Charles Krauthammer thinks John Edwards crossed the line, and he supports his argument with wisdom generated from personal experience:

This is John Edwards on Monday at a rally in Newton, Iowa:

“If we do the work that we can do in this country, the work that we will do when John Kerry is president, people like Christopher Reeve are going to walk, get up out of that wheelchair and walk again.”

In my 25 years in Washington, I have never seen a more loathsome display of demagoguery. Hope is good. False hope is bad. Deliberately, for personal gain, raising false hope in the catastrophically afflicted is despicable.
Where does one begin to deconstruct this outrage?
First, the inability of the human spinal cord to regenerate is one of the great mysteries of biology. The answer is not remotely around the corner. It could take a generation to unravel. To imply, as Edwards did, that it is imminent if only you elect the right politicians is scandalous.
Second, if the cure for spinal cord injury comes, we have no idea where it will come from. There are many lines of inquiry. Stem cell research is just one of many possibilities, and a very speculative one at that. For 30 years I have heard promises of miracle cures for paralysis (including my own, suffered as a medical student). The last fad, fetal tissue transplants, was thought to be a sure thing. Nothing came of it.
As a doctor by training, I’ve known better than to believe the hype — and have tried in my own counseling of people with new spinal cord injuries to place the possibility of cure in abeyance. I advise instead to concentrate on making a life (and a very good life it can be) with the hand one is dealt. The greatest enemies of this advice have been the snake-oil salesmen promising a miracle around the corner. I never expected a candidate for vice president to be one of them. . .

Politicians have long promised a chicken in every pot. It is part of the game. It is one thing to promise ethanol subsidies here, dairy price controls there. But to exploit the desperate hopes of desperate people with the promise of Christ-like cures is beyond the pale.
There is no apologizing for Edwards’s remark. It is too revealing. There is absolutely nothing the man will not say to get elected.

My sense is that the Kerry-Edwards Campaign staff will be deploying a trap door device for Mr. Edwards if he does this Benny Hinn imitation again before Election Day.

Count me as one who is skeptical of John Kerry’s position that soaking the rich with more income taxes is the way to relieve middle class tax rates and to reduce the federal government’s deficit. Similarly, I am not particularly sanguine about the prospects for income tax reform and simplification in a second Bush Administration. However, it is somewhat galling to listen to Mr. Kerry decry income tax “loopholes” for wealthy Americans while, at the same time, taking advantage of those loopholes personally.
In this Wall Street Journal op-ed, Stephen Moore of the Club for Growth takes dead aim at the hypocrisy of Senator Kerry’s position on the income tax:

According to the Kerrys’ own tax records, . . . the couple had a combined income of $6.8 million in income last year and paid $725,000 in income taxes. That means their effective tax rate was a whopping 12.8%.

Under the current tax system the middle class pays far more than the Kerry tax rate. In fact, the average federal tax rate — combined payroll and income tax — for a middle-class family is closer to 20% or more. George W. and Laura Bush, who had an income one-tenth of the Kerrys’, paid a tax rate of 30%.

Of course, there is delicious irony in the Kerry family tax-return data. Here is the man who finds clever ways to reduce his own tax liability while voting for higher taxes on the middle class dozens of times in his Senate career. He even voted against the Bush tax cut that saves each middle-class family about $1,000.
The Kerrys have unwittingly made the case for what George W. Bush says he wants to do: radically simplify and flatten out the tax code. Dick Armey and Steve Forbes have persuasively argued over the years that America should have a flat tax with a rate of 17% to 19%. John Kerry has consistently opposed a flat tax, because he says it would be a tax break for the rich. But the truth is with a 19% flat tax, some rich people with lavish tax shelters, like John Kerry, would pay more taxes. I calculate that the Kerrys would pay another $500,000 of taxes if we had a flat tax.

Meanwhile, Steven Pearlstein in this Washington Post op-ed takes a look at the current corporate tax bill in Congress and throws up his hands:

It remains a mystery why Congress feels such a need to reduce corporate tax burdens even further. Despite what you hear from politicians and the National Association of Manufacturers, there is precious little economic evidence linking reductions in corporate profit taxes to job creation. Struggling firms don’t have profits, while successful ones with ample cash flow are likely to base hiring decisions on whether the new employees will generate new profits.
This is largely a Republican bill reflecting the majority party’s tax-cutting philosophy and increasingly strong corporate ties. But it says something about the moral and intellectual bankruptcy of congressional Democrats — and their lack of political imagination — that they haven’t rallied behind a Senate filibuster of this legislative abomination. If, at a time of record federal budget deficits, a self-proclaimed “party of the people” can’t take a principled stand against the biggest corporate tax giveaway in a generation, maybe it doesn’t deserve to be the majority party.

And finally, check out Professor Maule’s analysis of the candidates’ statements in regard to taxation policy, a part of which follows:

Listening to these two candidates spar over taxes was unpleasant. They toss about sound-bite phrases but I would be shocked if they really understood the underlying issues.
Though each candidate tried to paint the other?s tax philosophy as bringing a significantly different approach to the table, neither one persuaded me that they get it. Both hold philosophies that complicate the code. Neither one addressed the flaws inherent in taxing capital gains and dividends at lower rates; the plans advocated by each candidate would continue to treat these types of income as less deserving of taxation than are wages.

Update (10/12-13/04): Trent, a reader of the blog, points us to this Kerry-Edwards Campaign press release from May of this year regarding Ms. Heinz-Kerry’s tax return, and Buster points us to another site that purports to refute Mr. Moore’s analysis.
The press release and the website analysis are both somewhat ambiguous because they make assertions that cannot be verified without reviewing the actual tax returns (or at least having an independent expert review them). However, Trent fairly points out that the Mrs. Heinz-Kerry paid taxes equal to a more reasonable 32% of their taxable income, and that Mr. Moore’s 12.8% rate appears to be based on total income, which includes non-taxable income. The other website’s analysis — i.e., that the Kerrys’ lower taxable income was purely the result of the Kerrys’ charitable donations — is not at all clear to me from the available information.
However, the fact remains that the Kerrys take advantage of loopholes in the tax laws by sheltering roughly half of their income in tax-exempt investment vehicles. Frankly, I see nothing wrong with this as the Kerrys are simply doing what our antiquated tax laws allow. Nevertheless, Mr. Kerry would be more credible to independent voters such as me if he would advocate reasonable income tax reform and simplification — an area in which the Bush Administration has failed miserably — rather than engaging in divisive demagoguery regarding tax loopholes while enjoying the benefits of those same loopholes.

Virginia Postrel of Dallas, who runs the smart Dynamist.com blog, does an excellent job of explaining in this NY Times article the public policy failure that is the current Texas Robin Hood public school finance system.
As Ms. Postrel notes, the problem is not with equalizing benefits between rich and poor school districts, but rather the structure under which such equalization was to be achieved:

Robin Hood does not just move money from rich school districts to poor school districts. It does so in a way that destroys far more wealth than it transfers, and that erodes the tax base on which school funding depends.
To understand why Robin Hood is so destructive, consider the market price of a given house. The home’s value depends not just on how big the house is or whether it has walk-in closets and granite countertops.
Property taxes depress the value of a house. The amenities those taxes buy, including good schools, increase the value. The final price reflects the net value of the taxes the homeowner pays.
Robin Hood essentially raises taxes while reducing benefits, creating a downward spiral in home values and property tax receipts. For each district, the state divides the total assessed value of property in the district by the number of pupils. (Districts get higher per-pupil weightings for such factors as students with learning disabilities or limited English proficiency.)
The state then compares this number with a confiscation threshold. The district keeps the taxes on the property base below the threshold. But every single penny collected on the property value above the threshold goes to the state.

Not surprisingly, Ms. Postrel notes that, when homebuyers no longer get as much education for their taxes, buyers will not pay as much for houses:

During the 1990’s, “a period of unusually rapid income growth for the wealthy,” the economists note, the property value per pupil actually fell in the state’s wealthiest 5 percent of school districts, even without accounting for inflation.
That drop was bad news for everyone. Robin Hood assumed that house prices would stay pretty much the same, so that property-rich districts would continue to provide ample tax dollars to the rest of the state. Instead, every year the tax base became smaller in the rich districts.
To meet its commitments to poor districts, the state effectively lowered the real value of the confiscation threshold. Corrected for inflation, the threshold was $340,000 per weighted pupil in 1994, when the system was established. By 2002, it had fallen to $305,000.
But lowering the threshold further depresses home values. A death spiral sets in.
As homebuyers switch from the once-rich districts into moderately priced districts, property values hit the threshold in those districts, setting yet another spiral in motion.
And while the state is pushing down the confiscation threshold, districts try to keep up by raising their property tax rates, pushing down home values even more.

Ms. Postrel notes that correcting the system is certainly not impossible:

[The solution is to bring] well-established principles of efficient taxation to bear on school finance. Transfers . . . should be funded through a statewide tax, while local taxes pay for local amenities.
But even local taxes could be more efficient. Instead of confiscating 100 percent of everything above a certain property-value threshold, . . . the state could take a much smaller percentage of the whole tax base.
“One of the principles of public finance is that having a high tax rate on a small base is very inefficient, whereas having a lower tax rate on a larger base is less distortionary, ” observes Ilyana Kuziemko, a Havard University economist who co-wrote with Caroline M. Hoxby a new working paper for the National Bureau of Economic Research entitled Robin Hood and His Not-So-Merry Plan: Capitalization and the Self-Destruction of Texas’ School Finance Equalization Plan.

As noted in this earlier post, the handling of public school finance by the Republican-dominated Texas Legislature has been so inept that it gives rise to reasonable questions regarding whether a Republican-controlled state government is capable of addressing such public policy issues in a responsible and effective manner. However, Professors Hoxby and Kuziemko note that the primary reason for the public policy failure of the Robin Hood public school finance system is much simpler than poor political leadership:

“Lawyers, not economists, designed the system.”

In his WSJ ($) Business World column this week, Holman Jenkins, Jr. addresses the Justice Department’s latest lawsuit against the big tobacco companies, and notes that the public relations benefit of such lawsuits far outweighs any meaningful public benefit:

Were there a single element of human or policy interest in the trial launched by the Justice Department last week, it would be the department’s conspicuous pride in admitting that it had spent an unprecedented $139 million preparing the case. To what end? In its dubious interpretation of racketeering law, the government seeks “disgorgement” of profits earned over half a century from selling cigarettes to smokers who started before age 21 — a newly identified demographic category that Justice calls the “youth addicted population.”
But those 50 years of profits were long ago distributed to shareholders. They won’t be found around the premises in a vault at Philip Morris, er, Altria.

Indeed, just who is the real owner of the big tobacco companies? It might surprise you to find out:

[G]overnment already gets the lion’s share of the proceeds of their continued smoking. Consider: A pack costs about $2.15 at the factory gate, of which the industry’s after-tax profit is about 17 cents. Federal excise tax takes 39 cents, while state taxes range from Virginia’s 37 cents to New Jersey’s $2.73.
Then there’s the additional, and novel, new “tax” imposed by the 1998 settlement with 46 states, which comes to about 50 cents a pack, though no legislator was ever obliged to cast a vote to impose this price hike on smokers.
Bottom line: The industry’s shareholders long ago were reduced to the role of cutouts, allowed to keep collecting a small piece of the pie so politicians can go on posing as scourges of “Big Tobacco” even as government has become, effectively, the “beneficial owner” of the major tobacco companies.

And the public relations benefit to the federal government from these lawsuits also has a rather stark cost:

Revenuers, after all, have imbibed a great deal of free-lunchism from the Campaign for Tobacco-Free Kids, which shouts in one of its press releases: “Raising State Tobacco Taxes Always Increases State Revenues.” Ditto the World Bank, which officially estimates that a 10% tax hike causes only a 4% decline in consumption. The bank goes out of its way to applaud governments like Greece’s and Turkey’s, which get upwards of 10% of their revenue from cigarette taxes.
Of course, a less decorous way of saying the same thing is that governments have learned to be calculating exploiters of the “inelastic” demand of addicted cigarette smokers.

But Mr. Jenkins points out that this ruse likely will not on much longer, but for economic reasons, not good public policy ones:

What might torpedo it politically, if not legally, however, is evidence that the lines are crossing and higher prices are leading to lower revenues.
We’re already there: Revenues under the state settlement have lately begun declining at 4.5% a year, twice as fast as predicted and faster than can be explained by smuggling or smokers switching to renegade brands or roll-your-own.
If this keeps up, we may find out whether the government is really interested in curbing smoking — or in profiting from it.

Read the entire piece. This reminds me a bit of the Texas Republicans’ proposal earlier this year to subsidize state public school finance through an increase in notoriously volatile taxes on gambling within the state. Republicans should be wary that independent voters will figure out that something is terribly skewed about government raising money from activities such as gambling and smoking that it really ought not to be promoting.

My sense is that the upcoming Presidential election is going to be a much closer race than many Bush Administration supporters currently think, so this NY Sunday Times article on John Kerry’s management style is timely in that it provides some insight into how a President Kerry would go about making decisions.
Mr. Kerry, who is a former prosecutor, is a four term senator without any meaningful management experience in terms of running a business, so his management style is primarily reflected on how he runs his campaign:

Mr. Kerry is a meticulous, deliberative decision maker, always demanding more information, calling around for advice, reading another document ? acting, in short, as if he were still the Massachusetts prosecutor boning up for a case.
He stayed up late last Sunday night with aides at his home in Beacon Hill, rewriting ? and rearguing ? major passages of his latest Iraq speech, a ritual that aides say occurs even with routine remarks.
In interviews, associates repeatedly described Mr. Kerry as uncommonly bright, informed and curious.

But Mr. Kerry’s curiousity brings with it an indecisiveness borne of a tendency to become deluged in what I refer to as “data dumps:”

But the downside to his deliberative executive style, they said, is a campaign that has often moved slowly against a swift opponent, and a candidate who has struggled to synthesize the information he sweeps up into a clear, concise case against Mr. Bush.
Even his aides concede that Mr. Kerry can be slow in taking action, bogged down in the very details he is so intent on collecting, as suggested by the fact that he never even used the Medicare information he sent his staff chasing.
His attention to detail can serve him well on big projects, as it did when he sent aides scurrying across the country to find long-lost fellow Vietnam veterans who could vouch for his war record. But sometimes, his aides say, it is a distraction, as it was in early 2003, when they say he spent four weeks mulling the design of his campaign logo, consulting associates about what font it should use and whether it should include an American flag. (It does.)
His habit of soliciting one more point of view prompted one close adviser to say he had learned to wait until the last minute before weighing in: Mr. Kerry, he said, is apt to be most influenced by the last person who has his ear.

And whereas President Bush rarely makes management changes in his top circle of advisors, Kerry often does:

Mr. Kerry has also, in this campaign and earlier ones, repeatedly upended his staff, edging longtime advisers aside or dismissing aides outright when things threatened to run off the tracks. As a result, while some stalwarts from Mr. Kerry’s first campaign have stuck with him since 1972, the senior staff of his campaign includes few people who call themselves his friends or are personally loyal to him.

And there is a hint of the Jimmy Carter micromanager management style in Kerry’s approach:

Mr. Kerry’s circle is as wide and changing as Mr. Bush’s is constricted and consistent. He is always calling one more friend, and the campaign lineup has shifted so often that rumors of staff changes have become part of the daily gallows humor at Kerry headquarters on McPherson Square in downtown Washington.
Instead of delegating authority to a single adviser, Mr. Kerry relies on different people for different advice. And, he made a point of saying in the interview, none of them have too much authority. “I am always in charge,” he said.

And though he is constantly seeking out advice, Kerry does not always follow it:
For all his eagerness to seek advice, Mr. Kerry does not always take it.

After he delivered a 35-minute speech at the University of Pittsburgh last spring, Gov. Edward G. Rendell of Pennsylvania gently tried to reinforce a message Mr. Kerry’s aides had been struggling to impart.
“I said I thought it was a little long for an outdoor speech,” Mr. Rendell recalled. “My rule of thumb for an outdoor speech is 15 to 20 minutes.”
That night at the Philadelphia Convention Center, Mr. Rendell prepped Mr. Kerry by saying the crowd was full of party veterans and urging him to keep his speech short. He talked for 32 minutes.
When Mr. Kerry arrived in Allentown early this month for a rally at the fairgrounds, Mr. Rendell did not even mention his 20-minute outdoor rule. “I’ve given up,” Mr. Rendell said. “He listens sometimes, and he doesn’t listen sometimes.”
Mr. Kerry spoke for 38 minutes.

This Washington Post story reports on Washington lobbyist Jack Abramoff and public relations consultant Michael Scanlon‘s efforts in 2002 working with conservative religious activist Ralph Reed to help the state of Texas shut down an Indian tribe’s El Paso casino, and then Messrs. Abramoff and Scanlon’s incredible activities in persuading the tribe to pay $4.2 million to try to get Congress to reopen it once it had been closed. In the end, Messrs. Abramoff and Scanlon failed to get the casino reopened. Here is an earlier post from Charles Kuffner on the early stages of the investigation into the matter.
H’mm, let’s see now. Work the political process to get a casino closed so that you can then work the political process to get the casino reopened. Not bad work if you can get it.

A Travis County, Texas grand jury indicted three people closely linked to Houston-based U.S. House Majority Leader Tom DeLay Tuesday along on charges of illegally using corporate money to help Republican Texas House candidates during the 2002.
The indictments focused on the DeLay-founded Texans for a Republican Majority Political Action Committee, which raised corporate money to help Republicans take control of the Texas House for the first time since Reconstruction. TRMPAC chief John Colyandro, fund-raiser Warren RoBold and DeLay political director Jim Ellis were the DeLay aides that were indicted. Travis County District Attorney Ronnie Earle, who is a Democrat, said the investigation continues into possible campaign-finance violations by TRMPAC, the Texas Association of Business and the election of GOP Texas Speaker Tom Craddick of Midland. This was the third grand jury to hear the investigation and Earle disclosed the investigation will continue when a new grand jury is impaneled in October. He would not say whether DeLay is a target of the investigation.
TRMPAC raised almost $600,000 from corporations, which usually contributed at fund-raisers in which DeLay was the featured guest. The money was used to pay for additional fund-raising and political activity to help Republican candidates win about 20 House seats. Texas Ethics Commission opinions have said corporate money can be used only to pay a political committee’s basic expenses, such as rent and utilities. However, TRMPAC supporters contend that the state law is trumped by the First Amendment of the U.S. Constitution and applicable federal law at the time.

This post from earlier this year pointed out the similarity between the federal government’s accounting and financing of Medicare and Social Security benefits with Enron’s accounting and financing of its infamous off-balance sheet partnerships.
This NY Times article reports that San Diego’s municipal government is now facing a municipal reorganization under chapter 9 of the Bankruptcy Code because of its dubious accounting and financing of public pension fund earnings.
Consistent with the government’s prosecution of former Enron executives involved in such questionable accounting and financing schemes, can we now expect criminal prosecutions of San Diego public officials who condoned the same type of accounting and financing practices that have caused San Diego’s current dance with municipal insolvency?