the data however I don’t have any answer at my finger tips.

    In the following article (and others) Wanniski claims that the 1993 Clinton tax increases were not big enough to have any severe impact on economic expansion. They also cut in at a fairly high income level so they effected a relatively small number of suppliers.

    In 1997 Clinton cut capital gains taxes from 28% to 20%. Capital gains taxes are seen as double taxation by supply-siders and they routinely argue that the fairest and most efficient rates for CGT is 0% (#). As such Clintons cut in CGT was more significant (although later) than his increase in income taxes.

    http://www.polyconomics.com/searchbase/08-18-00.html

    You presume that I would say: “Claims that tax cuts increase revenue are false but who cares?�. This is not accureate at all. So let me spell it out a little more.

    If we were to draw a laffer curve we might agree broadly that revenue at 0% tax and 100% tax is close to nil. The question then turns to what shape is it in the middle. My own view is that in most circumstances the curve looks a lot like Ayres Rock (Uluru) with the top being slighly higher at the left.

    The laffer curve looks only to the optimisation of public revenue. It does not look at total output which would include private sector production. As such the societal optima would be to the left of any laffer curve optima. As such I would be of the view that tax cuts should still be in order even after they finished being revenue positive.

    My view would be more acurately summariesed as “Claims that tax cuts increase revenue are generally true however thats only half the point of tax cuts”.

    Even Keynes could see the point of the Laffer curve although it did not go by that name in his day (*).

    Regards,
    Terje.

    (#) The reason capital gains tax is double taxation is because any gain in the price of capital generally stems from the capitals increased ability to generate future income. This future income is already subject to income tax. Under CGT this future income is taxed a second time if the ownership of future income flows is transfered to a different owner. However if there is no change of ownership then no CGT applies.

    (*) QUOTE KEYNES
    “Nor should the argument seem strange that taxation may be so high as to defeat its object, and that, given sufficient time to gather the fruits, a reduction of taxation will run a better chance than an increase of balancing the budget. For to take the opposite view today is to resemble a manufacturer who, running at a loss, decides to raise his price, and when his declining sales increase the loss, wrapping himself in the rectitude of plain arithmetic, decides that prudence requires him to raise the price still more–and who, when at last his account is balanced with nought on both sides, is still found righteously declaring that it would have been the act of a gambler to reduce the price when you were already making a loss.”

  53. abb1
    September 5th, 2005 at 01:20 | #54

    I disagree that revenue at 100% tax is close to nil. Israeli kibbutz is a clear empirical example.

    In addition, many social democracies have (or used to have) a top tax bracket that’s reasonably close to 100% (the US in 1940s and 50s, for example) while experiencing rapid economic growth and growing tax revenues.

  54. Terje Petersen
    September 5th, 2005 at 09:57 | #55

    Abb1,

    I thought that Kibbutz was a voluntary affair. Can you expand on the notion or provide links.

    If one part of the population suffers 100% taxation but most do not then I have little doubt that official production and trade will still happen.

    Wanniski offers this example to support your position:-


    When the nation is at war, point E can approach 100 percent. At the siege of Leningrad in World War II, for example, the people of the city produced for 900 days at tax rates approaching 100 percent. Russian soldiers and civilians worked to their physical limits, receiving as “pay” only the barest of rations. Had the citizens of Leningrad not wished to be taxed at that high rate, which was required to hold off the Nazi army, the city would have fallen.

    http://www.wanniski.com/PrintPage.asp?TextID=2980

    Regards,
    Terje.

  55. abb1
    September 5th, 2005 at 16:56 | #56

    Yes, a voluntary affair, but that’s the whole point. To postulate 0 revenue at 100% tax you have to assume a sort of un-enlightened self-interest as the solo motivation for any and all economic activity. This is a simplistic presumption that may or may not be justified when applied to any particular scenario.

    In addition, even if we accept your assumption, your laffer curve is not really a flat curve, but due to a progressive tax system it’s more of a 3-dimentional surface. In this model raising high tax brackets to 100% (or close to it) may cause more income to flow to low-income segments of the population and create a better equilibrium. Well, I am not an economist, but I think it’s a possibility.

  56. Terje Petersen
    September 5th, 2005 at 22:12 | #57

    Abb1,

    You may not be an economist but perhaps you are also a contortionist.

    Regards,
    Terje.

  57. abb1
    September 5th, 2005 at 22:50 | #58

    Fair enough. I was just trying to point out that your ‘optimum between 0 and 100′ illustration might be a bit simplistic, that’s all.

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