Tag Archives: political economy

An Academic’s Self-Importance

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Professor Cal Newport, a Georgetown University Computer Science professor, has some interesting ideas regarding how Americans should work and how we should communicate with each other. He laid out these views in a recent Harvard Business Review piece.

This unstructured workflow arose from the core properties of email technology—namely, the standard practice of associating addresses with individuals (and not, say, teams, or request type, or project)….

This is bad, of course, because the individuals doing the work didn’t actually do that. Someboedy else did—those nebulous “teams,” or this thing called a “request type.”

But the big demonstration of an Academic’s self-importance is in this:

But just because this unstructured approach is standard and easy doesn’t mean it’s smart. It’s important to remember that no blue ribbon committee or brilliant executive ever sat down and decided that this workflow would make businesses more productive or employees more satisfied.

Yeah. No Betters told these plebes what to do. They just stumbled around in the dark, using this complex new tool—email!—without guidance, without an Expert’s or a Blue Ribbon Committee’s instruction. Never mind that they got the work done, and better, using this new tool (among others) their way instead of in the Approved Way.

A consequence of this workflow is that an organization’s tasks become entangled in a complicated network of dependencies with inbox-enslaved individuals sited at each node. The only way to keep productive energy flowing through this network is for everyone to continually check, send, and reply to the multitude of messages flowing past—all in an attempt to drive tasks, in an ad hoc manner, toward completion.

Now he’s projecting and assuming everyone shares his shortcomings. Of course in serious work, this isn’t the case. It certainly wasn’t the way we worked—with email and instant messaging—at a major defense contractor that was my latest employer.

Newport’s piece goes on in this vein, but you get the idea.

Democrat Extortion, State Level

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Louisiana Democratic Gov John Bel Edwards is suggesting the legendary Louisiana State University football team’s 2016 season might be canceled—and other doomsday consequences—unless the GOP-legislature swiftly passes a package of tax increases to help close a looming $940 million budget shortfall.

The budget deficit is projected to reach $2 billion by the start of the next fiscal year. The Republicans should call him out on his naked extortion threats. And then pass a budget with $2.5 billion in spending cuts and $500 million in tax cuts. Does Edwards want to balance the budget, or is his precious spending and taxing all he cares about?

After all, the state’s economy runs over $250 billion as of 2015. Surely, they can find $2.5 billion just by shaking the state government’s couch cushions.

HSBC’s Move

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HSBC (née Hongkong and Shanghai Banking Corp) was considering moving its headquarters out of London and back to its roots in Hong Kong. Much of the consideration, and much of its decision not to move, were driven by Great Britain’s decision to tax all British banks’ overseas earnings in the aftermath of the Panic of 2008 and Great Britain’s subsequent decision not to tax HSBC so heavily.

However, I think the primary motivation for HSBC’s decision to stay put is buried at the bottom of the linked article.

…concerns about China’s growing influence over Hong Kong had helped make it more likely the bank would stick to London.

Indeed. Other banks should take heed.

Business Taxes

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Richard Rubin, of The Wall Street Journal, thinks reforming these is not a straightforward proposition. To an extent, he’s right, as business and personal income taxes have become increasingly intertwined with each successive tax reform since Reagan.

The links between corporate and individual taxation inevitably lock policy makers in intractable disputes about popular deductions and the question that divides the parties most bitterly: is the US collecting enough money from wealthy individuals?

But this entangling, or more correctly, the concern about the entangling, simply overcomplexifies the problem.

It’s an easy thing to do conceptually, if political will is lacking, to reform business taxes. Keep in mind a single, core fact: businesses don’t pay very much of their tax bills already. Business taxes are just another cost center, whose value in large part is paid by the business’ customers in the form of higher prices that are set to recover, at the least, a significant fraction of that cost. Customers pay much of those business taxes.

The framing provides the answer. Cut through the Gordian business/personal income tax knot by eliminating the business tax altogether. This, aside from eliminating the tax pass-along to already taxed individuals, also eliminates disputes about popular deductions, credits, and so on: they go away with the taxes.

This also removes the non sequitur of whether business taxes are hitting the wealthy sufficiently. That question becomes focused on the personal taxes where it belongs and thereby brought into sharper relief.