15 Comments:

• Re the quote: "Part of Mr. Bush’s legacy may well be that he robbed America of its optimism."
  
  I do agree with that. I also believe that this is very likely more important than it might seem on the surface.
  
  Re #3: Conservatives are giving up on the doctrine of limited government.
  
  There does seem to be a lot more blurring of the lines these days, as far as what the parties were originally identified with. Some of it is very surprising - Republicans embracing the welfare state? But some of it has to be expected just because of the changing times.
  
  Although the original intent was for states to retain as much autonomy as possible, some things are starting to become a problem for a society as transient as we have become. Personally, I'd like all banking and insurance laws to be taken completely from the states and only be Federally governed. It's just ridiculous to have contradicting laws affect services for people moving from one area to another.
  
  Although, what I'd really love to see, is all those convoluted laws - both state and Federal - yanked out and streamlined. Along with the IRS code, while we're at it. I am convinced that all that crap is costing us money. In the process, they could decide what no longer makes sense for the individual states to have control of. I know, don't tell me, there's not much chance of that happening.

  By  Rebecca, at 3:18 PM  

• I'll admit some hesitation at the notion of "streamlining" laws, because the more concentrated power is, the less real self-government there is. It sounds trite, but what works for New York won't work for Mississippi.
  
  I think that the conservative embrace of the welfare state is more apparent than real. Their prime motivation is to redistribute wealth to the top. Whether that can best be done through limited government or active government policy is more a matter of what they can get away with than anything else. I really don't think that conservatism as an intellectual project really has any substance any more.

  By  Arbitrista, at 6:53 PM  

• I completely agree about the conservatives' stands being more apparent than real in some cases. Sometimes they remind me of wolves in sheeps' clothing. That is a change from trying to convince us how much better wolves can run a country.
  
  But, Publius, I'm not saying that everything should be centralized. And, certainly, the states will want to protect their interests - some of which are geographic.
  
  But some industries were state regulated for anti-trust purposes. Now, however, banks are allowed to operate in more than one state. And I don't see why banks shouldn't have national chains these days like retail stores. Also, I think that a lot of the insurance industry scandals of several years ago would have been a lot harder to pull of if they all had had to answer to only Federal regulations.
  
  So, I'm not saying get rid of state governments completely. But there are a lot of outdated laws on the books, nationally and individually. I seriously doubt anyone will be doing any spring cleaning with those, but it offends my minimalist tastes to know they are cluttering things up. I just cannot rid myself of the notion that, somehow, they are costing us money. Probably because it all seems so inefficient. But, that's me. A little on the anal side. :)

  By  Rebecca, at 9:45 PM  

• Thanks for responding, Rebecca. You always have interesting things to say.
  
  Actually there used to be a lot more regulations on banks by the national government, but the neoliberals & conservatives eliminated most of them in the 1980's and 1990's. Hence the scandals.
  
  As for national banks existing as chains like retail stores, well I'd say that I'm not a big fan of retail chains. Chains consolidate wealth and power, and also tend to provide cookie-cutter service to their various branches. Bank chains are also much less likely to give loans to small businesses.
  
  There's certainly a lot of clutter and inefficiency in state laws. But I'm afraid that's just the price of popular government. You can get a more streamlined legal system in a dictatorship, of course - because there's no real law at all!

  By  Arbitrista, at 7:41 AM  

• I think what you're saying is interesting, as well, which is why I comment.:)
  
  I'm starting to think, though, that I'm not being as clear as I'd like to be. You seem to be seeing my points only at their most extreme.
  
  There are already bank chains which cover several states. And there are still very many smaller branches in those states. So it doesn't really have to be a case of either/or.
  
  I don't even think it will be like Wal-Mart moving in and closing the little stores. There are enough banking companies now to keep the competition healthy, as long as the mergers are kept under control.
  
  And, c'mon, reforming the IRS code doesn't have to end in dictatorship. There's lots of middle ground here. And I think that the best way to move forward with changes is usually to find that middle ground and stake it out - no extremes allowed.
  
  Of course, having someone a little smarter than Zippy in charge certainly wouldn't hurt, either.

  By  Rebecca, at 12:50 PM  

• Oh, if it's simplifying the tax code you're talking about, then I'm all for it. Most of the deductions just turn out to be ways for rich people to avoid paying taxes, anyway.
  
  I thought you were talking about having every state have the same laws.

  By  Arbitrista, at 1:43 PM  

• Simplying government in order to eliminate waste is always a good idea, if you see a government and its associated institutions as merely providing services to a group of people in the same way that a business provides a service or a product to the market. The problem is that simplicity and efficiency are not ends in themselves if you are talking about the public sector. One of the main reasons conservatives have swept into power is because they have managed to convince the public that everything should run like a business, with the voter acting like a consumer and voting with his feet simply by moving elsewhere. However, government is not meant to operate like a business. Instead, government is supposed to provide a common vision, promoting the idea of a human family (what we call nationalism), and even dictating moral behavior. Business can't do that. Businesses can survive only by breaking the market up into different segments. Governments operate in the reverse direction, aggregating different segments into the common good. However, liberals have somehow forgotten this because they have accepted the idea of the government becoming more efficient and particularistic to different groups. You cannot have good government and efficient government simultaneously. All governments will produce some waste.

  By  Marriah, at 5:19 PM  

• "All governments will produce some waste."
  
  Yeah, but can't we have some cleaning out of the obsolete stuff? Especially in the freakin' tax code?
  
  "I thought you were talking about having every state have the same laws."
  
  No, I knew I wasn't being clear. What I meant was that, for instance, banking and insurance industries would only be regulated by Federal laws. So that I could bring my insurance from Florida to Nevada the same way I brought my bank account from Nevada to Florida. Except I still had to change my account to a local branch, otherwise they were putting a hold on my deposits. All that kind of stuff is just ridiculous.
  
  And what about telecommuting? We all know that this would give a big boost to employment, while enlarging the profits of business by cutting overhead. So I think a company should be required to pay taxes in only one state in addition to Federal taxes. Currently, having any employees living in a state often means the companies have to pay taxes there. Which means that using employees around the country requires those employees to be independent contractors with no benefits in order for the company to avoid paying extra taxes.
  
  With changes in technology added to greater transience, we are overdue for some changes. But, back to the other point, we keep adding changes and never take the old stuff out. I just don't think that can be good.
  
  Anyway, there are still lots of things that states can have their individual laws about, local governments too. But the big stuff, the stuff that crosses state lines, I'd like to see all of that Federalized. Uniform. That would reduce costs and the savings could be passed on to the consumers. Ideally.

  By  Rebecca, at 2:00 AM  

• The problem with centralizing tax policy is that taxes are one of the major ways (maybe THE major way) that governments shape behavior. Take that away from the state & local governments and they've pretty much been reduced to administrative districts rather than self-governing polities.

  By  Arbitrista, at 8:03 AM  

• Once more, my brain is thinking one thing while my fingers are writing another.
  
  The states would still collect income taxes from everyone who lived there - except, of course, those states which don't collect any. And there are also property and sales taxes. But I would like to see businesses only be responsible to a single state for it's income taxes.
  
  They would still have to pay sales taxes on anything sold in other states. But simply having a person or two on their payroll living in a different state than where the company is registered would not be sufficient cause to pay income taxes in those states - as is the case now in many states.
  
  For instance, you can now have a perfectly viable business with not much more than a cell phone and a mailbox. There are telephone services, outsourcing services and all kinds of internet services which make this possible. So if it is possible for some of my employees, such as salespeople and bookkeepers, to work for me without living in the same state as I have registered the business, this should not necessitate my paying business income taxes in each of the other states where my employees live.
  
  That is not the case right now. I don't know about all of the states, but I know many use the question "Do you have any employees in this state" as a way of determining whether you must register your business there...which would mean you'd have to pay business income tax there.
  
  My point is that, in this day and age, there are many laws which ar overdue for changes - including tax requirements, banking and insurance regulations -simply because society is so much more mobile than ever before and will continue to become even more so.
  
  To tell you the truth, though, coming back around to your post and my original comment, I'm not so sure that this is necessarily in line with the Democratic or Republican traditional lines regarding less vs more govt. regulation. The lines have become blurred and the times, they are a-changing.

  By  Rebecca, at 4:30 PM  

• This is fascinating. Publius, the neo-Hamiltonian-Federalist-Whig is essentially arguing a states' rights, Jeffersonian position. By centralizing policy to make it more efficient, one inevitably erodes (or even eliminates) the power of states to govern themselves. Not surprisingly, Publius has apparently changed his position because Rebecca is presenting a pro-globalization argument, but on the micro-scale of the U.S. The problem here is that no one is talking about the benefits of capital mobility for a democracy. Yes, tax policy is one of the main ways states shape behavior, but increasingly important is the ability of a state to attract mobile capital. The desire to attract mobile capital does much more to shape behavior now than tax policy. If a state wants to encourage/discourage behavior, it simply needs to link the said behavior with job growth or destruction, and most people will voluntarily change their behavior. It is easier to get someone to change their behavior with the carrot than the stick. (Such as prohibiting smoking on the job in a 24/7 work environment in contrast to merely applying a 20% sales tax to cigarettes to discourage smoking. Smokers will ignore the tax, but they will respond right away to a job opportunity.)

  By  Marriah, at 8:22 PM  

• Marriah: There's a difference between saying that you need an energetic national government and that we should abolish the states. Just because I don't think we should neuter state governments doesn't mean that I've abandoned my basic philosophical position. Yeesh.
  
  Rebecca: Yeah I'll confess that the highly mobile nature of our society makes it very difficult for state or local governments to control their own destinies. I really haven't thought very carefully about the role of business taxes vis a vis globalization. The problem with allowing businesses to "concentrate" their holdings for purposes of taxation is that corporations would inevitably use it as a tax dodge, and it would also encourage a "race to the bottom" as corporations played the lowest-cost states off against one another.
  
  So for the purposes of business taxes, perhaps some sort of national standard and rebate back to the states is worth considering.

  By  Arbitrista, at 8:53 PM  

• I'm not so sure that businesses would be any more apt to choose one state over another than they do already. I mean, there have been great advantages to being a Delaware corporation for decades, but there are still companies registering in South Dakota or Nevada, while others are staying in California or some other state for some other reasons.
  
  There would have to be guidelines, of course, laying out what would be required in order to claim a state for registration. I seriously do not believe that the distribution would be much different than it is now. And it would be fabulous if there were some way to force companies to pass these tax savings on to consumers, but that I'm not quite so optimistic about.
  
  So, basically, everyone would be paying the same Federal income taxes as they are now, plus income taxes to the one state they are registered in - if that state collects income tax. And there would be a standardized set of rules to determine which states you could choose to register in. Once you registered in a particular state, you play by that state's rules.
  
  This plan appeals to my longing for streamlining, as well as the need for more up-to-date rules for a mobile society. And I think they need to be put into place real soon because, even with new terrorist/money laundering rules in place, it's getting to be easier and easier to set up global offshore businesses that won't be paying any state taxes, anyway.
  
  The world is shrinking at an ever increasing rate and if our lawmakers don't start looking ahead instead of continuing to fight rearguard actions, a lot of people are going to end up like the music business - pissing into the wind while trying to plug losses, instead of trying to figure how to turn the new ways to their advantage.

  By  Rebecca, at 11:05 PM  

• Publius, there is nothing inherently wrong with a "race to the bottom". As Rebecca pointed out, this happens anyway, and this is supposed to happen. The firm is designed specifically to produce the most goods and services for the lowest cost possible. However, this entire discussion, and hence the theme of the post, makes sense only if we are talking about corporations that cross state and international boundaries and not sole proprietor firms that are confined to single states. The problem Rebecca is pointing to is transaction costs. Economics Nobel Laureate Ronald Coase argued that when transcations costs are prohibitive, individuals will form firms, or corporations, that deal with these costs administratively. http://nobelprize.org/nobel_prizes/economics/laureates/1991/presentation-speech.html
  If there were no transaction costs for contracts, almost all state and federal laws regarding economic behavior would be redundant. The market, in its ideal conservative form, is supposed to promote a "race to the bottom" for every good and service offered to consumers. The problem you properly point to is that when we leave the realm of sole proprietor and enter the realm of distributed ownership, which is the corporation, the supposed benefits of the free market stop being benefits because the market stops being free. Instead, the market is tightly controlled as corporations shift all profits to the shareholders, not the enployees or the consumers. Sole proprietor firms promote limited government, but corporations promote big government because so many laws are necessary to bring back a balance between the corporation and the employees or customers. Firms are cautious as they try to cut costs, but corporations are aggressive with the enormous profits they put into lobbying the government. As a logical result, there is now an exodus of Libertarians from the Republican Party. Movement Conservatism can work, but only if we limit the ability of sole-proprietor firms to turn into corporations.

  By  Marriah, at 3:33 AM  

• The race to the bottom refers to states, not corporations. It's the policy of "smokestack chasing" in which corporations use their leverage over localities that want jobs to shift the costs off of themselves and onto the citizens of a state. It's called an externality, and represents a market inefficient outcome, since the true cost of a good is concealed.
  
  By the way, movement conservatism is an incoherent mess. It can't "work" because its policies inherently lead to fascism (i.e. authoritarian government founded on militarism, corporate power, and cultural intolerance).

  By  Arbitrista, at 6:50 AM  

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