April 16, 2009

‘Going Galt’ Reaxes at PJM, and April’s Coming Indicator

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 4:00 pm

Update, 10:30 p.m. — Well well, John Cole via Andrew Sullivan got it totally wrong, won’t recognize what has happened, and will be among those who will be quiet while the crickets chirp if, as I expect, receipts continue to tumble at a rate faster then the economy as a whole. But they will, of course, continue to claim that incentives and disincentives will have had nothing to do with it. And they will, of course, be wrong — strident as always, but wrong nonetheless.

It’s an honor for that PJM column to be considered dumb by the likes of Cole.

Getting a critique from Cole is as good an indication as any that the PJM piece, like the POR (Pelosi-Obama-Reid) Economy posts that observed what was really happening last summer, will be seen as accurate when the dust settles and the objective history is written.

But thanks for the traffic, ya clowns. :–>

(A bit ago, I missed that a piece elsewhere wasn’t written by him, and regret the error. Exposure to clownishness appears to be rubbing off.)

Update, 11:55 p.m. — Hey John and Andy, put this in your pipe and smoke it. There’s still plenty of time left in April, but tax collections from individuals on April 15 in the “non-withheld” and “individual income taxes” line items amounted to $7.215 billion. Last year, same day (a Thursday instead of a Wednesday): $21.191 billion. That’s roughly a 66% drop. I wonder why? I would suggest that many of the most productive among us who pay their taxes directly have decided not to work so hard. I would say the arrows are pointing to me being right, and you being wrong. See you on May 1.

__________________________________________________

(begin original post)

A few commenters at my PJM column are trying to claim that the “going Galt” phenomenon is fiction.

Part of the problem is the headline (beyond my ultimate control, though I could have influenced it and perhaps erroneously decided not to), which would seem to imply that Americans en masse are deliberately slacking off because the rewards for effort aren’t there.

That’s not what I’m claiming. I’m claiming that “quite a few ordinarily industrious people ‘went Galt‘ months before the tea party movement even came into existence.” If I had known what the headline would be, I would have suggested “most industrious” to be crystal clear.

It doesn’t take many among the most industrious to cause the government a significant money problem. For example, Mayor Bloomberg of New York has noted that about 50,000 people — in a city of maybe 4 million adults and probably a couple million more net incoming commuters — “pay so much in tax that they essentially support the city.” If even 5,000 or 10,000 of them decide to go fishing for the rest of their lives (and most can more than likely afford to), Gotham has a big problem.

Analogously, if no more than a million or so of the top taxpayers nationwide decided to do the same thing, the results would be fiscally disastrous for Uncle Sam.

The evidence that some of these key people are deciding to pull back on the intensity began to develop back in June of last year. As I observed at the time, entrepreneurs, investors, and businessmen began, as a result of the initiation of the POR (Pelosi-Obama-Reid) Economy, “battening down the hatches and preparing for the worst.” That’s a BizzyBlogese paraphrase for “going Galt” — not hiring, not expanding, letting people go and not replacing them, making worn-out equipment last longer instead of buying new, etc., etc.

A couple of commenters are taking me to task for citing corporate tax figures. Who do you think owns the hundreds of thousands of regular (as opposed to pass-through) corporations that aren’t publicly-held? Tooth fairies? Corporate receipts have dropped like a rock largely (not entirely, of course) because their owners started seeing less and less sense in investing in them, and have decided to hold the line at best, or scale back, or in some cases sell out.

This PJM commenter nailed it when he/she said that:

What I consider most significant about all the talk of “going Galt” is not the hesitant way most folks are going about it but that there are significant numbers of productive Americans who have begun to speak of such a thing at all. Never before has this happened in U.S. history.

That’s because never in U.S. history has a major political party either ignorantly taken political campaign positions (that’s the charitable version) or deliberately concocted a political strategy (not quite so charitable) designed to take down the economy and suck life and hope out of the citizenry in order to achieve electoral victory. When you say that you’re going to starve the economy of its energy — energy that’s sitting right there, begging to be used — regardless of the consequences, and regardless of whether there’s a viable alternative (which there certainly isn’t yet), you are, deliberately or not, taking down the economy. When you say you’re going to punitively tax the most productive, even with the economy in a relatively fragile situation (which of course has gotten much worse since), you are, deliberately or not, taking down the economy.

Even the most determined political oppositions in the past, at least since World War II, have recognized the potential consequences of their campaign statements and positions on the current economy, and have generally worked to avoid hurting it. That last vestige of statesmanship in the Democratic Party totally went out the window in June 2008. This is why the economy has since then been, and henceforth shall remain, the POR Economy — which has been followed by the POR Recession as Normal People Define It.

___________________________________________

UPDATE: As to how deep the “going Galt” phenomenon is, April will provide an important clue.

Recall that last April’s federal receipts of over $400 billion were an all-time record by far. That result reflected an economy that was in the midst of recovering nicely from a rough 4th quarter of 2007, and relatively decent though cautious outlooks of investors, entrepreneurs and businesspeople.

A stunning $236.5 billion of that $400-billion plus came from “individual income and employment taxes not withheld,” which are largely payments made by the self-employed, partners, and those in S corporations whose incomes flow through to individual tax returns. Many if not most of the top 5% that the Obama administration is targeting for it tax increases are in this contingent.

So far this April, the money Uncle Sam has collected in this category is within striking distance of last year ($23.5 billion through April 14 for the two related line items vs. $24.7 billion at the same time last year), but the next two-plus weeks, when 90% of the receipts will come in, will tell the tale. The fact that some of those affected may have accelerated income and pulled money out of their businesses in 2008 to keep it out of 2009 and 2010 (meaning they ultimately had to pay up yesterday if they did these things) may muddy things a bit, but I still expect a pretty significant, going-Galt drop.

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56 Comments

  1. “The Democrat Effect” -the rational
    response by firms to prepare for the inevitable insult to the economy
    from oppressive regulation, litigation, and taxation-
    which started election night of ‘06 led to the POR Economy of ’08 as predicted.

    Comment by Joe C. — April 16, 2009 @ 7:52 pm

  2. #1, Hey John, I know your first name, and I corrected a typo before I saw your comment, which is no longer necessary.

    Comment by TBlumer — April 16, 2009 @ 11:02 pm

  3. Uh, but John Cole of Balloon Juice did not write the article at Anti-War.com, that was Juan Cole of JuanCole.com. Different people.

    Comment by Randall Shane — April 16, 2009 @ 11:30 pm

  4. #3, I was wrong, and I am sorry, and correction has been made after previous error noted.

    Comment by TBlumer — April 16, 2009 @ 11:37 pm

  5. Stunningly bad analysis – if you went to college, you should really ask for your money back. I don’t know where to begin with your analysis of “not withheld” – try this – consult someone who actually knows something about taxes before you try and analyze them.

    “That’s roughly a 66% drop. I wonder why? I would suggest that many of the most productive among us who pay their taxes directly have decided not to work so hard. I would say the arrows are pointing to me being right, and you being wrong. See you on May 1.”

    Are you really that stupid? It’s called a recession. I can’t believe you’re actually trying to make the argument that a 66% drop in tax revenue comes from people “Going Galt” (a term you don’t understand either) rather than from the economy going down.

    When you say “I wonder why” – how about this: provide proof – anything – that backs up your point. Otherwise, please, please, stop writing. It’s too painful to see logic thrown under the bus.

    Comment by inthewoods — April 17, 2009 @ 8:39 am

  6. #5, it’s as if you didn’t read what Mike Bloomberg said, or how I expanded on it.

    The recession would explain only part of the drop, and certainly not its steepness in comparison to how much the economy has declined — and by the way, it shrunk less than 2% in the final six months of 2009 (gov’t figures are annualized; if you didn’t know that, maybe you should ask for your college money back).

    I’m supposed to believe that receipts are down by double digits, ONLY because the economy has shrunk by 2%? There’s someone being stupid here, and it isn’t me, pal.

    If this is too painful, there are plenty of Keynesian parrots available elsewhere.

    Comment by TBlumer — April 17, 2009 @ 9:14 am

  7. So your dumb-ass argument is that people just stopped working to contribute less to the government? And your confirmation for this idiot argument is that the economy decline (I assume you mean GDP) doesn’t match with the decline in tax revenue? God man, go learn some economics – the scales of declines are totally and utterly different as a simple chart of GDP would show. Your whole argument is based on misunderstanding the relationship between GDP growth and tax revenues.

    How about this – show me one case – one case – where someone reduced their work output in response to the government action? People, during a recession, are more likely to up their work output because of a fear of losing their job, not lower it. Give me one person on Wall Street that stopped performing – or a small business owner who decided “hey, I’m not going to work as hard” in a tough economic climate. I work in a small business – as do most of my associates – everyone is working twice as hard to make sure, for instance, that we don’t lose a client.

    “There’s someone being stupid here, and it isn’t me, pal.”

    You’re not being stupid – you are stupid.

    Comment by inthewoods — April 17, 2009 @ 10:40 am

  8. This is really stupid, and a great demonstration of how “conservatives” have become irrelevant. Pure distortion, that no economist could ever endorse, and mere speculation (wild speculation) elevated to the level of definitive evidence. Here’s a teabag for you, sir! Right in the forehead!

    Comment by Jones — April 17, 2009 @ 10:58 am

  9. #7, name calling doesn’t advance an argument. It makes you look … stupid.

    I never stated what the exact relationship is between GDP growth and tax receipts, so you don’t even know what you’re criticizing. Stop putting words in my mouth (a favorite stupid technique for people who don’t have arguments). Tax receipts in certain categories, such as those I cited, have fallen by far more than you would expect when the economy shrinks by 2%. Or is a 57% drop in corporate taxes what you would really expect? Or a 66% drop in non-withhelds? In what genius Keynesian model have you seen that?

    If you want examples of people who have reduced their output in response to the items I cited, read through various PJM comments and comments at other sites from real people over the past several months. I won’t do your work for you.

    #8, considering who pays the taxes in the categories cited, it’s well beyond speculation.

    Comment by TBlumer — April 17, 2009 @ 11:33 am

  10. I’ll call you names because you’re part of the morons that broke this country and I’m sick of you guys stating bullshit with no evidence.

    And it’s not me that has no argument – you have not a single shred of evidence that the drop in tax revenues is caused by people going Galt. Instead, you infer it. You decide, therefore, that the only explanation of the drop in revenue is due to Galtism. This is called a correlation argument, not causation – and single causation at that. Have you, for instance, looked at tax revenues during a prior recession to see what it has looked like in the past?

    Reading PJM comments from “real people” is not evidence – that’s what people say they are doing – not what they’ve done.

    Your timing in the article is also laughable – as though the Democrats were the main cause of the recession. This is why you and your party have been banished to the fringe of the American political spectrum – because you’re so wrong and just continue to sling the same crap.

    In summary – your article and your “argument” are a total and utter joke. Come back when you’ve learned how to actually construct an argument.

    Comment by inthewoods — April 17, 2009 @ 12:04 pm

  11. Tom, you are what people in the sane world call an anti-intellectual. Look man, you LOST. As John Stewart so eloquently said, “it’s supposed to taste like a shit taco.” The sky is not falling. Stop watching Hannity. Stop blogging. Grab a beer and go enjoy a movie or a massage or screw your wife. Perpetuating the bullshit that are your economic theories is only contributing to your ad revenues, not mainstream economic academia, and I get a sneaking suspicion that you KNOW that.

    Comment by Dan — April 17, 2009 @ 12:32 pm

  12. #10, This exemplifies what’s so funny about your endless wailing:

    You decide, therefore, that the only explanation of the drop in revenue is due to Galtism. This is called a correlation argument, not causation – and single causation at that.

    I NEVER said it was the ONLY cause. Again, dishonestly putting words in my mouth. Bleep you — Don’t you ever get tired of dishonest argument?

    The fact is that the CBO estimates of revenue are, as they have always been, static. They assume no change in economic behavior as a result of changing conditions, including changes in tax rates or threats to do so. Because of this, they have consistently underestimated the increase in receipts in response to cuts in marginal tax rates. CBO was off by HUNDREDS of billions during the Bush econ’s best three years (FY 2005, 2006, 2007). Even Bush underestimated what the rate cuts would do.

    Now we’re seeing that supply-side can work in reverse. At the prospect of rate increases, cap and trade (another tax in reality), and the reality of increased regulation and intervention, at least some key producers are reducing their economic activity.

    CBO is on track to underestimating the revenue shortfall because, as stated, supply-side tragically works in reverse. “Going Galt” is shorthand for that.

    The fact that it pisses you off doesn’t change the fact that it’s happening to some extent. The only argument is how much. If it wasn’t happening, CBO forecasts would be much more accurate.

    Separately, I await your application of your newfound standard of proof to the hoax known as global warming. No one can even show a correlation, let alone causation, between global temps (which aren’t rising) and increased human activity, yet they merrily act as if their proof is ironclad. THAT is stupid. Are YOU that stupid?

    Comment by TBlumer — April 17, 2009 @ 1:04 pm

  13. #11, my name wasn’t on the presidential ballot. What was that you said about ME losing?

    Comment by TBlumer — April 17, 2009 @ 1:05 pm

  14. “The fact that it pisses you off doesn’t change the fact that it’s happening to some extent. The only argument is how much. If it wasn’t happening, CBO forecasts would be much more accurate.”

    Ah, brilliant – so now your argument is that it is affecting, in some measure, the amount of revenue. The only question is how much! Your conclusion – it’s affecting it a lot! Your proof: NOTHING. Great – here’s my guess at how much – zero. There, prove it wrong. You have any data? Anything other than your statement that it is happening?

    And then you argue that the ONLY way the CBO forecast could be off is if it was happening. Talk about a flawed argument – yes, that’s clearly the only reason the CBO forecast could be off. Wow, you are shockingly stupid – go read about the flaws in government data, just to begin with.

    And what about the timing of all this – which you conveniently ignored in your response – companies must have had ESP to start doing this so long ago!

    “They assume no change in economic behavior as a result of changing conditions, including changes in tax rates or threats to do so. Because of this, they have consistently underestimated the increase in receipts in response to cuts in marginal tax rates.”

    Ah yes, continue to argue the non-existent Laffer Curve. If you’re still buying that horseshit, then I can see why you’re equally confused by this topic. Let’s state this again so that it is plan and clear: tax cuts do not increase receipts. The CBO states this. The Treasury states this – any yet, here you are, shockingly pushing the same bullshit.

    http://www.cbpp.org/cms/?fa=view&id=507#_ftnref9
    http://www.factcheck.org/taxes/supply-side_spin.html

    “Now we’re seeing that supply-side can work in reverse. At the prospect of rate increases, cap and trade (another tax in reality), and the reality of increased regulation and intervention, at least some key producers are reducing their economic activity.”

    Yes, that’s it, all the news of job layoffs and companies missing their earnings numbers have nothing to do with it. It’s all about increased regulation and taxes! That’s why the tax revenue numbers are dropping. Nothing to do with demand that has fallen off a cliff. Or that people have too much debt. Or that companies have too much debt. You are now approach a new level of stupid.

    Again, show me one company – one large company – that is going Galt to back up your point. Since corporate revenues, in particular, have fallen off a cliff, so me one company that has pulled back on what they are doing because of regulation or taxes. Go ahead – I’ll wait.

    “Separately, I await your application of your newfound standard of proof to the hoax known as global warming. No one can even show a correlation, let alone causation, between global temps (which aren’t rising) and increased human activity, yet they merrily act as if their proof is ironclad. THAT is stupid. Are YOU that stupid?”

    Ah, brilliant again – can’t win this argument, so shift the ground to another argument. You should really keep going, it’s entertaining – like watching a monkey in the zoo playing with his own poo.

    Comment by inthewoods — April 17, 2009 @ 1:42 pm

  15. #14, the only poo I see is in your comment. Lots of it.

    Receipts to Uncle Sam increased in the 1920s under Coolidge. That’s not arguable.

    Receipts to Uncle Sam increased in the 1960s under Kennedy/Johnson far beyond what was “expected.” That’s not arguable.

    Receipts to Uncle Sam increased in the 1980s under Reagan far beyond what was “expected.” That’s not arguable.

    Receipts to Uncle Sam increased from 2003-2007 under Bush far beyond what was “expected.” That’s not arguable.

    So given this set of historical facts, you deny in each and every case that cuts in marginal tax rates had anything to do with it. Uh-huh.

    And given this set of historical facts, you deny that when faced with likely tax increases coming in many forms and unprecedented regulation in the name of a compete hoax, that the falling tax receipts are totally unrelated. Uh-huh.

    (Show) me one company that has pulled back on what they are doing because of regulation or taxes.

    Geez, I don’t even have to work at that. How many energy companies have been prevented from building coal-fired plants, or from exploring for oil and natural gas? Answer: A lot more than one. Argument over.

    Finally:

    And then you argue that the ONLY way the CBO forecast could be off is if it was happening.

    I said exactly the opposite. What about “I NEVER said it was the ONLY cause” don’t you understand?

    The next time you attempt to stuff words in my mouth, the comment moderator will tire of you. You don’t have open permission to lie about my positions. If you want to lie about me, you’ve got millions of other outlets.

    Your stupid comment is total poo, hundreds of words of it.

    Comment by TBlumer — April 17, 2009 @ 2:05 pm

  16. “Receipts to Uncle Sam increased from 2003-2007 under Bush far beyond what was “expected.” That’s not arguable.”

    Yes it is – did you look at the links I had in my last post? They DIRECTLY REFUTE YOUR POINT WITH DATA!

    “So given this set of historical facts, you deny in each and every case that cuts in marginal tax rates had anything to do with it. Uh-huh.”

    Laffer Curve works at extremes – anything in the middle lowers revenue. See, Obama gave a tax cut to middle-america, and it decreased government income. That is the reality – the middle of the Laffer curve is pure republican fiction. This is borne out by the increase in the deficit during the Bush years even with out the war.

    “Geez, I don’t even have to work at that. How many energy companies have been prevented from building coal-fired plants, or from exploring for oil and natural gas? Answer: A lot more than one. Argument over.”

    What a clever shift in your argument – now you’ve shifted it away from tax increases and put it toward regulation! Fantastic. And you’ve also now shifted from discussing tax revenues.

    So let’s get back on the topic: name me one company – just one – that has lowered their work output because of the Obama tax policy. Give me just one example. Since you are arguing that Obama and the Democrats have caused tax revenues to drop, give me an example. I want a company name and the action they did.

    “I said exactly the opposite. What about “I NEVER said it was the ONLY cause” don’t you understand?”

    Sigh – will you answer the f***ing question? What is the amount you think the Galt effect has reduced tax revenues, and then please state your proof that that is the case.

    I don’t need to stick words in your mouth – you’re doing a great job of just hanging yourself.

    Comment by inthewoods — April 17, 2009 @ 2:29 pm

  17. “N. Gregory Mankiw, former chairman of President Bush’s Council of Economic Advisors and a Harvard economics professor, wrote in his well-known 1998 textbook that there is “no credible evidence” that “tax revenues … rise in the face of lower tax rates.” He went on to compare an economist who says that tax cuts can pay for themselves to a “snake oil salesman trying to sell a miracle cure.”[13]

    Commenting on President Bush’s claim that tax cuts pay for themselves, the Economist magazine recently wrote, “Even by the standards of political boosterism, this is extraordinary. No serious economist believes Mr. Bush’s tax cuts will pay for themselves.”[14]

    The President’s own Council of Economic Advisors concluded in its Economic Report of the President, 2003, that, “although the economy grows in response to tax reductions (because of the higher consumption in the short run and improved incentives in the long run) it is unlikely to grow so much that lost revenue is completely recovered by the higher level of economic activity.”[15] The CEA chair at the time was conservative economist Glenn Hubbard.”

    http://www.cbpp.org/cms/?fa=view&id=165#_ftn13

    Comment by inthewoods — April 17, 2009 @ 2:44 pm

  18. Hi there,

    I’d just like to add my voice to the chorus of people who think this about as silly and facile an argument about economic behavior as can be conceived. I admire TBlumer’s Blagojevich-esque level of cluelessness in defense of his argument though. Give ‘em Hell, Blumer!

    Comment by hw — April 17, 2009 @ 4:04 pm

  19. #16 – #17,

    This is borne out by the increase in the deficit during the Bush years even with out the war.

    That has to do with spending, not receipts which went up 44% or so in 4 years. Doh.

    As for taxes affecting behavior, I’ve told you to read comments by PJMers spread over several months. You won’t do the work. That’s not my problem.

    Regulation IS a tax when it stops your business plans that would have made money (and raised taxes) dead in its tracks.

    Regulation IS a tax when it prevent energy companies from getting resources, which would raised hundreds of billions if not trillions in royalties even BEFORE considering income and excise taxes.

    …. it is unlikely to grow so much that lost revenue is completely recovered by the higher level of economic activity.

    Total straw man. They have NO idea how much revenue was lost, because they naively assume no behavior change. All they know is how much cash came in, and that it far exceeded expectations. Then they discount its value, even though it really did exceed expectations.

    Historical facts are historical facts, and even the mighty Mankiw can’t change them.

    At to your question: What is the amount you think the Galt effect has reduced tax revenues, and then please state your proof that that is the case.

    Answers:
    - Don’t know yet, because the cycle is still in process.
    - It’s quite a bit, because receipts are trailing last year by an amount that far exceeds what you would expect based on the condition of the economy and other possible factors alone.

    Finally, by engaging in obscenity, you’ve banned yourself. Be an honorable person, if you’re capable of it, and abide by the ban.

    Buh-bye.

    Comment by TBlumer — April 17, 2009 @ 4:12 pm

  20. #18, it will be even “funnier” in a few weeks.

    Today was just a barrel of laughs:
    - 4/16/09 non-withhelds and individual taxes came in at $4.149 bil + $1.213 bil.
    - 4/16/08 non-withhelds and individual taxes came in at $8.104 bil + $1.034 bil.
    - 2009 trailed 2008 by a combined 41%.

    What a knee-slapper.

    Comment by TBlumer — April 17, 2009 @ 4:15 pm

  21. “That has ….

    From BizzyBlog:

    I expected you to conduct yourself honorably and abide by the ban.

    You haven’t. Shows your lack of integrity.

    Now your IP is banned. Oh well.

    Comment by NOTinthewoods — April 17, 2009 @ 4:35 pm

  22. Boy TB, you must be more right than we know because you’ve hit a nerve with the Uber-rich fascisti puppetmasters that have sicked their astroturfing minions on you. These economics-challenged Garofolos are besides themselves that Pres. Affirmative Action got elected and reality didn’t play along.

    The worse than necessary economic decline following Dem control and then Heir ‘Prompters election was predicted months ago. The fact that it nominally started at the tail end of the Bush Administration (whose economics policies after the tiny tax rate cuts of ’03 we didn’t support either) is irrelevant because it was overwhelmingly voted for by the Dems in Congress, and John Kerry (who, I believe, served in Viet Nam) said it was all Obama’s idea, anyway! B. Hussein and the leftists own this, and they know it; but are trying to play rhetorical games (enabled by the legacy Media) to avoid culpability by the dumbed-down free-riders that make up their base. The question is will this political business cycle game catch up with them in 2010 or 2012?

    Comment by Joe C. — April 17, 2009 @ 8:26 pm

  23. TBlumer – so you have no evidence! Nada!

    But it was fun to see you get pwned.

    Comment by sassy — April 17, 2009 @ 10:02 pm

  24. #23, in your dreams. See #20. The evidence continues to accumulate.

    #22, they hate you more when you show them to be wrong. It’s already there for anyone with open eyes. Just because you can’t tie it down to the nearest dollar doesn’t mean it isn’t there. Supply side is working in reverse.

    Comment by TBlumer — April 17, 2009 @ 10:14 pm

  25. Linguistic impoverishment:

    “got it totally wrong, won’t recognize what has happened, and will be among those who will be quiet as crickets if, as I expect, receipts continue to tumble”
    L O L

    quiet as crickets? really? incapable of abstract thought? it’s ok, it happens to lots of guys..

    Comment by James Matthew Ladd — April 17, 2009 @ 10:32 pm

  26. #25, thx for the correction. I’ve modified accordingly.

    Haste makes linguistic waste, as they say.

    I know you didn’t mean to be constructive, but I’ll stay that way. You’re thus clearly on the short end of the civility stick, and you can put your gratuitous insult where the sun doesn’t shine.

    Comment by TBlumer — April 17, 2009 @ 10:48 pm

  27. TBlumer wrote:
    “#22, they hate you more when you show them to be wrong. It’s already there for anyone with open eyes. Just because you can’t tie it down to the nearest dollar doesn’t mean it isn’t there. Supply side is working in reverse.”

    Maybe they don’t hate you because you are wrong. Maybe it’s not that you can’t tie it down to the nearest dollar, but that you can’t tie it a single dollar. Where is the evidence that this is happening? Here’s what you put at as evidence to ITW:

    “Answers:
    - Don’t know yet, because the cycle is still in process.
    - It’s quite a bit, because receipts are trailing last year by an amount that far exceeds what you would expect based on the condition of the economy and other possible factors alone.”

    That’s it? “Don’t know and quite a bit”

    You got PWNED!

    Comment by sassy — April 18, 2009 @ 6:02 am

  28. #27, in your dreams. That answer is perfectly acceptable.

    See #20. The evidence continues to accumulate.

    Comment by TBlumer — April 18, 2009 @ 7:31 am

  29. TBlumer wrote:
    “That’s a BizzyBlogese paraphrase for “going Galt” — not hiring, not expanding, letting people go and not replacing them, making worn-out equipment last longer instead of buying new, etc., etc”

    I see now, you’re simply redefining anything that is typical in a recession as “going Galt” – so, if you lose customers and don’t have revenue, I’m not downsizing to match business to revenue, I’m “going Galt” – making the “concsious” decision to not participate in the economy because of governmental decisions. Which is pretty darn silly.

    I repeat – you got PWNED.

    Comment by sassy — April 18, 2009 @ 9:10 am

  30. #29, you can repeat a lie as much as you want that doesn’t make it true. It’s all in your dreams.

    See #20. The evidence continues to accumulate, and it continues to lean towards my premise.

    Comment by TBlumer — April 18, 2009 @ 9:33 am

  31. Quoting falling numbers over and over as though they prove your point is not “evidence”. And even if a % of the people are “going galt” you’ve been unable to quantify how much it is – is it 1% of the total or 10% of the total.

    Let’s do a thought experiment. Let’s say that that I say it is 1% of the total. You say it is 50% of the total. How would either of us prove the other wrong?

    Until you can answer that question, you’ve got what is called a “theory” – not evidence. And because you keep pushing it like it is fact, you look, well, foolish and like a partisan hack.

    Comment by sassy — April 18, 2009 @ 9:57 am

  32. #29, As noted in the Bloomberg point made in this post, it doesn’t need to be very many of the most productive people for it to be having an impact.

    You can rephrase your critique as much as you want, but see #20. The evidence continues to accumulate, and it continues to lean towards my premise.

    Stop wasting my time.

    BTW, what about the word “premise” don’t you understand?

    Comment by TBlumer — April 18, 2009 @ 10:10 am

  33. What can I say, I like watching you admit it is just a premise. Now that you’ve made that clear, I’m happy to go away. I’m looking forward to the follow-up article where you “prove” it. I should expect that in the next three months?

    Comment by sassy — April 18, 2009 @ 10:18 am

  34. #32, as noted previously, several commenters at PJM and elsewhere over several months have provided anecdotal “proof.”

    Other supporting evidence will continue to come in during the coming months that will continue to support my premise.

    Libs demanding courtroom-level proof won’t be satisfied until the entire population is focus-grouped or interviewed. I can’t help that.

    The best “proof” will be if receipts continue to trail CBO static estimates, as I suspect they will.

    Comment by TBlumer — April 18, 2009 @ 10:39 am

  35. Your primary source of data to support your point is the Treasury data – not CBO data – go back to the prior recession in 2000-2002 and you will see similar data. I don’t remember anyone discussing going Galt then. So how would we, in any way, separate the data?

    CBO static estimates could off for any number of reasons – mainly based on just the economic growth or non-growth they’ve put into their model. If the economy continues to go into recession, we would expect their model to be off – there is no magic there.

    I still don’t see anyway to determine if your premise is right – by any metric or data source.

    Comment by sassy — April 18, 2009 @ 11:35 am

  36. #35, the metric is treasury actuals vs. static-assumption CBO projections. If they differ there has to be an explanation beyond that predicted by general economic conditions. Enter human nature, and supply-side working in reverse.

    Comment by TBlumer — April 18, 2009 @ 2:04 pm

  37. Yes, and the most likely conclusion is that the effects are caused by changes in legislation (eg the stimulus) – that is why the CBO updates their projections. Given that these are updated all the time, why would you conclude that the Galt effect is a large impact on it as opposed to any number of other factors? And the CBO, the administration and the “blue chips” are off all the time – so the predictions are hardly much more than a best guess.

    Comment by sassy — April 18, 2009 @ 2:42 pm

  38. #37, nice try, no sale. They’ve already had their bite at that apple, where they predicted $9.3 trillion in deficits over 10 years vs. Obama’s $7 tril. That like Prego, it’s in there, and they can refigure pretending it wasn’t.

    Comment by TBlumer — April 18, 2009 @ 3:30 pm

  39. Ok – so if the CBO is wrong, then your argument would be that a major factor in the being wrong will be people going Galt? That’s your argument?

    And your definition of “going galt” is anything that relates to a typical recession?

    Comment by sassy — April 18, 2009 @ 5:44 pm

  40. #39, if they don’t have a better reason, it’s the place to start, because they supposedly already factored in the recession and its impact. So you’ll have to consider all things OTHER than the recession to explain the dives. The recession excuse is gone, as it’s already in there, as am I from this discussion until more data appears, and then it will be at another post. ….

    Comment by TBlumer — April 18, 2009 @ 5:50 pm

  41. Tom, pay no attention to the name-callers…they have never been comfortable with numbers unless you can manipulate them to their advantage (you know, 2+2=5). Lack of vision and intellect have rendered them ineffective. Plus, they’re clearly upset that for the umpteenth time, we’re finding out that their way doesn’t work.

    Many people are “going Galt” and it is EXACTLY because they don’t want the government to get any more money to waste. Many working moms are finding that their added income becomes a detriment after taxes and as such, it no longer pays to work…so they are staying home.

    They figure why bother? Who is John Galt?

    (Not that any lib posting here has the attention span or intellect to actually get through any of Rand’s books).

    Poor wittle wiberals, all this power and nothing but failure to show for it…

    Comment by Rose — April 18, 2009 @ 6:36 pm

  42. “Tom, pay no attention to the name-callers…they have never been comfortable with numbers unless you can manipulate them to their advantage (you know, 2+2=5). Lack of vision and intellect have rendered them ineffective. Plus, they’re clearly upset that for the umpteenth time, we’re finding out that their way doesn’t work.”

    I’m comfortable with numbers – what numbers are you arguing I am uncomfortable with? Strikes me that you are the one uncomfortable wtih numbers – since you don’t mention any.

    “(Not that any lib posting here has the attention span or intellect to actually get through any of Rand’s books). ”

    I’ve read Rand – I read it in the 10th grade – which is where I put it from a philosophical point of view.

    Needless to say I don’t see any real response to the argument – just more “liberal” nonsense.

    Comment by sassy — April 18, 2009 @ 10:46 pm

  43. #42, arrogance revealed.

    Do tell — “from a philosophical point of view” — what “grade level” is:
    - The Constitution?
    - The Four Gospels?
    - The Communist Manifesto?
    - The Audacity of Hope?

    Your next reply won’t be posted unless and until you provide specific and responsive answers.

    Comment by TBlumer — April 19, 2009 @ 6:33 am

  44. They serve different purposes, and came out at different times – so their philosophical sophistication and grade level has to be in the context of this.

    The Constitution is, at its heart, a legal document. However, it was also expressing the freedoms of a new nation and a vision of that nation at a time when there was nothing comparable. So, philosophically, I’d put it right at top. You can read it at just about any age, but to really understand what a radical concept it was, you have to put it in the context of the time. Then, finally, there are the interpretations which continue to this day – arguing about the placement of commas and such – that are both philosophical (what did the framers mean) and legal (how do we interpret this as law). Very heady stuff indeed.

    The Communist Manifesto is simplistic political diatribe, that is designed to convince readers of it’s political point of view. Philosophically, unlike other Marx writings (or others writing from a Marxist point-of-view), I’d put the philosophical content at about a 8th or 9th grade – it was designed to be simple.

    The Audacity of Hope is a biography which seeks to tell the story of Obama. One can argue that Audacity is itself a political book, but it does not explicitly push a particular political philosophy (in the same way the Communist Manifesto does). It’s the story of a person. As a result, I wouldn’t attach much of a philosophical level to it – if I did, I would put it at about 7th or 8th grade level. All it really expresses is a journey of a man.

    Comment by sassy — April 19, 2009 @ 7:07 am

  45. #44, so we’re being led by someone who writes his life story at an 7th-8th grade level, while you ridicule Rand’s 10th grade level. We’re being “led” by the former (who despises the Constitution for not requiring “economic justice,” and who followed the lead of a man, Alinsky, who bought Marx lock, stock, and barrel, and then some), while his fans attempt to marginalize the latter.

    As Instapundit frequently sardonically notes, “The country is in the very best of hands.”

    Comment by TBlumer — April 19, 2009 @ 10:21 am

  46. Amazing how you try and turn everything into a political position. I decided to answer in a straightforward manner and, as I expect, you responded with nonsense.

    The fact that he wrote it for a lower-grade audience is what people typically do – and doesn’t indicate his own intelligence level. That is typical of biography. This is also true of Alan Greenspan’s book – and I’m sure you wouldn’t call him stupid.

    Rand’s “Atlas Strugged”, on the other hand, is just a philosophical mess as well as being a pretty terrible and obvious novel. Most of her thinking is really just a rework of Nietzsche. And her other work in Objective Epistemology is weak logically. But typical of Rand followers, you can’t tolerate any critique of her it seems.

    As for the rest of your comments, coming on the last 8 years of true Constitutional attack (with little to no response from anyone on the right), I find it nothing if not entertaining. But that is what I now expect from all your responses – because you’re not engaged in a discussion or approach, you’re shaping all points to fit your political viewpoint.

    Quoting Instapundit to back up your point only proves this further. Hopefully hackory of your nature will continue to be constrained to the fringe. Enjoy your day.

    Comment by sassy — April 19, 2009 @ 10:51 am

  47. The fact that he wrote it for a lower-grade audience is what people typically do – and doesn’t indicate his own intelligence level.

    No, it’s above his intelligence level, if as is with cause suspected, he didn’t write it.

    Even without going there, I maintain that it’s as high a level of intelligence as you’ll ever see him demonstrate without a teleprompter.

    Comment by TBlumer — April 19, 2009 @ 11:15 am

  48. #46, upon further review, your “fringe” claim is the last refuge of someone who is out of arguments, meaning that in essence you’ve admitted to having been Pwned.

    Comment by TBlumer — April 19, 2009 @ 1:10 pm

  49. I’m not the one claiming the President has a 6th grade intelligence, or that his book may have been written by Bill Ayers – you’ve shown yourself to be as fringe as they come. PWNED.

    Comment by sassy — April 19, 2009 @ 1:30 pm

  50. #49, not at all. You’re Pwned. I just “YAwned.” And what about “if” don’t you understand? Are two-letter words challenging you now?

    Comment by TBlumer — April 19, 2009 @ 3:51 pm

  51. Qualify it anyway you want to after the fact – why’d you bring it up and link to it if you didn’t believe it?

    You’re absurd – I look forward to more of your illogical, poorly conceived posts!

    Comment by sassy — April 19, 2009 @ 4:19 pm

  52. #51 – what a jerk. I didn’t say I didn’t believe it. I didn’t say I did believe it.

    Typical loser who’s been Pwned tactic — put words in the other guy’s mouth because you can’t make a point any other way.

    Comment by TBlumer — April 19, 2009 @ 9:15 pm

  53. Ok then – do you believe it or not?

    Comment by sassy — April 19, 2009 @ 9:24 pm

  54. #53 – another jerk maneuver. I’m not on trial here. I’ve stated my position. You just can’t read.

    What about ….

    “I didn’t say I didn’t believe it. I didn’t say I did believe it.”

    …. don’t you understand?

    Do I need to start using crayons?

    Further comments by you will have to take place at another post. No more will go up at this post.

    Comment by TBlumer — April 19, 2009 @ 9:30 pm

  55. I think that the point that was lost in this too-ing and fro-ing of name calling is that in a very progressive income tax system (which we have) a very small number of people have a very large impact on income tax receipts. If, for example, only 50,000 of the 10 million New Yorkers pay the vast majority of income taxes it won’t take very many of those people stopping/reducing work (or stopping/reducing taxable events) to have a large impact on receipts.

    Not every high income earner is a public figure with suspected ghost authors or a politically connected spouse – many (most) are entrepreneurs who can indeed adjust their activities to reflect their belief in the marginal utility of spending the extra time on work.

    A real life example – a friend has a manufacturing business. He can chose to invest his money in new equipment and employees to pursue a market opportunity. There is significant risk in this decision – the money invested in capital equipment and people directly (dollar for dollar) reduces the funds available for him to pay himself. If he decides that the return (the higher income minus taxes and fees) over time does not justify the investment then, voila, through the magic of spreadsheets the investment doesn’t occur. The people don’t get hired, the equipment doesn’t get bought and the greater (hoped for, future) income doesn’t get earned. This directly impacts the income tax that can be raised. Of course, it isn’t a straight calculation since there are so many intangible variables – you might say that confidence in the outcome is a factor, too. So if you combine a reduced confidence in the business environment with a lower marginal return you get less investment and less tax receipts.

    Comment by NedLee — April 21, 2009 @ 6:24 pm

  56. #55, you nailed it.

    Comment by TBlumer — April 21, 2009 @ 10:42 pm

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