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Posts Tagged ‘Herbert Hoover’

Are Liberals Smarter Than Conservatives?

In 2010 Elections, Political Rhetoric, Tea Party, Uncategorized, Voter Intelligence on August 24, 2011 at 11:59 pm

It is taken as an item of faith in certain left-leaning circles that liberals are smarter than conservatives.  The most intelligent way to access the claim is to look at data.  What are the facts?

There are no IQ tests for voting.  Exit polls do ask voters about their educational attainment.  I take college degree as a proxy for ‘intelligent’ and use the two major parties as proxies for “liberal” and “conservative”.  

Exit poll data from 2010 US House races:

“What was the last grade of school you completed?

Answers for “College Degree”:
Voted For Democrat (D) 47%
Voted For Republican (R) 53%  [1]

This exit poll is consistent with other national elections: those with college degrees are a bit more likely to vote Republican.   One can argue, of course, there are some conservative Democrats and liberal Republicans, which would distort the data.

But, it happens the New York Times polled people who hold “more conservative views on a range of issues than Republicans generally. They are also more likely to describe themselves as ‘very conservative’.”  This polled group was Tea Party members.  “Tea Party supporters are wealthier and more well-educated than the general public”.  Of Tea Party members, 23% hold a college degree (vs. 15% of the general population) and 14% hold a post-graduate degree (vs. 10% of all survey respondents). [2]  

Does this prove conservatives are smarter than liberals?  Not necessarily.  We are using college degree as a proxy for intelligence and one can quibble about the correlation between intelligence and grades.  The exit polls do not ask for grades or areas of study which may have different academic admittance standards (e.g. engineering vs. education).  But the fact Tea Partiers were more likely to hold a graduate degree certainly argues for good grades and solid undergraduate pedigrees. 

Before conservatives turn the tables and declare “I am smarter than you” to liberals, I think there are a number of cautionary take-aways:

(1) There is a bell-shaped curve distribution of intelligence.  Most people (of all political views) are in the mid-ranges of the distribution.  Any particular liberal, conservative or moderate has a statistical probability of being near the middle of the pack.

(2) Generalized IQ is not the same as being well-informed about any particular issue.  An example would be Members of Congress talking about business and economics. [3]

(3) Being smart and well-informed still does not constitute being right.  Examples include 1920s and 1930s Western intellectuals who were smitten with the apparent ‘accomplishments’ of Soviet Communism and fascism in Mussolini’s Italy and Hitler’s Germany.  They were dreadfully wrong.

(4) Being smart and well-informed is not the same thing as holding solid judgment.  Herbet Hoover and Jimmy Carter were among the brightest of Presidents, but made some very poor decisions.

(5) Intelligent and informed people can look at the same data and come to different conclusions.  Try getting Nobel Prize winning economists such as, say, Professors Joseph Stiglitz and Gary Becker to agree on economic policy.

(6) If you are smart but let it go to your head, it might become too easy to be lazy and jump to conclusions or read only periodicals that already support your worldview.  I believe truly brilliant people never tire of the pursuit of new knowledge.

(7) “Liberal” and “Conservative” are catch-all terms and people hold all manner of divergent views.  For example, libertarians may be said to be economically “conservative” and socially “liberal”. 

(8) It is rude and obnoxious to flaunt your IQ, whatever it is.  Surely, the golden rule applies!

The Thinker, Rodin.jpg

[1] http://abcnews.go.com/politics/2010_elections/National?ep=house

 [3] “The Employment Policies Institute (EPI) found that only 8.4 percent of lawmakers majored in economics or a related field, while just 13.7 percent studied topics related to business or accounting,” in http://thehill.com/homenews/news/177897-report-three-fourths-of-congress-has-no-education-in-business-economics

Pictures from Wikipedia commons.

Soaking the Rich, Herbert Hoover Style

In Great Depression, Herbert Hoover on August 18, 2011 at 12:01 am

The economy is in tatters.  Unemployment continues to rise.  America is losing its confidence amidst foreclosures and a seemingly never-ending drop in home prices.

Populist fingers of blame are pointed at Wall Street financiers.  Many blame a Republican President who was in office when the financial markets collapsed.  The budget is in the red and the federal deficit may double during the President’s term. 

The President signs into law a big increase in income taxes to balance the budget.  Marginal income tax rates more than double for millionaires.  The estate tax is doubled and corporate taxes are raised [1] as America asks the rich to pay ‘their fair share’. 

Is this President Obama’s America in 2011?

No, it is Herbert Hoover’s America in 1932.

In a way, it is odd Herbert Hoover is not an icon on the Left.  The Revenue Act of 1932 was steeply progressive, raising the top personal tax rates on $1 million in income from 25% to 63%.   A “check tax” of two cents on every bank check was even introduced.[1] [2]

Today, some on the Left propose a similarly large tax increase on the ‘rich’.  US Rep. Jan Schakowsky (D-IL) recently introduced a bill to increase income tax rates to 45% for $1 million – up to a top rate of 49%.  She has many co-sponsors in the US House. [3]

History never quite repeats itself the exact same way.  Thankfully, 2011 is not quite 1932.  Economists and historians do not agree on the exact causes of length and severity of the Great Depression, though the causes noted often include the Stock Market Crash of 1929 and ensuing declines, tightening of the money supply by the Federal Reserve [the opposite of what modern theory holds the Fed should do], Hoover signing the protectionist Smoot-Hawley tariff, a terrible drought, a lack of confidence perhaps exacerbated by the increasingly aloof President Hoover, and anti-business policies of FDR.  The tax increases proposed by Schakowsky is not quite as draconian as that of 1932.

Be that as it may, the big tax increase of 1932 most certainly was not followed by any economic improvement.  Unemployment rose from 13% in 1931 to 18.8% in 1933, 19.8% in 1934, 21.3% in 1935, was 19.5% in 1935, 16.6% in 1936, 14.1% in 1937, 17.8% in 1938 and 16.0% in 1939. [2]   A big rise in tax rates in a recession did not work any magic on the economy in 1932-3 and would not work in 2011-2.

[1] http://en.wikipedia.org/wiki/Revenue_Act_of_1932

[2] $1 million is $16.5 million in 2011 dollars http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=1000000&year1=1932&year2=2011

[3] http://www.huffingtonpost.com/2011/03/16/jan-schakowsky-income-tax_n_836624.html

[4] http://en.wikipedia.org/wiki/User_talk:Peace01234

Pictures from Wikipedia commons.

Stimulus Recipient Among Illinois Mass Layoff Notices… Indiana Welcomes Another Illinois Company

In American Recovery & Reinvestment Act (Stimulus), Economy, Illinois, Indiana, Job Creation on August 3, 2011 at 9:32 pm

Today’s Yahoo News story “Ominous signs of surging layoffs in Illinois, nation” [1] reports mass layoff notices.  Let’ see why these layoffs are happening.  An AP story explains why A-1 Wire was closing its Rockford, Illinois operation, laying off 51 employees:

“ELKHART, Ind. — The Indiana Economic Development Corp. says a producer of high-performance engineering alloys is moving its operations from Illinois to Indiana, creating up to 100 new jobs by 2014.  THE IEDC said Saturday that Special Metals Corp. will move its A-1 Wire division from Rockford, Ill., to a 50,000-square-foot plant in Elkhart starting in September.” [2]

The State of Indiana is one of many that has targeted Illinois companies for relocation after Illinois raised its personal and corporate income tax rates in January 2011. 

On-Cor Frozen Foods is moving 85 jobs out of Illinois [3].  This is interesting because last fall, On-Cor was the beneficiary of Stimulus tax-exempt financing to open a new facility in the Chicago suburb of Geneva. [4]  As reported 11/6/10 in the local newspaper:

“GENEVA – Kane County officials are getting ready to issue $10.25 million in recovery zone bonds to facilitate On-Cor Frozen Foods’ relocation to Geneva.  Under the American Recovery and Reinvestment Act of 2009 the county can issue up to $41 million in bonds to stimulate the economy through low-cost, tax-exempt financing.  The proposed bonds are intended to help companies with financing for buying or improving property or for buying equipment. The bonds do not create an obligation for the county or the taxpayers, but will be paid back by On-Cor, officials said.  Sherry DeMeulenaere, treasurer for a limited liability corporation that owns most of On-Cor, said the bonds will pay for equipment used to process frozen foods… “We have an existing workforce in Chicago and jobs will depend on how many will come out to Geneva.  We have 85 jobs downtown and we expect to create another 46.” [4]

So much for the job creation in Illinois.  46 minus 85 is a negative number.  Might those “46 jobs” at the new Geneva facility be among Stimulus jobs the Administration’s website counts as created? 

“Furniture maker Clarin is closing in Lake Bluff, telling the state that it’s letting 75 workers go due to the sale of its assets. ” [5]  This site is Clarin’s corporate office and manufacturing plant.  Ironically, Clarin’s website is proud President Hebert Hoover sat in a Clarin chair.  [6] [7]  Clarin survived the Great Depression but not the Great Recession.

President Herbert Hoover sitting on a Clarin chair

Atlanta-based Consolidated Container is a good-sized operation with 65 facilities; I could find no word on why they’re closing in suburban Chicago. [8]

Pacific Coast Feather is a large company from Seattle, WA.  No word on why it is closing a facility in Des Plaines, Illinois. [9]
 
Schofield Media Group LLC in downtown Chicago is closing, affecting 107 employees.  Schofield was a $25 million revenue company and is closing operations after “unexpectedly” losing its bank financing. [10] 
 

The Chicago Sun-Times “will eliminate 456 jobs in Chicago starting in late September through year-end. Most of the jobs are unionized and include electrical workers, machinists, mailers, operating engineers, pressmen, paper handlers and Teamsters who serviced the soon-to-close plant at 2800 S. Ashland Ave.” [5]

Some of these closings are not surprising; Borders is closing everywhere.  Retail operations like Shopko, restaurants or garden centers may close due to competitive stresses or because of weakness with local consumers.  A weak economy may reflect high local unemployment, which might be expected when companies like A-1 Wire, Pacific Coast Feather, On-Cor Foods, Clarin Seating and Schofield Media close or leave.  The Illinois economy is not working very well and Illinois does itself no favors with an unattractive tax and regulatory environment.

  

[1] http://news.yahoo.com/blogs/chicago/ominous-signs-surging-layoffs-illinois-nation-132147422.html?bouchon=602%2Cil

[2] http://articles.wsbt.com/2011-07-16/elkhart-county_29783101

[3] http://www.examiner.com/independent-in-chicago/10-large-companies-closing-or-leaving-illinois 

[4] http://www.kcchronicle.com/2010/11/06/on-cor-on-tap-for-bonds-geneva-move/aqusss1/

[5] http://articles.chicagotribune.com/2011-08-02/business/chi-10-illinois-companies-tell-state-theyll-cut-1100-jobs-by-yearend-20110802_1_job-cutting-jobs-in-plant-closings-job-losses

[6] http://www.clarinseating.com/about.php

[7] The picture of Herbert Hoover in a Clarin chair is from Yahoo! Images http://images.search.yahoo.com/images/view?back=http%3A%2F%2Fimages.search.yahoo.com%2Fsearch%2Fimages%3Fp%3Dclarin%2Bherbert%2Bhoover%26ei%3DUTF-8%26fr%3Dyfp-t-892&w=118&h=192&imgurl=www.clarinseating.com%2Fimages%2Fabout_us%2Fabout-us_right_img_2.jpg&rurl=http%3A%2F%2Fwww.clarinseating.com%2Fabout.php&size=5KB&name=President+Herber…&p=clarin+herbert+hoover&oid=8e622c509a44a00989da692e63fb24cd&fr2=&no=1&tt=4&sigr=116rkq78b&sigi=11u46dl55&sigb=12q1bl78i&.crumb=hHoSiPH8Zmf

[8] http://www.cccllc.com/facilities.php

[9] https://www.pacificcoast.com/about-us

[10] http://www.foliomag.com/2011/schofield-media-shutters-u-s-operations