The Other McCain

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Matt Yglesias: Solving Non-Problems

Posted on | January 3, 2014 | 88 Comments

Slate.com has become a journalistic ghetto, an “Amateur Online Webzine Specializing in Hit-Trolling and Outrage-Fishing,” as Ace calls it, and their “business and economics correspondent” (?) Matt Yglesias gets in the spirit with a 415-word item under this headline:

Why Taxing the Rich Is Great

Yglesias quotes one sentence from a New York Times article:

Matt Hlavin, an entrepreneur in Cleveland who owns seven businesses, mostly in manufacturing, bought three Mercedes last year: a $237,000 SLS AMG and a $165,000 S63 AMG for himself, and a $97,000 GL550 sport utility vehicle for his wife.

Yglesias then proceeds to argue — I’m sure you’re surprised — that it is a bad thing for Matt Hlavin to have three Mercedes.

That’s it. That’s all he’s got.

And when I say that Yglesias “argues” that it’s a bad thing for Hlavin to have three Mercedes, of course, I mean Yglesias just assumes this, and also assumes Slate.com’s readers share his contempt for Hlavin’s wealth and thus are eager to applaud Yglesias’s plan to expropriate and re-distribute Hlavin’s wealth:

[I]f you managed to give it to the truly needy in the United States, you’d create a huge surge in well-being. And of course if you were able to use it to reduce severe third-world poverty, the gains would be incredible. . . .
The kind of conspicuous consumption that drives people to buy a $165,000 S63 AMG is basically zero sum, whereas the kind of consumption that a family in the bottom half of the income distribution would finance with more money is not.

The assumptions embedded in Yglesias’s “argument” (which is not actually an argument at all) are enormous. He assumes, for example, that Hlavin and other wealthy people are fixed targets, whose economic behavior will not be modified by higher taxes. They’re supposed to keep earning at the same rate, no matter how steeply you increase the progressive taxes on their income. And, at a second degree of causation, Yglesias evidently never considers whether changes in the economic activity of the “rich” (however you define this) produced by higher taxation might also result in greater hardship for the poor.

The best anti-poverty program in the world is a job, after all, and if higher taxation of the rich results in less capital investment in business, there will be fewer jobs created. You can’t make capitalism work without capital, and Yglesias’s judgment that someone with three Mercedes has too much capital — too much wealth –requires a belief that excess wealth is an economic problem.

Why? Yglesias never adequately explains this. He simply assumes that Hlavin’s wealth is a problem and then proceeds to “solve” it, without any real consideration of obstacles to implementing his redistributionist policy, or the potential harms of such a policy:

 I’d say the taxation should focus on Hlavin’s consumption spending more than his income per se, and should be designed to especially hit activities with substantial environmental impacts. But the point is that taking the money Matt Hlavin is spending at the Mercedes dealership and giving it to other people is a huge winner.

Alternative proposal: If there were a tax on bullshit, Matt Yglesias could pay off the national debt by the end of the year.

 

Category: Economics

Comments

88 Responses to “Matt Yglesias: Solving Non-Problems”

  1. ThomasD
    January 3rd, 2014 @ 7:10 am

    Doesn’t Matty own himself a tony condo in NYC? Why should his extravagance be tolerated? shouldn’t his ‘excess’ wealth be taxed away and he be assigned to one of those spiffy new 300 sqft micro apartments?

    It’s for the greater good Comrade Yglesias.

  2. WJJ Hoge
    January 3rd, 2014 @ 7:28 am

    Alas, your proposal for paying off the national debt so quickly falls into a similar trap as Yglesias’s nonsense. In order to generate the necessary cash flow to be taxable, his drivel would have to have sufficient economic value that someone would actually pay to read it.

  3. Chris Smith
    January 3rd, 2014 @ 8:44 am

    So…let me get this straight. An owner of several manufacturing companies (employing about 100 people in the economically depress Cleveland area) has a good year (most likely after several bad years) and decides to splurge on a couple of very nice cars. And what comes to Matty Y’s head is, “Damn, we need to tax this guy more!”

    Maybe he could have given that money to charity. Oh, he’s giving to charity already: http://www.wkyc.com/video/1966824589001/1/Matt-Hlavin–Mike-Stewart-Food-Fight-111312.(Yeah, that was just 3 minutes of internet search right there, to find out his companies’ sizes, his local business association profile, and this charity giving. Balls in your court Matt Y.)

  4. rjacobse
    January 3rd, 2014 @ 8:47 am

    Matty also assumes that just giving “the truly needy” stuff automatically and without exception creates “a huge surge in well being” (whatever the hell “well being” means).

    The real world don’t work like that. Just giving stuff away more often than not turns people into entitled brats who are incapable of coping with adversity. And this world is just chock full of adversity.

  5. DavidD
    January 3rd, 2014 @ 9:16 am

    “But the point is that taking the money Matt Hlavin is spending at the Mercedes dealership and giving it to other people is a huge winner.”

    By spending his money at the Mercedes dealership, Mr. Hlavin is giving it to other people. What do you think happens to the money, Matt, after the Mercedes dealership gets it? Would you rather Mr. Hlavin just stuffed it under a mattress?

    Do you have any concept of how many jobs Mr. Hlavin creates not just through his ownership of various companies but also through his consumption? Isn’t the left always claiming that spending creates jobs, even when it’s unemployment benefits that’re being spent?

    What a tool.

  6. Quartermaster
    January 3rd, 2014 @ 9:16 am

    The most important impact is that when you tax something you get less of it. Even if we don’t collect a dime, it’s a big win.

  7. McGehee
    January 3rd, 2014 @ 9:16 am

    I can only imagine what Yggy would think of a household that has acquired so many new(ish) vehicles in the past three weeks that we have to leave the 2012 out in the rain.

    Granted, none of them is a Mercedes, but one was built by a company formerly owned by Daimler, and given Yggy’s track record for substance, that should be enough to taint the entire fleet.

  8. Mike G.
    January 3rd, 2014 @ 9:42 am

    Yggy looks exactly like the kind of pretentious SOB that would excoriate someone else for buying and driving an expensive car, as he sits in his BMW 7 series listening to Justin Beiber and Miley Cyrus.

  9. JeffS
    January 3rd, 2014 @ 9:54 am

    Looks like Matt is following leftie talking points exactly:

    What You Need to Know About the Left’s Big Issue for 2014

    But I’m sure he’s motivated by jealousy; he wants to own three expensive cars, he just doesn’t want to pay for them.

  10. Art Deco
    January 3rd, 2014 @ 10:00 am

    In a ham-handed way, I think Yglesias is arguing that the marginal utility of an additional dollar in income declines as one grows more affluent. I suspect economists with no equalitarian or social-democratic sympathies might endorse that notion. (It’s common sense).

    About 30% of the population at any one time is quite impecunious next to the mean. If you altered certain incentives and made regulatory changes which improved the lubrication of the labor market, these people might change their behavior and earn somewhat more, but most simply do not have the human capital to earn much. You want to structure your tax system to hold this 30% harmless at the very least.

  11. Rob Crawford
    January 3rd, 2014 @ 10:10 am

    Why wasnt Matty’s drivel thrown in the trash? Why was that crap published?

  12. robertstacymccain
    January 3rd, 2014 @ 10:14 am

    Wait a minute: You expect Yglesias to do research for his blog posts? To discover more about the subjects of his rants than can be learned from a New York Times article?

    That kind of expectation is either racist or homophobic or some other species of HATE.

  13. robertstacymccain
    January 3rd, 2014 @ 10:22 am

    So what you’re saying is that while Matt Yglesias is getting paid by Slate.com, the work he’s doing is actually on behalf of the Democrat Party? So the purpose of Yglesias’s work is not to generate revenue for his employer, but rather to generate votes for Democrats?

  14. robertstacymccain
    January 3rd, 2014 @ 10:23 am

    The vagueness of categories like “truly needy” is not accidental.

  15. marew
    January 3rd, 2014 @ 10:28 am

    How do I get a job like Matt’s? Saying stupid stuff and getting paid for it. I’m highly qualified.

  16. richard mcenroe
    January 3rd, 2014 @ 10:38 am

    Someone should introduce Matty to that guy who decided not to open a coal mine and give jobs to the town’s unemployed because they whined about it. (Note: tried to find the video, which seems to have gone down the Google memory hole) Dude tells the leeches off nicely. Think I saw the video on Ace, but no Ace search engine.

  17. TC_LeatherPenguin
    January 3rd, 2014 @ 11:00 am

    No he recently bought a three-bedroom, three-bath condo on Q Street in Logan Circle for $1.2 million. That’s a chi-chi DC suburb, and there ain’t a soul alive that could convince me Young Matthew’s collateral consisted of his punditry paychecks. The little punk is a trust fund baby.

  18. archonix
    January 3rd, 2014 @ 11:13 am

    You spelled “raaaaacist” wrong.

  19. Art Deco
    January 3rd, 2014 @ 11:17 am

    The name ‘Yglesias’ is hispanic, but his family is Jewish and he is from Manhattan. He graduated from Harvard University in 2003. There’s a reasonable wager that there is some inherited wealth there, though its possible that Mrs. Yglesias hails from the patriciate. I think his principal employment is on the staff of the Center for American Progress and it is possible that Darth Soros does not underpay his minions.

  20. Art Deco
    January 3rd, 2014 @ 11:25 am

    Just giving stuff away more often than not turns people into entitled brats who are incapable of coping with adversity

    Handing out cash and prizes to people who have retreated from the labor market for sundry reasons (i.e. working aged and non-disabled people). I think provably enhances the entropic tendencies in society.

    When you are talking of income transfers to non-pathological social categories who are crisply defined and entry into which is not subject much to the discretion of the client, this observation does not hold. The problems you have with Social Security (for example) stem primarily from failure to place the retirement age on an escalator which reflects changes in cohort sizes and life expectancy. A secondary problem is the difficulty you have in defining ‘disability’ and adjudicating cases. It was not old folks and cripples who made public housing projects unlivable.

    There are also problems which derive from means testing, in which eligibility criteria create conditions similar to having a marginal tax rate which exceeds 100%; they induce people to reduce their earnings to continue to meet eligibility criteria. Except for public defenders and legal aid societies, they really need to replace means-tested with universalistic programs.

  21. Robespierre
    January 3rd, 2014 @ 11:37 am

    What don’t conservatives understand here? Massive wealth inequality leads to social strife, destabilization, and eventually revolution like it did in Russia, France, China, Cuba, etc. And then we have tyranny. The best thing a society can do is tax it’s rich at higher rates like we did for decades. As soon as Raygun came into office and slashed tax rates for the uber rich the gap exploded and lead us to this very sorry state where the American worker has been reduced to a mere serf. For people who pride themselves on being logical and objective you’re really ignorant of history.

  22. Robespierre
    January 3rd, 2014 @ 11:39 am

    Yeah, but when the shit goes down they won’t forget, and he’ll be one of the first to fall under the new national razor.

  23. ATexasRedneck
    January 3rd, 2014 @ 12:22 pm

    I think the bigger issue here is being overlooked. Why would this d*****bag pick a nobody from cleveland to make an example of? Why choose Matt Hlavin? He’s just some guy from Cleveland that owns a couple of business and trying to enjoy some of his hard work? The point here for Yglesias is to demonize an individual. To demonize somebody who had an idea and most likely risked everything he had to put it into motion. This is the problem in our country – You have these so-called pundits and thought police trying to marginalize somebody who should be admired and emulated. This is the problem. Like the left’s fixation on the Koch brothers. Individuals who do not toady up to their “moral and intellectual superiors” (Hope Ace doesn’t see this and send a takedown notice) must be destroyed.

  24. Mm
    January 3rd, 2014 @ 12:31 pm

    A guy like that doesn’t NEED a $1.2 million condo.

  25. Max
    January 3rd, 2014 @ 12:41 pm

    Baloney. This is called projection.

    In a healthy economy you will always have a increase in wealth inequality, this is called growth. In an unhealthy economy like we currently have wealth inequality increases at a greater rate because the middle class and poor can not absorb the impact as well. The middle class is being eaten alive by stupid progressive policies that raise the price on basics… Obama kills coal and electric rates go up by 40%, we divert corn to fuel production and food prices greatly increase, the Unaffordable Health Care Act causing health care insurance cost to increase for the middle class. The poor and the middle class cannot absorb the cost of Obama’s policies the rich do not even notice.

    Ronald Reagan cut taxes and still nearly doubled tax revenues while he was president. It is a good thing when wealth explodes because of growth.

    The American worker is being reduced to a serf because of our Government… a very poor educational system largely due to the actions of the Federal Government, increased burdensome unnecessary regulation, and stupid corporate tax policy, among a host of other things. We need good paying jobs, progressive policies are not compatible with that aim.

    Yea I understand the progress plan of creating equality by dragging everyone down to the same level of misery, well everyone but the elite rich who who will end up making this country into their version of the Hunger Games. Yea I understand you are going to lie and say it ain’t so but your screen name tells anyone not ignorant of history where you are coming from, admiration of of destruction and mass murder.

  26. Max
    January 3rd, 2014 @ 12:43 pm

    Matt Hlavin enemy of the people time for his “two minutes of hate”.

    If we have reached this point the country is done.

  27. Quartermaster
    January 3rd, 2014 @ 12:51 pm

    We have and it is.

  28. ThomasD
    January 3rd, 2014 @ 12:52 pm

    I stand corrected.

    Maybe we could introduce him to a Guatemalan family or three. You know, the ones with the ‘undocumented’ title to his new digs?

    I’m sure there is plenty of room to spare.

  29. Finrod Felagund
    January 3rd, 2014 @ 12:54 pm

    Indeed. Personally, I support high taxes on leftist bullshit. After all, stupidity should be painful.

  30. Finrod Felagund
    January 3rd, 2014 @ 12:54 pm

    Indeed. Personally, I support high taxes on leftist bullshit. After all, stupidity should be painful.

  31. Quartermaster
    January 3rd, 2014 @ 12:54 pm

    You need to research the fate of your handle. This place is far different than France of 1789.

  32. Quartermaster
    January 3rd, 2014 @ 12:55 pm

    Salon is desperate for content most likely.

  33. Unix-Jedi
    January 3rd, 2014 @ 12:56 pm

    http://i.imgur.com/yTvEmJe.jpg

  34. Quartermaster
    January 3rd, 2014 @ 12:56 pm

    He looks like a Belieber.

  35. ThomasD
    January 3rd, 2014 @ 12:56 pm

    Salon is desperate to keep Soros happy.

  36. Finrod Felagund
    January 3rd, 2014 @ 12:56 pm

    Salon’s motto: “If you’ll believe this, you’ll believe anything!”

  37. Quartermaster
    January 3rd, 2014 @ 12:58 pm

    The raving left specializes in the nebulous. It allows them to appear to care without doing on sort of thing.

  38. Quartermaster
    January 3rd, 2014 @ 12:59 pm

    RSM was probably in full flight and simply forgot the proper spelling.

  39. ThomasD
    January 3rd, 2014 @ 12:59 pm

    Says the guy who got beheaded by his own brand of raging lunacy.

    Sarcasm on the internet is hard. Your moniker is a decent tell, but you really should strive to be a little more over the top in your delivery.

  40. Quartermaster
    January 3rd, 2014 @ 1:01 pm

    I think a government commission could be set up and chaired by the Koch Bros. to determine what is stupidity and subject to taxation. We could tax it on a graduated scale. The more BS you produce the more tax you pay. That would be fair nicht wahr?

  41. ThomasD
    January 3rd, 2014 @ 1:01 pm

    Still recovering from too much Sugar.

  42. Dana
    January 3rd, 2014 @ 1:04 pm

    The problem is that Government General Motors doesn’t produce the cars that Mr Hlavin wanted. Then it would have been perfectly fine for him to buy three luxury automobiles.

  43. Dana
    January 3rd, 2014 @ 1:06 pm

    Think back to the scene from Dr Zhivago, when Yuri Andreievich finally returns home to Moscow after the first World War. The local Soviet has taken over his home, and the local deputy says that there was room for 17 families in that one house. Yuri Andreievich says, meekly enough, “This is a better arrangement; more just.”

  44. Finrod Felagund
    January 3rd, 2014 @ 1:08 pm

    Precisely! Hey, after all it’s ‘fair’, so leftists shouldn’t be able to object (not that it ever stops them).

  45. Finrod Felagund
    January 3rd, 2014 @ 1:08 pm

    Precisely! Hey, after all it’s ‘fair’, so leftists shouldn’t be able to object (not that it ever stops them).

  46. Robespierre
    January 3rd, 2014 @ 1:42 pm

    Progressive policies lead to revolution in Russia, France, Cuba, and China? No, greed on the upper end, a lack of social mobility, and ignoring the plight of the masses lead to revolution. And if the rich are going to be able to benefit by this explosion of growth while everyone else get’s poorer it’s simply in their own self interest to give more back or inevitably wind up on the shit end of the stick. And a free search engine or social media profile is not giving back. Our tech geeks are the worst offenders. People’s animosity is continuing to grow towards our ruling class and inevitably that will break out in violence. The American experiment is over. Either we change course or self destruct.

  47. rmnixondeceased
    January 3rd, 2014 @ 1:45 pm

    Fact-h8ers or truth-rapists most likely …

  48. Evi L. Bloggerlady
    January 3rd, 2014 @ 1:46 pm

    http://batshitcrazynews.com/wp-content/uploads/2014/01/yglesias_pizza.jpg

    Actually it is in DC. But he needs a place to entertain guests like David Brooks, so you can forgive him that.

  49. Rob Crawford
    January 3rd, 2014 @ 1:49 pm

    The “ruling class” in the US is “progressive”. They spout the same bullshit you do — but you still lap it up like it’s mana from heaven.

    Love the hatred to “tech geeks” — you’re a failed journalist, aren’t you? You can’t live off the classified ads, so you want to tear down liberty.

  50. Rob Crawford
    January 3rd, 2014 @ 1:52 pm

    You’re both echoing the loser “Robespierre”.

    The country is not done; its just in need of renewal.