Worth Reading 20060621

Worth reading, June 21, 2006:

Hal Varian: In the debate over tax policy, the power of luck shouldn't be overlooked: Those who argue for a more progressive income tax emphasize equity: a tax dollar paid by a rich person causes less pain than a tax dollar paid by a poor person. Those who argue for a less progressive system emphasize efficiency: the most productive people should face lower tax rates to give them strong incentives to work harder and produce more.... This formulation of the optimal income tax problem was first examined by the economist James Mirrlees of Cambridge University, who received a Nobel in economic science for his analysis. In the simplest version of the Mirrlees model... those at the very top of the income scale should face low marginal rates...

Economist.com | Articles by Subject | Cotton: If weather were the only problem facing cotton farmers, things might not be so bad. They are used to nature's whims: Kress lies in the heart of the 1930s Dust Bowl, and even today dirt storms (and sometimes tornadoes) roll through in the spring. Fortunately cotton requires much less water than, say, maize.... Free trade is even more of a threat. The cotton industry exists in America only because of subsidies, and it stands to lose much if the World Trade Organisation's Doha negotiating round succeeds. Cutting trade-distorting farm subsidies is a top priority in the trade round.... The absurdity of America's cotton subsidies is well known. Uncle Sam spends over $4 billion a year propping up cotton farmers, with the bulk of the money going to those whose operations are much larger than Mr Evans's. Cotton receives far more government cash per acre than other crops%u2014in 2001, four or five times that of maize or wheat, according to a recent paper by the National Centre for Policy Analysis, a conservative think-tank. The losers are not just American taxpayers but some of the world's poorest farmers, as America's subsidised production pushes down world prices. Cotton prices have halved since the mid-1990s as America's subsidies have doubled...

NYO - Joe Conason: Our Coarse President Can’t Fix Middle East: Watching the President of the United States try to fulfill his responsibilities at an international summit is a sobering experience these days. To observe George W. Bush talking trash, chewing with his mouth open and demonstrating his ignorance of geography marks still another step down in the continuing decline of U.S. prestige. It’s the diplomatic equivalent of flag burning. While Mr. Bush’s little misadventures make headlines, what they symbolize is a collapse of policy and a vacuum of competence that are far more troubling than mere cloddishness. Preoccupied from the beginning of his Presidency with Iraq, alienated from our traditional allies and the United Nations and neglectful of broader American interests in the Middle East, he and his team now confront a sudden crisis for which they seem woefully unprepared. We are learning what happens when the leadership of “the indispensable nation” takes a mental vacation. We are also beginning to learn why regime change in Iraq, originally sold as the solution to every problem in the region, has proved to be such an enormous liability for us and for our allies. Recall that when the Bush administration decided to invade Iraq—on the pretext of disarming Saddam Hussein—a new era of peace and democracy was supposed to dawn. Making an example of the toppled Saddam would, according to neoconservative theory, persuade other despots in the region to reform and reconcile themselves to co-existence with Israel, and stimulate the “peace process” too. (That same theory, of course, similarly predicted flower-strewn parades in Baghdad and enough oil revenues to finance the whole bloody enterprise.) Indeed, when the weapons of mass destruction didn’t turn up, those anticipated dividends became the retrospective justification for the war...

King of Zembla: How do you tell a pro-lifer? When the lab catches fire, he leaves the live baby and saves the five blastocysts. Mr. Bush did just that yesterday, exercising the first veto of his benighted presidency to deny medical researchers the use of embryonic stem cells that will now wind up in the dumpster instead: 'Bush and his allies say that frozen embryos are tantamount to humans, and therefore are no more appropriate for medical research than are death row inmates. "If this bill were to become law," Bush said yesterday, "American taxpayers would for the first time in our history be compelled to fund the deliberate destruction of human embryos." Others reject that analysis, saying it would make killers of every couple that produces an unused embryo, and every employee and official who allows fertility clinics to produce and store such embryos. "If that's murder, how come the president allows that to continue?" asked Sen. Tom Harkin (D-Iowa). "Where is his outrage?" Harkin called the veto "a shameful display of cruelty, hypocrisy and ignorance."'

They don't call Tom Friedman "Airmiles" for nothing: Order vs. Disorder - New York Times: Too often, assaults like Hezbollah's, which have global implications, have been met with only "a local response," said Gidi Grinstein, who heads Reut, an Israeli defense think tank. "But the only way that these networks can be defeated is if their global assault is met by a global response." Unfortunately, partly because of China, Russia and Europe's traditional resentment and jealousy of the U.S. and partly because of the foolish Bush approach that said unilateral American power was more important than action legitimated by a global consensus, the global forces of order today are not at all united. It is time that The World of Order got its act together. This is not Israel's fight alone -- and if you really want to see a "disproportional" Israeli response, just keep leaving Israel to fight this war alone. Then you will see some real craziness. George Bush and Condi Rice need to realize that Syria on its own is not going to press Hezbollah -- in Mr. Bush's immortal words -- to just "stop doing this shit." The Bush team needs to convene a coalition of The World of Order. If it won't, it should let others more capable do the job. We could start with the elder George Bush and Bill Clinton, whose talents could be used for more than just tsunami relief...

A Sound Marketplace For Recorded Music: A Sound Marketplace For Recorded MusicBy Steven PearlsteinWednesday, July 19, 2006; D01 Here in Washington, there is nothing more amusing than watching business interests work themselves up into a righteous frenzy over a threat to their monopoly profits from a new technology or some upstart with a different business model. Invariably, the monopolists (or their first cousins, the oligopolists) try to present themselves as champions of the consumer, or defenders of a level playing field, as if they hadn't become ridiculously rich by sticking it to consumers and enjoying years in which the playing field was tilted to their advantage. A recent example is the political and legal attack mounted by the music-recording industry against the upstarts of satellite radio.You'd think an industry that has managed to turn out so much mediocre music for so many years, done so much to lower moral standards and lost so much business to illegal file-sharing would have something better to do than attack some of the few distributors that are actually expanding the market and charging for music. But the prospect that the industry might not extract every last penny out of the new satellite radio services and their customers is simply unacceptable to the Recording Industry Association of America...