Gary Fields in The Wall Street Journal has one of these articles making the point that a family making slightly over $250,000 doesn’t necessarily feel all that “rich” when it comes to facing a tax hike from Barack Obama.

What the story doesn’t do is put this issue in the appropriate context of what an increase in the marginal rate really implies. If you raise taxes on “people making over $250,000″ that means an increase only in the 250,001st dollar and onward. It’s not, in other words, as if a guy earning $249,999 and a guy earning $250,001 will be paying radically different amounts of taxes. In other words, though if you’re earning $5 million a year, Obama’s plan really will saddle you with a big tax increase, a person who’s earning $260,000 and feels that he’s facing a basically middle class economic situation is only going to be facing a very small tax increase. And however much our $260,000 a year guy may feel not so rich, surely he can agree that $260,000 is a lot more than $130,000 or $65,000 so it’s hardly absurd that he might pay a slightly higher rate.

Basically, even if you grant the premise of the story there’s no actual problem here. That said, I wouldn’t have a problem with launching a new, slightly higher rate, starting at $500,000 and a higher one starting at $1 million and another at $2 million another at $4 million another at $8 million and another at $16 million. I don’t see any reason to think that the progressivity of the scale should max out at $250,000 when obviously there’s a huge difference between someone earning that much money and someone earning ten times that amount.

Robert Wright, a hippie globalist one-worlder like me, and Bob Kagan, a neocon warmonger, both agree on an idea for dealing with the pirates problem—put a couple of armed United Nations peacekeepers on merchant ships going through the region. The idea here is that arming merchant ships would solve the problem, but that you can’t arm merchant ships because countries don’t let armed ships dock at their ports. Putting the guns in the hands of the UN solves the problem:

I have my doubts about this. My impression is that the biggest problem with arming merchant ships is that ship owners actually don’t want to see firefights happening in the vicinity of their cargo. If you think about the idea of holding a ship for ransom, the premise is that the amount of money being asked for is less than the value of the cargo.

Given that reality, if you own a cargo ship and some guys in a small craft amble up next to you with a shoulder-launched rocket what you really want is for your crew to surrender. If your crew starts shooting, then they’re putting your ship at risk of getting blown up by a rocket. It’s true that over time, a sufficient number of bloody exchanges would serve as a deterrent to piracy both because pirates would get killed and also because pirate counterattacks that end up sinking ships don’t get any ransom. But on an individual level, it still makes more sense to surrender than to fight so it’s not clear that anyone would want blue helmets on their ship.

A different idea would be to go “Anbar Awakening” on the whole situation. Suppose there were a group of armed Somali possessing maritime skills and a spirit of derring-do. The international community could find leaders of these Somalis and provide funds to assist them in their brave effort to battle the pirates who’ve been plaguing their community. It’s true that to some this would look like paying protection money to extortionists. But if you call the protection money “aid” and call the pirates you’re paying off “former pirates” and call the process by which the pirates you’re paying try to kill their rivals “anti-piracy operations” then I think it looks perfectly legitimate to recruit some former pirates to conduct anti-piracy operations that are financed by international aid.

This is a less morally tidy approach, but it’d almost certainly be cheaper. You could call ‘em the Somalia Coast Guard, reach an agreement with them about fishing rights and so forth, and they’d be national heroes.

Reading Paul Krugman’s pushback against recent optimism about the economic situation it occurs to me that the whole debate over “green shoots” or “glimmers of hope” is a little bit mis-framed.

I think what everyone agrees on is that the situation is out of free fall mode and that’s good. This is basically what the green shoots amount to. But the metaphor of a green shoot implies not just something that’s good, but something that’s promising. And this really just gets us back to a different set of metaphors. Namely about the prospects of a “V”-shaped recession in which you bounce sharply back up, or else a “U”-shaped recession in which recovery is slugging (the 2001 and 1991-2 recession were like this, or else worst of all, an “L-shaped” recession like Japan in the 1990s where things stop getting worse but don’t really get better.

Insofar as by “glimmers of hope” we mean an apparent end to the rapid-collapse phase of the business cycle, then detecting those glimmers just doesn’t tell us anything at all about whether we’re going to “L”-out or whether we’re going to loop back up.

For my part, the glimmers seem real enough. But I still worry about the L. And that’s because I think you get a different set of policy problems when you start talking not about how to avoid collapse but how to bring back growth. A strong and sustainable recovery means we would need to get to a point where global demand is at a high level but isn’t depend on debt-financed consumer demand in the United States. Not that Americans are going to stop consuming. But merely that since the United States is such a big and rich country, what constitutes a relatively modest level of prudent re-balancing on the part of an individual household can have a dramatic systemic effect. We need to a more sustainable set of international flows of money, and I’m not sure we have a real idea of how to get there. At the moment, there’s the idea that US public sector debt can serve as a kind of transitional source of demand as the US consumer cuts back. But how does that next transition get made?