At Home in Vegas

By Kevin D. Williamson

Tuesday, October 03, 2017

Las Vegas was, for a time, home. I spent a happy year there living outside the city on a ridge overlooking the Strip, from Mandalay Bay down the road to all the other brightly lit curiosities. It was and is a great place to live, and the events of Sunday evening will not change that.

Las Vegas, the largest American city incorporated in the 20th century, is a strangely conservative place. I want to write “in spite of” its hallmark industry and its infamous entertainment district, but it might very well be because of the vulgarity and vice for which Vegas is famous. “What happens in Vegas stays in Vegas,” they say, but everyone knows that is not so — not always.

Mostly, Las Vegas is just good fun, cheerfully ersatz — why not build an Eiffel Tower and a New York skyline? — though the Strip has for some years been developing in a way that almost nobody could have seen coming: tastefully. The newest hotels and clubs are sleek and cosmopolitan (so cosmopolitan you might hear four or five languages spoken while having a cosmopolitan at the Cosmopolitan), the prime-rib buffets have been replaced by Michelin-starred restaurants (try Wing Lei), and at the nicest bar on the Strip, you cannot — this would once have been unthinkable — smoke, or gamble, or even expect to run into a hooker.

But the Strip — the weird little village of Vegas Baby — is only a small part of life in Las Vegas. Sunday Mass at St. Francis Church is at times literally standing-room-only, and it’s not the only one. It is not really true that the locals never go to the Strip, but they are also an outdoorsy bunch: hiking, hunting, fishing. There’s a great sporting-clays course, and a dozen great golf courses. And, sometimes, you just turn your Jeep off the road and go into the desert, where the coyotes look at you like they’re expecting you to ask for directions. If you’re lucky enough to have a swimming pool, you can use it in February, and get a nice winter tan.

But the Village of Vegas Baby has a funny way of working its way into everyday life, too. I went into a Whole Foods in nearby Henderson late one evening and saw a very pretty young woman walk by who looked for all the world like Taylor Swift. For a second, I thought it was Taylor Swift, until it occurred to me that she was an off-duty Taylor Swift impersonator. Elvis isn’t the only one who has stand-ins working in Vegas. At the same Whole Foods, I also saw a woman who wasn’t wearing any pants and wasn’t impersonating anybody at all so far as I could tell. I suppose the line between pantyhose and yoga pants is, from the right point of view, permeable.

The massacre was horrifying. There isn’t any place you want to have a massacre, of course, but there is something especially heartbreaking about having this happen on the Strip — a place dedicated to nothing more or less than having fun. I am not so naïve as to think that every kind of indulgence on offer in Las Vegas is entirely harmless, but Las Vegas is in my experience one of our least offensive cities, full of decent and hardworking people, kind and indulgent, living and working in the shadow of the international circus in the middle of it all. They’re veterans and immigrants and business owners who listen to a lot of jokes about the lovely, sunny, very livable city they call home. They’re tolerant, and they have good reason to be. And if the folks from Muleshoe want to come and stay at Caesars Palace, play a little blackjack, drink some cocktails, see a show, and spend their money, there’s nothing terribly wrong with that.

And there’s a funny flip side to Las Vegas’s purported libertarianism, a kind of corporate nanny state. (You think gambling is legal in Nevada? Try organizing a church raffle.) Las Vegas really does not want to arrest you for drunk driving or to see you suffer anything other than the loss of a sum of money big enough to miss but not so large as to keep you from coming back next year. Poor Vince Neil, the singer from Mötley Crüe, came out of a casino having had one or two cocktails too many and went into a rage when the valet wouldn’t get him his Rolls-Royce. He pulled the old “Do you know who I am?” routine. Of course the valet knew. That’s why he wouldn’t get him his car. He’d had a DUI before in Vegas. Bartenders are well-practiced in dealing with toasted tourists inquiring about prostitution, which is legal in some rural areas not far from Las Vegas but strictly verboten in Sin City itself. “That isn’t a conversation we can have,” they’ll say. Steely eyes, slightly ironic smile. “Would you like another drink?”

There are downsides: An old friend of mine raising children there told me how she had to drive miles out of her way when taking her children to school in order to avoid the gigantic billboards advertising the Adult Video News Awards, a.k.a. the “porn Oscars.” But, mainly, Las Vegas is like a big, cheerful Rancho Mirage with a more convenient airport and without the hassles of living in California.

People will keep going to Las Vegas for the same reasons they’ve always gone, and the cleverer among them might look around a little bit and discover some new ones. A few of them might decide to stay, as I did, at least for a while, and learn to appreciate the very real virtues of a city supposedly built on vice.

An Anti-Growth Tax Cut

By Kevin D. Williamson

Thursday, September 21, 2017

Republicans want to cut taxes by $1.5 trillion — while the government already is running a deficit — and they propose to offset those cuts with wishful thinking.

In control of both houses of Congress with a nominally Republican president in the White House, they are pursuing the dead opposite of the immigration policy touted by Donald Trump on the campaign trail, and considering something close to the opposite of their longstanding promises on health care. They are embarrassed by their inability to execute any proposal of great consequence, and have retreated into that great Republican safe space: tax cuts, the more irresponsible the better.

Congressional Republicans argue that they can in good conscience pass these tax cuts without any corresponding spending cuts or other countervailing measures on the theory that the tax cuts will produce economic growth, and that this economic growth will be so substantial that it will entirely offset the revenue theoretically lost to the tax cuts. There is very little evidence to support this theory, but Republicans remain fond of it.

Taxes are not especially high just at the moment. Federal revenue amounted to 17.6 percent of GDP in 2016; by way of comparison, consider that in the balanced-budget year of 2000, federal revenue was 19.7 percent of GDP — and 2.1 percentage points is a heck of a lot in an economy the size of ours.

Taxes were 18.7 percent of GDP in 1981, when the Reagan tax cuts were passed. The free-lunch theory of taxation holds that strategic, pro-growth tax cuts allow the government to increase its revenue by taking a smaller share of a larger GDP. But that isn’t what happened after the Reagan tax cuts: In constant dollars, federal revenue shrank, and by 1983 revenue was in real terms $153 billion lower than it had been. There was a recession, and revenue in constant dollars declined along with revenue as a share of GDP. It would not make sense to blame the tax cuts for that recession — nor would it make sense to credit them for all the growth that came after. By the end of the Reagan years, tax revenue as a share of GDP was right back around where it was at the end of the Carter years — and right about where it is now. The deficit as a share of GDP doubled between 1981 and 1985, then declined — and began to climb again in 1990. As usual, the main variable was spending.

In economic terms, there are two things going on with those revenue and deficit numbers. One is the structural issue, i.e., tax policy, spending, etc. The other is the cyclical issue, i.e., the ups and down in the economy. Both structural and cyclical factors have an effect on growth, revenue, and deficits — and they both have an effect on each other, too. Disaggregating those is a complicated business, one that does not necessarily provide any clear answers. But if you want to stick with the naïve supply-siders’ story, then you have to credit essentially all of the economic growth following their favorite tax cuts (Reagan’s in the 1980s, Kennedy’s in the 1960s) to tax policy in order to arrive at the conclusion that these tax cuts not only paid for themselves but actually added to federal revenue. Given the fact that the economy is growing right now, that is not a very plausible story.

It also is not the story that the designers of the Reagan-era tax cuts told themselves. Bruce Bartlett may have become an insufferable crank in his dotage, but there is no reason to doubt that he knows his own mind. Bartlett, one of the architects of the 1981 tax plan, did in fact have the Kennedy-era cuts in mind, and did expect there to be offsetting growth effects. But he and the other designers of the 1981 tax bill expected those growth effects to amount to only about one-third of the lost revenue, which was what studies at the time had found to be the case with the Kennedy cuts.

“Contrary to common belief,” Bartlett writes, “neither Jack Kemp nor William Roth nor Ronald Reagan ever said that there would be no revenue loss associated with an across-the-board cut in tax rates. We just thought it wouldn’t lose as much revenue as predicted by the standard revenue forecasting models, which were based on Keynesian principles. Furthermore, our belief that we might get back a third of the revenue loss was always a long-run proposition. Even the most rabid supply-sider knew we would lose $1 of revenue for $1 of tax cut in the short term, because it took time for incentives to work and for people to change their behavior.”

The Kennedy tax cuts saw the top individual income-tax rate reduced from 91 percent to 70 percent, and the Reagan cuts saw it reduced from 70 percent to 50 percent. The current top rate is 39.6 percent, which kicks in at $470,700 for a married couple. President Trump’s preferred policy would reduce the top rate to 35 percent, while congressional Republicans have aimed at 33 percent, along with modest reductions in other brackets and, possibly, a large reduction in the corporate tax rate. Our corporate tax rate is one of the world’s highest on paper, but the effective rate — what corporations actually pay — is on average unexceptional, though it varies significantly from industry to industry and firm to firm.

If coming down from 91 percent to 70 percent was not expected to be a self-financing proposition, and if coming down from 70 percent to 50 percent wasn’t, either, then why should we expect a relatively small change to produce such radical results?

We shouldn’t.

Tax cuts can contribute to economic growth by putting more money into the pockets of consumers and investors. In the free-lunch version of the story, that extra money produces so much new economic activity that the resulting growth in corporate and individual incomes offsets the reduction in tax rates. If that sounds like Keynesian stimulus theory standing on its head, it is. There is a multiplier effect — and politicians looking to sell you a bill of goods always assume that the multiplier is >1, even when there’s no reason to believe this to be the case.

Tax cuts can have anti-growth effects as well as pro-growth effects. Deficits and public debt are a drag on the economy, hoovering up investable capital and putting upward pressure on interest rates. If you want to eventually eliminate those deficits and pay down that debt, then you either have to raise taxes in the future, cut spending, or do both, i.e., you have to invert today’s stimulus measures at some point in the future. (“At some point in the future” is every politician’s favorite timeframe, of course — they all assume they’ll be dead or retired by the time the music stops.)

Republicans are right about the existence of growth effects, but they are fooling themselves about the scale of those effects. There is nothing wrong in principle with “dynamic scoring,” the Republican-favored policy of incorporating growth effects into the Congressional Budget Office’s evaluation of the fiscal effects of legislation. But that should be done responsibly. The current pie-in-the-sky Republican attitude toward taxes is something else entirely. On the other hand, there’s a good conservative case for ignoring dynamic scoring, too: If we cut a dollar in spending for every dollar in tax cuts and find out 20 years from now that we could have gotten away with only cutting 70 cents in spending on the dollar, then that will be a happy surprise. Sobriety in expectations and caution about future developments was, once upon a time, considered “conservative.”

There are many things that Congress should be doing to improve our national economic performance. Blindly hacking away at the tax code with a meat ax isn’t one of them.

Trump’s Straight Talk At The United Nations Disturbs Global Elite

By Megan G. Oprea        

Thursday, September 21, 2017

President Trump made his debut at the United Nations on Tuesday, addressing the U.N. General Assembly at its annual opening. Afterward, media headlines and news coverage of the speech focused on Trump’s absurd (but admittedly amusing) new nickname for Kim Jong Un, “Rocket Man,” and his threat that the United States is willing to “totally destroy” North Korea to protect itself and its allies.

The mainstream media, liberal elites, and the international community have been doing a lot of handwringing about Trump’s rhetoric and his talk of going it alone. They also had a lot to say about his comments concerning the Iran nuclear deal, whose dissolution the president has long desired.

Although the focus was on Trump’s supposedly dangerous isolationism and nationalism, what’s really upsetting them is that he dared to say what no one is supposed to say: that the U.N. is broken and that it is unrealistic and dangerous to have a world without borders and without national sovereignty. In other words, Trump violated the Emperor Has No Clothes rule.

The Importance of Governments Serving Their People

One of the major themes of Trump’s U.N. speech was national sovereignty, both of the United States and of foreign countries: “Our government’s first duty is to its people, to our citizens, to serve their needs, to ensure their safety, to preserve their rights, and to defend their values. As president of the United States, I will always put America first. Just like you, as the leaders of your countries, will always and should always put your countries first.”

Although the international community gives lip service to the idea of national sovereignty and the U.N.’s role in defending it, this concept fundamentally conflicts with the liberal belief that the world should be progressing toward a kind of borderless global nationalism, in which no one country can claim superiority over another. That’s the real reason Trump was so roundly criticized for saying that he’s willing to go it alone on North Korea.

Trump also dared to praise America for its enduring legacy as a free democracy. His speech was devoid of the kind of America-bashing that President Obama was fond of, especially in front of international audiences. Instead, Trump asserted that the United States should “shine as an example for everyone to watch,” which indeed it should. He also praised the 230th anniversary of the U.S. Constitution as the “foundation of peace, prosperity, and freedom” for Americans and millions around the world who have embraced it as a model of good government.

No doubt, this kind of talk disturbs the American Left and international bureaucracies, both of which have grown comfortable with the idea that American exceptionalism is a myth based on an ugly and misguided sense of supremacy and pseudo-colonialism. This goes hand-in-hand with “nationalism” becoming a dirty word that can only be interpreted as a form of fascism. Thus it has become bigoted to desire defensible borders, whether here in the United States or in Europe, and the idea of loving one’s country is now a touchy and uncomfortable subject, something Trump specifically brought up at the end of his speech.

The international community has believed in a sort of fictional world since the end of World War II, in which national sovereignty was to be ceded in exchange for peace on earth. Except no one really defined whose peace. Neither did they consider that different countries have different ambitions, not to mention different values that are sometimes irreconcilable. There can never be a utopic one-world order because countries are made up of people, and people have ambition, vice, and self-interest. The best that any world order can do is contain these impulses; it can never eradicate them.

Since the U.N.’s founding in 1945, we’ve seen that China and Russia, as permanent members on the U.N. Security Council, have repeatedly and consistently vetoed efforts by the council to take action against rogue members or intervene effectively in genocidal conflicts (like the Syrian civil war). Everyone knows this, yet no one dares to say it for fear it will expose the U.N. for the failure that it is.

In light of these problems, Trump stated that he would work outside the U.N. if it became necessary, if the United States and its allies continue to be threatened by North Korea and the body doesn’t do more to prevent that. That makes sense. It’s absurd to defer to an international body that, with the exception of the first Gulf War, has never resolved a foreign conflict and is not now taking the necessary steps to stop Pyongyang’s nuclear and ballistic missile programs.

Trump called out the rogue regimes represented at the U.N. and “have hijacked the very systems that are supposed to advance them.” He pointed specifically to the countries that sit on the U.N. Human Rights Council that have terrible human rights records themselves, like Cuba and Saudi Arabia. He also criticized the U.N. for delays and stagnation in resolving conflicts as a result of “bureaucracy and process.”

Trump Also Condoned International Cooperation

Although his speech promoted American values and interests, and contained a healthy dose of criticism for the U.N., Trump’s speech wasn’t a total rejection of the U.N. or the international community.

Trump called for member states to work together to help protect the sovereignty of other nations, like Ukraine, and protect the international shipping lanes in the South China Sea. He praised the mission of the U.N., urging that we “must work together and confront together those who threatens us with chaos, turmoil, and terror,” and calling for “all nations to work together to isolate the Kim regime.” He said that although the United States is ready to act unilaterally, he hoped that wouldn’t become necessary because he held out hope that the U.N. would step up and function as it was intended.

Rather than slamming the very existence of the U.N. or threatening to leave (as he has done with the North Atlantic Treaty Organization), Trump praised the founding of the international body, calling it a pillar of “peace, security, and prosperity.” He urged the U.N. to make a collective effort to improve, in the hope that one day it would more accountable and be able to effectively advocate for “human dignity and freedom around the world.” That doesn’t sound like the words of an isolationist to me.

Trump’s message was not a black and white case of promoting isolationism and denigrating internationalism. After all, he said plainly, “As long as I hold this office, I will defend America’s interests above all else, but in fulfilling our obligations to our nations, we also realize that it’s in everyone’s interests to seek the future where all nations can be sovereign, prosperous, and secure.” He sees the need for both, or so it seems.

Despite Trump’s efforts to make a generous nod to the U.N., notwithstanding all the failings he pointed out, half the country (and much of the world) only heard what it wanted to hear—the speech of a dangerous isolationist who threatened to attack North Korea. That way, they don’t have to talk about the real meat of the speech, which shined a spotlight on the manifest and longstanding failures of the U.N.