The Economy Hub
With Michael Hiltzik
Warren Buffett is 'betting against America' on Burger King. Or is he?

Back in February, in his annual message to shareholders in his company Berkshire Hathaway, Warren Buffett said this:

"Who has ever benefited during the past 237 years by betting against America? ... America's best years lie ahead."

You can expect these words to be thrown back in Buffett's face this week (as we're doing), as word spreads of his investment in a corporate "inversion" deal, in which Burger King will relocate its tax home to Canada.

But it's worthwhile to take a closer look at Buffett's involvement, and about his opinion of corporate taxation -- indeed, of taxes in general. Here's a spoiler: He doesn't think U.S. corporate taxes are too high, and he's not really in favor of the inversion loophole. 

First, some background.

Inversion deals involve U.S. companies buying smaller foreign firms to take advantage of the latters' lower tax rates and other opportunities for financial manipulation. (We outlined the issues here and here...

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Another GOP state may be signing up for Medicaid, and the reason is obvious

Reports out of Cheyenne say that Wyoming is finally talking to federal officials about expanding Medicaid. 

That would make Wyoming the 12th state with a Republican governor to expand Medicaid under the Affordable Care Act, leaving 16 with GOP leadership still in the "no expansion" column. The reason for Wyoming's wavering is clear: It's money.

The Health Department says Medicaid expansion could save the state $50 million or more if it expands the program, for which the federal government will pay at least 90%. Meanwhile, Wyoming hospitals say they're losing more than $200 million a year in uncompensated care for people without insurance.

The state Legislature has rejected the expansion, but Republican Gov. Matt Mead has been saying it's time to pack up. He's entering negotiations with the feds for a way to expand Medicaid next year, covering as many as 17,600 low-income residents.

Mead's actions reflect some realities about the Affordable Care Act that may finally be hitting home for...

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Wisconsin shows how job incentives are handed out -- in Bizarro world

Via the Wisconsin State Journal of Madison, we learn of the zany way that political officials in that state are handing out job-creation funds. Long story short, they've voted to hand over $6 million in taxpayer cash to a company that's planning to cut its Wisconsin work force in half.

The company is Ashley Furniture, which has had its snout in the taxpayer trough before. But the new grant is more than all those others combined, the Journal says. The $6-million grant, which has been voted by the state Economic Development Corp. but not yet finalized, won't require Ashley to create any new jobs. Instead, it will allow the manufacturer to "lay off half of its current 3,848 Wisconsin-based workers," the newspaper says.  

The chairman of the incentive-awarding body is Republican Gov. Scott Walker. A few weeks after the WEDC approved the grant to Ashley, its owners donated $20,000 to Walker's re-election campaign.

Walker also is a candidate for the 2016 GOP nomination for president, so his...

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A women's rights victory as California nixes an attack on abortion coverage

With minimal fanfare, California state officials have nixed an underhanded effort by two Catholic-affiliated universities and their insurers to deprive the universities' employees of insurance coverage for abortions. 

The move by the Department of Managed Health Care is one of the strongest statements in favor of women's reproductive health rights you're likely to hear from officials of any state, at a time when those rights are under systematic attack. So it's proper to pay attention.

On Friday, the DMHC informed the state's major health insurers by letter that provisions in health plans eliminating coverage of "voluntary" or "elective" abortions, or limiting coverage only to "medically necessary" abortions, violate state law and the state constitution.

A copy of the letter--this version sent to Anthem Blue Cross--can be found here. It says health plans in California are prohibited from "discriminating against women who choose to terminate a pregnancy. Thus, all health plans must...

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Big business takes aim at corporate activists

"Shareholder democracy" long has been derided as an oxymoron, like "military intelligence" or "jumbo shrimp." Yes, corporate managements bow endlessly to the mandate that they act exclusively in the shareholders' interest, but in real life they treat the poor sap with a few hundred shares as hardly more important than the night janitor.

So it's proper to ask why Big Business has been aiming its heavy artillery at a small clutch of shareholders who have the temerity to try to obtain for their fellows the right to vote at annual meetings on issues that might affect the value of their stock. Issues such as the structure of their companies' boards of directors, oversight of their chief executives' actions, the right to call special meetings — of shareholders — and so on.

The shareholders include John Chevedden, 68, a former employee of Honeywell and Hughes Aircraft who lives modestly in Redondo Beach and submits about 20 or 30 shareholder resolutions for annual meetings per year; and James...

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What the history of Medicare Part D can tell us about Obamacare

How Americans will take to the Affordable Care Act over the long haul may be hard to predict, but mapping out its future course need not be entirely the product of guesswork. That's because we have a model on which to base our predictions: Medicare Part D, the prescription drug benefit enacted just over 10 years ago.

That's the conclusion of an article in the latest New England Journal of Medicine by Julie M. Donohue, a health policy expert at the University of Pittsburgh. Her main message: gaining public acceptance for a major program takes time.

"It takes a couple of years at least for people who are eligible for coverage to become aware of a program, to enroll in that program and to experience the benefits," Donohue says in a taped interview accompanying the article. "And until people experience the benefits of an insurance program, especially something that's new and a little different, the public opinion of that program may be relatively low." 

Donohue...

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The case against school vouchers in one blistering court ruling

Of all the self-interested scams perpetrated by school "reformers" against public education, the school voucher scam may be the most dishonest.

In their undiluted form, these programs are a sop to right wingers and religious fanatics convinced that teaching children that the Founding Fathers were all upstanding Christian gentlemen and evolution should be doubted somehow prepares them for life in the 21st century.

This week in Raleigh, N.C., a judge named Robert Hobgood called out North Carolina's version of the swindle for what it was: a raid on the state treasury. His target was the state's $10-million Opportunity Scholarship Program, which was to go into effect with the upcoming school year.

Wake County Superior Court Judge Hobgood, ruling in a case brought by the state teachers association and an advocacy group for low-income residents, found the program to be "unconstitutional beyond a reasonable doubt," and designed chiefly to relieve the state of the responsibility for educating...

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Economic harassment and the Ferguson crisis

Scratch any social crisis, and you're likely to find economics not far below the surface. Via ArchCity Defenders, a St. Louis legal-aid nonprofit, we can see how this has worked to create the dismaying spectacle of the breakdown of justice in Ferguson. (H/t Alex Tabarrok, via Kevin Drum.)

According to the group's recent report on the municipal court system in St. Louis County, the Ferguson court is a "chronic offender" in legal and economic harassment of its residents. There's not much of a secret why: the municipality collects some $2.6 million a year in fines and court fees, typically from small-scale infractions like traffic violations. This is the second-largest source of income for that small, fiscally-strapped municipality.

For a low-income community--and for a black community subjected to the racial profiling, as the report documents--these fines can gather force like a boulder rolling downhill. 

And racial profiling appears to be the rule. In Ferguson, "86% of vehicle stops...

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A fair-minded pundit falls into a right-wing trap on Social Security

New York Magazine's Jonathan Chait is usually a judicious and perceptive analyst of the intersection between politics and economics. So it's disappointing to see him blindly falling in step with a conservative attack on Social Security.

Chait's error is part of his otherwise astute analysis of the Republican Party's demographic quandary. He writes that the GOP, by focusing its appeal on older Americans, has become trapped in a "self-perpetuating cycle" in which it attracts mainly old people, and thus represents the interests only of old people. (His theme is based partially on an analysis by David Frum in Foreign Affairs.)

In making his point, Chait cites a recent op-ed in the Wall Street Journal by Andrew Biggs of the American Enterprise Institute, whom he accurately describes as "professionally committed to cutting Social Security."

The op-ed, Chait says, is about "the need to restore solvency to the Social Security Trust Fund, which certainly ought to be a conservative priority." He...

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Republicans throw a conniption over the teaching of U.S. history

As students prepare to return to school in the next few weeks, there's no better time for a conservative freakout over education. The issue of the moment is a new outline, or "framework," issued by the College Board for advanced placement classes in US history.

The framework is here. According to a resolution passed at the recent summer meeting of the Republican National Committee meeting in Chicago, it "reflects a radically revisionist view of American history that emphasizes negative aspects." The RNC calls the framework, which is to be implemented for some 500,000 AP history students this fall, "biased and inaccurate."

The RNC calls for Congress to de-fund the College Board, an independent body, until the course material can be "rewritten...to accurately reflect U.S. history without a political bias."

You can see what's happening here: it's a continuation of the old culture wars, transplanted to the AP history classroom and slathered over with political foam. One would expect the...

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A few (impolite) questions about the ice bucket challenge

Americans are probably not unique in the world in treating philanthropy as a sort of game, with the goal of making it go down painlessly.

The ice bucket challenge sweeping the nation--or at least those parts of it accessible by Facebook and Twitter--is another example of how that system works. It's a system that includes credit card companies making a Christmastime donation to a charity every time you charge a purchase, or shoe companies sending a pair to Africa every time you buy one for yourself, or your pledging some money for every mile that someone else runs or swims to support research into a disease cure. 

On the surface there's nothing wrong with any of this, since every dollar donated means one dollar more. But deeper down, there are lots of problems with it, and the ice bucket challenge illustrates why.

The challenge, as you may know, benefits the ALS Association, which supports research into the degenerative condition amyotrophic lateral sclerosis, or Lou Gehrig's disease.

...

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NCAA antitrust ruling barely chips at college sports dysfunction

On Sept. 4, 2010, at Michigan Stadium in Ann Arbor, I was part of what the public address announcer proudly told us was the largest crowd ever to watch a football game anywhere in the world, college or pro.

There were 113,090 that day filling the newly expanded "Big House," as the University of Michigan's football stadium is known. That was more than its official capacity of 109,901. Only a tiny percentage of us, however, were students; they got some of the worst seats, quarantined behind one end zone and identifiable only as a big splotch of maize-yellow T-shirts.

The rest of the crowd comprised parents, alumni, boosters, corporate executives (ensconced in renovated luxury suites ringing the stands), and other hangers-on hoping to share in or profit from the glory of Big-10 football at Michigan. A few years earlier, James Duderstadt, the university's former president, had written about his fascination at the volume of Michigan-branded merchandise available, including "maize-and-blue...

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