Monthly Archives: September 2012

England tried this, and it didn’t work. It won’t work in France, either. The new top tax rate on incomes of more than one million Euros is 75%. It’s supposed to be temporary, but things like that never are.

(Reuters) – President Francois Hollande’s Socialist government unveiled sharp tax hikes on business and the rich on Friday in a 2013 budget aimed at showingFrance has the fiscal rigor to remain at the core of the euro zone.

The package will recoup 30 billion euros ($39 billion) for the public purse with a goal of narrowing the deficit to 3.0 percent of national output next year from 4.5 percent this year – France’s toughest single belt-tightening in 30 years.

But with record unemployment and a barrage of data pointing to economic stagnation, there are fears the deficit target will slip as France falls short of the modest 0.8 percent economic growth rate on which it is banking for next year.

The budget disappointed pro-reform lobbyists by merely freezing France’s high public spending rather than daring to attack ministerial budgets asSpain did this week as it battles to avoid the conditions of an international bailout.

“This is a fighting budget to get the country back on the rails,” Prime Minister Jean-Marc Ayrault said, adding that the 0.8 percent growth target was “realistic and ambitious”.

“It is a budget which aims to bring back confidence and to break this spiral of debt that gets bigger and bigger.”

With public debt at a post-war record of 91 percent of the economy, the budget is vital to France’s credibility not only among euro zone partners but also in markets which for now are allowing it to borrow at record-low yields around two percent.

France’s benchmark 3.0 percent 10-year bond was steady, yielding 2.18 percent after the announcement.

The government said the budget was the first in a series of steps to bring its deficit down to 0.3 percent of GDP by 2017 – slightly missing an earlier target of a zero deficit by then.

But early reactions were skeptical.

“The ambitions that were flagged are very audacious,” said Philippe Waechter at Natixis Asset Management. “I struggle to see how we’ll find the growth needed in 2013 and afterwards.”

Of the total 30 billion euros of savings, around 20 billion will come from tax increases on households and companies, with tax rises already approved this year to contribute some 4 billion euros to revenues in 2013. The freeze on spending will contribute around 10 billion euros.


To the dismay of business leaders who fear an exodus of top talent, the government confirmed a temporary 75 percent super-tax rate for earnings over one million euros and a new 45 percent band for revenues over 150,000 euros.

Together, those two measures are predicted to bring in around half a billion euros. Higher tax rates on dividends and other investments, plus cuts to existing tax breaks are seen bringing in several billion more.

Business will be hit with measures including a cut in the amount of loan interest which is tax-deductible and the cutting of an existing tax break on capital gains from certain share sales – moves worth around four billion and two billion euros each.

“The government is impeding investment and so will block innovation,” Entrepreneurs Club head Guillaume Cairou said of the preference for raising taxes rather than cutting spending.

“France is sick because of the model it has … but is choosing to preserve it.”

Rick Wilson pulls back the curtain on the September polls that show Barack Obama with a big lead.

Once you know the secret behind a magic trick, it loses its appeal.

No matter how carefully crafted, no matter how spectacular the effect, no matter how much skill goes into its design, once you see the wires, or know where the secret compartment is, the trick stops being magic and becomes nothing more than engineering.

The trick the Obama campaign has executed beautifully this month is to demoralize and dismay the GOP base. A combination of a very, very, very heavy TV buy in swing states (pay attention, because this is a rabbit they can’t pull out every week), a fierce assault on Romney at every turn (abetted by a cooperative press that loves the taste of blood) and a series of public polls that have played into a self-reinforcing narrative that Obama is inevitable.

The trick is a good one, and to judge from the wailing and lamentations on our side, it’s been working.

But it’s just a trick.

Let’s pull back the curtain, shall we?

The polling-validity battle has gone on for weeks now, and I’ll skip recounting the arguments on both sides. Yes, they’re playing 2008+ model games. No, it isn’t a just a conspiracy by the liberal media. Yes, the race is closer than the public polls show – on either side. The poll coverage looks the way it does because the media monster is always hungry, confirmation bias is like slipping into a warm bath and the herd runs the same direction, despite the facts.

The polls are what they are and September polls are never, ever wrong… except of course in 1948, 1968, 1976, 1980, 1992, 1996, 2000, and 2004. (h/t the amazing Jay Cost for that one).

See? You just saw one of the wires that make the trick work.

The polling is presented superficially, with typically only the toplines and a degree of analysis that is facile at best. There’s no context, history or depth. I’ve covered this problem a bit here and here.

So the polls became part of the message of chest-beating triumphalism by Team Obama. The drumbeat of Obama’s glorious, inexorable ascension to another four years in the Oval Office is something Chicago feeds to the media, but doesn’t for a second believe themselves.

The entire purpose of the last two weeks on their side is to game early voting. That’s it. It’s not about the end game, but rather an attempt to roll up some numbers in key states before the debates start and the campaign joins in earnest. They’re desperate to have you demoralized, depressed and sitting home in your living room, grumbling at Fox instead of voting early.

The Democrats know very well this race will tighten even further toward the end, and that the Potemkin Village of polls showing Barack Obama with a double-digit lead is just that.

Read the rest Behind the Magic Trick –

British comedian and political commentator Pat Condell has some words for rioting members of “the religion of permanent offense” everywhere: “We don’t care if you’re offended, and we never will. You demand respect, but you’ve done nothing to earn it. Free speech will win, no matter how many flags you burn, and how many embassies you trash. So suck it up, and learn to like it.” Five minutes and 18 seconds of awesome. (via Roger Kimball)

It only lasts 16 to 24 hours, but why would you do it in the first place?

(Daily Mail) A new television series has shed light on the bizarre Japanese trend for ‘bagel heads’.

The extraordinary look, which is created by injecting saline into the forehead, then pressing in the centre of the swollen area with a thumb, is a hit on the country’s underground body modification scene.

The dramatic results of the two-hour treatment last just 16-24 hours, after which the saline is absorbed by the body and the forehead reduces back to its normal size.

Dylan Matthews examines the sources behind the wide disparity in average wages between the Metro D.C. area and the rest of the country. It looks like The Hunger Games.

Of the 10 richest counties in America, seven are in the D.C. area. To some pundits, that looks like strong evidence of crony capitalism. “Whence comes this wealth? Mostly from Washington’s one major industry: the federal government,” Ross Douthat writes in the New York Times. “Not from direct federal employment…but from the growing armies of lobbyists and lawyers, contractors and consultants, who make their living advising and influencing and facilitating the public sector’s work.”It’s a good theory. But only part of it holds up.

First thing’s first — is Washington actually doing well relative to the rest of the country? Yes, and it’s doing better and better. The average wage in the D.C. metro region has skyrocketed relative to the average of metro regions:

In 1969, the first year for which the Bureau of Economic Analysis has figures, wages in the D.C. area were 12 percent higher than the national average. In 2010, they were 36.1 percent higher.

Read the rest: Is the government making Washington rich? In charts, of course.