Relevant and even prescient commentary on news, politics and the economy.

Three long-shot Senate races worth polling: Idaho, Nebraska, and South Dakota

Three long-shot Senate races worth polling: Idaho, Nebraska, and South Dakota

On Sunday I wrote that it would be really helpful to have statewide polling in some Senate races that look on the surface like safe bets for the GOP, but might actually be worth contesting.

The reason for this is that, not only are the 4 Senate seats most likely to flip from GOP to Democrat — Colorado, Arizona, Maine, and North Carolina — all showing consistent leads for the Democratic challenger in the past two months, but in several other States — most notably Iowa and Kansas — the democrat has *also* taken the lead, in the case of Iowa, a small but consistent one. In several other States — Alaska and South Carolina — the democrat has polled within striking distance in one or more recent polls.

Because there is no Senate polling available in other States, I have created a spreadsheet (below)  showing the 2016 Presidential result, and 2020 Presidential and Senate polling both in the contested States that we know of, and the States where we are flying blind. The final column is the direction of change comparing 2016 vs. 2020 Presidential polling followed by 2016 Presidential result vs. 2020 Senate polling. Discussion follows below the chart (numbers are %-ages):

State 2016
Presidential
Result
2020
Presidential
Polling
2020
Senate
Polling
2020
Change from
2016
Alaska T+14.7 T+3 D-9 D+11.7, D+5.7
Iowa T+9.4 T+1 D+2 D+8.4, D+11.4
Kansas T+20.5 T+12 D+1 D+8.5, D+22.5
Montana T+20.2 T+9 Even D+11.2, D+20.2
Nebraska-2^ T+2 B+7 N/a D+9, N/a
S. Carolina T+14.3 T+5 D-4 D+9.3, D+10.3
Idaho T+21.7 N/a N/a N/a
Nebraska T+25.0 N/a N/a N/a
N. Dakota T+45.7 T+17*(*Mar) N/a D+28.7, N/a
S. Dakota T+29.8 N/a N/a N/a
West Virginia T+42.1 T+35*(*Jan) N/a D+7.1, N/a
Wyoming T+46.3 N/a N/a N/a

^Congressional District

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A Republican Idea for Onshoring Pharmaceutical Intangible Assets

A Republican Idea for Onshoring Pharmaceutical Intangible Assets

Alex Parker reports on a proposal from Representative Darin LaHood:

As part of the next round of pandemic relief, House Republicans are pushing new incentives for companies to bring home offshore intellectual property — something that they contend could boost job growth but that critics see as another corporate giveaway … While the 2017 Tax Cuts and Jobs Act overhauled the federal tax code and eliminated many of the incentives for offshore income-shifting, it left the structures themselves intact, and companies have been reluctant to undo them as the law remains young.

I think we admitted these 2017 tax cuts for the rich were complex so permit me to slightly disagree with Mr. Parker’s excellent reporting. If the intellectual property (IP) were left offshore, the GILTI income would face a tax rate of only 10.5% whereas onshore IP would face that FDII rate of 13.125%. Why bring the IP back home and face a higher rate? But I interrupted Mr. Parker who basically notes all these nuances:

Current law gives companies plenty of reasons to onshore the intellectual property they spent decades pushing offshore in licensing and cost-sharing agreements. Income from intangible assets held domestically may qualify for a reduced 13.125% tax rate as foreign-derived intangible income. The same income, held offshore, may fall under the global intangible low-taxed income regime, which is meant to penalize companies for holding intangibles abroad. Those carrot-and-stick provisions ultimately ensure neutrality in decisions about where to locate IP, the TCJA’s authors said when it was passed. The TCJA also included a deemed repatriation that allowed companies to bring home offshore income after it had paid a one-time transition tax. But the intangible assets that generated that income were not brought home with it, and they must be repatriated under the normal tax rules. And companies still face a potential tax charge when bringing a valuable asset home. Upon repatriation, if the property has gained value offshore, the company’s taxable income will increase based on that gain for that year, depending on how it classifies the transaction. Even though it’s a one-time payment, it could be enough to discourage the transaction.

 

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International Factor Payments and the Pandemic

(Dan here…Joseph Joyce writes for Econbrowser)

International Factor Payments and the Pandemic

I have written a piece on international factor payments (migrants’ remittances, FDI income) and the pandemic for Econbrowser, the widely followed blog of Menzie Chinn of the University of Wisconsin and James Hamilton of the University of California-San Diego.

You can find it here:

http://econbrowser.com/archives/2020/07/guest-contribution-international-factor-payments-and-the-pandemic

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More economic wisdom from the Library of Economics and Liberty

In a post today at Econlib, David Henderson writes:

Postscript:

There was an unusually high percentage of good comments on my op/ed on the WSJ site. Here’s one I just noticed:

In Michigan, our Governor ordered auto insurance companies to issue rebates – due to folks driving less I guess.

But amazingly, our Governor who is owned by the teachers union, gave no such order  to rebate the portion of property taxes that go toward public schools. Even though there is no way teachers, who stopped in school teaching in March, provided the same level of service.

This needs to change.

Indeed!

This is, in fact, an absurd comment, strictly on economic grounds.  The cost of producing auto insurance has gone down due to the pandemic – people are driving less and having fewer accidents.  In fact, many auto insurance companies are offering rebates to customers as a good will gesture.  In contrast, it is not at all obvious that the cost of producing public education has gone down.  Of course, the quality of public education has gone down – on line learning is, for many students, a decidedly inferior alternative to in person instruction, and on line instruction does not provide child care to parents.  But as Henderson is well aware, price is driven by cost, not quality.  The bundle of goods and services I get when I go to the grocery store today is decidedly lower quality than it was 6 months ago, because I risk getting COVID-19 when I shop.  Yet the price of food has risen because the cost of grocery store inputs has risen.  (To be clear, I am not defending the governor’s order on auto insurance, or her handling of schools and property taxes, just explaining why the two situations Henderson is comparing are not at all comparable, on narrow economic grounds.)

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Coronavirus dashboard for July 28: the “pain threshold” exists, and leads to a decline in new cases

Coronavirus dashboard for July 28: the “pain threshold” exists, and leads to a decline in new cases

 

Total US coronavirus cases: 4,275,188

Average daily cases last 7 days: 65,896
Total US coronavirus deaths: 140,309
Average daily deaths last 7 days: 1,004

(Source: COVID Tracking Project)

Several months ago I wrote:

my forecast over the past month [has been] that the population of the US as a whole lacks the political and social will to beat the coronavirus. As a result, the outbreak will continue to wax and wane as complacency alternates with the fear generated by big new outbreaks.

The complacency of May gave rise to new outbreaks that showed up in June and deaths that have shown up in July. Case statistics over the past week show that the surge in cases and deaths, in turn, has caused the fear to kick back in, as shown in the below graph of the 7 days average in cases (solid line) and deaths (dotted line, separate scale) per capita for the US:

 

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Goodbye To The Last True Georgist Economist: Mason Gaffney

Goodbye To The Last True Georgist Economist: Mason Gaffney

Mason (“Mase”) Gaffney died on July 26 in Redlands, CA of Covid-19 at age 96.  He was both a great guy as well as arguably what the title to this says: “the last true Georgist economist,” with such economists being followers of Henry George, whose 1878 book, Progress and Poverty, was the best-selling book on economics in the US during the 19th century.  George was a journalist who ran unsuccessfully for Mayor of New York.  His book, drawing on influences from Quesnay and Ricardo, advocated that there be a single (“site”) tax on land, replacing other taxes.  Advocates of this view, such as Mase, argued that it brought about an economy that was both equitable and efficient.

Gaffney became a follower of Henry George in 1940 in his senior year of high school, when he read Progress and Poverty while convalescing from an accident.  He started at Harvard in econ in 1941, but dropped out from majoring in econ due to his disgust with the non-Georgist approach in the department there, joining the US military to fight in WW II.  He would later say that a virtue of an overseas military deployment was that it made one appreciate life as one felt they were living on “borrowed time.”  In any case, he ended up having quite a lot of it.

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June durable goods orders continue rebound

June durable goods orders continue rebound

Last week I wrote a synopsis of the short leading indicators and what they suggested about the ultimate Presidential election result in November. Basically, they have improved over the last several months and suggested the polls would tighten compared with the present.

Among the missing June indicators were durable goods. They were reported this morning, and continued their sharp rebound from May, making up in total about half of their pandemic decline:

This adds to the evidence that the economy is likely to be better in November than it was in Q2, so adds incrementally to the idea that the race will tighten somewhat compared with recent polls.

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Just Some Conversation

Republicans finally get “death panels,” Hullabaloo, Tom Sullivan, July, 26, 2020

Dr. Jose Vasquez, the health officer for Starr County, Texas located on the US-Mexico border “The situation is desperate.” At the only hospital in the county, over 50% of patients are testing positive for the COVID-19 virus — 40 new coronavirus cases were reported Thursday. Starr County Memorial Hospital in Rio Grande City made plans to set up a committee to decide which patients to send home to die. The hospital will ration its resources to patients with the best chances of surviving  (CNN).

Texas
Fri, July 24, 2020
126 died this day
5 002 total deaths
391 609 tot. confirm cases
7 947 new confirmed
2.1% daily growth

The hospital quickly filled the eight beds in its Covid-19 unit, so it expanded to 17 and then 29 beds, Vasquez said. About 33 medical workers, including medical practitioners and lab technicians, were deployed by the state to assist the hospital.

“Unfortunately, Starr County Memorial Hospital has limited resources and our doctors are going to have to decide who receives treatment, and who is sent home to die by their loved ones,” Starr County Judge Eloy Vera wrote in a Facebook post on Thursday. “This is what we did not want our community to experience.”

Republicans screamed about ACA death panels  deciding whether citizens could have treatment under its regime.

Does Gun Ownership and Concealed Carry Deter the Frequency of Mass Shootings and Firearms Homicide?,” Justice Quarterly, Emma E. Fridel, July 23, 2020

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